The Quartz Crisis
There is an interesting account of that at Wikipedia, which can be seen pressing above. There is another more simplified version, but interesting version, which deserves to be seen. Summarizing, visually, my take:
Although both articles attribute the almost monopoly of the Swiss watch industry to its neutrality in both wars, with more than 50% of the global market around 1970, I suspect that there are more reasons than that, but I will leave it aside. Better yet, will elaborate loosely how they came to be the biggest watchmakers of the world. With the introduction of the Astron by Seiko in 1969, they took a plunge that made then in the next ten years to cut in half their production.

The very first quartz watch was the Hamilton 600 and Bulova also preceded the Seyko:


As you can see at Groups of Watchmakers in Switzerland, Swatch is the biggest and it is divided as, according to sectors:
- Prestige and luxury sector: Breguet, Blancpain, Leon Hatot, Jaquet Droz, Glashütte, Omega (Each have models between $2500 to sky is the limit)
- Top of the range sector:(Between US$ 1000/2000) Longines, Certina and Rado
- Mid range sector: (Under 1000 US): Tissot, Calvin Klein, Union, Mido, Hamilton and Pierre Balmain
- Basic sector: (under US$100) Swatch and Flik Flak
Tissot is the leader of the Mid Range sector, and it is meant to have an appeal as prestige and luxury which makes it an Investment. In terms of accuracy, when with quartz movement, it is as accurate or more accurate than those listed as prestige, including Omega, which when mechanical, falls under Quartz’s Tissot’s in the precision issue.
This is due to the fact that in place of a balance wheel which oscillates perhaps 5/6 beats per second, a quartz crystal resonator vibrates at 8.192 Hz. Adding to the fact that it is impossible to build up a mechanical watch with less than 4/5 seconds error a day, they are sensitive to temperature, position and magnetism. A 5 dollar children quartz watch is accurate as of half a second a day. Not to mention that mechanical watches are more costly to produce, require regular maintenance and adjustment and are more prone to failures. Their preference stems from the craftsmanship involved in the production of its mechanical parts.
Back to Tissot, Stainless steel, titanium, 18 K gold plated cases are standard and also are sapphire crystal dials, typically from the best possible design. If you add to that the reliability reflected in its sturdy construction, you have it. But it’s real secret is its positioning in price, sold as a midrange, but clearly with prestige and luxury embedded. To confirm the precision issue, it should be noticed that the Tissot PR100 watch that was selected as official time-keeper by the Austrian, German and Swiss Olympic Games teams in 1984 and they should know what they were doing.
Put in simple words, from the design and manufacturing point of view, a Tissot is very close to an Omega and the pricing is a marketing strategy put in place in the late 70’s, when the japanese revolution producing quartz watches was menacing the swiss watchmaking industry of extinction.
This strategy resulted in the following as of 1919
Hover the mouse over the figures and you will get for each brand the following:
- Annual turnover
- Number of units sold
- Average retail price per watch
Rolex is not listed on the stock exchange and its securities are not negotiable. It is an arrangement that enables the Geneva-based brand to control its communications in the manner it sees fit, outside of transparency rules imposed by stock markets and their figures are generally accepted as inflated.
As of 2019, Switzerland produced just over 20 million watches per year, or just over 2% of global timepiece manufacturing. However, it commands more than a 50% share of the global watch industry in value terms, with turnover for all Swiss brands combined estimated at more than CHF50 billion (US$53 billion) in retail sales value.
In the high- and mid-range segments, Switzerland leaves just a few crumbs for its French or German competitors: more than 95% of watches sold for CHF1,000 or more are produced by Swiss companies.
In recent years, the average value of exported Swiss watches has continued to climb, reaching around US$1,000. Multiply that number by two or three and you have an idea of the average price paid by clients who wear those watches.
How they got to that is the interesting history to be told.
When Tissot commemorated its 150th anniversary, they issued a book:“The story of a watch company” , under the sponsorship of Nicolas Hayek, then Chairman of the Board of Tissot Ltd. and Chairman of the Board of The Swatch Group, from wich I will use information together with other sources.
Historically, believe it or not, there existed Omegas with Tissot movements and Tissot’s with Omega movements.
“In “Omega – A Journey through Time” Marco Richon explains that in 1935 an economic collapse in Brazil made it impossible for Omega to maintain sales at Omega’s normal price points. Rather than cut prices just for Brazil, which would have inevitably affected Omega branded watches sold in other markets, the company withdrew Omega marketing and sales from the country and sold watches branded “Omega Watch Co. – Tissot” at the lower price points in Brazil”.

As far as the opposite, i.e., Omega with Tissot movement, my watch, wich I bought in the USA in the 70’s, had a Tissot movement…

I discovered it in the year 2000, when the automatic winding ceased to work and I have it repaired by the Omega dealer of my hometown, (Relojoaria Moretti, now extinct) which was owned by the neighbour of my parent’s house, Nezo, as we called him. Nezo candidly told me that my Omega had a Tissot movement, which I didn’t know for almost 25 years…
This false step hasn’t been only a sin of Omega Tissot. As matter of fact Rolex made the same mistake selling Rolexes with Marconi movements and when it was in its infancy did some incursions towards this direction and it is particularly a problem difficult to spot on vintage Rolexex, specially the Rolexes Marconi. It goes the same way for vintage Rolexes Unicorn, ROLCO, Tudor, etc., specialy the Oyster Watch brand, from the Rolex group, but not a real Rolex, despite partially having the same name. Wilsdorf, the father of Rolex, had other incursions under marketting contingencies. It should be mention “Northern Goldsmiths”, “Admiralty” and “Genex”, which were manufactured by Rolex. He discontinued everything by the end of WW II and kept only Tudor, which is alive today in the 21rst century. Believe it or not, my father, when visiting Swtzerland in the 60’s, toured the Rolex Manufacturing facilities and bought a Tudor. As time passed, its case presented a corrosion which does not match to the Rolex standard. I found out now by making this blog site that the Tudor my dad bought was made of Snowite. It’s hard to understand how Rolex used chrome zinc, which Rolex patented as Snowite, to make its watch cases, because it is a very bad material that corrodes easily. The Tudor my father bought when visiting Swtizerland was stolen, but it looked like that one, without the inscription of its Rolex origins, with the same false step of my Omega Tissot:

I have another interesting story about my “fake” Omega Tissot. When I bought my Omega in the US, back in 1974, a colleague of mine at IBM, with whom I would work for over 20 years together, bought a Rolex. He was of light build and a Rolex Oyster dress watch, which has a smaller dial than the submarine and is also less thick, matched his wrist better. His Rolex Oyster costed about the same I paid for my Omega. 250 US$ dollars, about 7% of a Chevy Nova, which I bought also (which means a price range as of 2020 of some US$3000 dollars and the fact that Rolex stepped up its price and Omega lagged behind). I, although I have a large complexion, I do not feel comfortable with watches the size of Rolex Submariners or even Omega’s Chronograph Seamaster on my wrist. He always joked with me because he said I hadn’t bought a real watch. When my Omega wore out the automatic winding mechanism, I commented to him that he was right, because the Omega had ended up showing signs of wear and wouldn’t last forever, as expected. He laughed, and said candidly: “The same thing happened to my Rolex, I had to send it to fix the winding mechanism because it wore out too…”

Another interesting observation is that the watch store where I bought, more recently, , in 2010, together with Daniel’s wife, his Omega Seamaster Chronograph, is that they ceased to sell Omegas a few years later. I questioned them why and they told me that Omega doubled the prices and demanded them to have at least ten watches stored in their inventory. They simply relinquished to be Omega dealers, perhaps as Omega anticipated. Obviously Brazil was below the level of Omega’s consumers purchasing power once again, what is easy to understand why because the same Omega which is sold here in Brazil you can buy it for une third of the price in the USA and we are talking several times the cost of a plane ticket…
The perception above is confirmed by Nicolas Hayek, who said the following in an interview to Harvard Business Review:
“So why was Omega near oblivion?”
Omega is one of the Swiss watch industry’s great brands. Its history goes back to 1848. You should visit the watchmaking museums and look at the pieces Omega made 50 or 100 years ago. They are wonderful. Few brands had or have Omega’s potential power.
The problems started in the early 1970s. There were bad business practices. The people there became arrogant. They treated their agents and dealers badly. If an agent from, say, New Jersey needed 200 units of a particular model, Omega would say: ‘You’re crazy! Don’t bother us with such nonsense. We’ll give you 50.’
Second, and much worse, Omega became greedy. Rolex sells 600,000 watches per year. That’s about as many as you can sell before a luxury brand begins to lose its prestige. That’s about how many Omega was selling in the late 1970s. But Omega wanted to grow more rapidly. So they took the easy route. They figured, ‘If we can sell 600,000, why not a million? Or 2 million? Or 3 million?’
Which meant, of course, they had to lower the price radically. A jeweler would say, ‘Omega is wonderful, but it is too expensive for my clients. How about giving me an Omega that is cheaper?’ Now, if you are crazy, or I guess if you are greedy, you agree.
That was the kiss of death. Omega was everywhere: high price, medium price, precious metals, cheap gold plating. There were 2,000 different models! No one knew what Omega stood for. By the end of 1980, the company was again in a deep crisis, its deepest ever.”
You can have the whole picture reading the inteview to Harvard Business Review.
On top of that, this may sound also suspicious but, although there is some malice in it, it is perfectly understandable under the system the swiss watchmaking industry works, which was established back in the 17th century by Daniel JeanRichard.

As Estelle Fallet informs us at page 49 of her wonderful book “The story of a watch company” and with some aditional information from David Boettcher, Daniel JeanRichard created the following idea, and I quote:
Daniel JeanRichard, happens to be the first horological entrepreneur, in the modern sense of the term.
- He created a product, developed from obsolete French models.
- He fixed a sale price adapted to the possibilities of the market.
- He used the retail network already set up by the domestic textile industry for their own products.
- He trained apprentices, the first of whom came from La Neuveville.
- He encouraged professional ties with mechanics and watchmakers specialising in equipment, tools and various supplies.
- He sought and purchased products not available locally, such as springs and hairsprings, from as far afield as Geneva.
- By selling land, he set up a fund so that he could pay his creditors before receiving payment from debtors for the sale of his goods.
Établissage and Établisseurs
What is known is that 1691 at the age of 19, Daniel JeanRichard opened a watch workshop near Le Locle, and proceeded to revolutionize the watch industry. He defied the restrictions of the guild system and employed local farmers, who had little work during the long winters, to manufacture individual components for him, which he would assemble into watches. This system of division of labour was called établissage and the person who sat at the centre of the web and controlled it all was called the établisseur. Businesses of this type were called comptoirs.
JeanRichard taught the farmers to specialise in making certain parts, so that with experience they could produce high quality individual parts very cheaply compared to the guild system, where a few craftsmen made all the parts of a watch. He also increasingly mechanized watchmaking, designing and improving tools and machines so that less skilled workers could still produce high quality parts. This system of increasing specialisation and mechanisation produced high quality watches at low prices.
In other words and I quote David Boettcher: The “haute horology” (high, or top end, “manufactures“) became a minority of Swiss watch makers after the creation of the mass production watch industry in the Jura region in the seventeenth and eighteenth century, after Daniel Jean-Richard showed farmers in the Jura mountains how to supplement their income by making watch parts during the long winter months when they were snowed in and work in the fields was impossible. After that revolution most Swiss watches were made by a style of manufacturing called établissage. Material was provided to workers operating in their own homes or small workshops, and then the finished components were collected and assembled into complete watches in a workshop or small factory établissement”. The man in charge of the whole process was called the établisseur.
Bottom line: Farmers specialised in a making individual components of a watch, and these would be brought together and assembled into a complete watch by an établisseur. Doing it this way, while it took Daniel JeanRichard nearly six months to make his first watch, but by 1837 it was possible to make a watch in just one day.
It should be noticed that the British have dominated the watch manufacture for most ot the 17th and 18th century but maintained a system of production that was geared towards high quality products for the elite. Daniel JeanRichard simply broke the tradition upside down, producing watches for the masses and framing the path to enable the Swiss replace the British (and any other) to offer high quality products.
The combination of the above facts originated he following:
- Large watch firms see the light of day
- First workshops, then factories producing spare parts are set up (assortments, hairsprings, jewels, ébauches, cases, dials, etc.)
- Training is organised around the new horological colleges opened in Le Locle (1868) and La Chaux-de-Fonds (1865) and around the Technicum (1933)
- Infrastructure is developed, railways are built innovation and research are encouraged in the area by the Society of Patriotic Emulation (1791), the Neuchâtel
Astronomical Observatory (1858) and the Laboratory of Horological Research, which opened in Neuchâtel in 1921 - These developments receive the financial support of the banks
- Bosses and workers found their respective unions and confront one another, notably during the general strike of 1918, over working conditions
Ébauche
An unfinished movement sold as such. Until circa 1850, an ébauche comprised only the plate, bridges, fusee and barrel. It was known as a blanc and was finished at the établissage.
The modern ébauche is a watch movement, with or without jewels but always without its regulating organ, mainspring, dial and hands. It is also known as a blanc roulant
The reason they interchange the two Ébauches not caring to match the brand in the dial and the brand in the movement and the way they reacted to the brazilian market, in two instances, in the 30’s and in the beginning of the 21rst century, not to mention to the american market in the 70’s based in the Omega I bought there. If you look at Ebay for vintage Omega watches you will find also Omega Tissots in the UK, Israel, Bulgaria and others.
This shows up something Nicolas Hayek perceived keenly as the Swiss biggest problems.
In the early 80’s, UBS bank, on the verge of the country’s two largest watch manufacturers close to financial collapse, hired him as an external consultant and it is history that he not only hit the nerve of the problem, but fixed it consolidating what today is the biggest watchmaker of the world, Swatch.
Quoting Professor Preston Bottger, author of a case study based on Hayek’s interventions in a Forbes article, it can be summarized as:
He concluded that Swiss watch companies had become absorbed in the technology of producing watches rather than thinking comprehensively about what made a customer actually want to buy a watch. In short, the manufacturing process had become detached from a clear understanding of the market.
The high price of Swiss watches had been based on a promise of exceptional accuracy and reliability. It was assumed that accuracy required complex, finely tuned engineering that justified high pricing, but Hayek realized that the quartz watch had erased that advantage. He decided that the customer had to be sold on the idea of wearing a watch as a personal statement. If an astronaut wore an Omega watch, a consumer could identify with the adventure of walking on the moon by wearing the same watch. For Swiss watches, the message counted more than functionality.
He drafted an analysis that was eventually accepted, and then he was asked to manage the newly formed consolidated company that was to become the Swatch Group. It would control 18 leading brands, as follows:
- Balmain
- Blancpain
- Breguet
- Calvin Klein
- Certina
- Flik Flak
- Glashütte Original
- Hamilton
- Harry Winston
- Jaquet Droz
- Léon Hatot
- Longines
- Mido
- Omega
- Rado
- Swatch
- Tissot
- Union Glashütte/SA.
He went on helping to create the Mercedes Benz Smart Car and eventually became the biggest stockholder of the Swatch Group which is actually controlled by his family.
Tissot style and positioning
The official explanation as it is exposed in the 150th anniversary can be read at page 144 of the book “The story of a watch company”:
Pierre extracts from his presentation case an elegant wristwatch whose dial features a kind of double brand “Tissot-Omega Watch Co”. For a fleeting moment I am nonplussed.
Undeterred, I grab my notebook. I remember having sketched out a precise genealogy”.
In 1930, Tissot and Omega’s respective Boards of Trustees signed an agreement recognising their common interest in both the commercial and industrial fields. The origins of the agreement went back to 1925. The official act of 1930 marked
the inception of the SSIH, or Société Suisse pour l’Industrie Horlogère (Swiss Society for the Horology Industry). The company’s headquarters were located in Geneva. From that
moment, it seemed clear that production would be organised on the basis of the SSIH agreement, that, effectively, Tissot and Omega would share a common production plan.
Henceforth, Tissot was to produce certain calibres under the Omega brand and vice-versa. And conjointly. “It is also through this arrangement that some Tissot calibres
were made by Lemania,” the former President points out.
“In effect,” I remember what Mr. Jean-Charles told me a few days ago in the Place du Marché: “This is what Paul Tissot said. I was still a young man at the time! ‘In Bienne, we have just taken the decision to design and produce a new automatic calibre at Le Locle for the SSIH (Omega + Tissot + Lemania, you remember?), Twin brand: Omega Watch Co Tissot, circa 1935.
Mr. Henchoz will direct and advise you in this task. So, what do you think?’
That’s why I spent another year in Le Locle, to work on the development of the 28.5 calibre with a rotor with an axial support piece. In fact, you can see one of the pototypes at the Museum at the Château des Monts.”
I examine the automatic movement, amusing myself with the oscillating mass for a while… Perhaps I’ve never entirely grown up!
“You have in your hands one of Tissot’s pioneering works.”
How, why?
After having designed and produced watches with antimagnetic movements and then distributed them all over the world starting in 1933, Tissot was able to dominate the
automatic watch market for a substantial period of time.
There was a profusion of watches of this kind in the decade between 1945 and 1955 and you can still find them in the catalogue.



The name of the game is Style which is analysed separately



































