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Behind these three rather rough letters we sometimes hear more cheerful words such as Valjoux, Unitas, Peseux, which suggest that they hide some ancient treasure whose riches we'd like to discover. ETA wasn't built in a day. The birth of such an industrial concentration even required the energetic intervention of the Swiss Confederation itself. Curiously, this fascinating story is difficult to reconstruct. There are partial documents, some of them remarkable (see bibliography), but no complete account from the birth of Ebauches S.A. in 1926 to the Swatch Group of today.
It's to this story that I invite you, reader. You'll discover hopes and tragedies, splendid successes and cowardly betrayals; a little of the soul of Switzerland, and no doubt a little of life itself.
Chapter 1. S.A.'s stroke of genius.
Watchmakers are individualists by nature. Tucked away in his "workbench" where he practices établissage, he doesn't like to reveal his secrets and intends to manage his business alone. In fact, when a crisis arises, as was the case at the beginning of 1921, everyone manages to sell their goods at more or less low prices and through more or less honest channels. The most reprehensible behavior in this case is chablonnage, i.e. the sale of chablons abroad. A chablon is a movement in parts. It makes it possible to circumvent any measures prohibiting the sale of Swiss movements outside the Swiss Confederation. Clearly, windfall was unfair competition to the manufacturers of complete watches, the famous Manufactures that were becoming more and more numerous at the beginning of the 20th century, and which were promoting their brands: Omega, Zenith, Longines... In an attempt to bring some discipline to the profession, in 1924 these manufacturers created the Fédération Suisse des Associations de Fabricants d'Horlogerie, better known by its acronym F. H. A strategy was then sought. But the situation was complex. Of course, the crux of the problem is the movement, the famous Swiss movement that the whole world envies. But there are many parts to this movement. There's the blank, made by large companies with hundreds of employees. There's the anchor, the balance beam, the spinnaker, all the little parts made by a multitude of micro-businesses, sometimes a simple workshop in the corner of a barn.
For the latter, the Union des Branches Annexes de l'Horlogerie, or UBAH, was created in 1927. The aim was to encourage self-discipline and keep a close eye on prices, to avoid the exhausting cycles of prices soaring and then collapsing. It's a bit reluctant, but the assurance of fixed prices ends up seducing. The UBAH is being built at its own pace. For the draft, it's a different kettle of fish. And that's the way it should be, because we're dealing with some heavy hitters here. In January 1925, 26 blank manufacturers tried to get together. In vain, a year later one of them unilaterally lowered its prices, and the initiative exploded. The banks were then asked for their opinion. A mandate was given to Société Anonyme Fiduciaire Suisse of Basel. It has to be said that Swiss banks are heavily involved in the financing of large-scale blank factories, and have a vested interest in fostering market stability to avoid the cold sweats of crisis periods. Banks are not known for their boldness. On December 27, 1926, Ebauches S.A. was founded in Neuchâtel.
Ebauches S.A. was born out of the merger of three major blank manufacturers: Ad. Michel S.A. in Granges, founded in 1898 by Adolphe Michel and Jean Schwarzentrub, A. Schild S.A. also in Granges, founded in 1896 by Adolf Schild-Hugi, and the Fabrique d'Horlogerie de Fontainemelon, founded in 1793 by Isaac and David Benguerel in association with Julien and François Humbert-Droz. Between them, these three factories produce over 75% of Swiss ébauches. Schild, for example, employs over 2,100 people. What's special about Ebauches S.A. is its last initials: S.A. It's not an association, not a trade union, no, it's a private limited company. And with the help of the banks, it's rich. Very rich. So when she invites guests to her table, it's not to discuss the economy. No, it's to talk redemption. And one by one, the small ébauches manufacturers gave in. In 1927, nine manufacturers were sold off, including Hora, Sonceboz and Charles Hahn, the maker of Landeron chronograph movements. In 1928, ten more, including Felsa, Vénus, Racine, Bovet and Optima. In 1929, eight more, including Urania and Postala. Strengthened by this concentration, on December 1, 1928 the manufacturers signed the Windfall Agreement in Berne, drastically regulating export rights and obligations.
It was just a little too soon. Considering themselves unaffected, the ébauches manufacturers, nicknamed "dissidence", who had escaped from the bosom of Ebauches S.A., had a field day, chopping away at free markets. To spice up the situation, the Great Depression of 1930 struck, and the United States, champion of liberalism and the leading export market for Swiss watches, increased its customs duties by 300 to 500%. The signatory companies cried unfair competition, watchmaking individualism took over, and in December 1930 the agreements were terminated.
More to come....
