The Nazi Party: General Motors & the Third Reich

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.

As the Nazis amassed power, what did General Motors know — and when?

By the spring of 1933, the world was beginning to learn about the lawlessness and savagery of the Nazi regime, and the Reich’s determination to crush its Jewish community and threaten its neighbors.

On March 27, 1933, a million protesters jammed Madison Square Garden in New York, and millions more around the world joined in a coordinated show of protest against Nazi brutality. By May 10, 1933, Nazi-banned books were being torched in public bonfires across Germany. The corporate library at General Motors’ Opel in Germany was purged, as well, of Jewish-authored publications and other undesirable literature.

Beginning in the late spring of 1933, concentration camps such as Dachau were generating headlines reporting great brutality.

By June 1933, Jews everywhere in Germany were being banned from the professional, economic and cultural life of the country. As state-designated pariahs, they were forbidden to remain members of the German Automobile Association, the popular organization for the general German motorist. Hitler’s anti-Semitic demagoguery and the daily, semi-official, violent attacks against Jews were discussed in the American media almost daily.

GM’s president Alfred P. Sloan knew what was happening in Germany. Sloan and GM officials knew also that Hitler’s regime was expected to wage war from the outset. Headlines, radio broadcasts and newsreels made that fact apparent. America, it was feared, would once again be pulled in.

Nonetheless, GM and Germany began a strategic business relationship. That relationship is largely the focus of a JTA investigative series that re-examines the company’s conduct on both sides of the Atlantic before, during and immediately after World War II. The four-part investigation reveals that while General Motors was helping mobilize the Third Reich, it was conspiring to demobilize America’s electric mass transit, and in the process, was helping addict the United States to oil.

Unleashing The Blitzkrieg

Opel became an essential element of the German rearmament and modernization Hitler required to subjugate Europe. To accomplish that, 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 would later unleash a Blitzkrieg, a lightning war. Opel built the three-ton truck named “Blitz” — to support the German military. The Blitz truck became the mainstay of the Blitzkrieg.           

Quickly, Sloan and James D. Mooney, GM’s overseas chief, 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.  

In 1935, GM agreed to locate a new factory at Brandenburg, where it would be geographically less vulnerable to feared aerial bombardment by allied forces. In 1937, almost 17 percent of Opel’s Blitz trucks were sold directly to the Nazi military.

That military sales figure was increased to 29 percent in 1938 — totaling some 6,000 Blitz trucks that year alone. The Wehrmacht, the German military, soon became Opel’s No. 1 customer by far. Other important customers included major industries associated with the Hitler war machine.

Expanding its German workforce from 17,000 in 1934 to 27,000 in 1938 also made GM one of Germany’s leading employers. Unquestionably, GM’s Opel became an integral facet of Hitler’s Reich.

More than just an efficient manufacturer, Opel openly embraced the bizarre philosophy that powered the Nazi military-industrial complex. The German company participated in cultic Fuhrer worship as a part of its daily corporate ethic. After all, until GM purchased Opel in 1929 for $33.3 million, or about one-third of GM’s after-tax profit that year, Opel was an established carmaker with a respected German persona. The Opel family included several prominent Nazi Party members. This identity appealed to rank-and-file Nazis who condemned anything foreign-owned or foreign-made.

For all these reasons, during the Hitler years, Sloan and Mooney both made efforts to obscure Opel’s American ownership and control. As a result, the average storm trooper, Nazi Party member or German motorist accepted the company’s cars and trucks as the product of a purely Aryan firm that was working toward Hitler’s great destiny: “Deutschland uber alles.”

The Masquerade

Opel became an early patron of the National Socialist Motor Corps, a rabid Nazi Party paramilitary auxiliary. Ironically, most of the members of Corps were not drivers, but Germans seeking to learn how to drive to increase national readiness. Opel employees were encouraged to maintain membership in the Motor Corps. Furthermore, Opel cars and trucks were loaned without charge to the local storm trooper contingents stationed near company headquarters at Russelsheim, Germany. As brownshirt thugs went about their business of intimidation and extortion, they often came and went in vehicles bearing prominent Opel advertisements, proud automobile sponsor of the storm troopers.

The Opel company publication, Der Opel Geist, or The Opel Spirit, became just another propagandistic tool of Fuhrer worship, edited with the help of Nazi officials. Hitler was frequently given credit in the publication for Opel’s achievements, and was frequently depicted in Der Opel Geist portraits as a fatherly or stately figure.

Hitler’s voice regularly echoed through the cavernous Opel complex. His hate speeches and pep rallies were routinely piped into the factory premises to inspire the workers. Great swastika-bedecked company events were commonplace, as Nazi gauleiters, or regional party leaders, and other party officials spurred gathered employees to work hard for the Fuhrer and his Thousand-Year Reich. Opel contributed large cash donations to all the right Nazi Party activities. For example, the company gave local storm troopers 75,000 reichsmarks to construct the gauleiter’s new office headquarters.

In the process, Opel became more than a mere carmaker. It became a stalwart of the Nazi community. Working hard and meeting exhausting production quotas were national duties. Employees who protested the intense working conditions, even if members of the Nazi Party, were sometimes visited by the Gestapo. SS officers worked as internal security throughout the plant. Order was kept.

Of course, 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, including one of the largest serving the Frankfurt region. Even long-time executives were discharged if Jewish descent was detected. Those lower-level managers with Jewish wives or parentage who remained with the company did so stealthily, hiding and denying their background.

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.

As early as 1934, however, America’s War Department was apprehensive about the transfer of such proprietary chemical processes. In late December 1934, as GM was considering building leaded gasoline plants for Hitler, DuPont Company board director Irenee du Pont wrote to Sloan: “Of course, we in the DuPont Company have always recognized the propriety and desirability of closely cooperating with the War Department of the United States. …In any case, I know that word has gone to the War Department and have the impression that they would be adverse to disclosure of knowledge which would aid Germany in preparing that chemical.” The profits were simply not worth it, argued du Pont.

Sloan had already bluntly told du Pont, “I do not agree with your reasoning to this question.” Days later, Sloan appended that GM’s commercial rights were “far more fundamental… than the question of making a little money out of lead in Germany.”

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.

Dwarfing The Competition

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 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.

In the meantime, GM was responsible for stunning growth in Germany’s economy. As most economists of the day knew, and as Sloan himself bragged, automobile manufacturing created thousands of factory jobs, hundreds of suppliers, numerous dealerships, widespread motorization and an attached oil industry.           

Moreover, the growth of the highway network, from local roads to the Autobahn, spurred a construction boom that spawned thousands of additional jobs and necessitated hundreds of additional suppliers. Even GM’s own sponsored expert historian, who decades later examined Hitler-era documentation, concluded: “The auto industry spearheaded the remarkable recovery of the German economy that boosted the popularity of the Nazi regime by virtually eliminating within a few years the mass unemployment that had idled a quarter of the workforce and contributed so importantly to Hitler’s rise.”

But Reich currency restrictions obstructed the outflow of cash for profits or even the purchase of raw materials to build trucks. GM in America circumvented those regulations through the overseas sales of German pencils, sewing machines, Christmas tree ornaments and virtually any other exports that would earn foreign currency internationally. Those sales proceeds were then exchanged for profits or raw materials through complicated bank transfers.

On The Homefront

Ironically, while GM’s Opel was a deferential corporate citizen in Nazi Germany, going the extra mile to comply with Reich requirements and making no waves, Sloan helped foment unrest at home as part of the company’s efforts to undermine the Roosevelt administration.

For example, the GM president was one of the central behind-the-scenes founders of the American Liberty League, a racist, anti-Semitic, pro-big business group bent on rallying Southern votes against Roosevelt to defeat him in the 1936 election. The American Liberty League arose out of a series of private gatherings organized in July 1934 by Sloan, du Pont and other businessmen. Some of those meetings were even held at GM’s office in New York.

The businessmen sought to create a well-financed, seemingly grass-roots coalition that du Pont declared should “include all property owners… the American Legion and even the Ku Klux Klan.” Sloan served on the American Liberty League’s national advisory board and was one of a number of wealthy businessmen who each quietly donated $10,000 to its activities. The American Liberty League, which raised more money in 1935 than the National Democratic Party, in turn, funded an array of even more fanatical, racist and anti-Jewish groups.

One such group funded by the American Liberty League was the Southern Committee to Uphold the Constitution. With help from the du Pont family fortune, the Southern Committee circulated what it called “nigger pictures” of Eleanor Roosevelt with African-Americans. Sloan sent a $1,000 check directly to the Southern Committee after those pictures were distributed, according to congressional testimony.

Racist diatribes found in Southern Committee literature included an anti-union screed that complained: “White women and white men will be forced into organizations with black African apes whom they will have to call ‘brother’ or lose their jobs.” The Southern Committee also jointly organized protest marches with the American Nazi “Silver Shirts.”

The American Liberty League also financed the Sentinels of the Republic. The Sentinels of the Republic, in turn, orchestrated incendiary, anti-Semitic letter-writing campaigns, and otherwise provoked a backlash against Roosevelt and what was sometimes derisively labeled his “Jew Deal.”

True, the Sentinels of the Republic bore all the earmarks of a rabble-rousing extremist group. But behind it were some of the nation’s most affluent and well-heeled, supplying the operating cash and direction. Among them: Sun Oil President Howard Pew, investment banker Alexander Lincoln who served as the group’s president, and the president of Pittsburgh Plate Glass, John Pitcairn. Sloan himself wrote a $1,000 check directly to the Sentinels of the Republic.

Only after an April 1936 congressional investigation was Sloan’s financial involvement in the Sentinels outed. Just days after the disclosure, Sloan issued a statement to an inquiring Jewish newspaper in Louisville, promising, “Under no circumstances will I further knowingly support the Sentinels of the Republic.” He added, ambiguously: “I have no desire to enter into any questions involving religious or political questions.”

Although Sloan backed away from further financing of the Sentinels, the GM chief continued to fund and fund raise for another anti-Roosevelt-agitation group, the National Association of Manufacturers. Founded in 1895 as a pro-business organization and still prominent more than 100 years later, NAM sowed anti-union and anti-New Deal discord among Americans in the 1930s through clandestinely owned and operated opinion-molding arms.

Roosevelt openly acknowledged that Sloan, GM, the du Ponts and other corporate giants hated him for his reforms and his efforts to relieve Depression-era inequities. In his final 1936 campaign speech, the president threw down the gauntlet, shouting to an overflow Madison Square Garden crowd, “They are unanimous in their hate for me — and I welcome their hatred.”

Roosevelt added that he wanted his first four years to be remembered as an administration where “the forces of selfishness and of lust for power met their match.”

Fearing Roosevelt’s possible re-election, several of Sloan’s top executives at GM actually considered deliberately extending the financial woes of the Depression, presumably in retaliation against the entire nation. In the final days of the 1936 election campaign, several GM officials met with W.H. Swartz, a Lehman Brothers investment banker, according to a historian who studied the incident.

The GM officials apparently planned to stop investing in and expanding their company in the event of Roosevelt’s expected victory. Swartz’s Nov. 4, 1936, confidential memo about the GM meeting asserted, “Certain General Motors people also felt further capital expenditures could not be expected now, in view of Roosevelt’s possible re-election.” Based on their plans, Swartz predicted “a break in general business next year ... mid-summer is the logical time to expect it,” adding, “I would suggest that the rather intense political emotions of certain of these men may have colored their thinking more than they themselves may have realized.”

Despite the lush opposition funding by Sloan and other affluent anti-New Deal nemeses, Roosevelt was re-elected by a landslide.

While no capital slow-down was actually implemented by GM, Sloan did continue to battle the administration. The conflict was not subtle. Washington knew that Sloan and GM were powerful adversaries. For example, in 1937, when Sloan telephoned Secretary of Labor Francis Perkins to renege on a promise made to meet with labor strikers, Perkins lashed out bitterly at the GM chief.

Shocked at the reversal, Perkins shouted into the phone, “You are a scoundrel and a skunk, Mr. Sloan. You don’t deserve to be counted among decent men…You’ll go to hell when you die… Are you a grown man, Mr. Sloan? Or are you a neurotic adolescent? Which are you? If you’re a grown man, stand up, and be a man for once.” A flabbergasted Sloan protested, “You can’t talk like that to me! You can’t talk like that to me! I’m worth 70 million dollars and I made it all myself! You can’t talk like that to me! I’m Alfred Sloan.”

Shifting gears: From war profiteer to U.S. public transit conspirator

During the late 1930s, Hitler’s persecution of Jews was building to a frenzy even as fears of a war escalated. Nevertheless, General Motors’ German automotive subsidiary, Opel, remained a loyal corporate citizen of the Third Reich — content to obediently do the Nazi regime’s bidding, and unstintingly supporting Hitler’s program on many fronts. These included economic and employment recovery, anti-Jewish persecution, war preparedness and domestic propaganda. In return, Opel prospered.

Hitler was pleased — very pleased. In 1938, just months after the Nazis’ annexation of Austria, James D. 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 again Jews.

President Roosevelt recalled America’s ambassador, plunging German-American relations to their lowest point since Hitler assumed power. All things American came under special scrutiny in Germany.

By now, the truth about GM’s ownership of the Opel car and truck operation was out in the open among Germans. Reich armament officials increasingly directed Opel’s output, including mandating that nearly all vehicles be devoted to military use.

These are among the many findings of a multipart JTA investigation that culled and re-examined thousands of pages of Nazi-era and New Deal-era documents that shed new light on GM’s relationship with the Third Reich. They reveal that even as GM and its president, Alfred P. Sloan, were helping mobilize the resurgent German military, they were undermining the New Deal of Franklin D. Roosevelt and undermining America’s electric mass transit, and in doing so helped addict the United States to oil.

GM has declined comment for this story. The company has steadfastly denied for decades that it actively assisted the Nazi war effort or  that it simultaneously subverted mass transit in the United States.

Laissez Faire, Sloan-style

In the months leading up to the feared 1939 invasion of Poland, Sloan, GM’s president, defended his close collaboration with Hitler. Brushing off attacks for his partnership with a Nazi regime already notorious for filling concentration camps, taking over Austria and now threatening to install the Master Race across Europe, Sloan was stony and proud.

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.”

Indeed, in August of 1939, the world wondered when Hitler might invade Poland. During those days, Opel, under the direct day-to-day supervision of GM’s senior executive, Cyrus Osborn, played its role in Germany’s fast-paced military plans. The company was already manufacturing thousands of Blitz trucks that would become a mainstay of the Reich’s upcoming Blitzkrieg.

The German military in early August urgently ordered 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. Moreover, at about that time, GM’s Osborn 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.

Shortly after war broke out in Europe, however, GM executives in Germany tried to distance the American company from its involvement in the brutal German war machine. The Opel board was restructured to ensure that GM executives maintained a controlling presence on the board of directors but continued invisibility in daily management. This was accomplished in part by bringing in GM’s reliable Danish chief, Albin Madsen, and maintaining two Americans on that board.

The company’s 1939 annual report, released in April 1940, stated: “With full recognition of the responsibility that the manufacturing facilities of Adam Opel A.G. must now assume under a war regime, the Corporation has withdrawn the American personnel formerly in executive charge… and has turned the administrative responsibilities over to German nationals.”

However, GM was still masquerading. 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 is still “actively represented by two American executives on the Board of Directors.”

The construction and 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.

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.

Back in the United States, Sloan tried to obstruct FDR’s war preparedness planning. The GM chief tried to dissuade GM executives with needed manufacturing and production experience from helping Washington’s early mobilization plans. In one typical 1940 case, 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, with or without Sloan’s acquiescence, 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. He was installed as an assistant to the new GM president to take “full charge of all negotiations [with Washington] involving defense equipment …”

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…?”

Collusion But No Disloyalty          

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.”

Sloan added a poignant contrast: “… But when some other system develops stronger leadership, works hard and long, and intelligently and aggressively — which are good traits — and, superimposed upon that, develops the instinct of a racketeer, there is nothing for the democracies to do but fold up. And that is about what it looks as if they are going to do.”

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 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.”

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.”

He then continued in a rambling, incoherent fashion, trying to further justify the company’s Nazi business dealings.

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.”

Opel’s Friendly Nazi Custodian

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. 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, the 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. The company continued as a major German war profiteer, and GM knew its subsidiary was at the forefront of the Nazi war machine. An Aug. 27, 1944, New York Times article detailed that Opel was the principal target of a 1,400-plane RAF bombing mission because its 35,000-worker plant was turning out crucial military transport and was known to be developing rocket technology.

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.

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.

After the defeat of Berlin, GM and its executives, including those who joined the government in Washington, then steered America toward its gargantuan postwar boom. That boom was in large measure powered by the constellation of direct and indirect economic benefits delivered by the U.S. automobile industry. 

The Transit Scam

Ironically, while GM was mobilizing the Third Reich, the company was also leading a criminal conspiracy to monopolistically undermine mass transit in dozens of American cities that would help addict the United States to oil.

The war in Europe had only been over for 16 months when on Oct. 2, 1946, a memo from the Department of Justice landed on the desk of J. Edgar Hoover, outlining the elements of the GM conspiracy.

At the center of the conspiracy was National City Lines, an Enronesque company that suddenly arose in 1937, 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 just 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. That is exactly what happened. 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 United States 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.

The last word: How will posterity remember General Motors’ conduct?

The epilogue of the tumultuous saga of General Motors during the New Deal and Nazi era is still being written.

That saga is the subject of a four-part JTA investigative series that concludes with this story. Thousands of pages of decades’-old documents were scrutinized and re-examined to produce this series, which sheds new light on GM’s relationship with the Third Reich — and on the company’s activities in America. They reveal that even as GM and its president, Alfred P. Sloan, were helping jump-start the resurgent German military, they were undermining the New Deal of Franklin D. Roosevelt and undermining America’s electric mass transit, and in doing so helped addict America to oil.

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, which mainly focused on the company’s conspiracy to monopolize scores of local mass transit systems in the United States.

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.

The Senate report, titled American Ground Transport, was released shortly after the Arab-imposed 1973 oil shock — and it accused GM of significantly contributing to the nation’s petroleum woes through its mass-transit machinations.

GM had been convicted in 1949 of leading a secret corporate combine that funded a front company called National City Lines that systematically replaced electric trolleys with oil-guzzling motor buses across America. 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, and demanding that the Senate Judiciary Committee cease circulating its own report. That, of course, did not happen.

But 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.”

GM has also consistently denied domestic wrongdoing.

Thus, GM’s involvement with Nazi transportation in Germany juxtaposed with its conspiracy to convert electric mass transit at home became inextricably linked by virtue of the Senate’s investigation, the company’s own rebuttal and the compelling historical parallel between the company’s conduct in the United States and its conduct in Germany.

GM further demanded that the Senate never permit its own report, American Ground Transport, to be distributed without GM’s rebuttal attached. The Senate agreed — a rare move indeed. Snell, however, labeled the GM rebuttal a document calculated to mislead historians and the public.

Yet 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 and report his findings. Turner, author of several favorably reviewed books, including “German Big Business and the Rise of Hitler,” was well known, among other things, 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. In February 2006, corporate spokeswoman Geri Lama twice refused to give this reporter the location of the company archive. In November of this year, Lama was again asked for an on-the-record response. She said she was referring the question to “staffers,” but after more than a week, no reply had been received.

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. GM attorneys even fought efforts by Alfred P. Sloan himself to publish his own memoirs, although the autobiography was finally published in 1964 after a long court fight.

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 since the publication’s release.

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.” 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 ten thousand 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 e-mail messages seeking information about his sponsored GM history project, his subsequent book or other relevant topics.

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

Sterling reference librarians, who are willing to make the collection available, complained to this reporter as recently as October that they do not know how to access the digitized GM materials because of a complicated and arcane database never before encountered by them. One Sterling reference librarian answered a question about the document by declaring, “I have spoken to two reference librarians. No one knows anything about it [the GM Opel Collection], no one is in charge of it. No one knows how to access it.”

Yale archivist Richard Szary, who supervised the accession of the collection, said that for the approximate half-decade that the documents have been on file, he knows of only “one or two” researchers other than this reporter who have had access to the papers. Szary, who was previously said to be the only Yale staffer who understood how to access the materials, facilitated this reporter’s on-site access. He has since left Yale. By late November, however, in response to an inquiry by this reporter, a senior Sterling librarian said her staff would “figure out how to make it available” by reviewing technical details.

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.

On Jan. 15, 1953, company president Charlie Wilson was nominated to be Secretary of Defense, a job that would ultimately see him usher in the era of the interstate highway system. At Wilson’s confirmation hearings, Sen. Robert Hendrickson (R-N.J.) pointedly challenged the GM chief, asking whether he had a conflict of interest, considering his 40,000 shares of company stock and years of loyalty to the controversial Detroit firm. Bluntly asked 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’s research for the JTA four-part investigative series, “Hitler’s carmaker” involved the review of documents at Georgetown University; Georgia State University; Henry Ford Museum; Kettering University; National Archives repositories in Chicago and Washington, D.C.; New York Public Library Special Manuscript Collections; Yale University Sterling Memorial Library and other repositories in the United States and Germany. In addition, he had access to confidential FBI files obtained under the Freedom of Information Act, period media reports from both Germany and America, secondary literature and other materials researched to produce his just-released book “Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives.” His sources also included the books: “General Motors and the Nazis” by Henry A. Turner; “Sloan Rules” by David Farber and “Working for the Enemy”by Reinhold Billstein, Karola Fings, Anita Kugler and Nicholas Levis.

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.”