Jewish Group Objects to GM Unit’s Sale to Germans : Autos: Relatives of Holocaust victims say dealing with a company that built Hitler’s tanks is a ‘slap in the face.’

A Jewish group added its voice Wednesday to complaints about General Motors Corp.’s proposed sale to a German firm of a subsidiary that, among other things, makes transmissions for army tanks.

A New York-based organization called Children of the Holocaust said GM’s proposal to sell its Allison Transmission unit to a firm that built tanks for Hitler’s army was a “slap in the face” to the Jewish community at a time of rising neo-Nazism in Germany.

The sale to ZF Friedrichschafen has already won most necessary government approvals, including one by the Committee on Foreign Investment in the U.S., a multi-agency panel chaired by Treasury Secretary Nicholas Brady that reviews all foreign investment in domestic high-technology and defense-related business.

GM says none of the products built by Allison’s 5,000 employees in Indianapolis are classified or on Defense Department lists of critical technologies, and only 30% of the subsidiary’s annual sales is to the military. The rest is made up of heavy-duty transmissions for commercial trucks and construction vehicles.

But some members of Congress have objected to the sale on grounds that too many U.S. defense-related businesses are coming under foreign control, and President-elect Bill Clinton has signaled a tougher posture toward such transactions.

The cross-agency CFIUS has been criticized as a rubber-stamp group. In the GM case, the approval of the Defense Department--a key member of the panel--was ordered by Under Secretary Donald Atwood, a former vice chairman of GM who was once general manager of the Allison division.

Rep. Dan Burton (R-Indiana), joined by such lawmakers as Rep. Mel Levine (D-Calif.), have written Defense Secretary Dick Cheney to object to the sale as causing more “erosion of our country’s defense industrial base.”