Nazis rode to war on GM wheels
Edwin Black
Sunday, January 7, 2007
James D. Mooney thrust his arm diagonally, watching its reflection in his hotel suite mirror. Not quite right. He tried once again. Still not right. Was it too stiff? Too slanted? Should his palm stretch perpendicular to the ceiling; should his arm bend at a severe angle? Or should the entire limb extend straight from shoulder to fingertips? Should his sieg heil project enthusiasm or declare obedience? Never mind, it was afternoon. Time to go see Hitler.
J
ust the day before, May 1, 1934, under a brilliant, cloudless sky, Mooney, president of the General Motors Overseas Corp., climbed into his automobile and drove toward Tempelhof Field at the outskirts of Berlin to attend yet another hypnotic Nazi extravaganza. This one was the annual May Day festival.
Tempelhof Field was a sprawling, oblong-shaped airfield. But for May Day, the immense site was converted into parade grounds. Security was more than tense, it was paranoid. All cars entering the area were meticulously inspected for anti-Hitler pamphlets or other contraband. But not Mooney's. The Führer's office had sent over a special windshield tag that granted the General Motors' chief carte blanche to any area of Tempelhof.
Mooney would be Hitler's special guest....
Reveling in the Führer
General Motors World, the company house organ, covered the May Day event glowingly in a several-page cover story, stressing Hitler's boundless affinity for children. "By nine, the streets were full of people waiting to see Herr Hitler go meet the children," the publication reported.
The next day, May 2, 1934, after practicing his sieg heil in front of a mirror, Mooney and two other senior executives from General Motors and its German division, Adam Opel A.G., went to meet Hitler in his Chancellery office. Waiting with Hitler would be Nazi Party stalwart Joachim von Ribbentrop, who would later become foreign minister, and Reich economic adviser Wilhelm Keppler.
As Mooney traversed the long approach to Hitler's desk, he began to pump his arm in a stern-faced sieg heil. But the Führer 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 -- one of many contacts between the Nazis and GM officials that are spotlighted in thousands of pages of little-known and restricted Nazi-era and New Deal-era documents.
This documentation and other evidence reveals that GM and Opel were eager, willing and indispensable cogs in the Third Reich's rearmament juggernaut, a rearmament that, as many feared during the 1930s, would enable Hitler to conquer Europe and destroy millions of lives.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 company Opel. GM's Opel, infused with millions in GM cash and assembly-line know-how, produced about 40 percent of the vehicles in Germany and about 65 percent of its exports. Indeed, Opel dominated Germany's auto industry.
As the May 2, 1934, Chancellery meeting progressed, Hitler thanked Mooney and GM for being a major employer -- about 17,000 jobs -- in a Germany where Nazi success hinged on re-employment. Moreover, because Opel was responsible for about 65 percent of auto exports, the company also brought in the foreign currency desperately needed by the Reich to purchase raw materials for re-employment as well as for the regime's crash rearmament program. Now, as Hitler embarked on a huge, threatening rearmament program, GM was in a position to make Germany's military a powerful, modern and motorized marvel.
A few weeks after the prolonged Chancellery session, the company publication, General Motors World, effusively recounted the meeting, 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."
For Mooney, and for Germany's branch of GM, the relationship with the Third Reich was first and foremost about making money -- billions in 21st century dollars -- off the Nazi desire to rearm even though the world expected that Germany would plunge Europe and America into a devastating war.
Today, General Motors is reluctant to talk about its links with the Nazis, but a spokesman said, "General Motors finds the atrocities committed by the Nazi regime abhorrent and among the darkest days of our collective history. General Motors deeply regrets any role the company or its vehicles played in the Nazi era."
...
Illusion for profits
To conceal American ownership and reinforce the masquerade that Opel stood as a purely Aryan enterprise, Sloan and Mooney, beginning in 1934, 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. GM as the sole stockholder controlled Opel's board and the corporate votes.
Among the decisions made in America beginning in about 1935 was the 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 that provided better automotive performance by eliminating disruptive engine pings and jolts. Better performance meant a faster and more mobile fighting force -- just what the Reich would ultimately need for its swift and mobile blitzkrieg.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.
Within a few years of partnering with the Hitler regime, Opel began to dwarf all competition. By 1937, GM's subsidiary had grown to triple the size of Daimler-Benz.
In 1938, just months after the Nazi annexation of Austria, Mooney, head of GM's overseas operations, received the German Eagle with Cross, the highest medal Hitler awarded to foreign commercial collaborators and supporters.
On Nov. 9-10, 1938, shortly after Mooney's decoration, nationwide pogroms broke out in Germany against the Jews -- Kristallnacht. The American public was finally shocked onto its heels by the night of officially orchestrated burning, looting and mob action against Jews.
By the summer of 1940, a senior GM executive wrote this 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."
The German-American balance of the many management entities created in the facade of control was constantly shifting during the Hitler years. But regardless of the number of members -- German or American -- on the various directing, managing or executive boards and committees, GM in the United States controlled all voting stock and could veto or permit all operations.
Willing partner with Nazis
For all intents and purposes, though, once war began, Wehrmacht requirements and orders determined the specifics of military manufacturing at Opel. Like any nation at war, including the United States itself, 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, to continue to subject itself to Reich military orders and answer the Reich's call for ever more lethal weapons.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. The factories and infrastructure that GM built during the 1930s were in fact finally used for their intended purpose -- war.
Opel-built trucks on the ground, Opel-powered bombers in the sky and Opel-detonated torpedoes in the seas brought terror to Europe.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.
Trade or treason?
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. 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."
On Dec. 7, 1941, Pearl Harbor was bombed. The United States declared war on Japan. On Dec. 11, German diplomats in Washington called at the State Department to deliver Germany's declaration of war against America. All direct communications between GM and its Opel subsidiary in Germany were necessarily severed, although historians have always wondered about indirect links through Denmark where GM operated a longtime subsidiary. Ranking GM men from Denmark were also in ranking positions both in Opel in Germany and GM in America.
After Germany declared war on America, 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. Generally, the Reich custodian's duty was not to dismember the firm or Aryanize it, but to continue to run the enterprise as efficiently and profitably as possible, holding all assets and profits in escrow until matters would be resolved after the war....
The business of war
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. 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."
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 billion in 21st-century money, according to an internal Opel document.
But Opel's friendly Nazi custodian, 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 the sweat of thousands of prisoner laborers or other coerced workers; some of those workers were tortured if they did not meet expectations.
Those profits and GM's 100 percent stock ownership were preserved by the Reich custodian, 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.In 1953, when GM President Charlie Wilson was nominated to be secretary of defense, he was asked at his confirmation hearing if he could make a decision in the country's interest that was contrary to GM's interest. Wilson shot back with his famous comment, "
I cannot conceive of one, because for years I thought what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big."
Indeed, what GM accomplished in both America and Nazi Germany could not have been bigger.
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." This article is adapted from an investigative series done for the Jewish Telegraphic Agency. Contact us at
insight@sfchronicle.com.
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