Supply and Demand Once Again Puts Swatch Group and Swiss Competition Commission at Odds
By Aaron Recksiek, CW21
In traditional economics, when a company no longer has the level of demand for a product they are producing, they simply produce less of the product. Not so for the Swatch Group. The situation they are currently in is contrary to the fundamental “supply and demand” laws of economics. On the one hand, they are required by law to produce 1.5 million mechanical movements each year, and on the other hand, they don’t have enough demand to sell these movements.
How did they get into this predicament? In 2011, the Swatch Group approached the Swiss Competition Commission, also known as COMCO, with a request to reduce, and eventually eliminate completely, the number of movements it was supplying to third-party brands. At the time the Swatch Group was producing about 60% of mechanical watch movements to the Swiss watch industry. The Swatch Group felt it was producing too many movements for its competitors and it was bad for the industry to be leveraged too heavily on one manufacturer.
In 2013, COMCO agreed to allow the Swatch Group to progressively taper off their supply year by year until 2019 when they would no longer be required to supply movements to any other company. This created plenty of concern around the industry as to where the supply of movements would come from to meet the ever-growing demand for mechanical timepieces. Also, many feared it would put some brands out of business due to the inability for smaller companies to develop and produce movements in-house.
In response to the projected unavailability of ETA movements, several movement manufacturers and many watch brands, spent a lot of time and money producing their own in-house components. Fortunately for the industry, but unfortunately for the Swatch Group, this came quicker than most experts had expected. Dependence on ETA mechanical movements has dropped significantly, partly due to brands making other arrangements, but it’s also due to the declining demand in Swiss watches over the last year.
This prompted the company to request a change to the agreement it originally struck with COMCO. They formally asked the agency to allow them to reduce the number of movements they are required to manufacture. In a statement on October 27, COMCO declined the Swatch Group’s request and stated, “Changing the supply agreement at this stage would threaten the projects of competitors.” In a statement later released by the Swatch Group, the company said, “In order to cover the additional costs arising from this enforced readiness to deliver, ETA will have to consider massive price hikes.” It seems imminent, unless the company can find new buyers for the hundreds of thousands of unclaimed watch movements.
Aaron Recksiek is an independent watchmaker in Salt Lake City, Utah. He is a graduate of the 2008 WOSTEP class at the Lititz Watch Technicum.
“If you have a strong purpose in life,
you don’t have to be pushed.
Your passion will drive you there.”
~ Roy T. Bennet
We are approaching what is for many of us a holy time and what is for all of us who work in the horological industry a busy time—we hope! As we prepare for this time of year, have we taken a look at our attitude: Is it positive or is it something else? I hope it is positive. Are we as enthusiastic as we can be about our job and what we need to accomplish? Last month I talked about attitude; this month let’s look at enthusiasm. It is that driving force that makes life interesting; it’s that twinkle in your eye; it’s what you feel in a firm handshake; it’s the spring in your step; it’s that feeling you get when you talk about your favorite subject.
Many years ago I took a class from a little guy from Texas who was a good motivational speaker. On the second day of the class, we all came dragging in after a long, busy day before and, for many of us, a short night of sleep. He said, “Everyone on their feet! Now throw your hands in the air and repeat after me: ‘Oh, I feel great!’” After doing this three times, Mr. Enthusiasm had us all awake, and he continued the class. He was one of the most enthusiastic people I ever met. His philosophy was: Do everything with enthusiasm; give it your all; no halfway in—all in or nothing.
Enthusiasm is something you cannot fake: You must have a strong belief in what you are doing or saying for it to be believable. Enthusiasm can help you find the new doors, but it takes passion to open them. “If you have a strong purpose in life, you don’t have to be pushed. Your passion will drive you there,” says Roy T. Bennet. During these trying times when parts are becoming less available, we watchmakers and clockmakers had better be looking for doors to open to help our businesses continue to thrive.
Many times in my life I have had to go back and look at myself and try to determine if I am positive in my attitude, or if I need to change my way of thinking. If things aren’t going right, is it because of me or something I have no control over? What can I change? Maybe it’s just some “stinking thinking” that has slipped in, and I need to clean it up. Your attitude has a direct effect on your enthusiasm for what you are doing. If you are passionate about what you are doing, then the enthusiasm will probably be there also. Do you look forward to that next repair job, or has it become so routine that you are bored? If you are bored, then look for a challenge to get you out of your comfort zone. Take on a job where you have to think about what you are doing. You are in control of your own destiny; you are the driving force that makes you, you. So, why not be the best you that you can be?
The New Witschi WisioScope S
By Aaron Recksiek, CW21
The WisioScope S represents a brand-new standard of precision watch timing in the watch industry’s after-sales service sector. The machine was announced in June at the Environnement Professionnel Horlogerie-Joaillerie (EPHJ), a show designed for brands to exhibit new tools and technologies in the watch industry.
At first glance, the machine resembles the Witschi S1 in size and appearance. The main noticeable differences are the full-color, 800 x 480-pixels display and the extra optical attachment mounted on top of the acoustic microphone. The camera mounted on top of the microphone is capable of visually recording the rate and amplitude independently, or in synchronicity, of the acoustic sound of the escapement. A non-harmful Class 1 laser is used to track the movement of the balance wheel, much like a modern hairspring vibrating tool.
The “real lift angle” of any watch can also be automatically calculated by comparing the optical readings with the acoustic sounds. The real lift angle of any watch might be slightly different than the manufacturer-specified theoretical angle, depending on the adjustments done to the escapement. This machine also allows the rate and amplitude of watches with special escapements to be recorded because the laser tracks the motion of the balance wheel. This is critical in modern industry because of advancements in silicon technology and other new, unconventional escapements being developed every year. The
machine is capable of recording the rates of a watch even in an extremely noisy environment, which is not possible with an acoustic-only machine. The interface is also capable of simultaneously showing the optical readings in comparison to the acoustic readings to help determine if there are any errors in the escapement.
The software for the new machine was developed in collaboration with the Centre Suisse d’Electronique et de Microtechnique (CSEM) in Neuchâtel, and funded in part by the Swiss Commission for Innovation and Technology (CTI). Witschi and CSEM jointly presented the new technology at the Congrès international de chronométrie 2016 (2016 International Chronometry Conference) in Montreux, Switzerland. Now that the innovations on this front have been made, it’s likely that we will soon see a new requirement of higher-precision machines in the modern watch-repair facility.
The WisioScope S will be available for purchase in the first quarter of 2017 and will be priced at 9,450 Swiss francs (approximately $9,651).
Aaron Recksiek is an independent watchmaker in Salt Lake City, Utah. He is a graduate of the 2008 WOSTEP class at the Lititz Watch Technicum.
“We can complain because the rose bush has thorns or rejoice because the thorn bush has roses.”
This month I would like to talk about attitude. We all have it: sometimes it is good, sometimes bad. A positive attitude will take you places that are far beyond your dreams. Believe me, I am an example of such success. I usually try to avoid talking about myself, but it’s hard not to in this message—so here goes. My wife, Shirley, asked me as we were sitting in a beautiful restaurant in New York, “Did you ever dream when you were growing up in poverty in West Virginia that your life would take you where it has?” My answer: “Not in my fondest dream could I have scripted it any better.” I owe it to my positive attitude and some beautiful people that believed in me along the way, including our landlord, who instilled in me that I was going to go places, and a couple of teachers. My grade school teacher, Clarence Lusk, and my high school principal, Harold Bailey, encouraged me to get an education and keep going even when the going got tough. They said that things are not always going to be easy; if they were, everyone would be doing it. My years as a commissioned salesman taught me if it’s to be, it’s up to me. That’s how I built my business, knowing that I had to work hard and expect good things to happen. When you are down, there is only one way to go—up. So, you set goals high and, to use an expression from my sales background, “hang the bacon high.”
I was recently at my doctor’s office and I saw the best examples of a bad attitude and a good attitude. A patient came in late for her appointment. She approached the receptionist, who said in a gruff tone and not smiling, “Your appointment was at 9:15 (it was 10:30), and there is nothing I can do for you. You will have to reschedule for next week.” Then, the receptionist received a phone call, which she abruptly took, leaving the poor lady standing there. Another receptionist said with a smile, “Come here and I’ll see if I can help you, Mrs. Smith. Let’s see what I can do. We can schedule you tomorrow at 9:30. Will that be okay?” About that time the doctor came to the front and said, “I will see you today. Just have a seat.” With the first receptionist, the lady would have left with ill feeling about her doctor, but the second receptionist saved the day. A good attitude will do the most good in all cases.
I was trained to smile when you answer the phone because a smile is transmittable even through the phone. A smile projects a positive attitude. Try smiling when you approach a stranger on the street and see what reaction you will get. There is a saying, “Smile and the world smiles with you; cry and you cry alone.” After all, who wants to be around a grump? Abraham Lincoln said, “We can complain because the rose bush has thorns or rejoice because the thorn bush has roses.” To pick the rose, we must look out for the thorns, and so it is in life. To achieve a thing of beauty in your life, you must risk getting stuck a few times.
It has been my pleasure to serve as your president for these past two years.
The past two years have been very busy and have gone by very fast. It seems like only yesterday that I was elected president of AWCI’s Board of Directors in my hometown of Clinton, Maryland. We finished that convention on a note of hope for the organization, looking forward to getting some things done. One objective was to shorten our BOD meeting to one hour or, at most, one hour and a half. We did accomplish that. One of the most difficult things that I had to overcome was understanding the role of the president of this organization. I can say it took a good six months to get a feel for it. It is a very complex job that you spend many hours each week working on. There are emails and phone calls and some very complicated decisions that have to be made. Some you make and hope the BOD will go along with, while some you just put off until the next board meeting.
Thanks to a group of dedicated people that serve on committees, subcommittees, and our Board of Directors, we were able to get some things done. In November 2014, we passed an amendment to our policy manual that provided funding to have speakers and educational programs brought to our Affiliate Chapters. We revised our online “Find a Professional” to make it more user-friendly, and made it so you could add your certification and a bit of bio about your qualifications as a craftsperson.
We sent a letter to membership about the attempt to restructure our membership, because most people did not like the way it was going. We also made a decision to purchase a digital microscope for the classroom and to replace a HVAC unit. In February we made the decision that the theme for the 2015 convention would be: “Join us in the heart of America as AWCI celebrates the rebirth of the American Watchmaking spirit.” Kansas City here we come! It was a great convention; everyone came away with uplifted spirits.
We have made some changes in the BOD structure. We will be down to six elected board members. The REC chair will no longer have a vote on the BOD, which gives the members you elected more power on the board. There have been some changes in the bylaws and the policy manual, all of which you can read for yourself online.
March 11 and 12 we got together at headquarters in Harrison, Ohio, for the mid-year conference, which is required by our bylaws, to discuss the state of AWCI. I am happy to report that we are in good condition financially. Our classes are being utilized to close to capacity. We have started some cooperation with NAWCC: we look forward to exchanging instructors to teach specific classes. These two days in Harrison were filled with reports, discussions, and decision making by a dedicated group of people who give of their time freely without pay, just for the satisfaction of knowing they may do some good for the horologist. For more details about what has happened in the past years, read the minutes online.
The BOD has had a conference call meeting just about every month. I am happy to report that most committees are busy doing what they should be doing. It has been my pleasure to serve as your president for these past two years. My hope is that history will look favorably on my service. Thanks to the two boards that I have had the pleasure of working with. They are truly great men and women.
WatchTime New York
Takes Place October 14–15 at Manhattan’s Gotham Hall
By Kathy Ortt
The consumer event and show for wristwatch collectors and enthusiasts is being held a second year at Gotham Hall. Twenty luxury watch brands, ranging from internationally renowned to aspiring independents, will exhibit their latest watches. Along with seeing the latest advancement in watches, guests will mingle with watch company executives, industry, experts, and other watch collectors. Last year’s event drew in nearly 1,000 attendees, including collectors, enthusiasts, journalists, celebrities, and personalities known on social media.
The event will kick off with a VIP cocktail party Friday, October 14, from 5:30-8:30 p.m. Roger Ruegger says, “WatchTime New York enables attendees to interact face-to-face with brand principals and experts in the watchmaking industry, and to mingle with other watchmakers, designers, enthusiasts, and collectors—particularly at the Friday night cocktail event. It’s an excellent time to network with peers and discover the latest product developments and novelties for 2016.”
Saturday, October 15, is an all-day session featuring watch exhibitors, entertainment, industry panels, and meet-and-greet opportunities. Several exhibiting brands will have professional watchmakers at their benches. Ruegger says, “The show provides the opportunity to handle groundbreaking new watch novelties, some presented in the US for the very first time, and discuss their innovative mechanical movements with informed professionals rather than in a disconnected retail environment. Select brands will present watchmaking demonstrations live on site for an up-close look into their complications and production. WatchTime New York will also host a few watch accessories vendors of interest to repair professionals, including strap vendors.” Some of the exhibiting brands include Breguet, MB&F, Seiko, Bell & Ross, Armin Strom, and Nomos.
According to Ruegger, “WatchTime has curated some of the foremost experts in watchmaking from various sectors of the field, including preeminent journalists (Joe Thompson, WatchTime Editor-at-Large, and Roger Ruegger, Editor-in-Chief, and Sarah Orlando, WatchTime Publisher), social media influencer Anish Bhatt, WatchAnish, noted collector and consultant Jeff Kingston, as well as several notable watch-themed book authors and speakers—to be announced. Each panel session allows a Q&A during which attendees may present their questions.”
WatchTime New York, formerly known as Inside Basel Geneva, is hosted by WatchTime magazine. The watch venue was completely revamped in 2015 with a new location and a broader range of watch brands and schedule of activities to appeal to consumers of today. Guests may purchase tickets at www.watchtimenewyork.com.
Kathy Ortt is an editor for the Horological Times.