Economy Monday, April 16th 2012
Swissness, which proposes to increase the Swiss-made value of industrial products to 60%, has reached an important stage in its adoption. Debate is rife among watchmakers, particularly concerning the objective to raise the threshold for mechanical watches to 80%.
The FH has made clear that it will not be satisfied with the proposed figure of 60% Swiss-made value for mechanical watches
The amendment to trademark law, or Swissness as it is also known, has reached an important stage. The National Council (the lower house of Switzerland's Federal Assembly) has adopted the project - which defines the percentage of production costs that must be incurred in Switzerland for an industrial product to qualify as Swiss-Made - by a large majority. It now falls to the Council of States (the upper house) to take its decision. Meanwhile, the Federation of the Swiss Watch Industry (FH) has made clear that it will not be satisfied with the proposed figure of 60% Swiss-made value for mechanical watches. This umbrella organisation, along with the majority of its members, is petitioning for an 80% threshold that will protect the public from misleading claims and ensure greater authenticity.
"The ball is in our court"
According to Philippe Merk, CEO Audemars Piguet, "we must defend and promote the unique expertise, inventiveness and craftsmanship which have developed in our country over the years." For Jérôme Lambert, CEO Jaeger-LeCoultre, this is about the preservation and future of the branch: "We must do everything within our power to prevent the demise of our industrial fabric. The ball is in our court."
In a word, Swiss-Made must be synonymous with prestige. However, the FH's 80% objective raises several issues, one of which is the question of watch cases. Switzerland doesn't produce enough, and many of the more complex cases are only available from overseas manufacturers. "Most of these products come from the Far East," declared Peter Stas, owner of Frédérique Constant. He is campaigning for legislation that applies only to the movement, where Swiss expertise is really concentrated. Other watch companies, including Mondaine, share his view. Some thirty in all, they have joined forces under the lobby IG Swiss Made to counter the proposal to reinforce Swiss-Made criteria. However, through lack of courage or fear of reprisals, they refuse to reveal their identity, none of which helps see clear in an affair where each of the players argues its point as a matter of life and death.
Bilateral agreements with the EU are at issue
Another company boss claims that imposing a higher Swiss-Made value, be it 60% or 80%, won't make an iota of difference. Manufacturers have never been subjected to controls, and chances are that even at the higher 80% rate, some will continue to make the same misleading claims. Éric Loth, CEO of Graham in Neuchâtel, takes a tongue-in-cheek view: "The day will come when Chinese customers realise not everything is made in Switzerland." This might well be a rude awakening. Another CEO, speaking at Baselworld, asked whether "this is customers' main concern. I think they buy a brand more than an origin."
Not everyone shares this view, and the debate has even gone beyond Swiss borders. France has already warned its neighbours that it will be keeping a close eye on the matter to ensure that any decisions taken in Switzerland comply with prevailing bilateral agreements. Put simply, France will oppose any measures it considers as protectionist, and has already made it clear that an 80% figure for mechanical watches would be a step too far. The mid-range segment is another potentially vociferous opponent, given the difficulties of meeting the new criteria without driving prices skyward. Clearly we haven't heard the last of the revamped Swiss-Made.
"Time for action"
Éric Loth raises a point that warrants attention. It's a well-known fact that Switzerland draws on the expertise of subcontractors based just across the border, in France. Why exclude these essential suppliers, the majority of which are alone in providing their services? Would it not be a better solution to incorporate them into the process? Why not create a supra-regional hub that would combine Swiss competencies and excellence with French production, with the advantage of greater honesty vis-à-vis the end customer? Of course the idea is a non-starter even in today's global economy, and one which the profession won't even begin to consider as it goes against the very idea of a reinforced Swiss-Made.
In January this year, Jérôme Lambert made a solemn appeal in favour of a more stringent Swiss-Made, commenting that Swiss watchmaking enjoys unique status, an effective monopoly that would be unthinkable in any other sector. This lies in the immaterial assets such as a history, culture and centuries-old savoir-faire which "even with massive investment, no other country can hope to rival." Lambert went on to emphasise the importance of "preserving this heritage at all cost, hence the absolute necessity of strengthening Swiss-Made criteria to further entrench its values, its roots and its local origin. […] This is no longer a time for pointing an accusing finger at those who are hesitating, but a time for awareness and action." A time for unity of the kind that will enhance the uniqueness of Swiss watchmaking. ■