|12/6/2006 8:56:00 AM|
|NEWS: GM Helped Mobilize The Third Reich
The inside story of how General Motors helped mobilize the Third Reich.
Jewish Telegraphic Agency
(See Web Exclusive Story Attached Below)
On May 2, 1934, after practicing his Sieg Heil! salute in front of a mirror, James D. Mooney, president of the General Motors Overseas Corp., and two other senior executives from General Motors and its German division, Adam Opel A.G., went to meet Adolf Hitler in his Chancellery office in Berlin.
As Mooney traversed the long approach to Hitler's desk, he began to pump his arm in a stern-faced Sieg Heil. But the Fuhrer surprised him by getting up from his desk and meeting Mooney halfway, not with a salute but a businesslike handshake.
This was, after all, a meeting about business - strategic business that would endure throughout Hitler's regime, reaping huge profits for the Detroit-based automaker and providing major employment to German citizens who would eventually manufacture the trucks that would drive Nazi troops into Europe.
The automaker's dealings with the Third Reich were well documented in thousands of pages of little-known and restricted Nazi-era and New Deal-era documents uncovered in this JTA investigation.
GM has repeatedly declined to comment for this story and has steadfastly denied for decades - even in the halls of Congress - that it actively assisted the Nazi war effort.
However, documentation and other evidence reveals that GM and its subsidiary Opel became willing and indispensable cogs in the Third Reich's rearmament juggernaut, providing trucks that would enable Hitler to conquer Europe and destroy millions of lives.
The documentation also reveals that while General Motors' German operation was complying with Hitler's anti-Semitic dictates, GM's president, Alfred P. Sloan Jr., was undermining the New Deal of President Franklin D. Roosevelt, which Sloan viewed as socialistic and pro-union.
Hitler turned to GM because he knew it was the biggest auto and truck manufacturer in Germany - indeed all of Europe. Since 1929, GM had owned and operated the 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, dominating Germany's auto industry.
Impressive production statistics aside, the Fuhrer was fascinated with every aspect of the automobile, its history, its inherent liberating appeal and its application as a weapon of war.
To conquer Europe, Hitler knew Germany needed to rise above the horse-drawn divisions it deployed in World War I. It needed to motorize, to blitz, that is, to attack with lightning speed. Germany later would 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.
A few weeks after Mooney's long meeting with Hitler, the company publication, General Motors World, recounted the meeting: "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 imagine the menace that Hitler would become.
Yet to the car company, its longtime relationship with Hitler was always about making money - billions in 21st-century dollars.
At first, GM hoped it 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. Hitler was eager to mass-produce his dream, the people's car or volkswagen, so more Germans would have access to affordable personal transportation and pleasure driving.
Clearly, Hitler saw the mass adoption of autos as part of Germany's great destiny. But quickly, Sloan and Mooney realized that the Reich military machine was, in fact, the corporation's best customer in Germany. Sales to the army yielded a greater per truck profit than civilian sales - a hefty 40 percent more. So GM preferred supplying the military, which never ceased its preparations to wage war against Europe.
Along the way, GM became one of Germany's leading employers, providing 17,000 jobs by 1934 and growing to 27,000 in 1938, plus slave laborers.
By 1937, GM's subsidiary 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.
Just days after Hitler came to power on Jan. 30, 1933, a worldwide anti-Nazi boycott erupted, led by the American Jewish Congress, the Jewish War Veterans and a coalition of anti-fascist, pro-labor, interfaith and American patriotic groups. Their objective was to fracture the German economy, not resurrect it.
The anti-Nazi protesters vowed not only to boycott German goods, but to picket and cross-boycott any American companies doing business with Germany. In the beginning, few understood that in boycotting Opel of Germany, they were actually boycotting General Motors. GM also wanted Opel to appear German-owned, to better appeal to the German people.
Against this backdrop, GM president Sloan and overseas president Mooney worked hard to obscure Opel's U.S. ownership and control.
Starting in 1934, they concocted the concept of a "directorate," composed 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.
By the spring of 1933, the world was beginning to learn about the savagery of the Nazi regime and the Reich's determination to crush its Jewish community and threaten its neighbors. By late spring, concentration camps such as Dachau were generating headlines as well.
Meanwhile, GM's subsidiary vigorously joined the anti-Jewish movement required of leading businesses serving the Reich. Jewish employees and suppliers became verboten. Established dealers with Jewish blood were terminated. Even longtime executives were discharged if Jewish descent was detected.
In 1938, just months after the Nazis' annexation of Austria and only months before vicious state-sponsored Kristallnacht pogrom against Jews, Mooney received the German Eagle with Cross, the highest medal Hitler awarded to foreign commercial collaborators and supporters.
Oiling The Machinery
Among the decisions made in America beginning in about 1935 was one transferring to Germany the technology to produce the modern gasoline additive tetraethyl lead, commonly called "ethyl," or leaded gasoline. This allowed the Reich to boost octane, which provided better automotive performance, yielding a faster and more mobile fighting force.
As early as 1934, however, America's War Department was apprehensive about the transfer of such proprietary chemical processes.
Yet GM moved quickly - in conjunction with its close ally Standard Oil. Each company took a one-quarter share of the Reich ethyl operation, while I.G. Farben, the giant German chemical conglomerate, controlled the remaining 50 percent.
The plants were built. The Americans supplied the technical know-how. Captured German records reviewed decades later by a U.S. Senate investigating committee found this wartime admission by the Nazis: "Without lead-tetraethyl, the present method of warfare would be unthinkable."
Years after the war, Nazi armaments chief Albert Speer told a congressional investigator that Germany could not have attempted its September 1939 blitzkrieg of Poland without the performance-boosting additive.
In the months leading up to the invasion of Poland, GM president Sloan defended his close collaboration with Hitler.
In an April 1939 letter to an objecting stockholder, he stated 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 wrote, "such matters should not be considered the business of the management of General Motors."
As the plans for the war progressed, urgent orders poured in for Blitz truck spare parts to be delivered to Reich bases near the Polish border. Days later in August, nearly 3,000 Opel employees, from factory workers to senior managers, were drafted into the Wehrmacht (German Army). Around the same 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.
Still, GM was masquerading as if it did not control its Opel operations. By the summer of 1940, however, 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 is still "actively represented by two American executives on the Board of Directors."
Despite the facade, throughout the war, GM in the United States controlled all voting stock and could veto or permit all operations. Like any nation at war, however, the Reich alone determined what weapons would be made by its militarized factories. That said, it was GM's decision to remain operating in Germany.
As anticipated, Opel's Brandenburg facilities were conscripted and converted to an airplane-engine plant supplying the Luftwaffe's JU-88 bombers. Later, Opel's plants also built land mines and torpedo detonators.
GM And Sloan At Home
Back in the United States, Sloan tried to obstruct FDR's war preparedness planning by dissuading GM executives with needed manufacturing and production experience from helping Washington's early mobilization plans.
In 1940, Sloan asked Danish-born William Knudson, who had ascended to become president of GM, not to leave the company and help Washington's war efforts. Sloan, who had become chairman of the company in 1937, warned his friend that the Roosevelt administration would make a "monkey out of you."
Knudson replied, "That isn't important, Mr. Sloan. I came to this country [from Denmark] with nothing. It has been good to me. Rightly or wrongly, I feel I must go." Sloan retorted, "That's a quixotic way of looking at it."
By mid-1940, GM had been drafted by Washington to become a major war supplier for the Allies. 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?"
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 du Pont.
Days later, on April 18, 1941, Carpenter retorted, "I think that General Motors has to consider this problem from three standpoints; first, from the commercial, second, the patriotic and, third, the public relations standpoint ... We are definitely a part of the nation here and our future is very definitely mingled with the future of this country. The country today seems to be pretty well committed to a policy opposite to Germany and Italy."
Carpenter continued with a blunt warning. "If we don't listen to the urgings of the State Department in this connection," he said, "it seems to me just a question of time ... The effect of this will be to associate 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."
A few weeks later, in May 1941, a year-and-a-half after World War II broke out, with newspapers and newsreels constantly transmitting the grim news that millions had been displaced, murdered or enslaved by Nazi aggression and that London was decimated by the blitz bombing campaign, Sloan, then in his mid-60s, told his closest executives during a Detroit briefing: "I am sure we all realize that this struggle that is going on though the world is really nothing more or less than a conflict between two opposing technocracies manifesting itself to the capitalization of economic resources and products and all that sort of thing."
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."
Profit On Both Sides
After Germany declared war on America on Dec. 11, 1941, all American corporate interests in Germany or under German control were systematically placed under the jurisdiction of a Reich-appointed "custodian" for enemy-owned property. In practice, the "custodian" was akin to a court-appointed receiver. This generally meant re-appointing members of the pre-existing management team, although these managers no longer reported directly to their American masters in the United States.
In the case of Opel, Carl Luer, longtime member of the Opel Supervisory Board, company president and Nazi Party stalwart, was appointed by the Reich to run Opel as custodian, but only some 11 months after America entered the war. In anticipation of the outbreak of hostilities, GM had appointed Luer to be president of Opel in late 1941, just before war broke out. In other words, the existing GM-approved president of Opel continued to run Opel during America's war years.
Meanwhile, in the wartime months and years that ensued, 1941-1945, GM built and operated some $900 million worth (about $120 billion in today's dollars) of defense manufacturing facilities for the Allies. Almost all of the company's undertakings were propped up by federal programs that guaranteed profit and "cost-plus" contracts, various subsidies, tax benefits and other incentives then available to defense contractors to produce goods for the war effort.
Secretary of War Henry Stimson later explained that when a capitalist country wages war, "you have got to let business make money out of the process, or business won't work."
Gen. Lucius Clay, who oversaw war materiel contracts, confessed, "I had to put into production schedule the largest procurement program the world had ever seen. Where would I find somebody to do that? I went to General Motors."
GM also reaped the financial benefits of its relationship with the Third Reich. During the pre-war Hitler years, GM entered its Opel proceeds under "reserves" instead of listing the profits as ordinary income. Then during America's war years, GM declared it had abandoned its Nazi subsidiary and took a complete tax write-off under special legislation signed by Roosevelt in October 1942. The write-off of nearly $35 million created a tax reduction of "approximately $22.7 million" or about $285 million in 21st-century money, according to an internal Opel document.
And Opel's Carl Luer kept on making profits for the company during those war years. Opel produced trucks, bomber engines, land mines, torpedo detonators and other war materiel, a significant amount of it by prisoner laborers or other coerced workers. Those profits - and GM's 100 percent stock ownership - were preserved by Luer, even though GM and Opel ostensibly severed ties with each other after America entered the war.
During the Hitler years, many of those excess profits were used to acquire other companies and properties, only increasing Opel's assets in Germany. After the war, starting in 1948, GM began regaining control over Opel operations and eventually its monumental assets as well as blocked dividends. GM also collected some $33 million in "war reparations" because the Allies had bombed its German facilities.
Examining The Past
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, which would be made by GM. (See related story on our Web site, JNonline.us.)
After Snell's report was presented, GM immediately went on the counterattack, denying Snell's charges about both its domestic conduct and its collusion with the Nazis.
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 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.
Ford 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 business historian Henry Ashby Turner Jr. in 1999 to conduct an internal investigation. Turner, author of German Big Business and the Rise of Hitler, was 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 originally contacted by this reporter.
How Open To The Public?
Turner's commissioned examination, along with GM Opel documents assembled for the probe, were digitized on CD-Rom 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.
Turner later published the book General Motors and the Nazis: The Struggle for Control of Opel, Europe's Biggest Carmaker (Yale University Press, 2005), written from his work as GM's historian. The book features carefully detailed and footnoted information, plus notes, an index and a short appendix.
In his book, Turner 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." Turner also states 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 voicemail and e-mail 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.
Nonetheless, GM's impact in both the United States and the Third Reich was monumental.
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."
Pictures are from:
Werner Oswald "Kraftfahrzeuge und Panzer der Reichwehr, Wehrmacht und Bundeswehr", 1982, Motorbuch Verlag Stuttgart. eBay Deutschland. Reinhard Frank "Lastkraftwagen der Wehrmacht", PODZUN-PALLAS, 1992. Bart Vanderveen "Historic Military Vehicles Directory", "After the Battle" publication, 1989.Eckhart Bartels "Opel Fahrzeug-Chronik 1887-2000", Podszun, 2000. Military Vehicles Sales & Appraisal Service. www.autogallery.org.
Web Exclusive: How GM and other petroleum boosters subverted U.S. mass transit
Edwin Black Jewish Telegraphic Agency
While GM was mobilizing the Third Reich, the company - ironically - was leading a criminal conspiracy to monopolistically undermine mass transit in dozens of American cities.
The aim was to enhance its profits by addicting the United States to oil. The war in Europe had been over for just 16 months when, on Oct. 2, 1946, a memo from the Department of Justice landed on the desk of J. Edgar Hoover, outlining elements of the GM conspiracy.
At the center was National City Lines, a company that suddenly arose in 1937, one ostensibly run by five barely educated Minnesota bus drivers, the Fitzgerald brothers.
Yet the Fitzgeralds miraculously marshaled millions of dollars to buy up one failing trolley system after another.
Soon, through a patchwork of subsidiaries, the brothers owned or controlled transit systems in more than 40 cities. Generally, when National City Lines acquired the system, the tracks were pulled from the street, the beloved electric trolleys were trashed or burned, and the whole system was replaced with more expensive, unpopular and environmentally hazardous motor buses that helped addict America to oil.
The Justice Department discovered that National City Lines was a front company for General Motors, in league with Mack Truck, Phillips Petroleum, Standard Oil of California and Firestone Tires - all petroleum interests. The companies became the major preferred stockholders of National City Lines, but operated behind the scenes.
The scheme worked this way: The manufacturers purchased NCL preferred stock to acquire transit lines on condition that when the systems were acquired, the trolleys would be dismantled and replaced with motor buses. All the conspirators gained immensely when non-polluting electric systems were replaced by oil-burners. Phillips and Standard sold oil products. Firestone sold the tires. GM and Mack divvied up the bus manufacturing and sales market according to an agreed-upon formula.
Transit systems in 16 states were converted, adversely affecting millions of Americans, who had to pay higher fares for lesser, more unpopular service. Dozens more cities were targeted in the $9.5 million scheme. In April 1947, indictments alleging two counts of criminal conspiracy were handed down against General Motors, Mack Truck, Phillips Petroleum, Standard Oil of California and Firestone Tires, as well as against numerous key executives of the companies.
The defendants were found guilty on one of the two counts: conspiring to monopolize the bus business by creating a network of petroleum-based transit companies that were forbidden to use transportation or technology products other than those supplied by the defendants themselves.
The jury found the defendants not guilty on the count alleging a conspiracy to actually control those transit systems.
On April 1, 1949, the judge handed down his sentence: a $5,000 fine to each corporate defendant except Standard, which was fined $1,000.
As for National City Lines, president E. Roy Fitzgerald and his co-conspirators at GM and the other companies, they, too, were fined. Each was ordered to "forfeit and pay to the United States of America a fine in the amount of one dollar."
The cases were appealed - even the one-dollar penalties - all the way to the U.S. Supreme Court, which allowed the convictions to stand. The government filed a civil action against the same circle of companies, trying to stop their continued conduct. But the government was unsuccessful.
Undaunted, National City Lines and its many subsidiaries continued into the 1950s to acquire, convert and operate urban transit systems using evolved methods.