Multinational Corporations - Early multinational corporations
The first American multinational corporation was I. M. Singer and Company (later changed to Singer Manufacturing Company), whose name became synonymous with the sewing machine. Established in 1851, Singer relied at first on independent foreign agents to sell its machines in Europe, even transferring to a French entrepreneur, Charles Callebaut, the rights to its French patent. Having successfully developed its own sales force and branches in the United States, however, and unhappy with the lack of control over these agents, some of whom even sold competing machines, the company decided to rely on its own salaried sales force and branch offices to market its product. By 1879 Singer was selling more machines abroad than at home and had branches in such distant places as India, Australia, South Africa, and New Zealand. In response to Europe's demand for its machines, moreover, it opened its first foreign factory in Glasgow, Scotland, in 1867. In 1883 it built a new modern plant outside Glasgow, where it consolidated the operations of the original factory and two others that had grown alongside it. It also built much smaller plants in Canada and Austria. By the end of the century other American corporations, including Westinghouse, General Electric, Western Electric, Eastman Kodak, and Standard Oil, often following Singer's experience abroad, had also opened plants or refineries in Europe.
Although talk was ripe at the end of the nineteenth and beginning of the twentieth centuries about gaining a larger American presence in the Far East and Latin America, most large American companies invested abroad where market success seemed most promising or where sources of raw materials could easily be developed; this meant primarily Canada, Mexico, and Europe. Canada was both a market for American exports and a source of such raw materials as gold, timber, and oil. As such it was the largest market for American investments, which totaled $618 million by 1914. In second place was Mexico, where Americans invested $587 million, mostly in mining and railroads but also increasingly in oil.
Europe was a primary market for U.S. industrial goods, including heavy industrial machinery, steam pumps, cash registers, electrical generators, reapers, and consumer goods, most of which were superior to European technology. American firms grew abroad largely by reinvesting their overseas earnings. In fact, by the turn of the twentieth century the United States had made such inroads into European markets that Europeans even talked and wrote about an "American invasion" of Europe, not dissimilar from American cries seventy-five years later against a Japanese "invasion" of the United States. By 1914, U.S. direct investment in Europe amounted to $573 million.
Worldwide, Americans invested $2.65 billion. Although this might not seem noteworthy by contemporary standards, it amounted to about 7 percent of the nation's gross national product or about the same percentage of the GNP as for the 1960s. On the eve of World War I, in other words, the United States had entered the still new world of multinational corporations, although that term was still unfamiliar and would remain so to most Americans for another half century.