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[TIMELINE] 1938 - Hitler's Carmaker (G.M.'s Opel)

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  • madchinaman
    Hitler s carmaker EDWIN BLACK JTA , THE JERUSALEM POST Edwin Black is the author of the award-winning IBM and the Holocaust and the recently published Internal
    Message 1 of 1 , Jan 3, 2007
      Hitler's carmaker
      EDWIN BLACK
      JTA , THE JERUSALEM POST
      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.


      -

      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.

      -


      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 November 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 JTA investigation. Thousands
      of pages of decades'-old documents were scrutinized and reexamined 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 was helping jump-start the resurgent German
      military, it was undermining America's electric mass transit, and in
      doing so helped spawn America's unquenchable thirst for 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,
      Alfred P. 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 September 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."

      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 December 7, 1941, Pearl Harbor was bombed. The United States
      declared war on Japan. On December 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 reappointing 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 August 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 $22.7m."
      or about $285b. in 21st-century money, according to an internal Opel
      document.

      But Opel's friendly Nazi custodian, 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 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 $33m. 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 US 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 October 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 $9.5m.
      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.
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