From the 1970s to the late ’80s, employment in the Swiss watch industry dropped by some three-quarters. This severe and near fatal downturn, often known as the Quartz Crisis, was caused by the rise of battery-powered timepieces.
Though early work with electronic watches began in the West in the 1950s, with watchmakers in the United States, Switzerland and France producing early electronic timepieces, it was the Japanese who popularised the quartz watch.
Seiko’s invention of the Astron in 1969 – the first Japanese quartz watch – was the beginning of the end of Swiss watchmaking. Or so it seemed. By the early ’80s, more than half of the watch companies in Switzerland had gone bust, with the number rising each year – the watchmaking equivalent of a nuclear winter.
But with grit, ingenuity and marketing savvy, a few Swiss watchmakers clung on and reinvented themselves. They made the same products as before, but sold them differently – not as keepers of time but as objets d’art. Merchants and engineers became stewards of four centuries of history and guardians of age-old artisanal skills.
What is now known as the Swatch Group – the owner of Swatch, Omega, Longines, Tissot, Breguet and a host of other top brands – was built by the late Nicolas Hayek. A Lebanese engineer-turned-consultant, he advised Swiss banks that were creditors to bankrupt watchmakers in the ’80s.
Hayek revamped and merged two big watchmaking groups, and eventually took over the new entity, forming what would become the Swatch Group. He used the industrial base acquired to create arguably the most well-oiled industrial organisation in Swiss watchmaking – objets d’art produced on a very large scale.
In the process, Hayek became a billionaire and, because his group controlled many of the biggest makers of watch components, possibly the most powerful person in Swiss watchmaking.
Another prominent individual in the industry is Jean-Claude Biver. Born in Luxembourg, he created the modern Blancpain brand by turning the appeal of quartz watches on its head with the slogan: “Since 1735, there has never been a quartz Blancpain watch. And there never will be.”
After selling Blancpain to the Swatch Group – turning a 15,000 Swiss francs investment into 60 million Swiss francs – he went on to make Omega the behemoth it is today, then revived and sold Hublot to LVMH. His three coups in watchmaking have made him a very rich man.
What all these survivors had in common was not just the tenacity to sell something that no one wanted, but also an unshakeable belief that there was a place in the world for an anachronistic, handcrafted mechanical object. That belief now pervades the industry, which has blossomed to a level unimaginable two decades ago.
In fact, many of the names that went under in the ’80s have risen again, Lazarus-like. Swiss watchmakers are now making money hand over fist, having enjoyed their best year in 2013.
That record year is unlikely to be topped this year, with all indications pointing towards a flat or even declining market, driven by factors like a steep drop in mainland Chinese sales due to an ongoing anti-corruption campaign.
And there is the longer-term question posed by the new Apple Watch. Many observers outside the watch business cannot imagine how an antiquated mechanical wristwatch will survive the rise of the sleek smartwatch produced by the cool tech giant. Though most people in the watch industry are too young to remember the quartz revolution, some still quietly see parallels with the Apple Watch.
But most industry leaders hold the opposite opinion. “I am sure that fine mechanical timepieces will maintain their place on the wrist,” says Wilhelm Schmid, chief executive of A. Lange & Sohne.
His view is echoed by Zenith’s boss, Aldo Magada.
They are secure in their belief that they are not selling watches – timekeepers bought to tell time died with the quartz crisis – but objects that convey history, craftsmanship and a damn good story. In their minds, smartwatches and fine timepieces are not even in the same product category.
As watchmaker Francois-Paul Journe puts it: “You cannot compare something disposable with something that will last hundreds of years.”