Staff Writer (Updated: 7/15/2016):
By this time in aviation history, Heinkel was a well-known and respective aviation concern. The company was founded in 1922 by Ernst Heinkel and primarily focused on design and development of airframes which were considered excellent for the period. Prior to World War 2 there proved a shift in company priorities which saw Heinkel begin to invest in the concept of turbojet propulsion. Heinkel obtained the services of engineer Dr. Hans Pabst von Ohain to head turbojet engine development in-house. Dr. Ohain came to the company with experience in gas turbines and Heinkel proved interested enough in the concept to help further it along
The German Air Ministry certainly respected Heinkel for his aircraft visions however it saw the shift to internal engine development as a nonsensical move, particularly when the German nation was gearing up for total war in Europe and all manner of resources would be required. This would lead to shortages of specialists and resources and, thusly, it was believed that each participating concern should continue to provide the services they had mastered in - Heinkel was needed to make its aircraft frames such as that of the famous He 111 Medium Bomber and not commit to a lengthy and expensive endeavor which may or may not yield something useful for the German cause.
Based on his patented concept for a gas turbine, Ohain successfully showcased his idea through the HeS 1 engine during a display in 1937. The concept evolved under Heinkel to become the diesel-fueled HeS 3 intended from the outset for aircraft propulsion. The engine initiative was evolved as a company private venture without official Air Ministry support and this commitment served to damage the good-standing Heinkel name. In 1938, the company debuted its turbojet aircraft concept fitted with the proposed jet and certainly earned notice from the Air Ministry - though officials were still more interested in war-making products for the here-and-now and not a developmental aircraft/jet combination effort. Heinkel persisted and managed a working prototype under the designation of He 178 - a single-seat, single-engine development strictly for testing the turbojet flight concept. The He 178 went airborne for the first time on August 27th, 1939 at Rostock and began the age of jet-powered flight - managing to achieve the top speed of 373 miles per hour (though a faster maximum speed was entirely possible, persistent issues with the undercarriage would consistently limit the He 178 from surpassing the 400mph mark). The first flight ended unceremoniously when the aircraft ingested a bird that forced a flameout of the engine. The test pilot - Flugkapitan Erich Warsitz - managed to bring his mount down safely.
Of note is that World War 2 officially began on September 1st, 1939, one week after the He 178's first flight.