while the designs by gustav otto were initially successful, he was continually experiencing problems related to cost-effective production, as well as generating profits. at the start of the war, otto werke was supplying the german air force, but as the war progressed so did production problems. eventually, the government agencies urged the company to nationalize its production. the stress of wartime and ongoing financial problems with the company proved too great a burden for gustav, who suffered health issues. at the insistence of the bavarian and prussian war ministries (and in particular the inspectors of the engineering corps) the unprofitable aircraft manufacturer was taken over by the german government, and gustav otto was forced to resign from his company. a consortium of banks took over the assets of the company. otto werke was reorganized into bayerische flugzeugwerke ag on 7 march 1916.