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Friday December 1, 2006

Hitler’s carmaker

How General Motors helped mobilize the Third Reich

by edwin black
A special JTA investigation

On May 2, 1934, the president of General Motors Overseas Corp. found himself in a meeting with Adolf Hitler in his chancellery office. James D. Mooney took with him two executives from GM’s German division, Adam Opel A.G.

In June 1934, GM’s publication, General Motors World, effusively recounted the meeting between Mooney and Hitler, proclaiming, “Hitler is a strong man, well fitted to lead the German people out of their former economic distress ... He is leading them, not by force or fear, but by intelligent planning and execution of fundamentally sound principles of government.”

Few could have imagined the monster that Hitler would become.

That 1934 meeting launched a strategic business relationship with the Third Reich, a relationship that continued long into Hitler’s barbaric regime. GM’s trucks would become the wheels that drove Nazi troops into Europe.

For Mooney and for Germany’s branch of GM, the relationship was first and foremost about making money — billions in 21st century dollars. The auto company’s dealings with Hitler were well documented in thousands of pages of little known and restricted Nazi-era and New Deal-era documents that were uncovered in this JTA investigation.

GM has declined comment for this story, but the company has steadfastly denied for decades that it actively assisted the Nazi war effort.

The documentation and other evidence uncovered during this JTA investigation revealed that GM and Opel were eager, willing and indispensable cogs in the Third Reich’s rearmament juggernaut, a rearmament that became evident as the 1930s progressed, would enable Hitler to conquer Europe and destroy millions of lives.

The documentation also reveals that while GM was mobilizing the Third Reich and cooperating within Germany with Hitler’s Nazi revolution and economic recovery, GM and its president in New York, Alfred P. Sloan Jr., were undermining the New Deal of Franklin D. Roosevelt.

GM and the Nazis were a natural match.

Hitler knew that the biggest auto and truck manufacturer in Germany was not Daimler or any other German carmaker. The biggest automotive manufacturer in Germany — indeed in all of Europe — was General Motors, which since 1929 had owned and operated the longtime German firm Opel. GM’s Opel, infused with millions in GM cash and assembly-line know-how, produced some 40 percent of the vehicles in Germany and about 65 percent of its exports. Indeed, Opel dominated Germany’s auto industry.

Hitler was well aware that, to conquer Europe, Germany needed to rise above the horse-drawn divisions it deployed in World War I. It needed to motorize, to “blitz,” to attack with lightning speed. Germany would later unleash a Blitzkrieg, a lightning war. Opel built the 3-ton truck named “Blitz” to support the German military. The Blitz truck became the mainstay of the Blitzkrieg.

GM hoped it also eventually would become the car of choice for all Germans. In 1928, just before the U.S. Depression hit, one in five Americans owned a car, while in Germany, ownership was one in 134.

But sales to the German army yielded a greater per-truck profit than civilian sales — a hefty 40 percent more.

GM became one of Germany’s leading employers, giving jobs to 17,000 Germans in 1934, a number that would increase to 27,000 in 1938, plus slave laborers.

By 1937, Opel had grown to triple the size of Daimler-Benz and quadruple that of Ford’s fledgling German operation, known as Ford-Werke. By the end of the 1930s, Opel was valued at $86.7 million, which in 21st-century dollars, translates into roughly $1.1 billion.

GM president Sloan and overseas president Mooney both made efforts to obscure Opel’s U.S. ownership and control.

Beginning in 1934, the two concocted the concept of a “directorate,” comprised of prominent German personalities, including several with Nazi Party membership. This created what GM officials variously termed a “camouflage” or “a false facade” of local management. But the decisions were made in America where GM was Opel’s sole stockholder.

Not unlike other German companies, Opel vigorously joined the anti-Jewish movement. Jewish employees and suppliers became verboten. Established dealers with Jewish blood were fired, including one of the largest serving the Frankfurt region. Even longtime executives were discharged if Jewish descent was detected.

In 1938, just months after the Nazis’ annexation of Austria and only months before Kristallnacht, Mooney received the German Eagle with Cross, the highest medal Hitler awarded to foreign commercial collaborators and supporters.

In the months leading up to the feared 1939 invasion of Poland, GM president Sloan defended his close collaboration with Hitler.

He stated in a long, April 1939 letter to an objecting stockholder that, in the interests of making a profit, GM shouldn’t risk alienating its German hosts by intruding in Nazi affairs. “In other words, to put the proposition rather bluntly,” Sloan said in the letter, “such matters should not be considered the business of the management of General Motors.”

Hitler’s

carmaker

How General Motors helped mobilize the Third Reich

A special JTA investigation

The German military in early August 1939 urgently ordered Blitz truck spare parts to be delivered to the Reich bases near the Polish border. Days later, nearly 3,000 Opel employees, from factory workers to senior managers, were drafted into the Wehrmacht. Moreover, at about that time, GM began evacuating most of the American employees and their families to the Netherlands. Soon, virtually all Opel civilian passenger car sales were eliminated in favor of military orders.

At 6 a.m. on Sept. 1, 1939, Germany launched its Blitzkrieg against Poland, with troops arriving in Blitz trucks manufactured by GM’s Opel. The night before, Sloan reportedly told stockholders that GM was “too big” to be impeded by “petty international squabbles,” according to a congressional investigation.

Nevertheless, GM was still masquerading as if it had no control of the Opel operation. However, by the summer of 1940, a senior GM executive wrote a more honest assessment for internal circulation only. He explained that while “the management of Adam Opel A.G. is in the hands of German nationals,” in point of fact GM was still “actively represented by two American executives on the Board of Directors.”

Throughout the war, GM in the United States controlled all voting stock and could veto or permit all operations. GM’s-approved president of Opel, Carl Luer, continued to run Opel during America’s war years.

Back in the United States, Sloan tried to obstruct FDR’s war-preparedness planning. He tried to dissuade GM executives with manufacturing and production experience from helping Washington’s early mobilization plans.

By mid-1940, GM had been drafted by Washington to become a major war supplier for the Allies. Sloan had no choice but to comply, and GM and its employees would ultimately make enormously valuable contributions to the Allied war effort.

In June 1940, Sloan brought Mooney back to America to head up GM’s key participation in America’s crash program to prepare for war. Mooney’s mere appointment sent shivers through the anti-Nazi boycott and protest committee, which well remembered his 1938 medal for what the Nazis had termed “service to the Reich.”

The Non-Sectarian Anti-Nazi League railed in a letter to Roosevelt: “How should we interpret the placing of a Hitler sympathizer and a Hitler servant (one must render service to the Reich to deserve such a medal) at the throttle of our defense program? Doesn’t that appear suspiciously similar to the planting of Nazi sympathizers in key positions?”

In June 1940, about the same time Mooney returned to America, Sloan wrote to a colleague, expressing disdain for FDR’s democracy while grudgingly acknowledging his admiration for Hitler’s fascist drive, even if that drive had become criminal.

“It seems clear that the Allies are outclassed on mechanical equipment,” Sloan wrote, “and it is foolish to talk about modernizing their Armies in times like these — they ought to have thought of that five years ago. There is no excuse for them not thinking of that except for the unintelligent, in fact, stupid, narrow-minded and selfish leadership which the democracies of the world are cursed with.”

When at the end of 1940 the White House began to insist that GM break off relations with Latin American car dealers suspected of being pro-Nazi, Sloan defiantly refused. He lashed out at Washington, accusing it of protecting communists at home while focusing on GM dealers in South America. “I have flatly declined to cancel dealers,” Sloan wrote in April 1941 to Walter Carpenter, a GM board member and vice president of DuPont.

Days later, on April 18, 1941, Carpenter retorted, “If we don’t listen to the urgings of the State Department in this connection, it seems to me just a question of time ... The effect of this will be to associate the General Motors with Nazi or Fascist propaganda against the interests of the United States ... The effect on the General Motors Corporation might be a very serious matter and the feeling might last for years.”

By now, Assistant Secretary of State Adolf Berle, whose portfolio included the investigation of Nazi fronts and sympathizers in Latin America, had had enough of Sloan and GM executives. Berle circulated a memo asserting “that certain officials of General Motors were sympathetic to or aligned with some pro-Axis groups. ... that this is [a] ‘real Fifth Column’ and is much more sinister than many other things which are going on at the present time.”

Berle called for an FBI investigation.

The FBI’s probe of GM senior executives with links to Hitler found collusion with Germany by Mooney but no evidence of any disloyalty to America. The Aug. 2, 1941 summary of the investigation clearly listed Sloan in the title of the report, but Mooney’s was the only name mentioned in the investigative results. However, in a separate report to FBI director J. Edgar Hoover, the agent stated, “No derogatory information of any kind was developed with respect to Alfred Pritchard Sloan Jr.”

After the war, starting in 1948, GM began openly running Opel operations. GM also collected some $33 million in “war reparations” because the Allies had bombed Opel facilities.

In 1974, a generation after World War II, the company’s controversial history was resurrected by the U.S. Senate Judiciary Committee’s subcommittee on antitrust and monopoly.

GM and Opel’s collusion with the Nazis dominated the opening portion of the subcommittee’s exhaustively documented study.

The report’s author, Judiciary Committee staff attorney Bradford Snell, used GM’s collaboration with the Third Reich as a moral backdrop to help explain the automakers’ plan in more than 40 cities to subvert popular, clean-running electric public transit and convert it to petroleum-burning motor buses — buses that GM would manufacture.

Following the release of the Snell report, the automaker then created its own 88-page rebuttal report, titled “The Truth About American Ground Transport,” whose entire first section, as it turns out, had nothing to do with American ground transport. It was headlined: “General Motors Did Not Assist the Nazis in World War II.”

Another generation later, in the late 1990s, GM’s collaboration with the Nazis was again resurrected when Nazi-era slave laborers threatened to sue GM and Ford for reparations. At the time, a GM spokesman told a reporter at The Washington Post that the company “did not assist the Nazis in any way during WWII.” The effort to sue GM and Ford was unsuccessful, but both Ford and GM, concerned about the facts that might come to light, commissioned histories of their Nazi-related past.

In the case of Ford, the company issued its 2001 report, compiled by historian Simon Reich, plus the original underlying documentation, all of which was made available to the public without restriction. Ford immediately circulated CDs with the data to the media. Researchers and other interested parties may today view the actual documents and photocopy them.

The Reich report concluded, among other things, that Ford-Werke, the company’s German subsidiary, used slave labor from the Buchenwald concentration camp in 1944 and 1945 and functioned as an integral part of the German war machine. Ford officials in Detroit have publicly commented on their Nazi past, remained available for comment, apologized and have generally helped all those seeking answers about its involvement with the Hitler regime.

As for GM, it commissioned eminent business historian Henry Ashby Turner Jr. in 1999 to conduct an internal investigation.

Turner, author of several favorably reviewed books, including “German Big Business and the Rise of Hitler,” was well known for his insistence that big business did not make a pivotal contribution to the rise of Hitlerism.

GM, however, declined to release Turner’s internal report or discuss the company’s Nazi-era or New Deal-era history or archival holdings when contacted by this reporter.

Turner’s commissioned examination was digitized on CD-ROMs and donated to Yale’s Sterling Memorial Library, where the collection is categorized as being “open to the public.” In fact, the obscure collection can only be viewed on a computer terminal; printouts or digital copies are not permitted without the written consent of GM attorneys.

In July 2005, Turner published the book “General Motors and the Nazis: The Struggle for Control of Opel, Europe’s Biggest Carmaker” (Yale University Press). The book features 158 chapter-text pages of carefully detailed and footnoted information, plus notes, an index and a short appendix. Although the book has been reviewed, BookScan, which tracks about 70 percent of retail book sales for the publishing industry, reported in late October that only 139 copies of the Turner book had been sold to the key outlets monitored by the service.

In his book, Turner, relying on his work as GM’s historian, disputed many earlier findings about GM’s complicity with the Nazis, concluding that charges that GM had collaborated with the Nazis even after the United States and Germany were at war “have proved groundless.”

Turner rejects “the assumption that the American corporation did business in the Third Reich by choice,” asserting, “Such was not the case.” He adds that GM had no option but to return wartime profits to its stockholders, since “the German firm prospered handsomely from Hitler’s promotion of the automobile and from the remarkable recovery of the German economy.”

However, Turner does state explicitly that “by the end of 1940 more than 10,000 employees at Opel’s Russelsheim plant were engaged in producing parts for the Junkers bombers heavily used in raining death and destruction on London and other British cities during the air attacks of the Battle of Britain.”

Turner also condemns GM for taking the Opel wartime dividends, which included profits made off of slave labor.

He writes, “But regardless of who [in the GM corporate structure] decided to claim that tainted money, its receipt rendered GM guilty, after the fact, of deriving profit from war production for the Third Reich made possible in part from the toil of unfree workers.”

Aware that questions would arise about his relationship with GM, Turner’s book states in its preface: “This book was not commissioned by General Motors. It was written after the documentation project was completed and without any financial support from GM. Its contents were seen by no one at GM prior to publication. It is therefore an independent undertaking by the author, who bears sole responsibility for its contents.”

Turner did not respond to voice mail and email messages seeking information about his sponsored GM history project, his subsequent book or other relevant topics.

Simon Reich, who compiled Ford’s Hitler-era documents, bristled at the whole idea. “Ford decided to take a very public, open and transparent route,” he stated. “Any serious researcher can go into the [Henry Ford] archive, see the documents in paper form, and have them copied. Compare and contrast this with the fact that GM conducted a very private study and the original hard-copy documentation upon which the study was made has never been made available, and today cannot be copied without the GM legal department’s permission.”

Between the unpublished GM internal investigation, the restricted files at Yale and the little-known insights offered in Turner’s book, the details of the company’s involvement with the Hitler regime have remained below the radar.

GM has maintained a special combative niche in the annals of American corporate history, achieving a reputation for suppressing books, obstructing access to archival records and frustrating critics from Ralph Nader to Bradford Snell.

The censuring even extended to Sloan himself after he retired. GM attorneys fought efforts by the Nazi-era GM president to publish his memoirs. He had to go to court against GM to get his autobiography published in 1964. Sloan died two years later.

Edwin Black is the author of the award-winning “IBM and the Holocaust” and the recently published "Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives."