World View of Swiss Watches: 1877 vs 2014

The Watchmaker, Jeweller, and Silversmith’s Trade Journal [July 5, 1877]

Curiosities of Clocks and Watches

As to Swiss watches.  It has been stated that the beginning of the Geneva watch-trade was owing to the bloody persecution of the Protestants in France towards the close of the sixteenth century, which caused some French watchmakers to take refuge in Switzerland.  In 1587, Charles Cusin, of Autun, in Burgundy, settled in Geneva as a manufacturer of watches, which were then sold for their weight in gold.  He had many scholars, and his success naturally drew labour from less profitable employment, and spread the watchmaking trade very rapidly.  But the substantial introduction of watch-manufacture into Switzerland, which, by the extensive employment of female labour, competes successfully with England, occurred in this manner:

In 1679, a native of Switzerland, after a visit to this country, took home with him from London a watch, which was a novelty in his mountain land, and greatly excited the curiosity and interest of all who saw it there.  On its getting out of order, the owner of the watch trusted it for repair to a mechanic, named Daniel John Richard, of La Sange, who, after attentively examining the mechanism of it, determined to construct a watch after its model.  He accordingly spent a year in making the requisite tools, and in six months afterwards completed a watch.  He next set up in the trade of a watchmaker, and supplied his neighbourhood with watches.  He died in 1741, leaving five sons, who pursued their father’s profitable business.  The trade has been largely developed during the present century, and Swiss watches are in considerable demand on account of their cheapness.  Sir John Bennett, whose advocacy of female labour in the watchmaking art has rendered him very obnoxious to some persons, calculated a few years ago that no less than 200,000 Swiss watches were annually imported or smuggled into England, while the  whole produce of the English watchmakers did not exceed 186,000.  In the valleys and in the slopes of the Jura mountains, during a winder which lasts six or seven months, the inhabitants, who are kept indoors by the inclemency of the weather, vigorously pursue some one or other of the several departments of the watch-trade.  Sir John states that in a visit paid by him to Neuchâtel, where the largest number of the Swiss watches are made, he found no less than 20,000 women employed in making the more delicate parts of the watch movement, and earning upon an average fifteen shillings per week.  They produced annually about 1,500,000 watches, besides movements, for the American markets.

The number of watches imported from Switzerland into this country in 1858 was 346,894.  The returns of the Goldsmiths’ Hall afford the following statistics of English manufacture in the number of watch-cases hall-marked, in 1858, in London, 83,614 silver, and 26,870 gold; in Coventry, 60,000 silver.

During the year 1860, 100,000 foreign watches passed through the Custom House for home use.  The number of foreign watches imported into England free of duty during the first seven months of the year 1865 was 86,114, and during the first eight months 96,401, as against 87,282 in 1864, and 100,938 in 1863, periods corresponding with the latter months.

Two causes are clearly assignable for the signal declension in the manufacture of watches, as already mentioned, the imposition of a duty on clocks and watches in 1797, and the elicit importation of foreign watches.  During the Pitt administration, an Act was passed levying certain duties upon clocks and watches to be paid by the possessors of them.  It was ordered by this Act that, after July 5th, 1797, an annual duty of five shillings should be charged on every clock or timekeeper; for every gold watch kept, worn, or used, ten shillings; and for every silver or metal watch, two shillings and sixpence per annum.

In a report of a Committee of the House of Commons in 1818 it is stated that the number of gold and silver watch-cases market at Goldsmiths’ Hall in the year 1796 amounted to 191,678; and in the year 1798, when duties were imposed upon clocks and watches, and a license to deal therein was made necessary, the number of watch-cases hall-marked was reduced to 128,798, showing a decrease of 62,880.  Although these duties were repealed, the manufacture never recovered itself.  In 1808 the number of watch-cases marked was most approximate, it being 180,389.  From this year the number diminished, so that in 1815 only 134,269 watches were hall-marked, and in 1816 only 102, 112, rather more than half of the number marked in 1796.

 

The New York Times [November 20, 2014]

How Switzerland Came to Dominate Watchmaking by Victoria Gomelsky

The Germans are generally regarded as the first people to make clocks small enough to be portable. Most historians credit Peter Henlein, a locksmith and clockmaker who lived in Nuremberg in the early 16th century, with making the first watch. His specialty was miniaturizing clocks so they could be worn as pendants or affixed to clothing.

Around the same time, Huguenots fleeing persecution in France brought their artistic savoir-faire to bear on the local watch trade in Geneva, gradually transforming the city into a cradle of high watchmaking.

But it would be nearly 300 years before the Swiss would challenge the supremacy of their European neighbors. The Germans and Dutch led the way in horological advances in the 17th century with inventions such as the fusee chain and balance spring, respectively. And no one disputes the 18th-century reign of the English, whose technical innovation — by men such as James Cox, George Graham and John Harrison — laid the groundwork for today’s mechanical movements.

By the time the Swiss-born master watchmaker Abraham-Louis Breguet — inventor of, among other things, the tourbillon, a rotating device to counteract the effects of gravity on a pocket watch; the pare-chute, a shock-absorbing mechanism; and the flat balance-spring with one or two terminal coils, known as the Breguet overcoil — arrived in Paris as a 15-year-old apprentice in 1762, the watch world was on the brink of another power shift.

The French watchmaker Jean-Antoine Lépine’s 1770 invention of a simplified flat caliber with bridges, known as the Lépine caliber, made it possible to produce a thinner pocket watch — and augured the end of England’s watchmaking ascendancy. “At that time, men’s fashion — thin trousers, waistcoats — demanded a nonbulky watch case,” said the horological historian David Christianson, author of “Timepieces: Masterpieces of Chronometry.” “And the Brits weren’t willing to thin their watches.”

More important, Frédérick Japy, a watchmaker on the French side of the Jura Mountains, adapted the Lépine caliber to factory production in 1800, setting the stage for a new era of mass production. The development favored watchmakers in Switzerland, where peasants and farmers occupied their winter months by making watch components for firms based in Geneva. Their industriousness and autonomy helped their country outproduce rival centers.

“As a country, Switzerland is very decentralized,” said Jérôme Lambert, chief executive of Montblanc. “Every valley has an owner or organization that has a dynamic, small city center. That created a very natural extension of the traditional watchmaking way. It was not the same case in England, Germany or France, where it was very much centralized in big cities.”

Using the établissage system, the Swiss turned out far more timepieces than their European counterparts, who had yet to grow beyond a cottage industry. According to Mr. Christianson, England and Switzerland each produced 200,000 timepieces in 1800; by 1850, the Swiss were churning out 2,200,000 watches while the Brits saw virtually no increase. Quantity, however, did not imply quality.

“The Swiss were able to produce ‘fake watches’ that looked like English or French watches but were of lower quality,” he said.

As national production ramped up, a few key makers with a reputation for making fine timepieces emerged. Longines, founded in St.-Imier in 1832 — when it was known as Agassiz & Co., after its founder, Auguste Agassiz — was among the first to buck the établissage trend. In 1866, the company brought all of its watchmaking activities under one roof, and within 45 years, employed 1,100 workers who shipped its timepieces around the world.

Concurrently, the budding American watch trade began to coalesce around the needs of the railroad industry, which demanded accurate timekeepers. While American watchmakers did not have a history of practicing rarefied arts, like their Huguenot counterparts in Geneva, they excelled at producing reliable timekeeping devices quickly and efficiently.

The industrialized American system was so alluring to the Swiss that, in 1868, an American by the name of Florentine A. Jones moved from Boston to Schaffhausen in eastern Switzerland, and founded the International Watch Company, today known as IWC Schaffhausen, in an effort to combine Swiss craftsmanship with America’s optimized production process.

The increasing dominance of American-made pocket watches threatened the Swiss, who tried to get the upper hand in the years between 1860 and 1880 by flooding the American market with cheap watches. “But they were junk,” Mr. Christianson said.

At the turn of the 20th century, the Swiss refined their strategy. “They started to produce a good quality watch at a mid-range price,” Mr. Christianson said. “That went on through World War I.”

Swiss firms such as Longines, Patek Philippe and Vacheron Constantin began aggressively to court American consumers. They succeeded in cornering the market after World War II, which decimated the American watchmaking industry, whose factories had been commandeered by the war effort and couldn’t adjust to the demands of civilian production.

Today, the Swiss watchmaking landscape is divided between companies that carry on the modern equivalent of établissage, sourcing parts and movements from outside suppliers — chief among them ETA — and those making a go of being manufactures. The latter includes a rising contingent of non-Swiss brands — based in Germany, America, Denmark, even China — that are beginning to challenge the watch industry conventional wisdom: that only Switzerland is capable of producing fine timepieces.

Maximilian Büsser, founder of the boutique Swiss brand MB&F, agreed with that assessment — with one caveat. “It’s not about ‘will the Swiss continue to dominate?’ ” he said. “The existing players will continue to dominate, not because they’re Swiss but because they’re so big. The barrier to entry in this business is enormous.”

 

What does it all mean?

Both of these articles have been shortened but the text hasn't been altered.  Of course our 1877 article refers to Daniel JeanRichard Sr. of Neuchâtel who was introduced to watches pretty much the way it was described.  According to an 1841 biography, JeanRichard was born in 1665 and demonstrated early skill as a locksmith who tinkered with clocks on the side.  At the age of fourteen he was pressed into repairing a watch by a passing horse trader who's English timepiece was misbehaving.  And the rest is watchmaking history...

William Pitt  "the Younger" was Prime Minister of Britian twice; first from 1783 (the youngest every at age 24) to 1801, then again from 1804 to 1806 when he died due to chronic ill health.  Imagine having to pay an annual tax for the privilege of owning a watch!  The anonymous writer from 1877 suggests the unfair use of women labor by the Swiss, assuming 15 shillings/week was less than men's wages.  Vacheron & Consantin did make use of "petites mains" or little hands, referring to women and teenagers, and the Annales of Vacheron Constantin as late as 1918 states they could make series movements cheaper than the farmer-repassaients of the mountains.  Swiss law aided this chauvanism by restricting women to certain watch-related trades only.

Women and taxes, however, fails to address the stubborn resistance of the British watchmaking industry to adapt to new trends and I'd suggest that once the public got a taste of thinner, cheaper, and reliable lever movements it was a difficult sell to return to heavy, large, expensive and delicate chain fusee English watches.

As for modern times, Büsser put his finger on the reality that country of origin means less than ever before in terms of the production of watches, but continues to dominate the marketing of watches.  History, real or imagined, plays a key role in brand creditibility but today's equivalent of petites mains are more likely to be found in the developing world than historic centers of watchmaking.

I'm very interested in hearing your thoughts on the past, present or future of Swiss watches smiley

Love the History...
08/31/2016 - 02:14

and analysis. Thank you for bringing these rich insights. It makes collecting watches all the more interesting.

I don't think Switzerland killed English or French watchmaking just because of price but rather
08/31/2016 - 14:23

because they made these creations into status symbols and not only big  chunky "tools". The Swiss have domonated watchmaking in the 20th century and since the rebirth of Lange in 1994 it seems that Germany is back and even though Japan and China make great watches it looks like the Swiss now have an aura of quality that the others may not or have less.

No denying that the Swiss watch industry is going through a severe crisis, they have almost outpriced themselves out of the market and now that the Russians and Chinese are no longer buying the brands will need to find new solutions, they can't lower prices on existing but will need to come out with lower priced watches, the issue now is that in the past decade the brands have invested heavily in building factories and developing production tools which have great constant costs which cannot be lowered.

But most of these brands are way to big to fail so I don't see any change in the current landscape.

 

 

alas, too big to fail
09/01/2016 - 01:01

was a phrase of the financial industry during the last recession sad.  Thanks for your insights Alex, as you are closer to the scene than most.  What about the Independents; if they can deliver quality, exclusivity, and creativity at a price equal to the best from the big names, will they be a threat?

Classic business cycles, barriers to entry, etc.
09/01/2016 - 04:14

I've been paying more attention to the Independents over the past few years, being under the influence of Alex and other Loungers!smiley

Starting off as small entrepreneurs/artisans, many of them really decided to go out on their own when they saw the overall market growing and growing fast.  Not many will start a small business in a declining industry/market.  As they develop their justly deserved reputations and names, they invest in their small businesses for growth.

Cash flow becomes critical and the need to sell more in order to justify, even cover their new fixed costs becomes more important.  When a downturn hits and they lose even a small percentage of their business, the impact is more severe.  Several amazing Independents are struggling right now, which is a true shame. 

These things and business environment/situation obviously apply the to big brands as well, but the small size of the Indpendents makes it easier for them to capsize.  They mostly compete at the very high-end of the market, where their quality and exclusivity can demand higher prices than what the big brands offer.  They don't have the economies of scale to compete with the big brands on price and still provide the quality that allows them to stand above the major brands (whether real or imagined). 

(going slightly off-topic) I often hear people talk about Lange and how they are #1 now and really should be Independent.  Lange is a marvelous brand that produces some AMAZING watches.  But I think that they would not be who they are now if it wasn't for Richemont's resources and support that started them off and allowed them to grow in a way that some Independents could only dream of.  You can't have it both ways (Group backing in terms of technical and financial resources + being "so special" that you should be Independent).

(back on-topic) Due to the weight of history and nature of luxury markets, I think Swiss watchmaking and Swiss Brands will always hold a firm position in the industry (China already manufacture more mechanical watches than Europe), they are too big to fail.  But that does not mean they will all succeed.  wink

Revenues and profits are declining and that is what so many in the industry are complaining about, but profits are not less than zero.  Money is still being made, its just that the Brands (big and small) have to work harder to generate more revenue and profits than before.  If I was an insider, I need to work harder and smarter to meet my customer demand.  As a customer, it's about time the sellers do not take me for granted.

my 2 cents

On or off topic
09/01/2016 - 16:08

Your comments are most helpful Dan.  Do you think that brand strategies may now shift from creating new demand to husbanding their existing markets?  I'm wondering if after sales service will receive more empasis at the expense of celebrity endorsements and cocktail parties.  How much does CEO egos limit the Swiss watch industry from responding to current challenges with adroitness?

Dan, you are right when you say "profits are not less than zero"
09/01/2016 - 19:45

... because those things less than zero called losses!

Apologies for e tongue in cheek humour (note well, this has a 'U' in it)

G

 

Hey, I'm just trying to keep up with modern lingo ;-)
09/02/2016 - 01:00

If we can now have negative interest rates, I figured negative profits was also a thing wink

I think the independents and small brands will/are suffering due to lack of
09/01/2016 - 10:16

funds to communicate compared to the mainstream brands and also due to low size of component orders (cases, dials etc...) the unitary price will be higher.

Furthermore sales staff in multibrand boutiques will often favor an easy sell of a known brand than having to push and explain a smaller brand.  Some smaller brands with no real philosophy or value proposition will surly disappear what would be a shame would be see those who are taking new paths and offering amazing watches disappear. Time will tell....

Time will tell...
09/01/2016 - 16:12

Thanks Alex for a morning smile!  I do fear for the Independants sad

1876 marks the breking point
08/31/2016 - 19:07

to my humble opinion. The Favre-Perret report from the Philadelphia Exibition is enlightening to understand the effort made by the Swiss watch industry afterwards.

I meant breaking of course :-D
08/31/2016 - 19:10
fascinating point, much appreicated
09/01/2016 - 00:55

coincidentally the report by Edouard Favre-Perret back to the Swiss watch industry following Philadelphia's Centennial Exposition wasn't published until 1877, the same year as this English article.  I have relied on the translation provided at the NAWCC website of Favre-Perret's written report which is self-flattering to the Swiss watch industry and diminishes the American threat.  Actually he had nice things to say about V&C while supporting the capacity of the Swiss to rise and meet the American competition for "cheap" watches...

Messrs Vacheron & Constantin are even more advanced; for 40 years they have not ceased, with the assistance of the skilful engineer Mr. G. Leschot, to improve and extend manufacture by machines; we can say with certainty that they have arrived, in the end, at a point which can hardly be bettered, and their products enjoy an unrivalled reputation throughout the whole world.

But it was in his speech delivered at La Chaux-de-Fonds in November, 1876 before the Federal High Council of Horology where he revealed his true findings by sounding dire warnings if the Swiss did not respond to the American challenge.  He noted, for instance, that the tide had turned and Swiss imports of watches to America were dropping while the Americans were, in addition to dominating their domestic markets, beginning to establish themselves in Europe.  He reported the Swiss had 40,000 workers producing each on average 40 watches per year.  The Americans, relying on machines, averaged 150 watches per worker each year!

Unfortunately, Leschot's machinery wasn't the entire solution.  His pantograph was able to consistently reproduce plates and pivot holes, however, only on untempered metal.  Once subjected to heat, the parts often warped and 25% wastage wasn't uncommon.

Favre-Perret was so alarmed by the accuracy and quality of an average American Waltham watch (as he described; one of 5th quality picked out of the heap) that he speculated if the Council had waited for this report by only a few more years, they wouldn't be able to recover.  As it was, he hoped they could at least protect their European markets.

Thanks for this timely reminder of an important event smiley

Re: fascinating point, much appreicated
09/01/2016 - 15:56

Thanks Dean,

An interesting summary indeed.

The crisis in swiss watchmaking was by their own hand. The same was true for the French and English.

I outlined this issue in my posting on Fredrich Ingold who strove to modernize watchmaking for decades in Switzerland, then France and then England without success. He was met with severe resistance from those in the cottage industry of watch making which predominated in these countries. Their attitude helped create the crisis.

At one point Ingold and Japy were to form a company to produce watches in a factory setting but nothing came of it.

It was the Americans who adopted many of his tools and techniques and thus succeeded in bringing watchmaking into a modern industry. The ability of the Americans to mass produce accurate watches at low prices was what finally stirred the Swiss to adapt. The French and English never fully recovered.

An excellent monograph on Ingold is here:

Some notes on Pierre-Frederic Ingold and the work of E. Haudenschildpublished by the Swiss Society for Chronometry on the occasion of the eighth general assemblyin Berne at the Bürgerhaus4 June 1932Translated by Richard Watkins2004

Regards,

Joseph

Your article on Ingold
09/01/2016 - 16:21

is definately worth a re-read.  Fear of change is human nature, even when the consequences of not adapting are obvious.  Thanks for the link smiley