Archive for the ‘News’ Category
Wednesday, June 10th, 2015
The Four P’s of Watchmaking and Clockmaking…
PATIENCE * PRIDE * PASSION * PERSEVERANCE
Patience To be a watchmaker or clockmaker you must have patience. There are so many times you will lose your cool if you don’t have patience. Many times when you are putting something together, it just will not go the way you want it to. Wheels won’t line up with the pivot hole, or you flip that part across your bench—now you have to practice patience. It is the very thing that keeps us from blowing our stack and doing something we’ll regret later. We also need patience to sit and work with a hairspring for what seems like hours or taking the time to analyze a problem until we find the solution. I’m sure you remember when you started out as a watchmaker or clockmaker how complicated a particular project might have seemed. But with time and patience, now it doesn’t seem complicated at all.
I will say more about the Four P’s of watchmaking and clockmaking next month when I talk about passion and perseverance.
We must also practice patience with problem customers: we need to show restraint and put on a happy face and help find a good solution to their problems. Listen. Really listen, and let them vent. After they have told you all their problems, ask the question: “Now, how can I help?” After you ask that question, shut up and let them tell you what they expect you to do for them. Now is the time for you to pay particular attention and deliver more than they expect. Promise little but deliver much more than expected.
Pride As watchmakers and clockmakers we should be proud of what we do. We are rendering a service to our communities just as surely as the doctor, plumber, carpenter, or trash collector. We are all a part of the community that makes the whole thing work. I grew up on a farm and was taught some good work ethics. I was taught if you plowed a row, you plowed it straight. If you dug a ditch, you did it with pride, so that when someone looked at the work you did, they would see the pride you put into it. And so it should be with all the work we do. You should be willing to put your name on your work just as an artist signs a picture. (I don’t mean scratch your name on the movement but in a fashion that will not deface the movement). I recently was talking with a young man who was serving an apprenticeship in the plumbing trade. He said he had to work three years as an apprentice before he could take a test to become a journeyman. He said, “I’m loving it.” We should all feel the same.
You should be proud of your association with AWCI. When you hang that certificate on your wall, it should be with much pride, whether it’s a membership, CW, CW21, CMW, CMW21, CC, CC21—or any other certificate of accomplishment. When you take classes that improve your skills or your understanding of the movement, you will be better able to serve your community. (It’s what you learn after you know it all that matters). You will gain knowledge or skills that will make you a better craftsperson. If you have a certification, be proud to display it, because it wasn’t given to you. You EARNED it, just as CPAs or PhDs earned theirs. It is something that any watchmaker or clockmaker can accomplish with patience, pride, passion, and perseverance.
To be continued.
Wednesday, June 10th, 2015
2015: The Year of Smartwatches
By Aaron Recksiek, CW21
Here we are in 2015, the year many industry commentators have dubbed “The Year of the Smartwatch.” There has been a recent, some might say frantic, push by many brands to produce some form of smart technology into a wristwatch package, not to mention the number of brands producing non-watch “wearable technology” (Fitbit, Nike, Jawbone, etc.). As we all know, most watch collectors don’t necessarily base their watch buying on useful functionality; rather, they purchase based on prestige and a need to connect with the mechanical world. The big question this year is whether the smartwatch will bring the next generation—a generation that avoids wearing anything strapped to their wrists—to embrace the conventional habit of wearing a watch. Many doubt this will be the case. However, if they do embrace it, this same generation might also discover the joy of the traditional collectible watch and become the next generation of mechanical-watch collectors.
In this piece I would like to highlight the most intriguing announcements and releases of the year and some of the biggest contenders in this relatively new facet of the industry. We covered some new smartwatches from the Consumer Electronic Show (Montblanc e-strap, Withings Activite Pop, Kronoz ZeWatch, and Guess Connect) in the March HT, so I will not include those here. I am going to approach this alphabetically and not necessarily in order of importance or popularity. Individual brands will be highlighted in bold.
Android Wear. This is the smartwatch version of Google’s Android operating system. The software is open sourced and is used by several different companies as the digital framework to go along with their manufactured hardware, similar to the current Android smartphone operating system. The current partners that use the system are: ASUS, Motorola, LG, Samsung, and Sony. The visual appearance varies depending on the brand’s desired interface of their watch. There are rectangular and circular cases with a vast variety of case material and band choices. A selection of 1,000+ different watch faces can be changed in an instant. The operating system allows the wearer to access many of the features of the compatible Android device: music, maps, weather, reminders, fitness, texts, and email. Battery life and charging method varies by device, but most of them need to be charged every day, similar to the paired smartphone.
The Apple Watch. By far the most anticipated smartwatch ever produced. There was speculation dating to early 2014 about the possibility of Apple developing a smartwatch, and the official announcement came in September 2014 with delivery estimates of spring 2015. In March 2015 the company announced that pre-orders would start at midnight Pacific Standard Time on April 10, and first delivery would be April 24. Unless they were up in the middle of the night to place their orders as soon as the watches went on sale, most consumers won’t see their watches until late May or June. It was widely reported that Apple sold one million watches in the first six hours of the pre-sale. The Apple Watch’s success is largely due to three major factors: variation, functionality, and ease of use. There are 38 different variations of the Apple Watch consisting of aluminum-cased models, stainless steel, and hardened 18k gold. The straps and bracelets are quickly and easily changeable and include fluoroelastomer plastic, leather with two different types of buckles or magnetic loop fastening, and two different bracelets— stainless steel link or stainless steel mesh. The use of the Apple Watch requires pairing it with a compatible iPhone, and it can do more than any other smartwatch on the market. It contains a Force Touch Sensor, accelerometer, gyroscope, heart-rate sensor, and barometer. It gives the wearer notifications of a small pulse using a linear actuator. Wearers can access much of the data and many of the apps stored on their phones without having to remove them from their pockets. The downsides are that it requires the wearer to also have an iPhone, connecting with Wi-Fi or Bluetooth 4.0. It will need to be charged every day, via electromagnetic induction, as the battery life is estimated at 18 hours.
Breitling. The B55 Connected is an extremely simplified version of the modern smartwatch that is still a genuine Swiss-made timepiece. The watch connects via Bluetooth to a compatible smartphone and the new Breitling smartphone app. It still uses the company’s B50 caliber SuperQuartz movement, and the smartphone connectivity is there to make the features of the watch easier to use. It can automatically update the displayed analog and digital time based on the time zone you are in. The app also allows the user to control and back up the timers, chronographs, and alarms. The watch is projected to go on sale in late 2015.
Bulgari. We now have some more details about the Diagono Magnesium that we first touched on last month in the Baselworld recap. The watch will contain a Swiss-made automatic movement as well as a near field communication chip that connects with the Bulgari Vault smartphone app. The NFC chip will be used to transmit secured personal data such as making credit card payments, unlocking smartlock doors, and transmitting passwords.
Gucci. The Italian fashion brand partnered with musician Will.i.am to create the i.am+ Smartband. It’s an integrated bangle-bracelet style smartwatch with independent 3G capability that will work without connecting it to a paired smartphone. Additional features include front-facing camera for video calling from your wrist, a heart-rate sensor, temperature sensor, and GPS. The smartwatch was announced at Baselworld, but no release date has been set.
H. Moser & Cie. The luxury Swiss watch manufacturer created a huge buzz all around the watch world when they dropped hints of a major “haute horlogerie smart watch” to be announced on March 9, taking place the same day as the Apple Watch unveiling. Words taken from the press release described “a revolutionary creation [that] provides state-of-the-art ergonomics and functionality, a clean interface, selective connectivity and an extremely long battery life.” They decided to punk watch collectors by declaring their mechanical watches are the smartest of them all. The entire release was nothing more than a marketing gimmick to debut the brand’s new Endeavour Perpetual Calendar Funky Blue, a dual barrel 18,000-beat, manual-wind, seven-day perpetual calendar with a new escapement design, all made in-house.
Hyetis. The Hyetis REDLINE smartwatch RDL-001 is a highly ambitious project by a company trying to manufacture the world’s first Swiss mechanical with electronic integrated display smartwatch. The watch was extensively covered back in early 2013, with a projected delivery date by the end of that year, and there have been design and production delays ever since. The endeavor was declared dead by enthusiasts last year, but recent updates from the company have promised delivery in 2015. The first model will contain a Swiss automatic, 48-hour power reserve, 28,800-beat movement, with a smart complications module that will contain an accelerometer, gyroscope, temperature sensor, pressure sensor, compass, humidity sensor, altimeter, and depth meter.
IWC. The eastern Switzerland manufacturer announced that soon all their sports watches, starting with the Big Pilot, will come equipped with IWC Connect, an activity tracker integrated into the strap of the watch. Not a lot of specifics have been announced yet, but the chip will provide full-fledged activity tracking and communicate with a variety of devices. With the announcement, Georges Kern, CEO of IWC Schaffhausen, added: “But, and this is essential, we do not touch our beautiful watches—an ‘IWC’ stays a mechanical handcrafted timepiece. We’ve engineered an intelligent design solution which perfectly integrates and underlines our product worlds.”
Kairos. Probably the most unique and innovative smartwatch company out there. The spectrum of available products includes the Hybrid Watch: a mixture of mechanical movement, Swiss Soprod A10BV-2 or Japanese Miyota 82S7, and a transparent digital display floating over the analog watch dial. The digital module operates on the Kairos OS software and connects via Bluetooth to Apple iOS, Android, or Windows Phones. It contains touch, gyroscope, 3-axis accelerometer, and gesture-detection sensors. The T-Band: this smartstrap comes in every millimeter size from 18-24mm and can be used with any watch that allows for interchangeable straps. It includes all the functionality of the Kairos Hybrid watch with the addition of a Galvanic Skin Sensor that monitors skin temperature and detects how much sweat your sweat glands are producing, optical heart-rate sensor, and compass. It has the option of a PMOLED display, hidden LED display, or no display at all. All of the sensor data can also be accessed on the paired smartphone app. Kairos also makes mechanical-only watches that can be purchased with plain straps and bracelets, or the Smart T-Band. The Hybrid smartwatch and T-Band both need to be charged every two to three days and connect via a POGO PIN USB charging port and not electromagnetic induction to avoid introducing any magnetism into the mechanical components. The company has an extensive backlog of orders because of the manufacturing challenges and tremendous popularity of the products.
Manufacture Modules Technologie’s MotionX-365 Horological Smartwatch Open Platform. This smartwatch tech is a joint venture between Silicon Valley and traditional Swiss watchmaking dubbed Swiss Horological Smartwatches. Starting in June 2015 we will see the release of ten different men’s and ladies’ models from Frederique Constant, Alpina, and Mondaine that will use this technology. There will be no digital displays and all the watches will have analog hands. If you didn’t know any better, you would not suspect they weren’t traditional Swiss watches. The smartwatches will connect to an iPhone or Android app, and the smart features will include: automatically syncing and updating date and time; MotionX activity tracking; Sleeptracker sleep monitoring, sleep-cycle alarms, activity alerts, and adaptive coaching. These watches will require no charging and boast more than two years of battery life.
Olio. The Model One is the first product to be produced by this new San Francisco-based company. They have drawn strong comparisons to Apple with their statements that they are dedicated to making products with the highest-quality materials and carefully crafted design that enrich people’s lives. The Model One works with both Apple iOS devices and Android smartphones and gives you access to notifications, weather, maps, music, calls, emails, texts, social media, news, sports, finance, etc. The smartwatch also has the ability to pair with other smart devices such as controlling lights, thermostats, locks, and cars. The watch is produced in 316L stainless steel, plain or PVD coated, with link bracelet or leather strap. First deliveries will be in June 2015 and all pre-orders are currently sold out.
Pebble. When they broke the record for Kickstarter campaigns in 2012, raising over $10 million, everyone knew this watch was going to be something special. The Pebble Steel has been the most successful single model smartwatch until the Apple Watch rolled out. The watch pairs with your smartphone—Apple or Android—to access apps and data. This is done through the Pebble app store, which is inside the Pebble app itself. This means that all the data on your phone is not always available on the watch, only the stuff you choose to be made available through the Pebble app. The watch screen is black and white with an e-paper display. This means it can be viewed just as easily in sunlight as in the dark. There are millions of watch faces available for download and extremely easy ways to create your own. The sensors integrated in the watch are a 3D accelerometer, compass, and a light sensor. The watch lasts up to a week on a full charge. In March 2015, Pebble outdid themselves again with another Kickstarter campaign—this time for the new Pebble Time, raising over $20 million. The Pebble Time is a full-color screen version of the classic Pebble with an added microphone sensor. The new watch is available in a variety of different colors of polycarbonate cases or 316L stainless steel, with an extensive selection of easy-to-change straps and bracelets. Most smartwatch aficionados consider the Pebble Time Steel the closest competitor to the Apple Watch.
The Smartwatch Group. They are not so much a watch company as they are an independent smartwatch research firm. They saw a need to compile all the data available relating to the smartwatch industry, such as trends, product offerings, sales figures, technical details, etc. They have compiled all the data into downloadable reports that can be purchased in a basic edition ($2,800) or a premium edition ($3,400). The reports include: market figures data; list of the top 300 smartwatch companies; applications and use cases; key technologies and operating systems; advice for successful projects; analysis of the global hotspots; and share price considerations. The need for the Smartwatch Group arose because few other industries have the growth projection estimates as the smartwatch industry; many industry experts project tenfold growth over the next five years.
Swatch Group. A lot has changed since CEO Nick Hayek dismissed smartwatches in 2013, stating: “Personally, I don’t believe it’s the next revolution.” Since then, not only has the entire industry been scrambling to come up with something, but now the Swatch Group will produce several different offerings of smartwatch technology in the near future. The first release is the Swatch Touch Zero One, mostly a fitness tracking device with viewable data on the paired smartphone app. There is a direct link to beach volleyball (not a hugely popular sport, but Swatch is a sponsor of the International Volleyball Federation). Oddly, an ice-cream cone graphic is used to show the wearer is progressing in his or her physical activity. The more interesting announcement from Swatch is that they plan to introduce NFC chips in several of their brands, ranging from the new Swatch Touch Zero One to the Tissot and Omega brands. The NFC chips will allow the wearer to make contactless payments from a paired smartphone. Swatch has already teamed up with China UnionPay to process payments in that country using the technology. There has been no further information regarding what the full capabilities of these smartwatches will be other than stating that they are “not a consumer electronics company,” so a full-blown smartwatch is not expected any time soon.
Tag Heuer. Not much has been revealed about the new Tag Heuer smartwatch. The price will be around $1,400, which is relatively expensive in the smartwatch world. The watch will contain a new, exclusive Intel microprocessor chip; the operating system will be a variation of Google’s Android Wear; and they are aiming for a 40-hour battery life. With Jean-Claude Biver, president of the Watch Division LVMH Group and CEO of TAG Heuer, at the helm, there are expectations they will be able to create something that brings Swiss-made smartwatches to the forefront of the smartwatch industry.
Vector. A new tech company is trying to break into the crowded market by offering something unique: a smartwatch with LCD screen and all the normal activity tracking, but with a 30-day battery life, which is achieved by the simplicity and efficiency of their proprietary operating system. The screen is not touch enabled, and the lighting is constantly changing to conserve energy. It connects to a smartphone with an app, just like most smartwatches, and comes in three different variations of case style with a vast array of traditional straps and bracelets.
Victorinox. The brand known for its multi-tool pocket knives and reasonably priced Swiss watches will be releasing a smartwatch in early 2016. Carl Elsener, the great grandson of Victorinox’s founder, announced in a Reuters report: “Our concept is something approaching a smartwatch.” Elsener did not give many specifics, but said he would like it to have the “opportunity to expand the functions” and “have a long lifespan compared to a mobile phone or a computer.”
Will the smartwatch succeed? Absolutely. We often hear people who don’t wear wristwatches say, “I just use my cell phone to tell me the time.” We have seen this trend before with mechanical pocket watches. A century ago, people said to the soldiers returning from World War I, “Why would I need to wear a watch on my wrist? I just use my pocket watch to tell the time.” This didn’t change the fact that while wristwatches were only 15% of all watches made in America in 1920, by 1935 they accounted for 85%. It became much more practical to wear your timekeeping device on your wrist as opposed to in a pocket or pouch. In modern times, with so much technology available, it seems silly for people to dedicate the valuable real estate on their arm to a device that only keeps time. Put the same technology they expect from their smartphone into a wristwatch, and you have the recipe for history to repeat itself. Recently when I was at the theater, a couple in front of me asked the usher for the time. It literally took him 10 seconds of fumbling around in his pockets to pull his cell phone out and give them the time. In the fast-paced future we all envision, this will not stand. For those who never developed a connection to traditional timepieces, a watch that works well with their smartphone will be the natural choice. This is why we will see a growing number of people who have never worn a watch before begin to accept the most personal of devices, the wristwatch—be it smart or otherwise.
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.
Thursday, May 21st, 2015
Baselworld 2015 Brand Highlights
By Aaron Recksiek, CW21
The annual spectacle of world watchmaking took place March 19–26, 2015. As always it was filled with excitement, as many brands announced their releases early, and surprises, as some brands were able to keep tight lips about their new offerings. It would be impossible, and mostly irrelevant, to cover every aspect of the show here in this forum. So I have decided to write brief recaps about the most notable brands, releases most relevant to our profession, new technological innovations, and the news that got everyone around the industry talking.
- Patek Philippe is making a push into an entirely new demographic of buyers by debuting the Calatrava Pilot Travel Time Ref. 5524, an aeronautical timepiece completely unlike anything the ultra-luxury watch manufacturer has made before.
- Rolex not only announced a new men’s caliber, the 3255 (a 70-hour power reserve, ultra-precise caliber that incorporates a new escapement design), to be paired with its new line of 40mm Day-Date watches, but they also created a redesigned Yachtmaster with black ceramic bezel and Everose gold case. It also comes equipped with the first-ever Rolex rubber Oysterflex strap.
- Omega started to put their new METAS certification to work in the new Globemaster, the first Master Chronometer, the title they have given to watches that achieve both the METAS standard as well as the traditional COSC certificate. Omega also added four new variations to their Dark Side of the Moon line.
- Oris bested everyone in the “throwback” competition with the new Divers Sixty-Five. Its styling and construction were designed to the smallest detail to feel like you’re wearing a watch from 1965.
- Bremont, one of the babies of the luxury watch world (they were founded in 2002), continued adding to their portfolio by creating a watch in collaboration with the car maker Jaguar, the Jaguar MKII Chronograph. Although the most notable news from Bremont came one week after Basel when Tonight Show host Jimmy Fallon presented his father-in-law with a special edition MBI watch that is only available to military pilots who eject from their aircraft in a Martin Baker seat.
- Tudor’s show was a big step in distancing itself from its parent brand, Rolex. They showcased the first in-house Tudor movement. It is not made alongside Rolex movements in Bienne, but at an entirely different facility. The movement is available in several of their new models. It is chronometer certified (also a first for Tudor), and it didn’t increase the price point one bit.
- Tag Heuer not only officially unveiled their partnership with Intel and Google to create a smartwatch, but they also unveiled their plans to produce the most inexpensive Swiss Tourbillon ever made. The watch would incorporate the Calibre Heuer 02 Tourbillon Chronograph movement that is currently in the final stages of development.
- Angelus reintroduced themselves with their first new watch since the late 1970s, the U10 Tourbillon Lumière, with an extremely unique and contemporary floating tourbillon. They were acquired in 2011 by Swiss watch manufacturer La Joux-Perret SA, a subsidiary of the Citizen Watch Company.
- Arnold Schwarzenegger previewed his new watch brand called The Schwarzenegger. Since he is a long-time, outspoken watch collector, many didn’t see it as much of a surprise that the former athlete/actor/politician would be looking to monetize his next passion.
- Breitling unveiled a new worldtimer, the Galactic Unitime SleekT. It’s a “double revolution” for Breitling, meaning that it contains the first non-chronograph in-house Breitling movement, and the first of their watches to utilize a tungsten carbide bezel.
- Nomos Glashutte presented a new, incredibly thin in-house automatic caliber containing their proprietary “Swing System” escapement, along with several new models to contain it.
- Corum brought the highly popular Bubble out of retirement after many collectors clamored for a return of one of the brand’s most iconic styles.
- Shinola introduced two new movement types, both of which are variations of Ronda movements assembled in Detroit, to be used in two new styles—one with a GMT function and the other with a moon phase. They also announced a collaboration to produce watches for outdoor-equipment maker Filson.
- Zenith showed that they are still master of innovation with the Elite 6150, with a simple 30mm diameter, 4mm thick, automatic movement that produces an astonishing (for its size) 100-hour power reserve.
- Bulova is doubling down in the new 262 KHz Ultra-High Frequency Accutron II watches, and they announced a full spectrum of styles to accompany the new technology.
- Ball continued their pursuit of developing antimagnetic technologies with the new Engineer II Volcano, a certified chronometer that is housed in a case made of material that has never before been used before in watchmaking—superimposed layers of carbon and mumetal (a carbon infused nickel-iron alloy, composed of approximately 77% nickel, 16% iron, 5% copper, and 2% chromium or molybdenum). The watch is shockproof to 5,000 Gs and resistant to up to 80,000 A/m of magnetism.
- Citizen improved upon their GPS time-receiving-technology they released last year with the new Satellite Wave F900 Eco-Drive. The improvement comes in the speed. The watch is able to track your location and update the time based on what time zone you are in (now in less than 30 seconds). The functional upgrade to the movement also came with an upgrade to the case and bracelet, which are made from Duratect-coated titanium Citizen calls “Super Titanium.” They claim it has a hardness of 2,200-2,500 on the Vickers scale.
- Seiko is also following suit in the GPS-timekeeping-innovation game by introducing the new Astron GPS Solar Dual-Time. However, the more notable releases from Seiko came in their continued pursuit to compete with the best the Swiss have to offer with the Grand Seiko collection. The new 55th anniversary watches return to 1967 and to its first-ever automatic watch, the impressively accurate Hi-Beat 62GS.
- Smartwatches—Frédérique Constant and Alpina were able to show off the new Motion X-365 Horological Smartwatch Platform designed to turn high-grade Swiss timepieces into low-key smartwatches (more on this next month). Bulgari is taking a unique approach to the smartwatch market by debuting the Diagono Magnesium, an “intelligent watch” equipped with cryptographic Near Field Communications, allowing the user to authenticate payment methods with a connected device.
Several trends became apparent this year. The reproduction of iconic vintage models was certainly one of them. Many brands revived old favorites while others made completely new models that had a distinct vintage look. Many brands ventured into new territory with their offerings, some introducing models going completely away from what many fans of the collections would expect from them. This is largely assumed to be a strategy to appeal to and draw in the next generation of younger watch buyers to invest in their brand. Another large trend was the reduction in expected cost and the added value for already existing prices across the board. The Swiss franc scare frightened the industry earlier this year and no doubt prompted many brands to re-evaluate the direction of the growth of their company and to try to maintain a more competitive price point to better appeal to the recessing markets. An extremely positive trend that was discovered throughout the show was the incredible amount of autonomy that many brands are investing in. One of the most common terms being thrown around was “in-house,” a hallmark achievement of any brand that should be encouraged and supported. It bodes well for the future of the industry to have more innovation coming from more sources around the watchmaking community.
Thursday, May 21st, 2015
By Aaron Recksiek, CW21
Madison Avenue in New York City has the long-held reputation as the largest marketplace in North America for fine watches. The Madison Avenue Business Improvement District would like to celebrate this fact and garner more interest for its businesses. So they’ve created an annual event to draw more attention to their prestige within the industry. The Madison Avenue Watch Week was born in 2011.
The 2015 version of this event will include participation from 13 fine timepiece brands: Lange & Söhne, Chopard, David Yurman, de Grisogono, Fabergé, FP Journe, Georg Jensen, Hublot, Jaeger-LeCoultre, John Varvatos, Montblanc, Panerai, and Vacheron Constantin.
The week kicks off on April 20 and runs through April 25, 2015. Events include but are not limited to: new timepiece releases, exhibitions, artisan demonstrations, receptions, and in-store events. The proceedings are primarily geared toward a retailer-to-customer dynamic but will inevitably include participation from the watchmakers and specialists working at the boutiques. Details of events will be released as the event draws closer. You can see all the events at madisonavenuewatchweek.com.
Thursday, May 21st, 2015
The Value of the Swiss Franc Increases Suddenly: Making Sense of the
By Aaron Recksiek, CW21
On January 15, the Swiss National Bank (SNB) ended its policy of trying to maintain a cap on the value of its currency compared to the euro. The policy was put in place in 2011, the last time the franc was considered “overvalued,” in an effort to reduce the country’s currency deflation and to promote growth of its industry. With exports making up more than two-thirds of the Swiss gross domestic product (GDP), a lower-valued Swiss franc translates to a healthier export market and, overall, to a healthier Swiss economy.
To maintain the cap, the Swiss National Bank would purchase the amount of foreign currency, mainly euros, it needed to stay undervalued. The more Swiss francs that were exchanged for foreign currencies, the weaker the franc would be. If the SNB needed to purchase more currency, all it needed to do was print more of its own Swiss francs. By the end of 2014 the SNB had amassed foreign currency holdings worth over 500 billion francs—more than twice the amount it had in 2011.
The main problem with investing in foreign currency is that the value of holdings is subject to unpredictable fluctuations in the market. The European Central Bank (ECB), which is in charge of administering monetary policy for the eurozone, was working on a solution to counteract much of Europe’s currency devaluation. The plan was to help improve their ever-weakening euro currency and provide stimulus to the stagnant European economies that have still failed to rebound from the worldwide financial crisis of 2008, by purchasing over a trillion euros worth of government bonds. This would have essentially required the Swiss National Bank to double down on its efforts to purchase euros to continue its currency devaluation, which would amass them a stockpile of European currency of such grand proportions likely never seen before. Many saw this as an unsustainable practice that would expose the historically conservative SNB to an extremely large risk: holding so much foreign currency—the value of which would be mostly out of its control.
Another issue is the growing reserves of deposits held by lenders at the SNB. This only added to the strain of holding down the value of the franc. As the size of the deposits grew, so did the value of the Swiss franc. In December 2015, the SNB announced a plan to charge a negative interest rate of .25% on deposits of over 10 million francs, in an effort to reduce the amount of deposits. After the announcement to end the cap, the SNB official interest rate was lowered even further to a unprecedented -.75%. The Swiss franc has long been an attractive currency to invest in because of its historical stability. As the economic uncertainty in Russia and other European countries mounted, the investment in the Swiss franc had become excessive as of late.
The rationale behind the decision of the Swiss National Bank to abandon the effort to cap its currency and essentially lose vast amounts of money based on the size of its foreign currency holdings has not been completely explained. It is believed by most that continuing to purchase foreign currency that had already grown to about 75% of its GDP would have grown a reserve too large, and the faith that the euro would do anything but decrease in value even further prompted the bank to cut its losses early and avoid the risk of losing even more in the future. The SNB also feared that its credibility would be hurt more by holding a greater amount of liabilities than assets and becoming insolvent than it would by going back on a promise it had made to buy “an unlimited amount” of foreign currency.
So far the SNB stands by its decision to remove the cap. Jean-Pierre Danthine, vice-chairman of the SNB, was quoted as saying, “The risks of the policy to the economy had begun to outweigh the benefits.” He claims that the Swiss franc is no longer overvalued, and foreign markets will need time to adjust to the new flexible exchange rate. He also said the SNB is not going to completely abandon intervening in the foreign exchange market. They are reevaluating their strategy and have yet to announce their new plans.
Obviously, this decision has consequences that will echo in all areas of the Swiss economy. In one day, the value of the Swiss franc jumped by 20%, and the value of the Swiss Stock Market (SMI) decreased by nearly 15%. Swiss watch brands’ stock value that traded on markets outside of Switzerland also fell on average 10–15%. The deflation within Switzerland, which had already dropped to -.25%, is expected to continue to deepen. Deflation is worrisome to modern economies because it increases the real value of debt and can lead to or aggravate an economic recession.
What this means to the watch industry is immediately apparent to everyone involved. Swiss exports immediately became at least 20% more expensive, and the cost will either need to be absorbed by the margins of the Swiss companies or passed on to the consumer. The Swiss watch industry, which was already showing stagnant growth over that last couple of years, will inevitably show negative growth for the immediate future, something that has only happened once since the resurgence of Swiss watches in the early 2000s. Swiss-made parts and tools for watches will now be more expensive, putting strain on after-sales service and on watchmakers. The news of the cap removal came just days before the annual SIHH watch convention in Geneva, where several executives of Swiss watch brands were quoted as not knowing the exact repercussions the new exchange rate would have on the prices that were already predetermined in Swiss francs and euros. Many dealers reduced their orders or cancelled them completely. The most notable quote to come from a Swiss watch executive was Swatch Group’s CEO Nick Hayek, who said, “Today’s SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country.”
The fine-watch industry has become more reliant on the Swiss for tools, parts, movements, and complete watches. The silver lining is that now the cost of manufacturing and innovating outside of Switzerland has become more appealing than ever. It may now be cheaper and more stable to invest money in the growing industry in Germany, where certain brands have been investing in all facets of watch-parts manufacturing, and in the United States where the long-dormant industry has finally started to show signs of resurgence under a few pioneering brands that have vowed to lead the charge to restore American watch manufacturing back to the glory of the 1940s.
Thursday, May 21st, 2015
“No one ever attains very eminent success by simply doing what is required of him. It is the amount and excellence of what is over and above the required that determines the greatness of ultimate distinction.”
~ Charles Kendall Adams
Our midyear conference is over, and we had what I feel was a very good meeting.We opened the meeting with a prayer and the pledge of allegiance. The prayer that Joe Cerullo chose was the serenity prayer, which I believe speaks to the situation that we as watchmakers and clockmakers find ourselves in: “God, grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.” We reviewed what we had accomplished in the last several months, which is highlighted in the minutes of those months. According to a report on the James M. Dodson Perpetuation Fund, submitted by Dale Coates, our financial position is strong. Each committee gave a report on what they had done and what they hope to do in the future.
It was a team effort, and the emphasis was to return AWCI to what our founding fathers believed we should be about, which is to educate everyone from the beginner to the most accomplished watchmakers and clockmakers to improve their skills. By doing so we can better serve our customers; it should be our desire to do the best job we can for our clients. There is no better feeling than to have a client come back to you or refer someone to you for a repair job.
We are working toward getting the bench courses put back together so when an affiliate chapter or a large enough group wants a day class, a weekend class, or a weeklong class, we can bring it to them. We feel that would better serve our membership. These classes would be taught by instructors who are in various parts of the country. Work is being done on the watch technician program as well as a sales program for salespeople. Salespeople and technicians can ultimately become certified in these programs; but if they never become certified, the knowledge they can gain from such programs could be very valuable to them and the businesses they work for. By August 2015, we are going to pilot a program on battery replacement that will show how to replace a battery while maintaining a high standard of quality. We also plan to develop a new CMW21 program for those who wish to take that certification. We should look at certification as a measure of our ability and as an accomplishment to be proud of.
When I think of a team, I think of a group of people working together to accomplish a common goal. Years ago I worked for Curtis Dworken as a manager of part of his business. When he hired me, he said, “We work together but I don’t want ‘yes men,’” meaning “Feel free to speak your mind.” That is what this Board of Directors does: We work through issues, try to solve problems, and we disagree at times without being disagreeable. Helen Keller said “Alone we can do so little; together we can do so much.” We as watchmakers and clockmakers should take the advice of the serenity prayer and accept the things we cannot change, have the courage to change the things we can, and the wisdom to know the difference.
Thursday, May 21st, 2015
“No one ever attains very eminent success by simply doing what is required of him. It is the amount and excellence of what is over and above the required that determines the greatness of ultimate distinction.”
~ Charles Kendall Adams
I hope the anecdotes I’ve been sharing for the past few months about my time running a small business have been helpful and entertaining to some of you. One of my proudest memories is of the time we opened our jewelry store and had customers coming in;our hope was that we could be of service
to our community. We served the community for 26 years in the same location and had a lot of good and not-so-good experiences. (Gun-point robberies are not too pleasant.)
We took a lot of pride in what we did, whether it was repairing a watch, clock, or a piece of jewelry, many of which were family heirlooms. Pride is defined as “great self-esteem; dignity.” We tried to finish each job and restore it to its original “like new” condition whenever possible. We worked to a high standard and wanted to hear, “Wow, that looks great!” or a report back that the watch or clock was keeping good time.
We had printed on our thank-you envelopes: “IF YOU ARE HAPPY WITH WHAT WE DID FOR YOU, TELL SOMEONE ABOUT US. IF YOU ARE UNHAPPY, TELL US.” We were prompted to put this on our envelopes when a lady brought in a ring that she had just had made by another jeweler and was very unhappy with the results. I said, “Why not take it back to him?” She said, “He was so proud of his work that I cannot take it back.” I said that we would make the ring for her but we needed a sketch of what she wanted. She produced a very good sketch of what she wanted: her engagement diamond in the center and her mother’s and grandmother’s engagement diamonds on each side; all stones were set in four-prong heads, but not in a straight line. Right then and there the decision was made to use the tag line: “IF YOU ARE UNHAPPY TELL US, BECAUSE IF YOU DON’T WE WILL THINK EVERYTHING IS OK.”
A happy customer might tell four of five people about you, but an unhappy one will tell as many people as will listen. So, do whatever you can to keep customers happy. Don’t be so proud of your work that you can’t see that someone is unhappy. We recently had a bad dining experience. The restaurant was cluttered, tables weren’t clean—the place needed attention. Our daughter told several of our friends about the bad experience with the statement: “I’ll never go back there again.” You and I do not want that to happen to our businesses.
Always listen to customers and watch their body language. Sometimes the body language speaks volumes.
In your business as well as your personal life, you can’t get more than you give any more than you can take a pint container to a well and bring back a gallon of water. You can’t give frowns and get back smiles; you can’t use a loud, angry voice and expect gentleness from others in return.
Note of Appreciation
Mr. Jon Safranek
has resigned from the AWCI Board of Directors.
We thank him for his service and wish him well.
Thursday, May 21st, 2015
|It is with great pleasure that I welcome Mr. Tom Schomaker back to the classroom at AWCI.
He brings great skills, both as a watchmaker and an instructor, to our organization.
Welcome back, Tom!
“I Bargained with Life for a Penny and Life Would Pay No More….
In last month’s President Message we discussed some of my experiences as an operator of a watch-repair shop for many years. This month let’s look at pricing our work for profitability. We all know the formula for how to look at our expenses: rent or mortgage, phone, auto, Internet, insurance, salaries, and various incidentals that may come up in the course of a year. But most of us forget to build in profit. How do you set your prices? Is it by what you think your competition would charge? How many of you are afraid to ask for the money? If you don’t ask for the money, people won’t just give it to you. How many times have you received a service or bought something and you said to the person serving you, “Here, take more.” (I’m not talking about tips). In the auto business we had a saying, “Hang the bacon high,” or, in other words, ask for more money—you can always come down.
When we price our work, we should always ask for a fair price for our services. What is a fair price? What if you price a job and when the project is finished, you lost money? Was that a fair price for you? In the jewelry industry it is a common practice to mark things up keystone. Do you mark parts up when you buy them? I’ll assume that’s a yes. Good for you. Let’s assume you took an hour to research and find the part. Do you charge for that time?
Let’s assume you repair 10 watches at $250 for a total of $2,500. But what if you raised your price by 25%? Now you can repair eight watches and make the same money. Learn to work smarter and make the same or more money, depending on the effort you wish to put into it.
How do you overcome objection to your price? When people bring their timepieces to you, encourage them to talk about the item they brought to you. Some of them have an interesting history. If you get a watch that belonged to a favorite grandfather or was carried through a war by this person, or many other stories that can be told, you have a more-than-likely chance of getting a repair job. Very few watches bought at yard sales ever get repaired. I never pressure anyone to leave a repair job. Let them think about it. Some people experience sticker shock when a price is quoted. I always explain that the watch is fully disassembled, cleaned, reassembled, oiled, and adjusted. Also, I will point out my credentials. If they still want to think about it, that’s okay.
Think on your feet. Many years ago a customer brought in a clock for repair. We looked the clock over and gave her an estimate of $185. (When you give an estimate, don’t say anything until the customer responds.)
The very next words out of her mouth were, “Can you do it any cheaper?” My reply was, “Yes, we can, but you have to go to your boss tomorrow and tell him to cut your salary.” I waited for her response. She said, “Fix it.” When you make a closing statement, wait for their answer.
…I worked for a menial’s hire
Only to learn dismayed,
That any wage I had asked of life,
Life would have paid.”
~From the poem “My Wage” by Jessie Belle Rittenhouse
Thursday, February 19th, 2015
Omega to Use New Whole-Watch Certification
By Donna Hardy
According to WatchPro, Omega has joined forces with the Swiss Federal Institute of Metrology (METAS) to produce a new, all-encompassing watch certification process to rival COSC.
Omega will begin using the METAS certification process next year to test its watches using antimagnetic Master Co-Axial movement, but the process will be open to all watchmakers.
Nick Hayek, Swatch Group chief executive officer, Dr. Christian Bock, director of the Swiss Federal Institute of Metrology, and Stephen Urquhart, president of Omega, at Geneva’s Cité du Temps announced the partnership on December 9, 2014.
Hayek said that the partnership with METAS was the next logical step in the face of a COSC chronometer standard that he said “needs to be strengthened.”
The new certification process will test whole watches rather than simply movements and will be carried out by the Swiss government body responsible for “all matters involving measurement and measuring procedures.”
The process will include tests for precision during and after exposure to magnetic fields greater than 15,000 gauss. They will have to perform within a tolerance of 0 and +5 seconds per day for autonomy (functioning without winding, measured in hours) and water resistance.
METAS will offer the Official Certification to any watch that meets these criteria and not only to Omega or the Swatch Group.
For more information, visit these websites—
Thursday, February 19th, 2015
By this time, the holiday gifts have been opened and those that needed to be returned have been returned. The holiday decorations have been put away for another year. You have celebrated the New Year and made those New Year’s resolutions (you did make a few resolutions, didn’t you?). I hope that one of them was to improve yourself. How do you go about improving? Take on a project that challenges you to do something that requires you to step out of your comfort zone. Listen to a motivational speaker either on audio or in person. How about reading a book that expands your knowledge on a subject of your choosing? Go to your local college and take a course or two. Maybe it might be something that would improve your health or wellbeing, like going for a brisk walk, joining an aerobics class, or going to the gym. President Harry Truman was known for his brisk, early-morning walks that challenged his secret service agents to keep up him. Maybe we should try to emulate this man. Take a walk along the seashore or go to the mountains. Whatever you choose to do, stick with it for at least one month, because it takes 21 days to develop a habit.
Your goal may be to improve your business practice, learn more about how to use your computer, Excel spreadsheets, Google Drive, PowerPoint, or to develop a website for your business. Or maybe you want to learn more about accounting or better use of the telephone (phone manners). Take a course on business management or how to be a better salesperson.
How about taking a course at AWCI’s state-of-the-art classroom, with our most excellent instructors. Whether you are a beginner or an accomplished watchmaker/clockmaker, AWCI is the place to improve your skills. You may want to review the article in December 2014 HT, “You Can Teach an Old Dog New Tricks,” by Michael Dempsey. It may change your mind about the class you have been thinking about taking.
Maybe you should get on a committee and offer solutions to real or perceived problems. There is a committee volunteer form on our website, http://www.awci.com/about-us/2012-committeevolunteer-form/.
A friend’s grandfather came to America from Europe, and after being processed at Ellis Island, he went into a cafeteria in New York City to get something to eat. He sat down at an empty table and waited for someone to take his order—of course, nobody did. Finally, a man with a tray full of food sat down opposite him and told him how things worked. “Start at that end,” he said, “and just go along and pick out what you want. At the other end they’ll tell you how much you have to pay for it.”
“I soon learned that’s how everything works in America,” my friend’s grandfather said. “Life is like a cafeteria here. You can get anything you want as long as you’re willing to pay the price. You can even get success. But you’ll never get it if you wait for someone to bring it to you. You have to get up and get it yourself.”
My wish for you this year is that you SUCCEED in everything you do.