GM and the Nazis: The Inside Story of How General Motors Secretly Mobilized the Third Reich To Conquer Europe (Part One)
By Edwin Black
June
9th 2008
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.
Just the day before, May 1, 1934, under a brilliant, cloudless sky, Mooney,
president of the General Motors Overseas Corporation, 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 Fuhrer’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.
As Mooney arrived at the airfield, about 3:30 in the afternoon, the spectacle
dazzled him. Sweeping swastika banners stretching 33 feet wide and soaring 150
feet into the air fluttered from 43-ton steel towers. Each tower was anchored in
13 feet of concrete to resist the winds as steadfastly as the Third Reich
resisted all efforts to moderate its program of rearmament and oppression.
Thousands of other Nazi flags fluttered across the grounds as dense column
after column of Nazis, marching shoulder to shoulder in syncopation, flowed into
rigid formation. Each of the 13 parade columns boasted between 30,000 and 90,000
storm troopers, army divisions, citizen brigades and blond-blue Hitler Youth
enrollees. Finally, after four hours, the tightly packed assemblage totaled
about 2 million marchers and attendees.
Hitler eventually arrived in an open-air automobile that cruised up and down the
field amid the sea of devotees. Accompanied by cadres of SS guards, Hitler was
ushered to the stage, stopping first to pat the head of a smiling boy. This
would be yet another grandiose spectacle of Fuhrer-worship so emblematic of the
Nazi regime.
When ready, Hitler launched into one of his enthralling speeches, made all the
more mesmerizing by 142 loudspeakers sprinkled throughout the grounds. As the
Fuhrer demanded hard work and discipline, and enunciated his vision of National
Socialist destiny, the crisp sound of his voice traveled across an audience so
vast that it took a moment or two for his words to reach the outer perimeter of
the throng. Hence, the thunderous applause that greeted Hitler’s remarks arrived
sequentially, creating an aural effect of continuous, overlapping waves of
adulation.
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 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 — one of many contacts between the
Nazis and GM officials that are spotlighted in this multipart investigation that
scoured and re-examined 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. The documentation also reveals that while
General Motors was mobilizing the Third Reich and cooperating within Germany
with Hitler’s Nazi revolution and economic recovery, GM and its president,
Alfred P. Sloan, were undermining the New Deal of Franklin D. Roosevelt and
undermining America’s electric mass transit, and in doing so were helping addict
the United States to oil.
For GM’s part, the company has repeatedly declined to comment when approached by
this reporter. It has also steadfastly denied for decades — even in the halls of
Congress — that it actively assisted the Nazi war effort or that it
simultaneously subverted mass transit in the United States. It has also argued
that its subsidiary was seized by the Reich during the war. The company even
sponsored an eminent historian to investigate, and he later in his own book
disputed many earlier findings about GM’s complicity with the Nazis. In that
book, he concluded that assertions that GM had collaborated with the Nazis even
after the United States and Germany were at war “have proved groundless.”
A Fascination With Four Wheels
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 long-time 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.
Impressive production statistics aside, the Fuhrer was fascinated with every
aspect of the automobile, its history, its inherent liberating appeal and, of
course, its application as a weapon of war. While German automotive engineers
were famous for their engineering innovations, the lack of ready petroleum
supplies and gas stations in Germany, coupled with the nation’s massive
depression unemployment, kept autos out of reach for the common man in Nazi
Germany. In 1928, just before the Depression hit, one in five Americans owned a
car, while in Germany, ownership was one in 134.
In fact, just two months before Mooney’s meeting at the Chancellery, Hitler had
commented at the Berlin International Automobile and Motor Cycle Show: “It can
only be said with profound sadness that, in the present age of civilization, the
ordinary hard-working citizen is still unable to afford a car, a means of
up-to-date transport and a source of enjoyment in the leisure hours.”
Even if few Germans could afford cars — GM or otherwise — the company did
provide many in the Third Reich with jobs. Hitler was keenly aware that GM,
unlike German carmakers, used mass production techniques pioneered in Detroit,
so-called “Fordism” or “American production.”
As the May 2, 1934, Chancellery meeting progressed, Hitler thanked Mooney and GM
for being a major employer — some 17,000 jobs — in a Germany where Nazi success
hinged on re-employment. Moreover, since Opel was responsible for some 65
percent of auto exports, the company also earned the foreign currency the Reich
desperately needed to purchase raw materials for re-employment as well as for
the regime’s crash rearmament program. Now, as Hitler embarked on a massive,
threatening rearmament program, GM was in a position to make Germany’s military
a powerful, modern and motorized marvel.
The Quest For The ‘People’s Car’
During the meeting with Mooney, Hitler estimated that if Germany were to emulate
American ratios, the Reich should possess some 12 million cars. But, Hitler
added, 3 million cars was a more realistic target under the circumstances. Even
this would be a vast improvement over the 104,000 vehicles manufactured in
Germany in 1932.
Mooney told Hitler that GM was willing to mass produce a cheap car, costing just
1,400 marks, with the mass appeal of Henry Ford’s Model T, if the Nazi regime
could guarantee 100,000 car sales annually, issue a decree limiting dealer
commissions and control the price of raw materials. Many automotive concerns
were vying for the chance to build Hitler’s dream, a people’s car or
“volkswagen,” but GM was convinced it alone possessed the proven production
know-how. An excited Hitler showered his GM guests with many questions.
Would the cost of garaging a car be prohibitive for the average man? Could
vehicles parked outdoors be damaged by the elements? Mooney answered that the
same vehicle built to withstand wind, dust and rain at 40 mph to 60 mph could
stand up to overnight exposure outdoors. To promote automobile ownership Hitler
even promised something as trivial as legalized street parking.
Of course, Hitler had already committed the Reich to expedite completion of the
world’s first transnational network of auto highways, the Autobahn. Now, to
further promote motorcar proliferation, Hitler suggested to Mooney that the
German government could also reduce gasoline prices and gasoline taxes. Hitler
even asked if Opel could advise him how to prudently reduce car insurance rates,
thus lowering overall operating costs for average Germans.
The conference in Hitler’s Chancellery office, originally scheduled for a
quarter hour, stretched to 90 minutes.
The next morning, May 3, 1934, an excited Hitler told Keppler, “I have been
thinking all night about the many things that these Opel men told me.” He
instructed Keppler, “Get in touch with them before they leave Berlin.” Hitler
wanted to know still more. Mooney spent hours later that day ensconced in his
hotel suite composing written answers to the Fuhrer’s many additional questions.
Clearly, Hitler saw the mass adoption of autos as part of Germany’s great
destiny. No wonder Mooney and GM were optimistic about the prospects for a
strategic relationship with Nazi Germany.
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.”
Ironically, Hitler’s famous inability to follow up on ideas caused GM officials
to wonder if they had been too revealing in their company publication’s coverage
of the Chancellery meeting. Copies of General Motors World were seized by Opel
company officials before they could circulate in Germany. Mooney later declared
he would do nothing to make Adolf Hitler angry.
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 re-arm even though the world expected that
Germany would plunge Europe and America into a devastating war.
Typical of news coverage of events at the time was an article in the March 26,
1933, edition of The New York Times, headlined “Hitler a Menace.”
The article, quoting former Princeton University President John Hibben, echoed the war fear spreading across both sides of the Atlantic. “Adolf Hitler is a menace to the world’s peace, and if his policies bring war to Europe, the United States cannot escape participating,” the article opened. This was one of dozens of such articles that ran in American newspapers of the day, complemented by continuous radio and newsreel coverage in the same vein.
However, the commanding, decision-making force at the carmaker was not Mooney,
GM’s man in Nazi Germany, but rather the company’s cold and calculating
president Alfred P. Sloan, who operated out of corporate headquarters in Detroit
and New York.
Who was Sloan?
Mr. Big
Sloan lived for bigness. Slender and natty, attired in the latest collars and
ties, Sloan commonly wore spats, even to the White House. He often out-dressed
his former GM boss, billionaire Pierre du Pont. An electrical engineer by
training, the Massachusetts Institute of Technology graduate was a strategic
thinker who was as driven by a compulsion to grow his company as he was
compelled to breathe oxygen.
“Deliberately to stop growing is to suffocate,” Sloan wrote in his 1964
autobiography about his years at GM. “We do things in a big way in the United
States. I have always believed in planning big, and I have always discovered
after the fact that, if anything, we didn’t plan big enough. I put no ceiling on
progress.”
For Sloan, motorizing the fascist regime that was expected to wage a bloody war
in Europe was the next big thing and a spigot of limitless profits for GM. But
unlike many commercial collaborators with the Nazis who were driven strictly by
the icy quest for profits, Sloan also harbored a political motivation. Sloan
despised the emerging American way of life being crafted by President Franklin
Delano Roosevelt. Sloan hated Roosevelt’s New Deal, and admired the strength,
irrepressible determination and sheer magnitude of Hitler’s vision.
For Sloan, the New Deal — with its Social Security program, government
regulation and support for labor unions — clanged an unmistakable death knell
for an America made great by great corporations guided by great corporate
leaders.
In a 1934 letter to Roosevelt’s Industrial Advisory Board, Sloan complained
bitterly that the New Deal was attempting to change the rules of business so
“government and not industry [shall] constitute the final authority.” In Sloan’s
view, GM was bigger than mere governments, and its corporate executives were
vastly more suited to decision-making than “politicians” and bureaucrats who he
felt were profoundly unqualified to run the country.
Government officials, Sloan believed, merely catered to voters and prospered
from backroom deals.
Sloan’s disdain for the American government went beyond ordinary political
dissent. The GM chief so hated the president and his administration that he
co-founded a virulently anti-Roosevelt organization, and donated to at least one
other Roosevelt-bashing group. Moreover, Sloan actually pressured GM executives
not to serve in government positions, although many disregarded his advice and
loyally joined the government’s push for war preparedness.
At one point, Sloan’s senior officials at GM even threatened to launch a
deliberate business slowdown to sabotage the administration’s recovery plan,
according to papers unearthed by one historian. At the same time, Sloan and GM
did not fail to express admiration for the stellar accomplishments of the Third
Reich, and went the extra mile to advance German economic growth.
Indeed, Sloan felt that GM could — and should — create its own foreign policy,
and back the Hitler regime even as America recoiled from it. “Industry must
assume the role of enlightened industrial statesmanship,” Sloan declared in an
April 1936 quarterly report to GM stockholders. “It can no longer confine its
responsibilities to the mere physical production and distribution of goods and
services. It must aggressively move forward and attune its thinking and its
policies toward advancing the interest of the community at large, from which it
receives a most valuable franchise.”
In ramping up auto production in the Nazi Reich, Sloan understood completely
that he was not just manufacturing vehicles. Sloan and Hitler both knew that GM,
by creating wealth and shrinking unemployment, was helping to prop up the Hitler
regime.
When explaining his ideas of mass production to Opel car dealers, Sloan proudly
declared what the enterprise would mean: “The motor car contributes more to the
wealth of the United States than agriculture. The automobile industry is a
wealth-creating industry.” What was true in America would become true in
Germany. Ironically, GM chose the alliance with Hitler even though doing so
threatened to imperil GM at home. 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 GM of Detroit. Effectively, they were one and the same.
Edwin Black is the award-winning, New York Times and international bestselling
author of IBM and the Holocaust, and six other books, as well as the forthcoming
book, Nazi Nexus (Nov 2008 Dialog Press). He can be reached at
www.edwinblack.com. This article is adapted from an award-winning series
syndicated by the JTA based on Black's book Internal Combustion (St. Martin's
Press) as well as additional research.
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