List of international subsidiaries of IBM
| Industry | Information technology |
|---|---|
Area served | Worldwide (Europe, Asia, North America) |
Key people | Hollerith, Flint, Watson, Schotte, Werner Lier, Emile Genon, H. Gabrecht, Hermann Fellinger, Willy Heidinger, Chevalerie, Mizushina Ko |
| Products | Punch card machines, adding machines, computing equipment |
IBM's engagement in international commerce predates the adoption of its present name. Pioneering figures such as Hollerith, Flint, and Watson played crucial roles in broadening the company's global footprint.
By the period preceding World War II, IBM had established approximately 70 overseas branches and subsidiaries. Its primary rivals during this time included Remington Rand, Powers, Bull, NCR, and Burroughs.
European HQ
Originally situated in Paris, IBM's European headquarters was relocated to Geneva in 1935 under Watson's leadership. Prominent executives like Schotte and subsequently Werner Lier managed operations there (refer to #Switzerland).
Austria
Until 1933, Furth & Company represented IBM in Austria, after which a direct subsidiary was founded. In 1934, IBM administered the Austrian census and constructed a facility for card printing. Following Austria's annexation by Germany in 1938, IBM’s German branch, Dehomag, took over from the Austrian subsidiary and conducted the May 1939 Reich Census covering Austria and other territories under German control.
Belgium
The Belgian division of IBM, known as Watson Belge, was headed by Emile Genon, who had previously worked with competitor Groupe Bull. After the United States entered World War II in 1941, Nazi authorities confiscated the company’s ownership and appointed H. Gabrecht as custodian—who also managed the Dutch subsidiary. Gabrecht collaborated closely with Hermann Fellinger, custodian of Dehomag, enabling local management to maintain operations.
Throughout the war, Nazi Mechanical Reporting units transferred IBM equipment from Belgium for deployment elsewhere within the Reich. Gabrecht oversaw contracts ensuring that IBM New York received compensation for machine usage.
Bulgaria
IBM’s Bulgarian branch, Watson Business Machines Corporation, Ltd., commenced activities in Sofia in March 1938. During World War II, Bulgaria’s designation as 'enemy territory' under German occupation limited business dealings with IBM’s offices in New York and Geneva. In 1942, payments from Bulgarian railroads to the subsidiary were blocked by the government, pushing it towards financial distress. Despite an unsuccessful appeal for aid from the U.S. State Department, the subsidiary endured through undisclosed methods and continued providing punch card scheduling services to railroads. After the war ended in 1945, IBM resumed its transactions, submitted a claim for war damages, and sought access to its bank accounts in Sofia.
Canada
Information Systems Management Corporation (ISM Canada) was created through the merger of Westbridge Computer Corp and STM Systems Corp, with a new headquarters established at 1 Research Drive in Regina. IBM secured a controlling financial stake and delegated its internal computing functions to ISM. ISM became one of Canada’s top 500 companies and significantly advanced its ranking in Commerce magazine’s listings. By 1995, ISM Canada was fully owned by IBM.
China
Before World War II, IBM operated an office in Shanghai. During the Japanese invasion, one of IBM’s machines was relocated to Kobe.
Czechoslovakia
IBM inaugurated an office in Prague around 1933, followed by a sales training school in 1935 and a card printing facility. Key customers included Czechoslovak State Railways. During WWII, under custodian Hermann Fellinger’s supervision, the Czech subsidiary remained operational supplying punched cards to Dehomag—IBM’s German branch—in exchange for equipment. Some machines were moved by Nazi forces to Eastern railway lines with rental fees managed via Prague Kreditbank.
France
CTR, which later became IBM, launched a sales office in Paris in 1919 and established a manufacturing facility by 1925. By 1932, IBM France catered to 65 clients, including the Ministry of War, but its expansion lagged behind competitors such as Powers and Bull. In response, Watson took on Bull by acquiring its Swiss rights and recruiting essential staff members, leading to legal disputes over unfair competition.
In 1936, the Compagnie Electro-Comptabe de France (CEC) was founded, providing services to banks, railways, and the military while broadening its manufacturing footprint throughout France. Following the German invasion in 1940, Nazi authorities confiscated hundreds of CEC machines for use by the Reich and relocated both operations and punchcard supplies. Although there were intentions to transform CEC into a Nazi rival to IBM, these plans never came to fruition. The Nazi-appointed overseer of CEC was SS officer Westerholt.
CEC also maintained branches in French territories such as Algeria, Casablanca, and Indochina. It worked alongside Vichy France’s Demographic Department on census activities; however, René Carmille—a covert member of the French Resistance—undermined this effort by deliberately excluding 'Jewish' punch holes on census cards and leveraged the census operation to aid resistance efforts in Algeria.
Germany
Prior to the First World War, IBM—then known as CTR—was active in Germany. During the conflict, German authorities seized the company as 'enemy property,' but due to alien custody laws in Germany, CTR’s assets were returned intact after hostilities ended.
In 1922, Dehomag, under the leadership of Willy Heidinger, obtained a license to manufacture machines from CTR. The hyperinflation crisis in Germany during the 1920s left Dehomag indebted to CTR for substantial sums, prompting Watson to acquire a 90% stake in Dehomag. The remaining 10% was retained by Heidinger under restrictive conditions that helped preserve control. Dehomag evolved into a subsidiary of CTR and outperformed other IBM affiliates.
During the early 1930s, other IBM subsidiaries such as Degemag, Optima, and Holgemag merged into Dehomag. Dehomag secured the contract for conducting the 1933 Prussian census and expanded its operations following Watson’s visit that year, obtaining rights to operate within regions previously managed by other IBM subsidiaries.
With the Nazi Party’s ascendancy in 1933 and new restrictions on foreign currency transfers, Dehomag’s profits were frozen in German banks but continued to be sent as royalty payments to IBM New York. That same year, Heidinger aligned Dehomag with the Sturmabteilung to assist in compiling vital statistics.
In 1934, Dehomag inaugurated a new factory in Lichterfelde, an event attended by IBM representatives along with senior officials from financial institutions such as the Reichsbank, government ministries, and industry leaders. Dehomag’s equipment served government agencies and major corporations including IG Farben, Siemens, Daimler-Benz, Krupp, and Deutsche Bank, facilitating payroll processing, inventory control, personnel management, financial operations, scheduling tasks, and manufacturing oversight.
Heidinger endorsed Hitler’s vision by comparing him to a physician healing Germany’s 'cultural body' through statistical methods—a perspective supported by Watson. In 1934, Watson backed Heidinger in a legal case against competitor Powers for lacking sufficient German affiliation; Powers was defeated.
Following World War II, efforts were made to rebrand Dehomag as IBM Germany. In East Germany, Dehomag’s assets were nationalized and prevented from reestablishing operations. Conversely, in Western occupation zones and later West Germany, Dehomag was reconstituted under IBM control by 1949 as IBM Deutschland, providing administrative support during the Cold War with widespread deployment of existing IBM systems.
The Netherlands
IBM established a significant presence in the Netherlands, inaugurating a card printing facility in 1936. However, it was not until March 1940 that the company founded a formal subsidiary, Watson Bedrijfsmachine Maatschappij N.V., based in Amsterdam. After the German occupation in May 1940, Dutch authorities employed IBM technology for population censuses and registration tasks, including the 1941 mandate requiring Jewish registration. During that year, IBM New York provided the Netherlands with 132 million punch cards.
Following the United States' entry into World War II in December 1941, legal restrictions prevented IBM from conducting business with subsidiaries located in territories controlled by enemy forces. Consequently, the Dutch subsidiary came under the supervision of custodian H Garbrecht, who also oversaw the Belgian branch. When German forces relocated IBM machines from the Netherlands, Garbrecht ensured accurate accounting to secure appropriate compensation for IBM.
Italy
During the war, IBM's Italian branch, Watson Italiana, coordinated its operations with Fellinger, who served as custodian for the German Dehomag subsidiary.
Japan
IBM's presence in Japan began in 1925 with the supply of adding machines to Mitsubishi Shipbuilding. Its principal rival was Powers Tabulating Machine (which later became Remington Rand), preferred by the Japanese government up until after World War II.
IBM initially encountered challenges adapting to Japan’s rental business practices. After early representation through Morimura Brothers and Kurosawa Trading, IBM established a subsidiary in Yokohama in 1937 named Nihon Watson Tokei Kaikei Kikai, under the management of Chevalerie until 1941. That year marked the opening of a manufacturing plant producing punch cards, alongside an increase in hiring Japanese managers due to wartime demand. The production process was enhanced by expertise obtained from Dehomag.
By 1939, IBM Japan had expanded into aircraft manufacturing and began producing punch cards. Following Japan’s invasion of Indochina in 1940, IBM Japan facilitated communication with its Hanoi office.
As tensions between the US and Japan escalated, Japan imposed restrictions on importing IBM equipment and transferring royalty payments abroad. Chevalerie was replaced by Mizushina Ko; meanwhile, assets were frozen in mid-1941. Despite severed connections with IBM New York, IBM Japan continued providing rental services and manufacturing punch cards until 1943 for clients such as insurance firms, government bodies, Mitsubishi Heavy Industries, and military organizations.
In 1942, IBM Japan was designated an "enemy company," with Jinushi Ennosuke appointed as custodian. The following year Tokyo Electric (now Toshiba) acquired its assets and operations; funds were held at Yokohama Specie Bank under custodianship later transferred to Mitsubishi Trust.
Mizushina Ko faced imprisonment on espionage allegations but subsequently contributed to naval coded communications efforts. Machines confiscated from occupied regions were stored in Kobe.
During wartime, Toshiba established JTM to manufacture punch cards and replicate IBM machinery.
After the war, negotiations with SCAP allowed IBM to reclaim property and royalties related to JTM’s use of seized equipment. These recovery efforts were led by T. Kevin Mallen, IBM Far East General Manager. Restrictions imposed by the Japanese government were gradually lifted only by the late 1950s.
Norway
Before World War II commenced, IBM Norsk—the Norwegian subsidiary—was transferred to Norwegian and other non-American ownership to prevent Nazi control after Watson declined an award from Hitler. When Norway came under German occupation, Dehomag custodian Fellinger took charge and assisted manager Jens Tellefson in interactions with Nazi authorities. Sabotage operations destroyed IBM Norsk’s offices aiming to disrupt forced labor activities; however, backup systems enabled continued operations following relocation.
Poland
IBM's initial presence in Poland was through the Block-Brun agency until 1934, when Thomas J. Watson founded the subsidiary Polski Hollerith to rival Powers Corporation. By 1937, this entity was renamed Watson Business Machines sp. z o.o., catering to clients such as the Polish Postal Service and the Ministry of Railroads. Following the 1939 invasions, operations in Upper Silesia were transferred to IBM’s German branch, Dehomag. Meanwhile, Watson Business Machines was reorganized as Watson Büromaschinen GmbH under German administration, concentrating on the Nazi-controlled General Government region and maintaining banking relations with Bank Handlowy in Warsaw. Both subsidiaries collaborated with Nazi authorities, contributing to initiatives like the 1939 Polish census—which facilitated population monitoring—and supporting railroad activities linked to deportations. After World War II, IBM sought protection from the U.S. State Department concerning its Polish bank accounts.
Romania
IBM Romania, operating as Compania Electrocontabila Watson, was established in Bucharest in 1938 and served various government sectors including railroads, census bureaus, and communication ministries. The company operated a Swift Press facility for card printing and played a role in the 1941 Romanian census, which included data collection on Jewish populations. Due to equipment shortages, IBM arranged for machine deliveries from German-occupied Poland through diplomatic channels. After the United States entered World War II and Romania was designated under General Rule 11, IBM’s communications with its offices in New York and Geneva became restricted. Following 1945, IBM petitioned the State Department for assistance regarding Romanian bank accounts and claims for reparations related to damaged assets.
With the collapse of communism in 1989, IBM formed a partnership with Romanian Business Systems (RBS Ltd.), which it fully acquired by 1995. Dan Roman, who was RBS’s CEO and owner at the time, became IBM Romania’s inaugural Country General Manager.
Russia / Soviet Union
Herman Hollerith secured a contract to provide tabulating equipment for the 1896 Russian census under Tsar Nicholas II. His Tabulating Machine Company eventually evolved into Computing-Tabulating-Recording Company (CTR), later renamed IBM.
By the late 1930s, IBM punch cards were extensively used at facilities such as the Stalina Automobile Plant. During Stalin’s Great Purge in 1937, U.S. Ambassador Joseph E. Davies intervened on behalf of an IBM employee and described IBM’s longstanding business dealings with Soviet government agencies as “pleasant.”
When Germany launched Operation Barbarossa against the Soviet Union, it confiscated IBM machine spare parts discovered within Soviet territory. After World War II ended, Soviet forces retrieved IBM machines from areas formerly occupied by Germany and relocated them to the USSR.
- See also:
Sweden
The Swedish branch of IBM, Svenska Watson, supplied punched paper cards to other subsidiaries during 1939.
Switzerland
In 1935, IBM relocated its European headquarters from Paris to Geneva under the leadership of Werner C. Lier. Internal investigations within IBM uncovered that Lier had falsified dates to conceal trade between IBM Geneva and companies blacklisted by the U.S. State Department during World War II; however, he was not removed from his position. After the war, Lier encountered difficulties obtaining visas but received assistance from U.S. officials to facilitate his entry into the United States.
IBM subsidiaries located in neutral countries reportedly continued providing punched cards to branches operating in enemy states throughout the war and engaged in commerce with blacklisted firms in Germany and Italy.
Vietnam
IBM's Hanoi branch was initially overseen by the French IBM division but lost all communication following Japan's 1940 invasion of Indochina. Subsequently, IBM Japan played a crucial role in reestablishing contact between IBM New York and the Hanoi office.
Yugoslavia
Before the outbreak of World War II, the Yugoslav subsidiary Watson AG was operational. During the conflict, it came under Nazi administration. Management remained with V Bajkic, who liaised with Edmund Veesenmayer, a Dehomag consultant connected to the Ustashi government. Major clients encompassed the Yugoslav Army, Ministry of Commerce, and railway services. Prior to the Soviet advance into Yugoslavia, equipment was confiscated and transported to Germany. Watson AG invoiced the Reich, which continued payments until 1945. After the war, funds held by the Nazi custodian were handed over to the US Army Property Control Officer for IBM New York. IBM requested assistance from the State Department to reclaim assets and monies held in Jugobank Belgrade.
German Alien Property Laws and World War II
During the war, Germany appointed custodians to administer foreign-owned companies’ assets, including IBM subsidiaries, with an understanding that these would be returned after hostilities ceased. This practice was employed in both world conflicts and involved changes in management—IBM’s German subsidiary Dehomag came under the supervision of Dr. Edmund Veesenmayer, who was notably involved in Holocaust operations in Hungary.
The United States government prohibited transactions with subsidiaries located in enemy-controlled regions through regulations such as General Rule 11. Once these restrictions were lifted, IBM sought reimbursement for damaged machinery, assessed subsidiary output for employee awards like the Hundred Percent Club, and secured access to wartime bank accounts.