Hitler's Carmaker: The Inside Story of How General Motors Helped Mobilize the Third Reich (Part 1)

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 JTA 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.

This article was first published by the JTA. Copyright by Edwin Black.