Hayek warns of impending crisis in watch industry
The chairman of the Swatch Group, Nicolas Hayek has warned there could be another crisis in Swiss watchmaking unless there is more innovation and investment.
He also took a swipe at the Central Bank, arguing that more could be done to bring down the value of the Swiss franc, which is hurting the industry.
Hayek was speaking in Le Locle at an event marking the 150 years of the Tissot watch company, which is based in the town.
He said that although the Swiss watch industry had been very successful over the past few years, it was ill prepared to face the future.
“The watch industry made a very big mistake. In the past three years, [companies] have been running after money, money, money,” he told swissinfo.
“No innovation”
“There was no innovation, no new development, and when I pushed them to start doing new production, everybody started shouting,” he added.
Hayek, who has just stepped down from the day-to-day running of the Swatch Group, was referring to a row between his dominant watch movement producer ETA and other Swiss brands.
ETA sells so-called “ébauches” or incomplete watch movements to third parties but has said it wants to halt deliveries by the end of the year 2005. This has prompted a storm of protest from companies not belonging to the Swatch Group.
“I said I was not going to deliver any more of my movements unless they try to do their own production,” Hayek told swissinfo.
“Otherwise the Swiss watch industry will suffer exactly the same problems it had before and it will go down,” he claimed.
Cartel inquiry
Switzerland’s Competition Commission in November launched an inquiry into the affair to determine if and to what extent ETA was violating the country’s cartel laws.
The Commission has ordered ETA to continue deliveries until its investigation is complete.
Hayek said that complaints about his decision had come as no surprise.
“I expected it. You see all my life I have been moving the watchmakers. This is the fourth time I have had this fuss but at the end everybody recognises that I was right,” Hayek said.
Widely acclaimed as the father of the Swatch, Hayek last year received Austria’s highest award of honour and was acclaimed as “the saviour of the Swiss watch industry”.
Uncertainty
At Le Locle he also said the industry was suffering because consumers were reluctant to spend in the current climate of uncertainty.
Hayek called once again on the Swiss National Bank to intervene to try to bring down the value of the franc, arguing that he could not understand why more efforts were not being made.
Hayek refused to reveal the Swatch group’s results for 2002, but said they had met expectations.
Detailed figures of Swiss watch exports in 2002 are expected to be issued by the Federation of the Swiss Watch Industry later this month.
swissinfo, Robert Brookes
The chairman of the Swatch group, Nicolas Hayek, has warned of a possible crisis in the Swiss watch industry in the next five years unless there is more willingness to invest and innovate.
He has also called on the Swiss National Bank for greater efforts to reduced the value of the Swiss franc, which is hurting Swiss industry.
Hayek, aged 74, has accused watch companies outside his group of buying blank movements from his ETA company and ignoring production themselves.
His buyers have accused him of trying to cement ETA as the dominating producer of Swiss watch movements, a move which they say threatens their existence in the industry.
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