The Watchmaking Crisis of 1975–1985

During the summer of 2010, the Swiss press and international media paid a vibrant tribute to Nicolas G. Hayek, who passed away on 28 June 2010 and was acclaimed as the saviour of the Swiss watch industry The American business magazine Forbes celebrated “a legend…credited with engineering the rebirth of the Swiss watch industry”,1 while The New York Times wrote about “a flamboyant figure [who] saved the Swiss watch industry with the introduction of the Swatch.”2 Indeed, when the big Swiss banks hired Hayek as a consultant in the early 1980s, the Swiss watch industry was in the grip of an economic crisis which threatened its survival. After nearly 40 years of virtually steady growth (the drop in exports of watches and movements during World War II had been more than offset by the production of munitions for the belligerents), the Swiss watch industry entered a recessionary phase in 1975. Swiss foreign trade statistics clearly reflect this phenomenon (see Figure 2.1). The volume of exports soared from 24.2 million watches and movements in 1950 to 40.9 million in 1960 and peaked at the historic level of 84.4 million in 1974, before falling to an annual average of 31.3 million pieces in 1982–1984. As for the number of people employed, it nosedived from almost 90,000 in 1970 to fewer than 47,000 in 1980.