To Manufacture or Not To Manufacture, That Is The Question!

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Last decade almost all watchmakers were (and still are) rushing to become a manufacture watchmaker. To answer to the title of this article, “To Manufacture or Not To Manufacture, That Is The Question!”, one needs to define the title ‘Manufacture’, and that is what ALL watchmakers leave in the middle!

Everybody who studied a bit of Latin, can split the word ‘Manufacture’ in two: ‘Manu’ and ‘Factura’ and knows one can translate this in: Manu is hand and Factura is to manufacture (Isn’t it funny what the English word derives from). Wikipedia gives the following definition for this word:

“Manufacturing (from Latin manu factura, “making by hand”) is the use of tools and labor to make things for use or sale. The term may refer to a vast range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale.”

By this definition almost all Swiss watchmakers can call themselves Manufacture Watchmakers. But then Wikipedia also states:
“Manufacturing is used ironically within some of these companies as a term referring solely to the marketing of the product, perhaps due to it having the alternate meaning of creating false statements. More generally, many companies use it to describe the entire process of production, all the way through from idea conception to its first use by the consumer.”

This is something that I can agree with. If we follow this definition of Manufacture, then suddenly there are NOT many watchmakers that are ‘true’ watchmakers. Companies that do not create new calibres are not watchmakers, but watch assemblers or to make a bridge to car making: Watch Tuners (Does the program ‘Pimp my Watch’ already exist?!). These watchmakers take a calibre and tune the ‘engine’ of the watch (Tissot, Raymond Weil, Rado, Baume & Mercier and many more). As you notice this discussion is soley about the ‘heart’ of the watch, the movement. That is why I only take mechanical watchmaking in to consideration in this article.

Until couple of years ago there was only ONE company in Switzerland could make Hair Spring Balances from mechanical movements (Nivarox), so there was not one compay that could make a 100% manufacture mechanical watch movement, so that was the start of when can one call it’s movement a manufacture movement?! In the watch industry there is still no clear definition. Some say a watch movement should made up by 80% of spare parts that are MANUFACTUREd by the watchmaker itself. Some say it is 90% and other says, no that is impossible and it should be 70%. If you search for a definition of manufacture on the official website of the non-profit organization Haute Horlogerie, you can find the following interesting article:

“For a long time, Manufactures were a rare breed in the watchmaking world and for one reason: after the quartz tidal wave, few companies held on to production resources that were tuned to the manufacturing of mechanical movements. Given the investments and skills this type of venture entails, few were tempted to make the move towards greater autonomy and industrial integration, in particular as there were no bottlenecks in production. How things have changed. With the return of mechanical watches, one of the main priorities has been to guarantee a continuous flow of supplies, particularly of movements. Hinging on this is brands’ credibility among an increasingly well-informed public, not to mention their all-important legitimacy at a time when more and more companies lay claim to the title of Manufacture.

Once used indiscriminately, the title of Manufacture has grown in importance and this time brands have the credentials to go with it. With an eye on the competition, numerous brands have grasped the nettle and embarked on production of their own in-house movement. Hublot has announced its calibre for next year, as has Bovet. Daniel Roth and Gérald Genta will follow suit in 2009. Omega, Panerai, Maurice Lacroix and Frédéric Constant can already pride themselves on having taken this crucial step. When Bovet took over three manufacturing firms (tourbillons, calibres and balance springs) that were grouped together under STT Holding, including the former Progress Watch, to create Dimier 1738, the brand was propelled to the rank of Manufacture. In 2002, no-one would have bet on such a transformation, except perhaps a certain Nicolas Hayek…”

Where this article stops, I want to continue, because the family Hayek had a bigger impact on the (Swiss) watch industry in last 25 year, than many grand watchmaking houses in the last hundred years. For those that are not up to date about the Hayek Family (Creaters of the Swatch brand and largest share holders of the public company Swatch Group – the biggest watchmaking group in the world), I’ll give a short summary:

In 1982, N. Hayek Sr. was attracted as a consultant to advise the SMH Group to overcome the ‘Quartz Crisis’, that crushed the mechanical watch sector: cheap and precise electronic watch movement (mostly Japanese) took the Swiss mechanical watch industy by surprise and many companies went bankrupt. In 1983 SMH group created a revolutionary watch concept: a plastic watch with a down-sized quartz movement (lesser spare parts) that took the world by storm. I don’t think I need to elaborate about the brand Swatch…. The name of group that owns over 156 Swiss watch (spare parts) factories and the following brands nowadays: Breguet, Blancpain Glashütte-Original, Léon Hatot, Jaquet-Droz, Omega, Longines, Rado, Union, Tissot, ck Calvin Klein, Certina, Mido, Hamilton, Pierre Balmain, Flik Flak and, last but certainly not least, Swatch.

The advantage of such a group is that they lifted the complete Swiss watchmaking industry and saved many ancient watch brands. The down side is that they also bought all the important spare part manufacturers (like: Nivarox, ETA, Valjoux, etc) and control the companies that are the supplier of approximately 90% of the watch industry. As you can guess, this creates monopoly inefficiencies and arrogance. For this reason many watch brands started creating their own calibers, because ETA announced to stop supply spare parts and only complete movement (read: reason to raise prices). Legendary brands like Patek Philippe and Rolex always have been independent (read: not belonging to any public listed company) and always make sure they will stay like that, they increased their research & development efforts to the maximum and took steps to create a watch movement that is almost 100% manufacture. But also many brands, like named in the article of Haute Horlogerie, are stepping up their R&D efforts. Last years many brands started to create new calibres, and if they didn’t have the knowledge in-house, they would either team-up with manufacturares or simply buy the complete company:

- Mont Blanc bought Minerva
- Audermars Piguet took shares in Renault & Papi
- Breitling bought Kelek (but not a manufacture)
- Harry Winston teams up with a different magnificant individual watchmaker every to years to create a unique Opus watch.
- Group effort: Cartier uses JLC movements (Richemont)
- Chanel will launch watches with Audermars Piguet movements during Basel 2008.
- Omega bought the co-axial eschapment from the Englishman George Daniels (BTW: Patek turned it down in the 1970s).

What I also believe many brands forget in their race to become a ‘pure’ manufacture, does the consumer really want/need it? Personally, as a purist, I love the thrive for excellence, but a bit more quality is an exponential spur in cost/price. What’s wrong with the strategy Breitling and the pre-Richemont IWC have: Their philosophy is to create a product with an excellent price-quality ratio. That means, create watches they believe are ‘Instruments for Professionals’ and using the best resources at the best price. So, they always use the Valjoux 7750 (nowadays ETA 7770 – Yes, both a Swatch Group company and ETA swallowed the legendary Valjoux), and enhance it to their personal quality specifications. And what I think even is more distinguished, is the fact that they are open about the fact that they are NOT a manufacture. Nowadays, almost every watchmaker calls oneself a manufacture, but if you confront them with the question, how many of your spare parts are actually made in-house, you never get a straight anwser!

I will not start the discussion about what is actually ‘Swiss Made’. If you are curious, have a look at the website of: The Swiss Watch Industry FH, you will be amazed what a hollow title that is!

To end this article: Should watchmakers become a true Manufacture?

To my opinion, please do, but only if you are true to your own values and more importantly to your fans, the WatchFreaks. Don’t do it to have a reason to increase prices. Don’t do it to spite the big bad wolf, The Swatch Group. Don’t worry about them, the Anti-Trust Laws in the EU are fierce and they can’t use all the movements they produce for their own watch brands (unlike they claim). Don’t be vague about it, be ethical and don’t mislead the consumer. The society is changing so rapidly, that the watchmakers should be happy that, in such a hi-tech society, people still buy old-school timekeepers. Everybody has a clock on his cell phone, in his car, on his microwave, Philips Wake-Up Light, etc.

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27 Responses to “To Manufacture or Not To Manufacture, That Is The Question!”

  1. To Manufacture or Not To Manufacture, That Is The Question! — Clocks and Watches Blog Says:

    [...] Their philosophy is to create a product with an excellent price-quality ratio…. source: To Manufacture or Not To Manufacture, That Is The Question!, [...]

  2. Balance Assemblers News » Fast Sunday links Says:

    [...] http://watchfreaks.wordpress.com/2008/03/09/to-manufacture-or-not-to-manufacture-that-is-the-questio…When Bovet took over three manufacturing firms (tourbillons, calibres and balance springs) that were grouped together under STT Holding, including the former Progress Watch, to create Dimier 1738, the brand was propelled to the rank of … [...]

  3. Spring Assemblers goings on » Quick Roundup Says:

    [...] http://watchfreaks.wordpress.com/2008/03/09/to-manufacture-or-not-to-manufacture-that-is-the-questio…Until couple of years ago there was only ONE company in Switzerland could make Hair Spring Balances from mechanical movements (Nivarox), so there was not one compay that could make a 100% manufacture mechanical watch movement, … [...]

  4. Harry Bishop Says:

    Great article Alon, thanks! (I found the link on Fratello and am glad I did, very interesting read).

    I’m of a slightly different mind about Swatch. I do worry that they dominate some specific parts of the mechanical watch industry a bit too much these days (which is tied into the whole “what is a Swiss watch?” question. which as you said is an entirely separate (and long, and emotional) dicussion). However my bigger concern is what other firms are doing with their product, now that ETA is fairly ubiquitous in the mechanical watch movement market. You and I can probably easily list of dozens of watch brands from memory, that case and polishing a standard ETA movement, then charge thousands of dollars for their product.

    I can see the appeal of some such brands if they show artistic uniqueness (such as Mazzuoli’s Manometro which is a favorite of mine), but far too many are derivative “me too” items. Let’s face it, we’re buying uniqueness and prestige – why settle for just a relabeled ETA when there are many other alternatives out there. And if you do, there are brands like Christopher Ward that are very open about what they are, and price their product accordingly, rather than pretending that they have some unique brand quality that adds some special value to the movements in their particular watches.

    For example I truly appreciate that RGM have just released their own caliber. I’m not being overly picky – I’m not sure if they made their own balance spring, or turned their own screws. That they designed and assembled the ebauche is enough for me.

    I also want to support the smaller independent firms, that are on the outside of the industry, dreaming different things, daring different works, and pressuring the industry forward.

    Thanks again for a very well written article!

    Cheers from Canada
    Harry
    http://www.harrybishop.ca

  5. I wanna talk about Production Assemblers » Blog Archive » Quick scan of the net - production assembler Says:

    [...] http://watchfreaks.wordpress.com/2008/03/09/to-manufacture-or-not-to-manufacture-that-is-the-questio…Companies that do not create new calibres are not watchmakers, but watch assemblers or to make a bridge to car making: Watch Tuners (Does the program ‘Pimp my Watch’ already exist?!). These watchmakers take a calibre and tune the … [...]

  6. Spring Assemblers goings on » Quick scan of the net - spring assembler Says:

    [...] http://watchfreaks.wordpress.com/2008/03/09/to-manufacture-or-not-to-manufacture-that-is-the-questio…Companies that do not create new calibres are not watchmakers, but watch assemblers or to make a bridge to car making: Watch Tuners (Does the program ‘Pimp my Watch’ already exist?!). These watchmakers take a calibre and tune the … [...]

  7. Elvis, James Dean, Marilyn Monroe and Product Assemblers » Blog Archive » Quick scan of the net - product assembler Says:

    [...] http://watchfreaks.wordpress.com/2008/03/09/to-manufacture-or-not-to-manufacture-that-is-the-questio…Companies that do not create new calibres are not watchmakers, but watch assemblers or to make a bridge to car making: Watch Tuners (Does the program ‘Pimp my Watch’ already exist?!). These watchmakers take a calibre and tune the … [...]

  8. Jewelry, Jewellery » Blog Archive » Manufacture is the magic word! Says:

    [...] Read this interesting blog posting over at WatchFreaks, click: Should watchmakers become a true Manufacture? [...]

  9. The Replicas » Manufacture is the magic word! Says:

    [...] Read this interesting blog posting over at WatchFreaks, click: Should watchmakers become a true Manufacture? [...]

  10. Manufacture is the magic word! · Online Watch Review Says:

    [...] Read this interesting blog posting over at WatchFreaks, click: Should watchmakers become a true Manufacture? [...]

  11. Michael Salazar Says:

    The watch as a handy timepiece is gone, unless you’re an old guy, like me, and cling to “time fashion.” So get over it and look at what’s next.
    The Swiss lost their market to the Japanese, and like GM, Ford, and other dinosaur automakers, remain lost in their past glory. They’re history.
    What’s the next step?
    Watchmakers should start concentrating on making an engine to run a car that uses no gas, or any other fossil fuel.
    It’s the clockmakers that brought us out of the Dark Ages and into the Industrial Revolution.
    Watchmakers forget your pretty, self induldged wrist watches and start looking at making a wind-up car we can all use!
    We need you more than ever today.

  12. Ron Says:

    Thank you for writing this blog- Alon. Very thought provoking!

  13. Robt Lyberger Says:

    Thanks for the information, very informative.

  14. Jayne Says:

    My client is a jewellery designer selling to high net worth individuals in the luxury sector.

    She has been asked to design a watch. When she has done this, she needs to have this watch manufactured.

    Do you have any names/companies who would be able to do this please.

    Dependant on this “one off” watch – it could well lead to a watch collection for my client’s brand.

    Any help or guidance you could give would be appreciated.

  15. mahesh Says:

    need somebody as a consultant to help us in launching our own brand off swiss mechanicle watches if u have knowledge please contact

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  25. SmartWatchPhone Says:

    The watch as a handy timepiece is gone, unless you’re an old guy, like me, and cling to “time fashion.” So get over it and look at what’s next.
    The Swiss lost their market to the Japanese, and like GM, Ford, and other dinosaur automakers, remain lost in their past glory. They’re history.
    What’s the next step?
    Watchmakers should start concentrating on making an engine to run a car that uses no gas, or any other fossil fuel.
    It’s the clockmakers that brought us out of the Dark Ages and into the Industrial Revolution.
    Watchmakers forget your pretty, self induldged wrist watches and start looking at making a wind-up car we can all use!
    We need you more than ever today.

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