As war raged in Europe all around them, Switzerland began to prepare for an expected Nazi invasion. In 1939, the Federal Assembly called for an election of a General, a rank that had been granted to only three men before. Henri Guisan was named to defend the country, a monumental task for some 430,000 troops against the untold millions of Germans and Italians. The odds only became worse as France fell in June of 1940, and the puppets of the Vichy government were set up to aid the Axis powers.
Upon hearing word of the speech, Hitler's famous temper exploded. He ordered the immediate invasion of Switzerland under Operation Tannenbaum (a battle plan developed the day France fell). While continuing the Battle of Britain, Nazi armies marched into the Alps with the speed of the Blitz into the north of Switzerland. They tried a feint of infantry into the Jura region in an attempt to draw out the Swiss, but the defenders did not budge. Instead, they used small artillery to slow German attack. Without a straight fight, the Germans simply rolled into the cities and declared anschluss as they had in Austria. Vichy France and Italy would follow suit as per their alliances, divvying up the nation along its language-borders of German, French, and Italian.
The Swiss would prove an incurable pain in the sides of the Axis. Bombings, ambushes, and assassinations would take place nearly continuously. While some of the Swiss would give to Nazi dependency, the majority of the nation would remain secretly (or publicly, in the mountains) at war. The French would lose much of their mobile army in an attempt to quell their region around Lake Geneva; Italy suffered enormous economic setbacks as Swiss destroyed shipment capabilities for their coal supply, virtually shutting down Italian industry; and Germany would dedicate hundreds of thousands of troops in attempts to pacify the Alps.
Despite the hangups in Switzerland and the failure of the Battle of Britain, Hitler continued his conquest of Europe with Operation Barbarossa invading the Soviet Union. While the Germans made great gains in 1941, the lack of available troops would cause the tide of war to turn against them. The Soviets would begin a counter-invasion, which would in turn speed the Allies' amphibious invasion of France in 1942 with Operation Sledgehammer. When Hitler was defeated in early 1944, Soviet domination of Eastern Europe would even include north of Switzerland as “occupation.”
Guisan refused to allow another invader to seize Swiss territory. The insurgency continued, and Stalin continually argued with Churchill and FDR, who demanded the pullout of Russians in Switzerland. Stalin did not blink, and war erupted as the Allies began to push Soviet troops eastward. Devastation again flowed over Europe, but the Swiss were soon liberated by British and American troops. Allies invited Swiss troops to continue, but Guisan and his soldiers refused. Their war was done, and they returned to rebuild their country and continue their tradition of independence on every level.
Meanwhile, the Soviet War would continue until 1946, when American A-bombs would destroy whatever was left of the Soviet infrastructure. Stalin would surrender, and Communism would fall.
In reality, Guisan did not bait Hitler with insult. His greatest scheme of defense was deterrence, showing that Switzerland would not be worth the devastation on his armies, and assuring Germany that the Swiss would not be a threat. Hitler would never invade Switzerland, sparing the Swiss of the carnage of the war, which would be seen so gravely on the Eastern Front.