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The History of Movement Manufacturing by Roffensian
The History of Movement Manufacturing
So this week, let’s look at the history of watch movement manufacturing. Again many sources to help me, but a very big thank you to Gisbert Brunner and Christian Pfeiffer-Belli, the authors of a very good book called Wristwatches. I have learnt a lot from them.
One quick set of definitions before we start. We talk a lot about ebauches when we discuss movements these days – the movement kits that Breitling and other manufacturers use. Technically there are a couple of different terms that we tend to use interchangeably, but which are distinctly different.
An ebauche or blank is techically not a complete movement. It is the bridges and plates plus the drive train of wheels and pinions that drive the hands. It does not contain the escapement or balance spring, and it does not contain the mainspring and barrel.
If you add those pieces then what you technically have is a chablon – still in kit form. I’ll use those definitions here, and I’ll try and remember to distinguish in other posts going forward, it’s just hard to break a habit!
If you go back to 1745, the city of Geneva published some statutes on watchmaking – rules and regulations if you like, and at that point one of the statutes actually forbade movement manufacturers from establishing their businesses inside the city walls of Geneva unless they could demonstrate a particular quality level.
It was clearly understood that what was then known as the watch industry was the production of cases, dials, etc and the decorative finishing of a mechanical device produced by suppliers. The movement was completely irrelevant to the perceived quality of the watch at this time, buyers looked for the right name, the right material and the right finish.
Things started to change in 1770, but ironically things actually got worse. A gentleman by the name of Frederic Japy started producing movement blanks or ebauches using the latest and greatest technology available at the time. Ebauches were already a low cost part of the entire process, and now Japy was producing them in unheard of numbers – by 1813 he was turning out 300,000 a year. For the watch manufacturers this reinforced their belief that there was no talent here – it was just a necessary part to enable the watchmaker to demonstrate his art.
As a result of this huge increase in supply, prices for ebauches crashed and Japy’s success in volume production threatened his firm’s survival. In large part this was because the high end watchmakers hadn’t adapted to the changes in supply numbers – they were still using traditional hand worked methods for finishing movements which meant that they couldn’t consume the numbers of ebauches that were being produced. As a result the market became flooded and movements were being sold at a loss just to keep turnover going. Of course this just meant that the profit margin for the watch companies that used the ebauches increased still further.
Nothing much changed in the next hundred years or so – there were lower grade watch companies who were consuming some of the excess supply, but the inherent disparity between the high end watch maker and the ‘industrial’ movement producers remained.
During the first world war many movement manufacturers changed focus and used their industrial equipment to produce war materiel, especially ammunition. After the first world war, they again started producing ebauches and once more the market saw glut conditions.
There were some attempts made to unite the movement manufacturers to address these issues – the Societe Suisse des Fabriques d’Ebauches et de Finissages in 1917 and the Federation Horlogere in 1924. Neither were particularly successful in making any changes or in uniting the industry however.
Things started changing in 1926 with the three largest ebauches manufacturers of the time, together accounting for 80% of the market, agreeing to what was effectively a merger. Although they decided to remain independent in operation they created a holding company that would own the three firms. That holding company was Ebauches SA.
They didn’t simply stop there though, over the next few years Ebauches SA tried to buy as many movement manufacturers as they could – both independent firms and the ebauches divisions of more diversified companies. By the late 1920s Ebauches SA controlled around 90% of the market, although the individual firms still retained creative independence. What Ebauches SA offered was economic control. Even companies that formed the 10% of manufacturers that were not controlled by Ebauches SA worked closely with the company in an attempt to ensure that the movement manufacturers had a voice and received a fair price for their work.
Things were starting to look up for the industry, and then came the 1929 stock market crash and the depression of the 1930s. Immediately the companies not controlled by Ebauches SA started selling movements for any price – just to try and survive. It was clear though that these small firms would not be able to survive on their own, and in 1932 a company called Allgemeine Schweizer Uhrenindustrie AG (ASUAG) came into existence. This company brought together most of the remaining independent movement manufacturers, as well as the producers of mainsprings, barrels and escapements – the things that turned ebauches into chablons.
Ebauches SA also acquired some more movement manufacturers including some of the big names – Eta, Unitas, Eterna et al. In the coming decades this rationalisation continued and by the end of the second world war there were some 50 companies under the Ebauches SA umbrella.
I’m going to list some of those companies and for those of you that think that all Breitling movements are currently made by Swatch, take a look at some of the bigger names on this list (and for those of you with a smug grin now – keep reading, it gets better!!):
So 50 years ago Breitling movements came from Ebauches SA – remember that.
Remember that all of these firms still operated independently, and this didn’t change. In the 1970s, as we all know, the industry came under tremendous pressure from the influx of Japanese quartz movements, and many of the Ebauches SA member companies failed to survive, while those that did acquired the assets of other memebers. By 1983, the entire industry was struggling to survive and further consolidation became necessary. As a result Ebauches SA and ASUAG merged. By that time ASUAG was already in talks with a watch manufacturer called Societe Suisse pour l’Industrie Horlogere or SIHH which owned Omega, so at the end of 1983 that company too joined the combined company.
ASUAG and SIHH had been in financial trouble for years and Swiss bankers had asked a consulting firm to oversee a liquidation of the companies in 1979. That consulting firm was headed by a Lebanese gentleman called Nicholas Hayek (some of you will now know where this is going).
In 1985 the group was renamed Societe Suisse de Microelectronique et d’horlogerie or SMH and in 1986 Nicholas Hayek became Chairman and CEO.
And that’s pretty much the story – 150 years of chaos and then 80 years of struggling for acceptance and stability through Ebauches SA, culminating in Nicholas Hayek’s involvement and his stewardship through the mechanical renaissance. His son still runs the company today.
Oh, just one more thing.....
In 1998 Ebauches SA, then called SMH, went through one further name change.
It’s now called Swatch Group.