Ford and GM Scrutinized for Alleged Nazi Collaboration

German diplomats award Henry Ford, center, with their nation's highest decoration ... They deny that their huge business interests in Nazi Germany led them, ...   FordandGMScrutinizedforAllegedNaziCollaboration GermandiplomatsawardHenryFord,center,withtheirnation'shighestdecorationforforeigners,theGrandCrossoftheGermanEagle,inJuly1938. (APPhoto) ByMichaelDobbs WashingtonPostStaffWriter Monday,November30,1998;PageA01 ThreeyearsafterSwissbanksbecamethetargetofaworldwidefurorovertheirbusinessdealingswithNaziGermany,majorAmericancarcompaniesfindthemselvesembroiledinasimilardebate. LiketheSwissbanks,theAmericancarcompanieshavevigorouslydeniedthattheyassistedtheNaziwarmachineorthattheysignificantlyprofitedfromtheuseofforcedlaborattheirGermansubsidiariesduringWorldWarII.Buthistoriansandlawyersresearchingclass-actionsuitsonbehalfofformerprisonersofwararebusyamassingevidenceofcollaborationbytheautomakerswiththeNaziregime. TheissuesatstakefortheAmericanautomobilecorporationsgofarbeyondtherelativelymodestsumsinvolvedinsettlinganylawsuit.Duringthewar,thecarcompaniesestablishedareputationforthemselvesas"thearsenalofdemocracy"bytransformingtheirproductionlinestomakeairplanes,tanksandtrucksforthearmiesthatdefeatedAdolfHitler.TheydenythattheirhugebusinessinterestsinNaziGermanyledthem,wittinglyorunwittingly,toalsobecome"thearsenaloffascism." TheFordMotorCo.hasmobilizeddozensofhistorians,lawyersandresearcherstofightacivilcasebroughtbylawyersinWashingtonandNewYorkwhospecializeinextractinglargecashsettlementsfrombanksandinsurancecompaniesaccusedofdefraudingHolocaustvictims.Also,abookscheduledforpublicationnextyearwillaccuseGeneralMotorsCorp.ofplayingakeyroleinHitler'sinvasionsofPolandandtheSovietUnion. "GeneralMotorswasfarmoreimportanttotheNaziwarmachinethanSwitzerland,"saidBradfordSnell,whohasspenttwodecadesresearchingahistoryoftheworld'slargestautomaker."Switzerlandwasjustarepositoryoflootedfunds.GMwasanintegralpartoftheGermanwareffort.TheNaziscouldhaveinvadedPolandandRussiawithoutSwitzerland.TheycouldnothavedonesowithoutGM." BothGeneralMotorsandFordinsistthattheybearlittleornoresponsibilityfortheoperationsoftheirGermansubsidiaries,whichcontrolled70percentoftheGermancarmarketattheoutbreakofwarin1939andrapidlyretooledthemselvestobecomesuppliersofwarmaterieltotheGermanarmy. ButdocumentsdiscoveredinGermanandAmericanarchivesshowamuchmorecomplicatedpicture.Incertaininstances,AmericanmanagersofbothGMandFordwentalongwiththeconversionoftheirGermanplantstomilitaryproductionatatimewhenU.S.governmentdocumentsshowtheywerestillresistingcallsbytheRooseveltadministrationtostepupmilitaryproductionintheirplantsathome. Afterthreeyearsofnationalsoul-searching,Switzerland'slargestbanksagreedlastAugusttomakea$1.25billionsettlementtoHolocaustsurvivors,asteptheyhadinitiallyresisted.Farfromdyingdown,however,thecontroversyoverbusinessdealingswiththeNazishasgivennewimpetustolong-standinginvestigationsintoissuessuchaslootedart,unpaidinsurancebenefitsandtheuseofforcedlaboratGermanfactories. AlthoughsomeoftheallegationsagainstGMandFordsurfacedduring1974congressionalhearingsintomonopolisticpracticesintheautomobileindustry,AmericancorporationshavelargelysucceededinplayingdowntheirconnectionstoNaziGermany.AswithSwitzerland,however,theirverysuccessinprojectingawholesome,patrioticimageofthemselvesisnowbeingturnedagainstthembytheircritics. "WhenyouthinkofFord,youthinkofbaseballandapplepie,"saidMiriamKleinman,aresearcherwiththeWashingtonlawfirmofCohen,MillsteinandHausfeld,whospentweeksexaminingrecordsattheNationalArchivesinanattempttobuildaslavelaborcaseagainsttheDearborn-basedcompany."Youdon'tthinkofHitlerhavingaportraitofHenryFordonhisofficewallinMunich." BothFordandGeneralMotorsdeclinedrequestsforaccesstotheirwartimearchives.FordspokesmanJohnSpellichdefendedthecompany'sdecisiontomaintainbusinesstieswithNaziGermanyonthegroundsthattheU.S.governmentcontinuedtohavediplomaticrelationswithBerlinupuntiltheJapaneseattackonPearlHarborinDecember1941.GMspokesmanJohnF.MuellersaidthatGeneralMotorslostday-to-daycontroloveritsGermanplantsinSeptember1939and"didnotassisttheNazisinanywayduringWorldWarII." ForGIs,anUnpleasantSurprise WhenAmericanGIsinvadedEuropeinJune1944,theydidsoinjeeps,trucksandtanksmanufacturedbytheBigThreemotorcompaniesinoneofthelargestcrashmilitarizationprogramseverundertaken.ItcameasanunpleasantsurprisetodiscoverthattheenemywasalsodrivingtrucksmanufacturedbyFordandOpel--a100percentGM-ownedsubsidiary--andflyingOpel-builtwarplanes.(Chrysler'sroleintheGermanrearmamenteffortwasmuchlesssignificant.) WhentheU.S.ArmyliberatedtheFordplantsinCologneandBerlin,theyfounddestituteforeignworkersconfinedbehindbarbedwireandcompanydocumentsextollingthe"geniusoftheFuehrer,"accordingtoreportsfiledbysoldiersatthescene.AU.S.ArmyreportbyinvestigatorHenrySchneiderdatedSept.5,1945,accusedtheGermanbranchofFordofservingas"anarsenalofNazism,atleastformilitaryvehicles"withthe"consent"oftheparentcompanyinDearborn. FordspokesmanSpellichdescribedtheSchneiderreportas"amischaracterization"oftheactivitiesoftheAmericanparentcompanyandnotedthatDearbornmanagershadfrequentlybeenkeptinthedarkbytheirGermansubordinatesovereventsinCologne. TherelationshipofFordandGMtotheNaziregimegoesbacktothe1920sand1930s,whentheAmericancarcompaniescompetedagainsteachotherforaccesstothelucrativeGermanmarket.HitlerwasanadmirerofAmericanmassproductiontechniquesandanavidreaderoftheantisemitictractspennedbyHenryFord."IregardHenryFordasmyinspiration,"HitlertoldaDetroitNewsreportertwoyearsbeforebecomingtheGermanchancellorin1933,explainingwhyhekeptalife-sizeportraitoftheAmericanautomakernexttohisdesk. AlthoughFordlaterrenouncedhisantisemiticwritings,heremainedanadmirerofNaziGermanyandsoughttokeepAmericaoutofthecomingwar.InJuly1938,fourmonthsaftertheGermanannexationofAustria,heacceptedthehighestmedalthatNaziGermanycouldbestowonaforeigner,theGrandCrossoftheGermanEagle.Thefollowingmonth,aseniorexecutiveforGeneralMotors,JamesMooney,receivedasimilarmedalforhis"distinguishedservicetotheReich." ThegrantingofsuchawardsreflectedthevitalplacethattheU.S.automakershadinGermany'sincreasinglymilitarizedeconomy.In1935,GMagreedtobuildanewplantnearBerlintoproducetheaptlynamed"Blitz"truck,whichwouldlaterbeusedbytheGermanarmyforitsblitzkreigattacksonPoland,FranceandtheSovietUnion.GermanFordwasthesecond-largestproduceroftrucksfortheGermanarmyafterGM/Opel,accordingtoU.S.Armyreports. TheimportanceoftheAmericanautomakerswentbeyondmakingtrucksfortheGermanarmy.TheSchneiderreport,nowavailabletoresearchersattheNationalArchives,statesthatAmericanFordagreedtoacomplicatedbarterdealthatgavetheReichincreasedaccesstolargequantitiesofstrategicrawmaterials,notablyrubber.AuthorSnellsaysthatNaziarmamentschiefAlbertSpeertoldhimin1977thatHitler"wouldneverhaveconsideredinvadingPoland"withoutsyntheticfueltechnologyprovidedbyGeneralMotors. Aswarapproached,itbecameincreasinglydifficultforU.S.corporationslikeGMandFordtooperateinGermanywithoutcooperatingcloselywiththeNazirearmamenteffort.UnderintensepressurefromBerlin,bothcompaniestookpainstomaketheirsubsidiariesappearas"German"aspossible.InApril1939,forexample,GermanFordmadeapersonalpresenttoHitlerof35,000Reichsmarksinhonorofhis50thbirthday,accordingtoacapturedNazidocument. DocumentsshowthattheparentcompaniesfollowedaconsciousstrategyofcontinuingtodobusinesswiththeNaziregime,ratherthandivestthemselvesoftheirGermanassets.LessthanthreeweeksaftertheNazioccupationofCzechoslovakiainMarch1939,GMChairmanAlfredP.Sloandefendedthisstrategyassoundbusinesspractice,giventhefactthatthecompany'sGermanoperationswere"highlyprofitable." TheinternalpoliticsofNaziGermany"shouldnotbeconsideredthebusinessofthemanagementofGeneralMotors,"SloanexplainedinalettertoaconcernedshareholderdatedApril6,1939."Wemustconductourselves[inGermany]asaGermanorganization....Wehavenorighttoshutdowntheplant." U.S.FirmsBecameCrucial AftertheoutbreakofwarinSeptember1939,GeneralMotorsandFordbecamecrucialtotheGermanmilitary,accordingtocontemporaneousGermandocumentsandpostwarinvestigationsbytheU.S.Army.JamesMooney,theGMdirectorinchargeofoverseasoperations,haddiscussionswithHitlerinBerlintwoweeksaftertheGermaninvasionofPoland. TypewrittennotesbyMooneyshowthathewasinvolvedinthepartialconversionoftheprincipalGMautomobileplantatRusselsheimtoproductionofenginesandotherpartsfortheJunker"Wunderbomber,"akeyweaponintheGermanairforce,underagovernment-brokeredcontractbetweenOpelandtheJunkerairplanecompany.Mooney'snotesshowthathereturnedtoGermanythefollowingFebruaryforfurtherdiscussionswithLuftwaffecommanderHermannGoeringandapersonalinspectionoftheRusselsheimplant. Mooney'sinvolvementintheconversionoftheRusselsheimplantunderminesclaimsbyGeneralMotorsthattheAmericanbranchofthecompanyhadnothingtodowiththeNazirearmamenteffort.Incongressionaltestimonyin1974,GMmaintainedthatAmericanpersonnelresignedfromallmanagementpositionsinOpelfollowingtheoutbreakofwarin1939"ratherthanparticipateintheproductionofwarmaterials." However,accordingtodocumentsoftheReichCommissarfortheTreatmentofEnemyProperty,theAmericanparentcompanycontinuedtohavesomesayintheoperationsofOpelafterSeptember1939.ThedocumentsshowthatthecompanyissuedageneralpowerofattorneytoanAmericanmanager,PeteHoglund,inMarch1940.HoglunddidnotleaveGermanyuntilayearlater.Atthattime,thepowerofattorneywastransferredtoaprominentBerlinlawyernamedHeinrichRichter. GMspokesmanMuellerdeclinedtoanswerquestionsfromTheWashingtonPostonthepowerofattorneygrantedtoHoglundandRichterortoprovideaccesstothepersonnelfilesofHoglundandotherwartimemanagers.HealsodeclinedtocommentonanassertionbySnellthatOpelusedFrenchandBelgianprisonersatitsRusselsheimplantinthesummerof1940,atatimewhentheAmericanHoglundwasstilllookingafterGMinterestsinGermany. TheNazishadaclearinterestinkeepingOpelandGermanFordunderAmericanownership,despitegrowinghostilitybetweenWashingtonandBerlin.BythetimeofPearlHarborinDecember1941,theAmericanstakeinGermanFordhaddeclinedto52percent,butNaziofficialsarguedagainstacompletetakeover.AmemorandumtoplantmanagersdatedNovember25,1941,acknowledgedthatsuchastepwoulddepriveGermanFordof"theexcellentsalesorganization"oftheparentcompanyandmakeitmoredifficulttobring"theremainingEuropeanFordcompaniesunderGermaninfluence." Documentssuggestthattheprincipalmotivationofbothcompaniesduringthisperiodwastoprotecttheirinvestments.AnFBIreportdatedJuly23,1941quotedMooneyassayingthathewouldrefusetotakeanyactionthatmight"makeHitlermad."Infall1940,MooneytoldthejournalistHenryPaynterthathewouldnotreturnhisNazimedalbecausesuchanactionmightjeopardizeGM's$100millioninvestmentinGermany."Hitlerhasallthecards,"PaynterquotedMooneyassaying. "Mooneyprobablythoughtthatthewarwouldbeoververyquickly,sowhyshouldwegiveourwonderfulcompanyaway,"saidGermanresearcherAnitaKugler,whousedNaziarchivestotracethecompany'sdealingswithNaziGermany. EventhoughGMofficialswereawareoftheconversionofitsRusselsheimplanttoaircraftengineproduction,theyresistedsuchconversioneffortsintheUnitedStates,tellingshareholdersthattheirautomobileassemblylinesinDetroitwere"notadaptabletothemanufactureofotherproducts"suchasplanes,accordingtoacompanydocumentdiscoveredbySnell. InJune1940,afterthefallofFrance,HenryFordpersonallyvetoedaU.S.government-approvedplantoproduceunderlicenseRolls-RoyceenginesforBritishfighterplanes,accordingtopublishedaccountsbyhisassociates. DeclarationofWarAltersTies America'sdeclarationofwaronGermanyinDecember1941madeitillegalforU.S.motorcompaniestohaveanycontactwiththeirsubsidiariesonGerman-controlledterritory. AtGMandFordplantsinGermany,relianceonforcedlaborincreased.ThestoryofElsaIwanowa,whobroughtaclass-actionsuitagainstFordlastMarch,istypical.Attheageof16,shewasabductedfromherhomeinthesouthernRussiancityofRostovbyGermansoldiersinOctober1942withhundredsofotheryoungwomentoworkattheFordplantatCologne. "Theconditionswereterrible.Theyputusinbarracks,onthree-tierbunks,"sherecalledinatelephoneinterviewfromBelgium,whereshenowlives."Itwasverycold;theydidnotpayusatallandscarcelyfedus.Theonlyreasonthatwesurvivedwasthatwewereyoungandfit." Inacourtsubmission,AmericanFordacknowledgesthatIwanowaandotherswere"forcedtoendureasadandterribleexperience"atitsCologneplantbutmaintainsthatredressingsuch"tragedies"shouldbe"agovernment-to-governmentconcern."Spellich,theFordspokesman,insiststhecompanydidnothavemanagementcontroloveritsGermansubsidiaryduringtheperiodinquestion. FordhasbackedawayfromitsinitialclaimthatitdidnotprofitinanywayfromforcedlaboratitsCologneplant.Spellichsaidthatcompanyhistoriansarestillresearchingthisissuebuthavefounddocumentsshowingthat,afterthewar,AmericanFordreceiveddividendsfromitsGermansubsidiaryworthapproximately$60,000fortheyears1940-43.Hedeclinedarequesttointerviewthehistorians,sayingtheywere"toobusy." TheextentofcontactsbetweenAmericanFordanditsGerman-controlledsubsidiaryafter1941islikelytobecontestedatanytrial.SimonReich,aneconomichistorianattheUniversityofPittsburghandanexpertontheGermancarindustry,sayshehasyettoseeconvincingevidencethatAmericanFordhadanycontroloveritsCologneplantafterDecember1941.Headds,however,thatboth"OpelandForddidabsolutelyeverythingtheycouldtoingratiatethemselvestotheNazistate." WhiletherewasnodirectcontactbetweenAmericanFordanditsGermansubsidiaryafterDecember1941,thereappeartohavebeensomeindirectcontacts.InJune1943,theNazicustodianoftheCologneplant,RobertSchmidt,traveledtoPortugalfortalkswithFordmanagersthere.Inaddition,theTreasuryDepartmentinvestigatedFordafterPearlHarborforpossibleillegalcontactswithitssubsidiaryinoccupiedFrance,whichproducedGermanyarmytrucks.Theinvestigationendedwithoutchargesbeingfiled. EventhoughAmericanFordnowcondemnswhathappenedatitsCologneplantduringthewar,itcontinuedtoemploythemanagersinchargeatthetime.Afterthewar,SchmidtwasbrieflyarrestedbyAlliedmilitaryauthoritiesandbarredfromworkingforFord.Buthewasreinstatedasthecompany'stechnicaldirectorin1950afterhewrotetoHenryFordIIclaimingthathehadalways"detested"theNazisandhadneverbeenamemberoftheparty.AlettersignedbyaleadingCologneNaziinFebruary1942describesSchmidtasatrustedpartymember.FordmaintainsthatSchmidt'snamedoesnotshowuponNazimembershiplists. MelWeiss,anAmericanattorneyforIwanowa,arguesthatAmericanFordreceived"indirect"profitsfromforcedlaboratitsCologneplantbecauseoftheoverallincreaseinthevalueofGermanoperationsduringthewar.HenotesthatFordwaseagertodemandcompensationfromtheU.S.governmentafterthewarfor"losses"duetobombdamagetoitsGermanplantsandthereforeshouldalsoberesponsibleforanybenefitsderivedfromforcedlabor. SimilarargumentsapplytoGeneralMotors,whichwaspaid$32millionbytheU.S.governmentfordamagessustainedtoitsGermanplants.WashingtonattorneyMichaelHausfeld,whoisinvolvedintheFordlawsuit,confirmsGMalsois"onourlist"asapossibletarget. ©Copyright1998TheWashingtonPostCompany Backtothetop