Freedom's Forge: How American Business Produced Victory in World War II

by Herman, Arthur

  Copyright © 2012 by Arthur Herman

  All rights reserved.

  Published in the United States by Random House, an imprint of The Random House Publishing Group, a division of Random House, Inc., New York.

  RANDOM HOUSE and colophon are registered trademarks of Random House, Inc.

  LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA

  Herman, Arthur

  Freedom’s forge: how American business produced victory in World War II / Arthur Herman.

  p. cm.

  Includes bibliographical references.

  eISBN: 978-0-679-60463-1

  1. World War, 1939–1945—Economic aspects—United States. 2. Industrial mobilization—United States—History—20th century. 3. Industrial management—United States—History—20th century. 4. Manufacturing industries—Military aspects—United States—History—20th century. 5. United States—Economic policy—1933–1945. I. Title.

  HC106.4.H467 2012 940.53’1—dc23 2011040661

  www.atrandom.com

  Jacket design: Christopher Sergio

  Jacket photograph: © FPG/Hulton Archive/Getty Images

  v3.1

  PREFACE

  THIS IS THE story of America’s forgotten heroes of World War II. They didn’t wear uniforms, at least not at first. They wore business suits, dungarees and flannel shirts, spectacles and Stetsons, Homburg hats and hard hats, lab coats and welding leathers and patterned head scarves.

  They were the American businessmen, engineers, production managers, and workers both male and female who built the most awesome military machine in history: the arsenal of democracy that armed the Allies and defeated the Axis. Together they produced two-thirds of all Allied military equipment used in World War II. That included 86,000 tanks, 2.5 million trucks and a half million jeeps, 286,000 warplanes, 8,800 naval vessels, 5,600 merchant ships, 434 million tons of steel, 2.6 million machine guns, and 41 billion rounds of ammunition—not to mention the greatest superbomber of the war, the B-29, and the atomic bomb.

  How this remarkable mobilization of American industry, technology, and material production happened remains the great untold story of World War II. This book builds that story around two central figures, William Signius Knudsen and Henry Kaiser. One was a Danish immigrant who worked his way up from the shop floor to become president of General Motors. The other grew up as a problem child in upstate New York before going west to head the most titanic construction cartel in America, the Six Companies, who built Hoover Dam.

  Almost forgotten today, their names and faces were emblazoned across the news in wartime America.

  At Roosevelt’s call, Knudsen left GM in 1940 to spearhead America’s rearmament, first as director of the Office of Production Management and then to accept a lieutenant general’s commission (the first and only civilian in American history to receive this honor) as head of industrial production for the U.S. Army.

  Henry Kaiser became America’s most famous shipbuilder and the living symbol of the productive power of the arsenal of democracy with his launching of the Liberty ships. A 1945 Roper poll named Kaiser as the civilian most responsible for winning the war, right after Franklin Roosevelt himself.

  Knudsen knew how to make things, especially out of metal. Kaiser knew how to build. They each gathered around them a few chosen businessmen who joined them in starting America’s mobilization effort. Many of these men had never been to college; some were school dropouts. None had heard of an MBA. But eventually hundreds, then hundreds of thousands of other businesses and companies joined in. Their foes weren’t German or Japanese soldiers but Washington politicians and bureaucrats, shrill journalists, military martinets, the denizens of Big Labor as well as Big Government—and sometimes the forces of blind fate.

  Many paid a terrible price. American workers in war-related industries in 1942–43 died or were injured in numbers twenty times greater than the American servicemen killed or wounded during those same years. At General Motors alone 189 senior executives died on the job during the war, trying to ensure final American victory.

  Most accounts of America in World War II center on the great climactic battles from Midway and Tarawa to D-day and Iwo Jima. The battles American business fought and won came earlier—some a year before the country went to war. Yet they enabled the United States to win those battles to come, and crush the forces of Fascism. In so doing, they transformed America’s military into the biggest and most powerful in the world. They also laid the foundations for a postwar prosperity that would extend across three decades until the 1970s and fuel the economic growth of the rest of the planet.

  Japanese admiral Yamamoto famously said he feared the attack on America at Pearl Harbor had “awakened a sleeping giant.” In fact, it had been aroused to life more than a year before by other events—events that led a man in a wheelchair to pick up the phone and dial a number in Detroit.

  CONTENTS

  Cover

  Title Page

  Copyright

  PREFACE

  PROLOGUE

  Chapter One THE GENTLE GIANT

  Chapter Two THE MASTER BUILDER

  Chapter Three THE WORLD OF TOMORROW

  Chapter Four GETTING STARTED

  Chapter Five CALL TO ARMS

  Chapter Six ARSENAL OF DEMOCRACY

  Chapter Seven SHIPS, STRIKES, AND THE BIG BOOK

  Chapter Eight COUNTDOWN

  Chapter Nine GOING ALL OUT

  Chapter Ten SHIPS FOR LIBERTY

  Chapter Eleven THE PRODUCTION EXPRESS

  Chapter Twelve STEEL MEN AND CAST-IRON CHARLIE

  Chapter Thirteen AGONY AT WILLOW RUN

  Chapter Fourteen VICTORY IS OUR BUSINESS

  Chapter Fifteen THE MAN FROM FRISCO

  Chapter Sixteen SUPERBOMBER

  Chapter Seventeen THE BATTLE OF KANSAS

  Chapter Eighteen FIRE THIS TIME

  Conclusion RECKONING

  Dedication

  ACKNOWLEDGMENTS

  APPENDIX A: GROWING THE ARSENAL OF DEMOCRACY, 1940–1945

  APPENDIX B: JOINING THE ARSENAL OF DEMOCRACY

  NOTES

  SELECT BIBLIOGRAPHY

  Other Books by This Author

  About the Author

  U.S. Army, mid-1930s. Courtesy National Archives

  Our opponents are miserable worms. I saw them at Munich.

  —Adolf Hitler

  IT WASN’T A DAY to expect catastrophe.

  Across Western Europe, May 10, 1940, dawned bright and clear. Then, with a whine accelerating to a scream, swarms of German Stuka dive-bombers swooped out of the skies over Holland and Belgium and unloaded their bombs. The skies turned from blue to white as thousands of parachutes opened and German paratroopers descended to earth to seize key bridges and installations. The supposedly impregnable Fort Eben Emael fell in a matter of hours. Dutch and Belgian troops, stunned into impotence, dropped their rifles and surrendered—beaten by an enemy they barely had time to see, let alone fight.

  After seven months of what the French called la drôle de guerre and the British the Phony War, the war declared back in September 1939 between Germany and the Allies had finally turned real.

  With drill-like precision, German shock troops crossed the Meuse River and grabbed key bridges for a thrust deep into French territory. On May 14 hundreds of German tanks began pouring through the gap at Sedan and into the open countryside. Entire divisions of the French army were cut off. Back at headquarters, generals ordered their troops to hold positions, only to learn that German panzers had already
bypassed them.1

  That same afternoon, French and British Royal Air Force bombers set out to blow up the crucial bridges across the Meuse. German antiaircraft fire and fighters shot down more than half in what was the bloodiest single day in RAF history. Yet the Meuse bridges remained unscathed. That same afternoon, German bombers devastated the ancient Dutch city of Rotterdam, killing a thousand civilians and rendering thousands more homeless. It was the world’s first taste of what massed modern bombers could do to a helpless civilian population.

  German tank columns, meanwhile, were pressing on toward Paris. Hitler’s Blitzkrieg, a mechanized tidal wave of planes, tanks, and armored cars, was sweeping aside everything in its path.

  Winston Churchill had been prime minister less than five days when he was awakened at 7 A.M. by a phone call from his French counterpart. “We have been defeated,” Paul Reynaud said in English. Churchill rubbed his eyes, but said nothing. Reynaud then repeated, “We are beaten; we have lost the battle.”2 Churchill flew to Paris that day to see what could be salvaged from imminent defeat. But he paused to send a telegram across the Atlantic to the White House and President Franklin D. Roosevelt. It read in part:

  As you are no doubt aware, the scene has darkened swiftly. If necessary, we shall continue the war alone and we are not afraid of that. But I trust you realize, Mr. President, that the voice and the force of the United States may count for nothing if they are withheld too long.3

  Sitting four thousand miles away, Roosevelt could read the headlines in the Washington Post: DOZEN FRENCH CITIES BOMBED. He was also getting private reports from his ambassadors in Paris and London, reports of Allied consternation and confusion, and imminent collapse.

  Churchill’s telegram seemed to burn a hole in his desk in the Oval Office. “You may have a completely subjugated, Nazified Europe established with astonishing swiftness,” it went on, “and the weight may be more than we can bear.”4 If France fell, and then possibly Britain, the entire balance of power in the world would change. The United States would face a hostile continent across the ocean—with a once-mighty British Empire rendered impotent almost everywhere else.

  Roosevelt drummed his fingers and thought. For years his political instincts had told him to stay away from what was happening in Europe. He had come into office in 1933 to deal with a domestic crisis, the economic depression left unsolved by Herbert Hoover. Unemployment had stood at 25 percent. Industrial production had fallen by a third; one-half of the nation’s wealth had been wiped out. His job had been tackling breadlines, closed factories, and a budget out of balance by $2.5 billion. Dabbling in foreign affairs had seemed a distraction.

  In addition, the Democratic Party he headed had been badly burned by European entanglements under Woodrow Wilson. It was led by men disillusioned by the failure of Wilson’s promises regarding the First World War, “the war to end all wars,” and what had seemed then to be a Carthaginian peace imposed on Germany at Versailles. Having once been determined to save the world, American progressives were now just as determined to turn their backs on it.

  Contrary to later myth, the Republican years of the twenties were not the heyday of isolationism. Presidents Harding, Coolidge, and Hoover had remained actively engaged in European affairs. Their representatives attended disarmament conferences, mediated disputes over war reparations, helped to rebuild a broken Germany, and provided famine relief to a starving Soviet Union.

  Roosevelt and New Deal Democrats rejected this legacy of engagement. It was a Democratic Congress that passed two Neutrality Acts in 1935 and 1936, prohibiting American companies from selling any war equipment to any belligerent in an armed conflict, and a Democratic president—Franklin Roosevelt—who signed them both.5

  Roosevelt had also encouraged Senator Gerald Nye (a Republican) and his young legal counsel Alger Hiss in their sensational investigations into the conduct of American armaments manufacturers in the First World War. The Nye Committee blasted companies like DuPont, General Electric, General Motors, Colt Arms, Electric Boat (makers of submarines), Curtiss, Boeing, and Sperry Gyroscope as “merchants of death.” It even blamed their “lies, deceit, hypocrisy, greed, and graft” for getting the United States into the war in the first place.6

  Nye’s proposed solution was nationalizing the armaments industry. That didn’t happen, but companies like DuPont got the message. The Wilmington, Delaware, firm had supplied America’s armed forces with gunpowder since the American Revolution. Now it slashed its munitions-making division to less than 2 percent of operations.7 Other companies drew the same lesson: Supplying America with arms was business you did not want.*

  That didn’t matter much, because the defense budget was moribund. Cuts President Hoover had imposed on the War and Navy departments with the onset of the Depression became self-sustaining. “Niggardly appropriations for the operation and maintenance of the Navy put naval operations in a veritable straitjacket,” one historian would write of those bleak years.8 Ships were scrapped or mothballed; fleet exercises were curtailed by a lack of fuel and support vessels. Building and fortifying facilities ceased, especially in the western Pacific. The naval base at Pearl Harbor, which was supposed to anchor a chain of fortified Pacific naval stations stretching from Midway to Guam and the Philippines, became a lonely outpost in a vast and empty sea.

  From the fourth-biggest military force in the world in 1918, the United States Army shrank to number eighteen, just ahead of tiny Holland. By 1939 the Army Air Corps, forerunner of the U.S. Air Force, consisted of some seventeen hundred planes, all fighters and trainers, and fewer than 20,000 officers and enlisted men.9

  In the late thirties, as tensions grew in Europe between the totalitarian powers and the liberal democracies, the United States remained reluctant to break its neutrality and take sides. Roosevelt and his special White House aide Harry Hopkins did not admire men like Hitler and Mussolini; quite the opposite. But their overriding goal was peace in Europe, in order to keep America out of war. If that meant appeasement of Hitler’s incessant demands, then so be it. When Roosevelt learned in October 1938 that Neville Chamberlain had handed over a large chunk of Czechoslovakia to the Third Reich, he sent a congratulatory telegram: “Good man.”10

  But soon after the surrender at Munich, Roosevelt’s mood began to change. He realized Hitler’s thirst for power was not going to be assuaged, ever. This would inevitably mean war, and once again America would find itself one ocean away from a Europe in flames. “If the Rhine frontiers are threatened,” he told friends in January 1939, “the rest of the world is too”—including the United States.11

  So after years of avoiding foreign affairs, Roosevelt began taking small, cautious steps, like a man feeling his way along in the dark.

  In 1936 the Washington Naval Treaty, which had sharply limited the future growth of the U.S. Navy in the name of arms control, expired. Roosevelt let it lapse. He then ordered the Navy to launch its first major shipbuilding program in more than twelve years (one of the ships to come out of it was the aircraft carrier USS Enterprise). In 1938 the Army Air Corps got the biggest authorization for buying planes in its history.12 Roosevelt began talking about an American air force on a par with those of Britain, France, and Germany.

  The Army and Navy Munitions Board, which decided what kinds of weaponry America would make, became an executive office of the president—a bureaucratic consolidation that showed the commander-in-chiefs new interest in military matters. He also authorized the transfer of American capital ships from the Pacific to the Atlantic, the first significant shift in the country’s naval dispositions since the close of World War I.

  Then when Europe went to war in September 1939, Roosevelt joined forces with Nevada senator Key Pittman to call for a bill modifying the Neutrality Act. Starting in November, the United Kingdom and France were free to purchase munitions from American companies on a “cash-and-carry” basis.

  All well and good for Britain and France. But what about munitions for America? Rep
orts that summer had it that Hitler’s Luftwaffe had reached a combined strength of nearly 8,500 fighters and bombers—most of them advanced types less than three years old. The Army Air Corps had barely a fifth of that number, and most were out of date. When it came to the other ingredients of modern mechanized warfare—tanks, armored cars, antiaircraft guns, and troop-carrying trucks—Americans were even more hopelessly behind.

  Brigadier General George Patton learned this when he took charge of the Army’s Second Armored Brigade at Fort Benning, Georgia, the summer of 1939. Patton had 325 tanks—at a time when the Germans had more than 2,000—but no reliable nuts and bolts to hold them together. Patton asked the quartermaster for the necessary nuts and bolts; they never reached him. In desperation he ordered them at his own expense from the Sears and Roebuck catalogue.13

  All of this is hardly surprising, considering that the Army had just six working arsenals for manufacturing weapons. Eighty-five percent of the machinery in those arsenals was over ten years old, and much of it predated the start of the century. Some went back all the way to Gettysburg and Antietam.

  Then in August 1939, on the eve of war in Europe, the Army held major war games at Plattsburgh, New York, to find out what it could do. Fifty thousand men were put on the field—but more than two-thirds were part-time National Guardsmen. They quickly lost their direction as units haplessly bumped into each other. Without radios to issue orders, soldiers began wandering in search of officers to give them. Some stumbled on lines of Good Humor trucks parked in a field: The Army had been forced to hire them to serve as decoy tanks because there weren’t enough real tanks or armored cars to go around. “The U.S. Army,” Time magazine said, summing up, “looked like a few nice boys with BB guns.”14

  No wonder, then, that on September 1, when Ambassador to Russia William Bullitt called the White House to say that Germany had invaded Poland, Roosevelt’s response was, “God help us all.”

  Neither the collapse of Poland nineteen days later nor Germany’s unleashing of its U-boats to prowl the Atlantic nor the fall of Norway and Denmark in April 1940 had roused the rest of the country to thinking about its own defense. After Poland fell, Roosevelt dared to appoint a War Resources Board of industrial leaders to consider what might be needed if America did have to prepare for a modern war. The board sat for six weeks before public outrage forced him to disband it.15