Arthur Kittredge "Dick" Watson served as president of IBM World Trade Corporation and United States Ambassador to France.
Background
Arthur Kittredge "Dick" Watson was born in Summit, N. J. , one of four children of Thomas J. Watson, Sr. , and Jeanette Kittredge. Watson, Sr. , was a business genius who transformed the small Computing-Tabulating-Recording Co. into the corporate giant International Business Machines (IBM). The lives, fortunes, and misfortunes of Arthur Watson and his older brother, Thomas J. Watson, Jr. , were decisively shaped by their father's creation of a business empire and their roles as heirs apparent to that empire.
Education
Arthur Watson, known as "Dick, " was educated at the Hotchkiss School and at Yale University, from which he graduated in 1942 with a B. A. in international affairs. He then enlisted in the army, where he served in the ordnance corps and ultimately attained the rank of major. Sent to the Pacific theater, Watson wound up at an ordnance depot in Manila. He so enjoyed his experience in the Far East that at war's end he asked his father for permission to remain in the Philippines as head of IBM's operations there. But Watson, Sr. , had other plans for his youngest son: he intended Dick to become a leading figure in IBM's foreign businesses. Ordered home, Dick Watson returned to Yale, where he studied Spanish, French, German, and Russian.
Career
Upon completing his studies, Watson enrolled in the IBM trainee program, emerging from it as a salesman. He compiled a good record as a salesman, but not as good as the sales record established by his older brother in the years before the war. Indeed, when not overshadowed by his powerful father, Dick Watson always seemed to be in his older brother's shadow - it was Tom, Jr. , not Dick, who eventually replaced his father as chairman and CEO of IBM. He and his wife accompanied Watson, Sr. , on a business trip to Europe, so that Dick could serve as his father's interpreter. Even after he had executive responsibilities of his own, Dick was pressed into such service. In 1949, the elder Watson divided IBM into two divisions: the parent company, IBM, would focus on serving the domestic American market, while IBM World Trade would serve the rest of the globe. Dick Watson, whose education and career to this point seemed to have been planned by his father for this eventuality, was immediately elected a director and vice-president of IBM World Trade. In 1954, Dick Watson was elevated to the presidency of IBM World Trade, and in 1963 he stepped up to the chairmanship of IBM World Trade. In 1949, it looked as if Dick Watson was on the fast track and his older brother was on the slow track. In his memoir Father Son & Son. , Thomas Watson, Jr. , confessed that he was very unhappy with his father's decision to promote his younger brother: "I'd been at IBM three years before the war and almost three years since - they weren't all happy years but I wanted credit for them - and here was Dick, who'd been in the company eight months, being handed the world on a silver platter. " But Dick Watson was destined to spend his productive years within the smaller kingdom of IBM World Trade, while his older brother eventually inherited the entire IBM empire. The IBM World Trade division Dick Watson became responsible for had nine factories producing equipment, twice as many factories that turned out the ubiquitous IBM cards, and offices or representatives in eighty countries. But IBM World Trade's revenues in 1955 were barely $133 million at a time when domestic IBM's revenues were $564 million. Under Dick Watson's leadership IBM World Trade expanded rapidly in Europe and Asia, and to a lesser extent in Latin America and the Middle East. In 1965, its revenues topped $1 billion for the first time, with earnings of $144 million. But that year IBM's domestic revenues were $2. 5 billion, with earnings of $333 million. By then IBM World Trade was a holding company, whose major responsibility was harmonizing the efforts of large units like IBM Deutschland and IBM France as well as smaller units elsewhere in Europe and throughout the world. Each national unit was free to adopt its own approaches, especially in the areas of marketing and services, but the major subsidiaries shared research and special expertise, usually with headquarters acting as an intermediary. Relations with the American parent were mixed. The parent company welcomed the World Trade division's contributions to earnings. By 1967, when on revenues of $1. 6 billion it had earnings of $209 million, twice that of only four years earlier, a prominent IBM World Trade executive remarked, "Our business is to convert foreign currencies into dollars. " With World Trade's growing strength came a greater degree of independence that some in the domestic division resented. For example, the larger IBM World Trade companies developed machines and programs for their special markets. Design work on what was to become the IBM 3000 computer series was initiated at IBM Deutschland in the early 1960's, and components for this computer were produced at factories in several other European countries. The 3000 machines were simple, nonelectronic computers that could be purchased for less than $18, 000 or leased for as little as $350 a month. They proved to be a huge success in Europe, and versions were shipped from there throughout the world. Dick Watson was elated, and suggested that the 3000's be shipped to the United States as well. Matters of pride at the home company militated against such a move, and Dick Watson backed down. But Tom Watson, Jr. , recognized IBM World Trade's growing abilities, and intended to use them in the creation of the company's most ambitious program to date, the creation of the third generation of computers. As its eventual name, the 360, indicates, this new series was meant to cover the spectrum of computers from the small to the very large. It was, as Fortune writer Tom Wise put it, "IBM's $5, 000, 000, 000 gamble. " It was too large a project for domestic IBM to handle on its own, so IBM World Trade was brought into the picture. Vincent Learson, an IBM board member since 1961 and the group executive in charge of data processing, was named to head the project. It was no secret that Learson had ambitions to succeed Tom Watson, Jr. But given the successful record at IBM World Trade and his family's historical role at IBM, Dick Watson also had hope of succeeding his brother. Learson turned the technical side of the project over to designers Gene Amdahl and Gerrit Blaauw, who clashed over technical points, with Amdahl the victor. Learson gave himself major responsibilities in marketing, financing, and placements. Dick Watson and IBM World Trade were left with various manufacturing assignments. The first machines, the 360/40's, were installed in April 1965, by which time there was a record backlog of orders on the books, assuring financial success--if the promised machines could be delivered. Before the end of the year the 30's, 50's, and 65's also made their appearance, to very good reviews. All of this created production problems. IBM World Trade was badly strained by production demands. Schedules had to be redrawn, and some customers had to be asked to accept delays. As a result, Learson's star rose while Dick Watson's went into eclipse. There seemed little doubt now that Learson was next in line for the succession, and that Dick would never rise above his leadership of IBM World Trade. And even there he was having problems. Already there was talk that he should resign for the sake of the company. There were many aggressive young executives who felt he was blocking their way to promotion. Some blamed him for production foul-ups, and believed that he was being retained only because he was the CEO's younger brother. Dick took to brooding. Although he was always in control while at work, he began to drink heavily. He and his brother barely spoke with one another. Later on, Tom realized what had happened: "I thought I was giving Dick an opportunity in an area where he would be an outstanding success. Instead I had handed him a stacked deck. He couldn't hold his own against the demands put on him by Learson. " In early 1966, the board of directors elected Learson president of IBM. Dick Watson became vice-chairman, but by then he had lost interest in the business. Tom wrote, "His confidence seemed shaken. I felt nothing but shame and frustration at the way I'd treated him. " In this period Watson served on several government commissions, most of which dealt with trade. He served as president of the International Chamber of Commerce (1967 - 1968), and was cofounder with David Rockefeller in 1967 of the Emergency Committee for American Trade, which opposed protectionism. Like his brother, and unlike his father, for most of his life Dick Watson was a Democrat. In 1968, he switched to the Republican party, attended the National Republican Convention held in Miami, Fla. , and made a large contribution to the Nixon campaign. After the election President Nixon sent him and New York governor Nelson Rockefeller on a fact-finding tour of Latin America. In 1970, Watson resigned from IBM to accept Nixon's offer to become the American ambassador to France. He served in this post for two years, during which time he also was involved with the preliminary steps toward the eventual American recognition of China. In the process Watson became friendly with Huang Chen, China's ambassador to France, who subsequently became ambassador to the United States. This friendship was an important bridge between the two countries in the early years following recognition. During this period there were persistent rumors that Dick Watson was an alcoholic and subject to bouts of depression. In 1972, Jack Anderson reported in his syndicated column that Watson had been inebriated while on a passenger plane. Watson denied this allegation but soon thereafter resigned his ambassadorship. He returned to IBM as a director and a member of the executive committee, but he had no real power or authority. In effect, Dick Watson had retired. For several years he had suffered from various physical ailments. In 1973, he had a heart attack, but appeared to recover. Then, in mid-July 1974, he suffered a serious fall on the stairway in his New Canaan, Connecticut, house. Watson fell into a coma from which he never recovered. He died in Norwalk, Connecticut.
Achievements
Watson was a benefactor of the Metropolitan Museum of Art, serving as a trustee of the Museum and as a member of the Museum's Centennial committee. He also founded partnership Dankist, a venture capital firm located in Stamford, Conn. Yale University's computer science building is named in his honor.
Personality
Dick Watson stood six feet, two inches tall and was noted for his patrician good looks and his excellent taste in clothes. Although considered reserved by casual acquaintances, he was relaxed and fun-loving with his intimates. He enjoyed telling funny stories and slightly risqué jokes.
Interests
He had a passion for sailing and owned his own sloop. He and his wife collected Royal Copenhagen figurines and fine art. He owned a Monet, a Corot, a Gauguin, a Childe Hassam, an Andrew Wyeth, and many other paintings.
Connections
On July 10, 1948, Dick Watson married Nancy C. Hemingway; they had six children.
