What is the Quartz Crisis Pt. 2 – Revival of the Swiss

Aug 01, 2018

What is up, watchfam?! Today, we’re going to finish up our discussion of the Quartz Crisis, and how the formation of the Swatch Group saved the Swiss watch industry You can catch up on the first article here.

When we last left the Swiss, they were backed into a corner. Seiko had come out with the world’s first quartz wristwatch, the Astron, and in the decade that followed, many other major players in the watch world jumped on board, both in the world of analog and digital. The Swiss, however, had such an impossible time getting their quartz lines off the ground that they had received a number of bailouts from both the Swiss government and Swiss banks. With one of these bailouts, they decided to allocate funds to the unification of two of the biggest watch groups in Switzerland at the time, SSIH (who owned Omega and Tissot) and ASUAG (who was primarily responsible for movements supplied to other brands). These two groups merged to become SMH, a name that would later be changed to Swatch Group.

Swatch “Tennis Grid”
Source: Swatch & Beyond

The group launched in 1983 not just as a conglomerate, but with a new brand at their forefront – the Swatch (which, as it turns out, actually stands for “Second Watch” and not “Swiss Watch” like I’d always assumed). This was an affordable, Swiss made, quartz watch that was aimed squarely at the consumer culture of the 1980s – and it hit a bullseye.

Designed primarily to function as a fashion accessory rather than a piece of jewelry and craftsmanship, the Swatch changed on a dime the course of the Quartz Crisis, bringing the Swiss not only back into the game but, in a way that would enable SMH to funnel money into other brands from Swatch profits. While all of this was going on, though, there was a British watchmaker with a chip on his shoulder and a desire to make a change. His name was George Daniels, and he was the man who played an integral role in the reestablishment of mechanical watchmaking in the modern world.

Patek Philippe Caliber 89
Source: HODINKEE

Before we get into Daniels’ contributions, though, we need a quick stop off in the world of Patek Philippe. The brand’s 150th anniversary was 1989, 7 years after the launch of the Swatch, and two decades after the launch of the Seiko Quartz Astron. With Patek Philippe, the piece they wanted to celebrate their anniversary with was not just going to be mechanical – it was going to be the most complicated watch ever made.

The Caliber 89 is a marvel in that regard, and also a colossal middle finger in a number of ways. It was Patek Philippe’s way of creating a sort of portable museum of haute horlogerie to showcase to the world the true power of Swiss mechanical watchmaking. Sure, at 88mm in diameter it isn’t exactly ultra-portable, but you get the point.

Now, come 1990, mechanical watches were still not at the top of their game in terms of popularity, especially at the 1990 Baselworld Fair. Still, the Caliber 89 had ignited a flame in many of the other major players in the industry, such as IWC and Blancpain, to produce high horology pieces of their own. By 1995, a new boost came in the form of Sylvester Stallone and other celebrities introducing luxury watches back into the public awareness.

George Daniels at work in his shop
Source: Crown and Caliber

Reenter George Daniels – Daniels had been hard at work trying to solve what he considered to be a major flaw in the way traditional mechanical movements functioned. The issue, as he saw it then, was that the traditional lever escapement’s use of sliding friction caused unnecessary wear and strain on the movement, something that could be counteracted by modifying the escapement by having the escapement deliver it’s impulse directly to the balance roller’s pallet via the gear’s teeth. In 1993, the escapement was done and, after a bit of work and investigating, Omega bought the escapement from Daniels, and integrated it into their new movements. With this, Omega had a new and highly unique new angle from which to market their pieces and their brand and, by extension, had created a further boost for the Swatch Group.

This move was accompanied by a number of major buyouts, including the acquisition of Tag Heuer by LVMH, and the acquisition of Breguet by Swatch Group, among others. With this, the Swiss watch industry had regained its footing. Sales of mechanical timepieces jumped from 1.7 million units in 1987 to 2.5 million units in 2000, which continued to climb through 2016, when it hit 6.96 million units. Using these new groups to position themselves at various points in the market, the Swiss watch industry also came to understand, at least in part, how to remain relevant in a world of fast fashion and disposable everything. And that, as far as I’m concerned, is the ultimate way to keep it classy, watchfam.

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