Mechanical watch globalisation & the sacrosanct Swiss Made

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May 2012

In 1969, Seiko won the Chronometry Competition at the Neuchâtel Observatory. The Swiss response was immediate: the Chronometry Competitions would no longer be held! In the midst of the “quartz crisis”, it was deemed necessary to put up a firewall and prevent the Japanese from seizing the advantage. Well, we all know the rest of the story: the long descent of the Swiss industry—devastated by the quartz invasion—into the watchmaking inferno, only to climb back to the surface, followed by its triumphant return to legitimacy on the royal road of the mechanical timepiece.

This renaissance was made possible by major efforts in terms of industrial rationalisation conducted by Nicolas Hayek as head of the SMH, which would later become the Swatch Group. Becoming almost the exclusive supplier for the entire expanding Swiss mechanical watchmaking sector—to which he regularly supplied strategic components (during this time, Europa Star was full of ads for ETA), the Swatch Group then reoriented its industrial strategy to increasingly benefit its own growing brands. Hayek thus announced in 2001 that the Swatch Group would gradually stop supplying movements to third party brands that had gradually become, in part thanks to him, major competitors.

Who would have thought that this decision would cause a breach in the walls of the Swiss fortress, a breach that would allow the Japanese to make their resounding entry today, twelve years later, into the heart of Swiss watchmaking territory? And, it is happening at the same moment that the Federation of the Swiss Watchmaking Industry and the Swiss government agreed to strengthen the criteria for Swiss Made.

Because they failed to develop their own alternatives required to cope with a progressive limitation of Swatch Group deliveries, Swiss brands are now seeing Japanese brands setting up in the strategic zones of the industry.

Citizen has purchased the movement maker, La Joux-Perret, one of the (partial) alternatives to ETA, from right under the noses of the groups and the Swiss brands. (The Swatch Group could not have outbid them, since the Competi-tion Commission would certainly have blocked them.) At the same time, TAG Heuer, suddenly deprived of assortments from Nivarox-FAR, turned to Seiko for balance springs.

So the two Japanese giants have managed to set up operations to varying degrees at the very heart of the Swiss watchmaking fabric. Undoubtedly, for Seiko, this comes at an opportune time since the brand has never stopped making high-quality mechanical movements. Although these timepieces have been, up to now, essentially distributed only on the domestic Japanese market, the company is today launching a major campaign to promote its mechanical watches on a global scale under the label Grand Seiko.

As for Citizen, the purchase of La Joux-Perret will allow it to gradually establish itself as the only real mass-market alternative after the withdrawal of ETA. Yet, the Japanese group will have to devote considerable resources to its new acquisition, which should be no problem for the giant Citizen Holdings.

But everyone says that this will not affect, in any way, the sacrosanct Swiss Made. Well, perhaps not on paper, no. In reality, the horological “Swissness”, at 50 or even 60 per cent or more, seems to be nothing more than an empty shell. The importance, however, is not in the supposed “purity” of this label. Rather, the importance is in the preservation of the most tightly woven industrial and artisanal fabric, and ideally, that this fabric remains as independent as possible. But, that is another story, much more complicated, a story that relates to the growing pre-eminence of groups in all economic sectors around the world. Whether they are called Swatch, Richemont, LVMH, Seiko or Citizen doesn’t really make any difference…

Mechanical watch globalisation & the sacrosanct Swiss Made

Source: Europa Star June - July 2012 Magazine Issue