The fabulous story of ETA, chapter 3: from the golden age to the beginnings of the great crisis

The fabulous story of ETA, chapter 3: from the golden age to the beginnings of the great crisis

ETA

Between 1945 and 1960, Swiss watchmaking enjoyed fifteen years of almost continuous growth. Annual production of watches and movements more than doubled, from 18.8 to 41 million units. Protective measures prohibiting the creation of new ébauches factories were extended in the early 1950s, and subsequently relaxed.

Description

Between 1945 and 1960, Swiss watchmaking enjoyed fifteen years of almost continuous growth. Annual production of watches and movements more than doubled, from 18.8 to 41 million units. Protective measures prohibiting the creation of new ébauches factories were extended in the early 1950s, and subsequently relaxed. But what had probably saved the watchmaking industry in the crisis years was to turn against it: the ébauches manufacturers who remained independent had the greatest difficulty fighting against the power of the Ebauches S.A. trust. They gradually disappeared, and this was the end of the Angélus, Excelsior, Universal and Movado ébauches...

In the early 1960s, Switzerland was faced with a strong surge in foreign competition. The watchmaking industry was rebuilding in most of the countries where it had suffered so badly during the Second World War. France and Germany now have strong positions at home, while the United States and Japan are approaching their foreign markets with increasing success, thanks to large companies (Timex, Seiko) producing inexpensive watches in their millions. In Switzerland, the industrial fabric is highly fragmented: there are over 3,000 watchmaking companies, 80% of which have fewer than 20 employees.

To cut costs and bring companies up to the size needed to compete on equal terms with foreign groups, ASUAG, with the help of the banks, once again embarked on a vast concentration campaign.

 

This led to the creation of Chronos Holding in 1966, which bought Cyma/Tavannes, acquired a stake in Gruen and, in 1968, created the Synchron group, bringing together Ernest Borel, Doxa and Cyma. In 1971, ASUAG created the General Watch Co. (G.W.C.), grouping together the Certina, Edox, Eterna, Mido, Oris and Technos brands, and in the same year acquired Longines, already owner of Record and Rotary. Concentration also continued on the movement side: in 1967 Ebauches S.A. bought Durowe in Germany and Sefea in Annemasse, France. By 1974, Switzerland was producing over 84 million watches.

  

But what lies ahead is black. Very dark indeed. It's often said that the crisis that hit Swiss watchmaking from 1975 onwards was the quartz crisis. But Swiss quartz was developed relatively early: in 1974, a good number of Swiss watches sold were quartz watches. In fact, manufacturers probably didn't expect the sudden disaffection with mechanical watches and, above all, the impressive drop in prices. This was because the nature of time measurement had changed: the lightning-fast rules of electronics prevailed, rather than the much slower rules of precision mechanics. But quartz wasn't the only thing at stake. In 1973 came the first oil crisis, and the following year saw the start of a worldwide economic recession. To make matters worse, the Swiss franc was revalued, gaining 70% of its value in just a few years.

  

The situation then became dramatic. Between 1974, a record year, and 1983, the number of watches and movements manufactured in Switzerland fell from 84.4 million to 30.2 million, a drop of almost 65%. Hundreds of companies disappeared, and tens of thousands of jobs were lost. ASUAG's only solutions were those of despair: in 1978, ETA and Schild merged, the Synchron group was dissolved, and Borel, Doxa and Cyma were sold. In 1980, the number of calibres produced by Ebauches S.A. was drastically reduced from 136 to 40. The following year, ASUAG lost over 44 million Swiss francs. In 1982, all the ébauches factories were merged into ETA, Oris was sold, and losses exceeded 156 million francs. We were on the brink of the abyss, dear reader. But I must introduce a new player, another giant with feet of clay: the Société Suisse pour l'Industrie Horlogère or SSIH.

To be continued... 

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