When you pop the back of a mechanical watch and see the intricate springs and gears in motion making incremental measures of time on the dial side, one can’t help but be amazed. If you have no watchmaking skills, you may also be confused. There are layers of complexity in even a simple three hander. As complicated as any watch may be, it still can never match the historical complexity of the Swiss watch industry.
We see a dominant conglomerate like the Swatch Group and we think there is some easy direct line to explain how each piece came to be part of the whole. That is true for some Swatch brands, but not for all. I know that the recent collaborations have blurred the lines a bit, but each Swatch brand has tried in recent years to keep in its own lane and sell to its segment of the watch market. When these brands were independent they competed directly with each other, or did they?
You will see it written often that Omega purchased Tissot in 1930. It is really not that simple. In 1930 a Tissot heir became the chief operating officer of Omega and both companies formed the Société Suisse pour l’Industrie Horlogère (SSIH). Two years later they were joined by the companies commonly called Lemania. This was in response to the economic upheaval of the Great Depression. The Swiss Watch industry created alliances and trade groups to limit competition and keep prices, especially for movements, from falling. Omega and Tissot were still nominally independent companies, unlike today.
In 1931 Allgemeine Schweizerische Uhrenindustrie AG (ASUAG) was formed for similar reasons, to save the movement industry and related watch brands. The first member was Ebauches, S.A. which was the combination of A.S. Schild, Fabrique d’Horlogerie de Fontainemelon (FHF), and Adolphe Michel (AMSA). They were soon followed by Eterna, Unitas, Glycine, Atlantic, and manufacturers of parts and jewels. It became, by far, the largest association. Each member was independent and some combined to form new companies and conglomerates (Cyma, Ernest Borel, and Doxa in Synchron, for example).
When the next crisis occurred (yes, the Quartz Crisis, queue the scary music) ASUAG formed the General Watch Company to reduce redundancies. In 1971 Certina, Mido, Eterna, Oris, Hamilton, Rado, Technos, and Edox came under the General Watch Company. They were joined by Longines and its brands Rotary and Record. At some point the rope ladders were pulled up into the tree house and no one else was admitted. Many old brands did not survive, and some that did, barely did.
It is with General Watch Company that we can see what would become the Swatch Group, although some parts don’t seem quite right. The early 1980’s saw some brands being sold off to keep the others alive. ASUAG combined with SSIH in 1983. More restructuring occurred two years later when Société de Microélectronique et d ‘ Horlogerie (SMH) was formed. This was eventually merged with Swatch that was founded in 1983 and SMH became known as the Swatch Group as we know it. This all happened because money that was required to keep the industry afloat was not going to be lent unless tough decisions were made. Some old brands had to go.
With that background out of the way, the question occurs to me: did Swatch keep the right pieces? Each company that was spun off to investors or management was left on its own. The movement divisions were separated from their watch brands (sorry Eterna, we will keep ETA). Leaving aside the later acquisitions (Blancpain, Breguet, Glashutte Original, etc…) and the niche jewelry brands (Harry Winston, Leon Hatot) and old pin pallet bargain brands (Endura, now a private label within Swatch) did Swatch keep the right pieces? Here are my subjective rankings:
Kept: Spun Out:
1. Omega Eterna
2. Longines Roamer
3. Rado Edox
4. Hamilton A. Reymond (ARSA)
5. Mido Atlantic
6. Certina Oris
7. Tissot Technos
8. Swatch Rotary
It is clear that of the companies let go none compared with Omega in terms of prestige. Eterna was an amazing company with innovative movements, but they were more in the Longines lane than the Omega one, although at some point in the 20th Century all three were of similar quality. With Longines Eterna was unnecessary.
Rado is an interesting choice to keep. They had always concentrated on Asian markets where their principal competition was Titus and Titoni. It makes sense to keep them. Roamer had some presence in Asia, but not as much. It was not a strong brand by 1980.
Atlantic had always concentrated on the Eastern Bloc countries. On price, they were always beaten by Soviet brands and Poljot could make pretty watches. That may not have been the best market to explore. Swatch turned Mido’s focus to Latin America, where it had little competition. Tissot had name recognition that the others didn’t have. And finally, it was named the Swatch Group for a reason. Swatch was popular and profitable. Rotary and Technos, not so much.
What the spun-off list shows is how well the management of Oris did in recreating that company. For years they had beautiful dials but could not put high grade movements into their watches. They are the success story of that group. They made Oris into something different. The investors who control Eterna are just remaking copies of old Kontiki models.
Of all the companies Swatch kept that I have listed the only one that I think Swatch has had a hard time making a distinct image for is Certina. They have it as a tool watch for a non-North American market. Historically, it was not that, but then neither were any of the spun-out companies.
So, maybe keep Eterna and spin out Certina. I confess to having vintage Eterna on the brain. Usually thinking and research ends, the way it always ends, with yet another mid-century watch. One thing is certain, on the vintage market at least, brands in the current Swatch Group bring better prices than those on the outside. Almost any Longines is going to bring much more than a similar Eterna or Roamer.
The Escapement Room 
This was truly a great article to read during coffee time.
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