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The situation of the Swiss watchmaking industry in the early 1930s was dramatic. Bankruptcies followed bankruptcies, and almost 20,000 watchmakers were out of work. Banks and watchmaking associations played their cards close to the vest. The basic principle is that the strategy behind the creation of Ebauches S.A. is the right one. It's just that it hasn't been carried through to the end, i.e. to the point of complete concentration of the ébauche. The following plan of action was devised:
- Creation of a super-holding company with equal participation by industry and banks,
- Acquisition by the super-holding company of the majority of Ebauches S.A. shares,
- Financial participation by the Swiss Confederation,
- Concentration of essential watch supplies, i.e. assortments, balances and balance springs, and acquisition by the super-holding company of the majority of shares in these concentrations.
Thus, on August 14, 1931, the Société Générale de l'Horlogerie Suisse S.A., better known as Allgemeine Schweizerische Uhrenindustrie A.G. or ASUAG, was created, with its first president, Hermann Obrecht.
The ASUAG's first urgent task was finance. After all, it takes lots and lots of money to bring about the concentration of drafts and ancillary industries. And even if you scrape the bottom of the drawers at ASUAG and the banks, there's still a shortfall. The analysts even allow themselves the luxury of being precise: there's a shortfall of 13.5 million Swiss francs. So we're going to put point three of the action plan into practice by knocking on the Confederation's door.
It's unusual for a state to provide financial support to a private company. But the situation is special: on the one hand, there is the impressive number of unemployed watchmakers; on the other, watchmaking is not considered in Switzerland as an industry like any other. It's a national treasure that conveys an image and values the world over, with spin-offs for the country that go far beyond watch exports alone.
After much negotiation, on September 11, 1931, the Swiss Confederation acquired a 6 MF stake in ASUAG, and granted an interest-free loan of 7.5 MF, repayable in annual instalments of 1 MF starting in 1934. Henceforth, ASUAG had free rein, and the concentration of blank and regulating parts was to be carried out at full speed. In 1932, Les Fabriques d'Assortiments Réunis S.A. and Les Fabriques de Balanciers Réunis were created. In the same year, Ebauches S.A. acquired Manzoni, Moser, Peseux, Fleurier, Ed. Kummer S.A. (Atlantic watches) and two mixed factories (movements and complete watches) that deserve a closer look: A. Reymond S.A. and Eterna.
Auguste Reymond founded his Fabrique d'Horlogerie in Tramelan in 1898. The company grew rapidly and became a Manufacture in 1906, producing its own ébauches first in Les Bioux and then in Tramelan. In 1918, the company became a société anonyme under the name A. Reymond S.A. or ARSA, and in 1926 acquired the Unitas Watch Co. factory in Tramelan. When the company joined Ebauches S.A. in 1932, it was split in two: ARSA for watches, Unitas for Ebauches.
The same goes for Eterna. Joseph Girard and Urs Schild joined forces in 1856 to run a cabinet-making factory in Grenchen. By 1870, the company employed over 300 people, and the Eterna brand was used from 1876 onwards. When Urs Schild died, Max Schild took over, and the company became Schild frères et Cie in 1891. By 1929, it was producing over 2 million pieces and employing more than 800 people. When Ebauches S.A. became affiliated in 1932, the name Eterna was reserved for watches, and the ébauches factory became ETA S.A.
Despite these considerable efforts, in 1933 there were still 22 "dissident" companies, including nine ébaucheries. On March 15, 1934, the "Federal Council Decrees to Protect the Swiss Watch Industry" were published. Henceforth, it was forbidden to open new watchmaking companies without a permit, and it was forbidden to export scrap outside the conventions.
Swiss watchmaking is now under control.
Company takeovers continued, but at a slower pace, as the economic situation improved and demand picked up. Nevertheless, La Champagne was absorbed in 1938, Derby, Precimax and Gigantic in 1941, Glycine in 1942 and Valjoux in 1944. The legendary Valjoux S.A., to which the Swiss chronograph owes so much, was called Reymond Frères when it was founded in Les Bioux in the Vallée de Joux by John and Charles Reymond in 1901. Hence the acronym R found on the movements. From the outset, the company specialized in chronograph mechanisms, producing its own ébauches from 1910 onwards. In 1929, John's sons Marius and Arnold took over, and the company became Valjoux S.A. In 1942, it produced no less than 60,000 ébauches a year, before being taken over by Ebauches S.A. in 1944.
To be continued...
