In March 1938 Fascist Austria was formally incorporated into an enlarged Nazi Germany following a largely unresisted military invasion from the north-west. That year Käthe Odwody returned to her job at the . It was also that year that the factory owners, the Mendl family, whom the authorities had identified as Jewish, escaped to Switzerland. The factory was expropriated by the authorities and "aryanised" but it remained a focus of trades union activism. At the start of 1939 a strike took place at the factory against the equalisation of payroll taxes (which before 1938 had been much higher in Germany than in Austria). There had been no compensating wage increase at the bakery to compensate. The Gestapo crushed the strike and intensified their surveillance and supervision activities at the plant.