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August 94, #126 ->
Ford Empire Played Both Sides In War
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Technocracy ->
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August 94, #126 ->
Ford Empire Played Both Sides In War
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Published in:
- Technocracy Digest, 1945. (Reprinted from the newspaper PM by kind permission of the publisher. Victor H. Bernstein, a PM staff correspondent, gathered some of this material while on a six-month stay in Germany; he collected the rest from government and industrial sources in Washington.)
- Northwest Area News, August 1994, No. 126 and Sept. 1994, No. 127
See also:
Henry Ford was no Oskar Schindler...So long as there continues to be offered a standing reward to all those who will "gyp" society successfully, socially objectionable activities follow as a consequence. It is the social system and not the individual human being that is at fault.
This is the story of the Ford empire and how it fought on both sides in World War II, helping to kill indiscriminately hundreds of thousands of Americans as well as Germans for profit.
It is not the story of villainy of any one man or any one corporation. For the Ford empire broke no laws devised by man in anything it did; and when the whole story of American--and British and German and French--big business is fully revealed, it will probably be found that the Ford empire acted no worse than other economic empires, and quite possibly better than some.
So this is rather an indictment of a system than of a single corporation—a laissez faire system in which the motives of profit and property, export-import balances and annual net earnings control. And it is a system that must be re-evaluated, not alone in the light of what happened in Europe during World War II, but also of what has happened since and what will continue to happen as long as there is a market for arms.
The Ford empire's dual role in the war, and particularly in the critical years immediately preceding the war, which for Hitler were the years of preparation, was achieved through its ownership of 52 percent of the stock of the Ford-Werke A.G. of Cologne, Germany, and through the presence on Ford-Werke's board of directors, until Pearl Harbor, of the late Edsel B. Ford, then president of the Ford Motor Co. of Dearborn, and Charles E. Sorenson, then vice-president of Ford and later president of Willys-Overland Motors.
Undoubtedly both Edsel Ford and Sorenson always considered themselves good American patriots and, as such, bitter enemies of Hitler and all that Hitler stood for. Yet they were representatives of the American majority ownership of Ford-Werke and members of the "German" firm's board of directors when the company management did these things:
These are the salient features of the Ford empire's international history in the years immediately preceding U.S. entry into the war. Shortly after Pearl Harbor, the Nazi alien property custodian formally took over Ford-Werke, the American members of the board of directors were ousted and Robert Schmidt, the man who had been the firm's general manager under American ownership became its administrative custodian under Hitler law.
But while all formal relationship between the Ford Co. of Cologne and the Ford Co. of Dearborn was thus severed, the German plants built with U.S. funds and operated by men instilled with American "know-how" continued to:
Thus did Ford Co. genius transcend national boundaries, extending its beneficent influence all the way from Willow Run and River Rouge to the Rhine; and if a grateful U.S. Army and U.S. Navy awarded banners to the Ford Co. of Dearborn for its share in the production of the B-24 and the jeep, so also had Hitler and the Wehrmacht reason to be grateful to the Ford Co. of Cologne, second largest producer in all Germany (second only to Opel, a General Motors subsidiary) of trucks for the German army.
The Ford Company's history in Germany properly begins in 1926, when a 100 percent American-owned assembly factory was started in Berlin for the building of Ford cars from American-made parts. In 1929 Ford Motor Co. A.G., as the German Ford Company was then known, was reorganized and expanded, with British Ford Co. (Ford Motor Co. Ltd., Dagenham) taking over 60 percent of the stock and the rest sold to selected German purchasers (including I.G. Farben, which bought up 15 percent of the shares).
Two factors changed this setup. One was increasinag German nationalism, which fostered the slogan "Buy German"; the second was the depression, which in Europe hit its peak between 1931 and 1934. The German Ford Co. satisfactorily solved both challenges by the end of the '30s. It answered the "Buy German" slogan by building a factory in Cologne and by manufacturing as many as possible of its own parts out of German raw materials. It answered the challenge of the depression by again reorganizing with the Ford Co. of Dearborn, reassuming majority ownership and throwing the full weight of its production technique and magnificent worldwide sales force behind the new German company.
But in 1933 Hitler had come into power and inaugurated a war economy that posed a whole new set of problems. Hitler would no longer permit German industrial firms to pay for imports with money; he wanted simultaneously to save foreign exchange and he wanted to have a voice in what was imported so that he could be sure such imports would serve his preparations for war.
In other words, the German Ford Co. was in the position of having to export cars and parts in order to obtain the materials needed to build more cars and more parts. A glimpse into how this was achieved is given in the 1935 annual report of the German Ford Co.:
``... Our company has also taken considerable and active interest in that very important task of German industry, namely the development of foreign credit. Our exports increased in 1935 to approximately 1,280,000 RM and we hope to be able to increase this amount considerably in 1936. In this connection it must be remembered that, owing to the special comercial relations our company has with an enterprise spread all over the world, we are in a different position concerning export matters than factories working exclusively in Germany. In order to help German economic interests, a number of other Ford Companies, especially the American and the English companies, have placed orders for industrial products in Germany.''
It goes without saying that the Ford Co. of Dearborn knew of this report, and as intelligent businessmen could read in it at least as much as you and I can read in it: to wit, an avowed declaration on the part of the German Ford Co. that it was working not only for itself and its German and American stockholders, but also quite openly for German national economy, which meant Hitler's economy, which meant for a war economy.
But this did not scare Ford Co. of Dearborn. The Emperors of the River Rouge and the Rhine watched Hitler break provision after provision of the Versailles treaty, watched him march into the Rhineland, into the Saar, into Austria, yes, even into Czecholslovakia--and continued to supply him with the export market he needed desperately, and the imports he needed even more.
The key products needed by German Ford Co. were rubber and nonferrous metals. They were also key products needed by Hitler. So Hitler clamped down on their use by foreign-owned automobile companies such as the Ford Co., which were still at the time turning out pleasure cars. The result, as Hitler must have known, was a mathematical certainty. German Ford Co. (this was in 1936) cabled frantically to Edsel Ford and Sorenson in Dearborn: "Purchase of tires in Germany...is now entirely impossible..." And the cable went on to describe the situation as "catastrophic."
Two representatives of the German Ford Co. followed the cable to Dearborn. The representatives sat down with Dearborn executives. The result was the first of the barter deals--that for 1937. Under its terms, Ford Co. of Dearborn undertook to supply rubber and other material (cotton, soot, etc.) to German tire manufacturers, and to accept in exchange cars and parts (particularly wheels, bearings and speedometers) produced by German Ford Co.
Ford Co. of Dearborn did not sell these German Ford Co. products on the American market but had them shipped directly to its foreign markets, mostly in Latin America. And meanwhile, back in Germany, Hitler gleefully watched raw rubber and cotton and soot unloaded for German Ford Co. at Hamburg and Bremen and other ports and snatched 30 percent of it for his own use--which meant that it was put at the disposal of the exclusively war-minded Nazi Ministry of Economics.
In 1938 this barter deal was repeated and extended to cover pig iron and nonferrous metals, again with special consent of the Nazi economics ministry, which this time exacted for its own disposition not only 30 percent of the rubber but also 20 percent of the pig iron. And this 1938 deal was substantially repeated in 1939.
The special contract under which German Ford Co. undertook to manufacture a special type of military car--command cars or troop carriers--for the High Command was signed in 1938, after Sorenson visited Germany. The contract was not signed without difficulty. It took three years to negotiate and involved a series of cables to and from Dearborn and visits of German Ford Co. men to the U.S.A. and of Dearborn Ford Co. men to Germany.
The records show that German Ford Co. was anxious for the contract, not alone for the profits involved but in order to obtain the goodwill of the German High Command, which had apparently first broached the subject of building a special military car. The records also show that Ford Co. of Dearborn was hesitant and vacillating. In the first place, the contract involved creation of a new factory in what was then considered by the German High Command as the absolutely safe Berlin zone--safe, that is, from all possible bombing raids.
But agreement was finally reached upon Sorenson's arrival in Germany in April, 1938, and production of the military car began in 1939 in a Berlin factory. Due to lack of material and frequent changes and ultimate abandonment of the design, the factory produced only 1100 military vehicles of the type originally intended, although it also was used for a while to produce Luftwaffe items and spare parts for the Cologne factory.
The factory was closed down in 1942, after the Wehrmacht's successes in the west seemed to have rendered Cologne forever safe from attack. But copies of the contract, which show American Ford Co.'s willingness to have the German Ford Co. produce military cars specifically designed by Hitler's High Command, still exist.
Shortly after the outbreak of the war (but before Hitler's declaration of war against the U.S.A.) Heinrich F. Albert, then chairman of the board of the Ford Co.'s German subsidiary, Ford Werke A.G., prepared a memorandum defending American majority ownership of the firm as in interests of German national economy. Below are the cogent paragraphs of Albert's memorandum, which should make clear the need for control and regulation of international big business:
``In the past seven years, Ford-Werke A.G. has been transformed into a Germany company to an increasing extent. Not only are all vehicles and parts produced in Germany, but German workers using German materials under German direction are producing them...
``In this connection, all needed foreign raw materials were obtained through the American Company (rubber, nonferrous metals) to cover not only the production needs of the German plant, but in part for the whole industry.
``Already during the peace, American influence has been more or less converted into support for the German plant. At the outbreak of war, Ford-Werke A.G. placed itself immediately at the disposal of the armed forces for armament purposes.
``Among the reasons that argue against complete Germanization of Ford-Werke's capital, the primary one is the excellent sales organization that, thanks to its connection with the American company, is at the disposal of Ford-Werke A.G. According to their productive capacity, the German plants can export to all countries of the world, and in this they are protected and supported in the matter of pricing by the American company. In some countries this has led to making possible the German export of German Ford cars, even where the rest of the German industry was unable to find solid footing. This limits or keeps away purely American competition to some extent.
``As long as Ford-Werke A.G. has an American majority, it will be possible to bring the remaining European Ford companies under German influence, and thus to execute the greater European policy in this field, too. As soon as the American majority is eliminated, each Ford company in every country will fight for its individual existence. The just now successfully accomplished joining of the potentiality of the non-German European companies to the potentiality of Ford-Werke A.G., and with this to the general war potentiality of Germany, would thus collapse more or less by itself.
`` A majority holding, even if it is only a small one, by the Americans is essential for the--actually free--transmission of the newest American models as well as for the insight into American production and sales methods. Since Americans are without doubt particularly progressive in the field, the maintenance of this connection is in the German interest. This cannot be accomplished merely through license fees or contractual stipulations. With the abolition of the American majority, this advantage as well as the importance to the company for the obtaining of raw materials and exports would be lost. The plant would practically be worth only its own machine capacity.''
Thus the story of the Ford empire and World War II. It is, in essence, neither a new story nor a unique story. It is, indeed, too old and too familiar for comfort. It is in itself an echo of the story of other industrial giants who played both sides of the fence before and during World Wars I and II. And it undoubtedly will be echoed in time.
We learned much after 1918--and did nothing.
Editor: Much has been made of World War II's D. Day recently and the tragic landing on Normandy Beach where American casualties ran high. Old patriotic war movies were revived. Nothing was said about the corporations that carried on business as usual at the expense of their own countrymen's lives and mutilation. How many times has it been said that "remove the profit, and we wouldn't have wars", and still the next generation and the next march patriotically off to war. TECHNOCRACY: An exciting New Idea for the social operation of North America by technology under the direction of science.