When corporatism leads to corporate governance failure

Over the past number of years many watch experts and industry insiders have shared juicy details about the murky dealings of the Swiss corporate world.  Others, like myself, simply conveyed thoughts and predictions based on micro-events, trying to build a bigger picture. However, a few months ago, we finally got an amazing opportunity to find out the truth. Dr Isabelle Campo and Dr Philipp Aerni, from the Center for Corporate Responsibility and Sustainability (CCRS) at the University of Zurich, have published a 120-page report, and this report is the work of a true insider.
The report draws on archival sources, accessible since 2015, that were also extensively discussed in the Swiss print media in early 2016. They provide increasing evidence of corporate governance failure in the 1983 merger of SSIH (Société suisse pour l’industrie horlogère) and ASUAG (Allgemeine Schweizerische Uhrenindustrie AG) that led to today’s Swatch Group.
The merger, induced by Swiss banks, was portrayed as a necessary step to save the two allegedly bankrupt watch companies. Yet, the archival sources show that ASUAG had already been successfully restructured and was ready to conquer global markets with its new product; the Swatch.
Through the forced merger of the two unequal parties, the banks were able to avoid heavy losses that would have resulted from the bankruptcy of the ailing SSIH. The merger essentially enabled the conversion of a former state monopoly, ASUAG, into an even stronger private monopoly; eventually called the Swatch Group. The Swatch Group was able to establish itself as the leading watch company in the world by benefiting from prior innovation and corporate restructuring. In addition, the company built up its market power through extensive brand and “Swissness” marketing, political lobbying designed to preserve its monopoly pricing power in the production of certain watch parts, and the rhetoric of innovation to keep shareholders in good spirits.
The report also explains how bankers 'assisted' Nicholas Hayek to take over 51% of the Swatch group turning it into a private monopoly and, consequently, making the Hayek family billionaires.
The focus is then shifted to 2016 and beyond. A large part of the report analyses industry challenges in relation to the Government's role in the 'smart watch segment' as the industry regulator. While the protection and support of the Swiss watch industry was previously based on a deal behind closed doors, the new protectionism was publicly announced as a patriotic step to protect the value of “Swiss made” products. However, at the other end of the watch market spectrum, there are serious doubts that Swiss watches, especially in the higher price segments, will always fetch a high premium.
Why is the Swatch Group sitting on $1.4 billion worth of unsold stock?
Why is the Swatch Group the lowest ranked watch company on the Swiss Stock Exchange which fails to disclose much information on its products, sales and prices, yet still is a trusted brand name?
What might Swatch and Volkswagen have in common?
What is the reason for the $500 million lawsuit between Tiffany and the Swatch Group?
Why did SG buy Harry Winston Jewellers for $1 billion?
How does all of the above affect the company’s share price?
Why is SG frantically buying back shares to shore up its price?
All these questions are answered in the report which is a must-read for anyone seriously interested in untangling the dealings between watch manufacturers, multinationals, banks, shareholders, the Hayek family, and the Swiss Government.
One thing, however, is certain. This Report does not pay much attention to you, the Swiss watch owner; nor me, a small independent watchmaker. It seems that swissness stops the moment you part with your cash and strap on your new Rolex, Omega or Patek. It completely overlooks the buyer's needs, desires, support - or lack of it - or its crucial role in the watch market. It neglects the feedback effect and portrays (rightly, yet unintentionally) the Swiss watch industry as a one-way street; still immune and resilient from outside criticism. The watch business issues are just Swiss internal matter, to be solved by Swiss themselves, as an internal affair.

The report 'When Corporatism Leads To Corporate Governance Failure' is available as free .pdf download or as a book ( $15).  Enjoy it.

FH is the Federation of the Swiss Watch Industry

Happy collecting,
Nick

Small but persistent - the Japanese way

Wataru Hasegawa was the son of a Japanese Naval Force Chief Engineer. His father died when Wataru was a very young boy, and his only dream was to become an engineer; like his dad.


After graduating in 1928 he started his small machinery manufacturing businesses. The competition was fierce, with many similar manufacturing start-ups competing in the Japanese market. However, the Hasegawa Machinery Co. was different.  Unlike competitors who fiercely competed in medium to large lathes, Wataru focused only on the small watchmaker’s lathes.


Then came World War II and, like many other businesses, manufacturing halted. However, during the post-war rebuild of Japanese industry, and especially thanks to the optical industry, orders for small precision lathes started flowing in.


As they say - the rest is history…


Today, Hasegawa small lathes and mills are synonymous with both precision and quality. 


A couple of weeks ago, while visiting a machinery dealer in Geneva, I made a passing comment that I really liked the latest Hasegawa mill and that I wished they had an Australian dealership!  The Swiss salesman replied, "Well, it just happened that we have here, right now, an engineer from Hasegawa, Japan. Would you like to pass your comment on to him in person?"


Of course I would not miss such opportunity! However, I was shocked to find out that the young engineer I was introduced to was young Hiroaki Hasegawa, and with him there was his father, Mr. Toru Hasegawa, the Company President.

I have to say that I have never met a nicer, more polite, and considerate Company President than Mr Toru. While he had a number of meetings lined up, we spent almost 20 minutes talking about watchmaking. He said that he is personally aware that "a rebelde from Australia" made an inquiry a few months ago about their precision CNC mill. Unfortunately, they are yet to sell mills to Australia.  However, that may change if there is interest in precision machining, and especially watchmaking.  He loved rebelde (I was wearing the N00 Pilots prototype!). On that day he wore a Rolex, which is a very sensitive choice when doing business in Geneva. Hiro wears Seiko; the pride of the Japanese watchmaking industry.

The highlight of this unexpected meeting was a personal demonstration of the latest PM250 mill by Mr. Toru, followed with more “watch talk”.   I have to say that this affectionate exchange between Mr Toru and me left quite an impression on our Swiss host.  


What a truly humbling experience!



I wonder, however, if Mr Hasagawa is a bit of a rebel himself?  In the Japanese corporate world where bigger is better, he continues to makes the small CNC watchmaker machines, following his grandfather's dream. "Size is not everything" is his company’s motto.  But persistence surely is…

Happy Collecting,

Nick

The 3 Best Jobs In Sydney

***The three best jobs in Sydney!

We are looking for smart and hard-working people to join our rebelde team!

1. Mechanical Engineer, proficient in Solid Works with CNC or EDM

machining experience. Role: in charge of micro-machining facility, parts design and manufacturing. Overseas training provided with a starting salary of $75,000 p/a.

2. Watchmaker's apprentice/technician to be trained in all aspects of

watchmaking from parts design to parts manufacturing, assembly, repair

and restoration work. 3 years TAFE course with guaranteed employment. Award

wages and a great career opportunity.

3. Office Assistant with excellent communication skills and a native English speaker. Pedantic, well-organized and willing to commit for the long term. $50,000 p/a.

Feel free to pass this information onto Watch forums. This is a unique

opportunity for enthusiastic people to enter the Watchmaking industry and

become a part of the only Australian watch brand investing in local

production and local talents.  Send your resume/CV to vk2dx@clockmaker.com.au

Ultra Thin

*** The very first pocket watches were the size of table alarm clocks; unsuitable for portable use, thick, large and awfully poor timekeepers. It took centuries of painstaking development to 'turn' them into true pocket-sized timepieces.  Wrist watches went through the same evolutionary process; from modified pocket watches to slim, practical, modern and lightweight timepieces.

Yes, for centuries, watchmakers have been on the mission to reduce the size and thickness of watch parts. We reached 'the golden era of slim and thin' in the 1980s where makers like Vacheron, Jaeger Le Coultre and Piaget proudly produced some of the most exciting super-thin watches. Thin was considered avant-garde; highly desirable and a mark of excellence in watchmaking.

There are a number of problems associated with an ultra-thin design. The reduction in thickness has an unwanted side-effect: the loss of rigidity. As you are decreasing the thickness, you are inevitably increasing fragility. Moreover, at some point, your bridges are no longer strong enough to support wheels, your levers and springs no longer behave like springs, and oils no longer lubricate overly fine pivots but, rather, choke them.

However, since the late 1990s there has been a renewed interest in micro-mechanical component research and development. Thanks to a new technology known as LIGA (the German acronym for lithography, galvanisation and moulding) some of those newly developed components are now finding their application in the watch industry.
Let’s put things into perspective. We are talking here about really tiny parts.

The photo below illustrates the power of LIGA and comes from the cover of the 1994 Scientific American Magazine…an ant carrying a micro gear:

(source: 1994 Scientific American Magazine Cover)

This was 24 years ago, so you can only imagine where the LIGA process has reached today.

During my last visit to Switzerland I had the privilege to meet with Mr Adrian Haubi, the CCO of Mimotec; a market leader in UV LIGA watch technology. Mr Haubi kindly explained to me the rather intricate process which starts with photolithography and the creation of a part-like cavity in a polymerised resin. Then the 'mould' is submerged into a galvanic bath where the micro part is literally grown by electroplating process. After the creation of the part the final desired thickness is achieved by lapping (polishing).

LIGA is a truly amazing part-creating process and the final watch parts are within 2 microns tolerance. Also, both stainless steel and non-magnetic material can be used in part-growing, and the achieved surface finishes are mirror-alike.

However, most importantly, my question is in relation to the mechanical property of the 'grown parts'.  Do they still behave like traditionally machined components? Do LIGA springs actually behave like real springs?

The answer is Yes, and I was able to actually see and touch a number of parts which simply could not be created in any other traditional way.

While Mimotec is not the only Swiss company which offers this service to the watchmaking industry, it is the only one which also offers rapid prototyping services well within the reach of medium-sized watch brands. And when it comes to mass production, LIGA is hands-down a price-effective solution.

At the moment few watch brands make their complex components using this new exciting technology. I am not going to mention brands which are Mimotec customers, however, I have been told that the Swatch Group is working on their own proprietor LIGA technology. Indeed, an Omega Press Release from 2014 mentions "LIGA coaxial escapement plates".

There is no doubt that Swiss watchmakers are, once again, pushing the limits of mechanical micro-engineering.  While most of the components are now a few hundred microns thick, the lower end is not a problem; theoretically a part can be made as thin as 10 microns (usable parts start at 20 microns) Actually, the real challenge for LIGA is not how thin a part can be made, but how thick it can be grown. At the moment the thickest component is just under 1mm. Reaching a 3mm thickness (expected to be achieved in 2019) would allow Mimotec to enter other industries like medical, aeronautical and automotive.


The photo below was taken with Mimotec's permission and will be most appreciated by fellow watchmakers already familiar with the shape and function of components. 

For those wondering which watch Mr Haubi wears…A Maurice Lacroix Square Wheel and Clover Leaf - a cool little gadget piece intended for curious horologists. Yes, the two wheels actually mesh perfectly and the square seconds indicator does rotate!  But there is one far more significant reason why he wears this ML than just novelty.  This very watch features yet another cutting-edge technology which, unfortunately, I am not able to talk about.

Well done, Mimotec – there are exciting times ahead! 

Our Secret Weapon

Reports from Switzerland are generating a fair bit of feedback, mostly - if not all - positive. And then here comes one which got me thinking for a moment: "Nick, it is obvious why the Swiss are not so keen to show you their watch manufacturing facilities, machinery and processes. They simply want to show you how difficult and expensive watchmaking really is, so you'll give up, broken and discouraged."

There is no doubt that watchmaking requires special knowledge, a large capital investment and two or three generations of watchmakers working on a project. But this is not a reason to quit, rather, the opposite; to work even harder and smarter. The Rebelde project has no alternative, no plan B.  Seriously, I cannot imagine myself waking up one day deciding that 'I have had enough of watchmaking'.  I am too old for a career change and completely unemployable. And if we run out of cash, so what? I can always set up a cardboard box watch repair booth in Martin Place and do battery replacements on the spot for $5 a pop. The best office in the city, a great view and thousands of people passing by just to say “hello”; No phone calls, no staff, all income tax-free. Flexible working hours, plus a shoebox with a chessboard and a hand- written sign:  "$1 to beat homeless Master Watchmaker!"

Even if the Swiss really want me to go broke I am not worried at all. I do have a SECRET WEAPON: I have YOU. Every time you place an order for a rebelde watch, or rebelde pen, cap or even a leather rebelde bracelet, we make a profit. Every time you buy a second-hand Swiss watch from us, again we make a profit. Thanks to this free newsletter, our advertising costs are practically zero.  We work harder and smarter - because of YOU.  If one day all Australians, collectively at once, decide that they no longer need a watchmaker, then so be it. We'll bow down, say thank you, pack up our bags and move to New Zealand.

That being sorted out, let’s move to on to something truly cool: outillage.

***As I said yesterday, French is the language of horology

And since French watchmakers have no intention of learning English anytime soon (why would they?) we have no choice but to learn a word or two of French.

One thing that I noticed a long time ago was that some of the flat-watch components were clearly made by a stamping process.  So my plan was to get in touch with some small press makers. After visiting a few machinery dealers, I soon discovered that stamping is not about presses, hydraulics and materials, but rather about outillage.  The word translates as 'set of tools', which in my mind, looked like this:

In other words, a simple punch and die tooling. Yet for some strange reason, press dealers kept frantically repeating outillage, outillage !! to the point that I got a bit annoyed.  So why such a fuss?

Finally, I asked them to show me the bloody outillage. And they couldn't. Now it was their time to get frustrated – why didn’t I understand that outillage is not something you buy with the machine, but rather something you make yourself?

After a bit of googling, I finally figured out that we are talking about the same thing, except for one: punch and die, or the tooling set they call outillage is a rather high precision piece, custom-made for mass production.   Something like the two examples shown below:

In horology, the stamping process is only feasible when production quantities reach a certain level, justifying the cost of tooling and preparation (we are talking here about 100,000 pieces, up to a million). Yes, the well-made outillage can make a million identical watch components still within strict tolerances. 

And how much is the outillage? The first one around $20,000 and the second one around $45,000. That is one set, to make just ONE watch component.

Clearly, parts stamping in horology is not for a small batch production or prototyping.

Au revoir outillage!

PS: the brass-looking cylinders are high precision ROTARY STROKE ball-bearings with zero backlash. A piece of art themselves!

Shaping prestige, tooth by tooth

You can spend your entire working life behind the watchmaker’s bench - and even call yourself a watchmaker - without the need to ever use a metal file. Indeed, most watchmakers don't make watches but repair them by pulling them apart, solving problems, replacing worn out or broken parts and then putting them back together.  It’s only once you start making individual components by hand that you realise that your most essential tool is no longer a screwdriver or tweezers but files, drills and polishing stones, which is now clearly obvious to me.

What is less obvious is the following:  What type of file is a true watchmaker’s file?  One which will allow you to craft a precision component, a file made to last for many years, even when used daily?

If there is one thing intrinsically more Swiss than Milka chocolate it has to be the custom of naming a product by the name of the village it was manufactured in.  Then - a few decades later thanks to the product's quality and longevity - that geographical place becomes a synonym for the product itself…or even an entire industry.

Here are a few examples:  To most watchmakers, Marvin, Cortebert, Tavannes, Orvin, Peseux and Fleurier are watch brand names but, for everyone else, they are just names of some tiny picturesque Swiss villages. Just like when you say: "I left my Montblanc on the desk", you are obviously referring to your pen, not the Mont Blanc; the highest mountain in Switzerland and Europe.

To me, Vallorbe always means just one thing: a watchmaker’s file. Well, as you've guessed, I was wrong…partially, at least.  Vallorbe is not a village but a tiny municipality near the Swiss-French border where, since the late 1890s, the Vallorbe file factory is located.  In their vast range of precision files for various industries, watchmakers’ files are branded under the name Glardon. 

So which glardon would be best suited for a job?

The answer would depend on a number of factors, all to be carefully taken into consideration. Firstly, which metal you are working on: steel, brass, titanium or some other exotic alloy? Next, the file profile, which should correspond to the shape of the component you are making, with many dozens to choose from. Then comes the grade selection which ranges from very coarse to extra fine (000, 00, 0, 1, 2 ,etc, up to 10).  There are different types of files for different stages of part production:  from roughing to precision work, polishing to shaping, down to very specific operations like escape-wheel teeth work. Then there are high-speed steel and coated glardons, diamond embedded ones, carbon fibre files; down to special shaped files designed to reach unreachable spots.

Vallorbe claims to manufacture "the hardest files in the world" with a coating of 72 on the Rockwell Hardness Table.  Since I am not an expert in hardness I had to look up this value only to find that 72 is the highest value on the list.  I guess I shouldn't be surprised... sometimes you do get what you pay for. 

While a modest set of Vallorbe watchmaker’s files could easily cost over $500 this investment is worth every cent.  Yes, there is something magical about shaping the metal - and if you prefer to do it by hand in style - then do it with glardons.

Things that make us go crazy

Charles Darwin wrote: "The sight of a feather in a peacock's tail, whenever I gaze at it, makes me sick!"

What a statement! And this is precisely how I felt when a master Guilloche artisan demonstrated the fine art of pattern making during our visit to Cernier.

But before we can go any further with this it is crucial to get familiar with Cernier itself.  Cernier is the former capital of the district of Val-de-Ruz in the canton of Neuchatel, Switzerland.According to one pedantic administrator Cernier had an area of 9.1 square kilometres . Of this area, 4.98 km2 is used for agricultural purposes, while 3.44 km2  is forested.  Of the rest of the land, 0.68 km2 is settled (buildings or roads) and 0.01 km2 (2.5 acres) is unproductive land.

Talk about attention to detail...

Yes, you've got that right; a mere 9 square kilometres of land populated by precisely 2,223 people.  And, as the aforementioned administrator reports,  "...most of the population  speaks French (1,727 or 89.9%) as their first language, German is the second most common (63 or 3.3%) and Italian is the third (49 or 2.6%). There is 1 person who speaks Romansch. " 

(A small linguistic digression:  Romansch is the fourth official language in Switzerland.  I couldn't resist but to look it up: Romansh is divided into five different regional dialects (Sursilvan, Sutsilvan, Surmiran, Putèr, and Vallader), each with its own standardised written language. In addition, a pan-regional variety called Rumantsch Grischun was introduced in 1982, which is controversial among Romansh speakers.)

There you go…a district capital the size of a small Australian hobby farm with zero English-speaking inhabitants and a township where everything is measured, recorded, kept as is; the place where time has stood still for well over 800 years.

Cerniers don't rush. They don't throw things away, or hurry to modernise the way they do the craft of fine engraving, known as guilloche.  And why would they - when millions of watch enthusiasts worldwide go crazy at the mere sight of an engraved watch dial, bridge or a case?

Yann von Kaenel, a guillocher, kindly demonstrated his craftsmanship on a 130-year old machine. The trick is to go slowly, he said, and also to become one with the machine.  The rest is a matter of practice. 

I am not going to bore you with the technique itself.   In essence, guilloche is the play of light and shadows caused by intricate patterns in metal created by a movement of a sharp engraving tool - or as Yann explains - the magic which happens when shadow marries the light.

There are no two identical patterns or two identical watch dials and, as in the case of Darwin's peacock, some patterns will simply drive you crazy.

'So what do you do for living', Yann asked, looking in at my business card. 'You are a watchmaker? Are your customers interested in guilloche?'
'
Maybe, perhaps, one day - who knows?  Rebelde is as much Breguet as Parramatta is Neuchatel. But then again, who knows?  In a generation or two, someone from rebelde may visit your atelier to discuss the deal.   Cernier is not going anywhere anytime soon, right?'

We shook hands, and smiled at each other.   He appreciated my curiosity, and I admired his 
craftsmanship.

A brief moment in time, to be cherished forever…

Nick

SCHAUBLIN lathe - which one?

Today's email is primarily intended for young watchmakers and clockmakers. However, I strongly believe the topic could be of interest to all watch enthusiasts. So feel free to keep reading. For easy digestion and clarity it is presented in 'Q and A format'.

What is a Schaublin lathe?

Schaublin lathes are one of the most popular Swiss-made manual-operated lathes designed for precision machining. What makes this lathe so uniquely special is the fact that this is one of the most widely-used lathes in the watch industry.

The Schaublin headquarters are in Bevilard, which is the true heart of Swiss watchmaking. The quality and longevity of the lathe is such that it can easily run for 50 or more years; and, as Schaublin proudly proclaims, many of their lathes are still in daily use after more than 60 years.
It’s clear when you invest in Schaublin you are investing in a precision instrument which will last you for your lifetime, and you will never need another lathe.

How many models are available?

The two most popular models are Schaublin 70 and 102.

What is the difference between 70 and 102?

The model numbers represent the height between the lathe centre and its base (70mm or 102 mm). Both lathes provide the same level of accuracy, however 102 can machine larger components.

Which model is best suited for my requirements?

Here is the short list in order of preference/machining requirements:

Schaublin 70
1. Watchmaking
2. Clockmaking
3. Precision toolmaking

Schaublin 102
1. Precision toolmaking
2. Clockmaking
3. Watchmaking

It is important to note that you can make any component on the larger 102 that you can on the smaller 70, but not the other way around. Obviously, if your intention is to make smaller-sized components then the more affordable 70 presents much better value for money.

Collet size?
Schaublin 70: W12
Schaublin 102: W20 or W25

What is the basic Schaublin lathe configuration?
In its basic configuration the lathe comes with a bench, beds, motor, carriage and tail-stock.

Price?
The price of a basic 102 model is AUD$31,200.

Which accessories are available?
The Schaublin catalogue lists pages and pages of accessories which would expand the capabilities of your lathe. Some of the most popular lathes are: dividing head with discs ($3500), grinding attachment ($4500) and milling attachment ($8500). Note: collets or chucks are not included so a basic set of collets and at least one 3-jaw chuck would be required ($3500).

The total?

Assuming you can live without the grinding attachment, the total would be around $51,700, plus $1700 for packing, around $2500 for shipping to Australia, and around $6,000 in GST.

AUD $60,000 for a small manual lathe? You must be joking!?

Yes, the Schaublin 102 is a relatively small piece of equipment, however, it is an indispensable high precision prototyping tool, built to last for 60 years.

During my past visit to Switzerland, I had the opportunity to see countless Schaublin 102 lathes in operation employed by almost every watch manufacturer, including, of course, the most famous brands. Some workshops had 10 or more. The 102 is a true toolmaker’s lathe which means it is used not just for component making but for tool making as well.

For example, a toolmaker in a watch industry needs a 102 to make tools for other machines.

Subcontracting a third-party toolmaker is both expensive and time-consuming; a set of arbours or part holders which could be easily made on a 102 can cost $1500 or more if subcontracted. So in a busy watch manufacturing factory a Schaublin 102 is not just a smart investment which will pay for itself in a short period of time but a necessity.

Are there any second hand Schaublins out there?

Based on my extensive research, finding a 102 which is younger than 40 years is almost impossible. While collets and attachments are perfectly interchangeable, the overhaul cost is prohibitive. In fact, the restoration bill for an older machine could run into thousands of dollars.
Since the shipping, packaging and import duty/GST is the same for an old and new machine there are no savings in buying an earlier model. Therefore, in most cases second hand/pre-owned old machines makes a poor and unpractical choice.

Any alternatives?

Not really. While there are a number of other toolmaker lathes out there Schaublin is the only lathe maker with a watchmaker’s pedigree, produced in Switzerland primarily for the watchmaking industry.

While some American lathe makers, like Hardinge from New York or the Californian-based Lagun, manufacture excellent toolmaker lathes renowned for both machine and work-holding rigidity and excellent accuracy, none of them offer the  versatility and range of accessories like Schaublin.

Looks like Schaublin 102 is then out of reach for a small Australian watchmaker?

Sadly, for most Australian watchmakers this fine lathe will just remain an item on the wish list…

Happy collecting,
Nick

How many angels can dance on the head of a pin(ion)?

***How many angels can dance on the head of a pin(ion)?

Depends, I guess; and your answer is as good as any - assuming you even have an interest in debating topics of no practical value. But this is precisely the question which came to my mind during the visit to a watch factory in Chaux de La-Fonds, Switzerland, last week.

For those of you who have just subscribed: I am emailing you from Switzerland. The purpose of my tour is threefold:  to learn as much as possible about the manufacturing of individual watch components; to acquire machinery for such production and to find an established independent watch manufacturer who will supply Swiss-made mechanisms for our Rebelde brand, until we develop our own in-house movement.  Namely, an automatic date movement (coming in 2018) as well as chronograph (2019).

So far the learning experience could be simply described as life-changing.   
Thanks to some old connections and a set of new circumstances, I was offered a tour of a highly specialized watch factory which manufactures a wide range of in-house movements, from chronographs to tourbillons. Due to the fact that they supply movements to some top end brands I am not at liberty to share any photographs, or even tell you their name but, thanks to their generous hospitality, I was able to see and touch every component, see every machine used in production, and have every question answered.

So back to the original question - how many watchmakers, how much time and effort and how much money is required to manufacture a $100,000 movement in-house? And not just to develop it from  scratch, but to make almost every single component for it, in one building, literally in one house?

The manufacturer has been in business for 10 years.  It started as a dream project of just two people. Today, they employ 95 watchmakers - designers, tool makers, machinists, engineers and assemblers. In such a short period of time they have developed the ability to make almost every component, except for watch jewels and main springs. Last year, they made their own hair spring, which makes them one of a handful of businesses in the world who can make such prestigious claims.

The facility tour started at the design office where four young men started to turn their dream into a blueprint. Then I was shown a prototyping department where  three or four watchmakers make, by hand, first a running prototype using hand tools, as well as the latest CNC machines. 
Once the movement is designed, assembled and tested, the show really begins:  I was taken to the basement - a metal warehouse which contains almost any imaginable variety of steel, brass, titanium, silver and countless alloys.  The raw material is heat-treated and prepared for machining of component mass production.

The second floor looks like a scene from a sci-fi movie:   About 20 or so CNC mills are packed tightly into one not-so large room; the smell of lubricants, coolants; high speed spindles creating the noise similar to dental drills, turning the raw plates into main watch plates and bridges. The entire floor is run just by a few engineers and the operation goes 24 x 7, day and night.

The third floor is the turning department which produces wheels and pinions, screws and barrel arbours. To my amazement, they are using CNC lathes from the very same manufacturer we use! Physically, this is the largest room but it only houses 5 lathes. For a moment I felt an overwhelming sense of joy realizing that our lathe is capable of much more that I thought but the joy dissipated quickly, once I realized that one CNC lathe is just  the starting point.

Raw wheels and pinions are then transferred to the gearing department for hobbing and pivot polishing - again, this job is highly specialized and conducted by half a dozen watchmakers.  And - unlike in previous stages of mass production - here each component is assembled individually one at the time, painstakingly by hand.  Once you see how slow this process is you really start to appreciate the cost factor of your watch mechanism. But the quality of the wheels is in direct relation to timekeeping, so no shortcuts here. The pivot tolerances are well below 3 microns which in itself is rather mindblowing. In addition, some wheels can be only produced in small batches because polishing tools require frequent re-sharpening. A pivot polishing diamond disc would require attention every 2000 parts. And , yes, there are grinding wheels which polish other grinding wheels, which then polish the final tools. There are 3 sets of tools required to accomplish just one final polishing operation. The cost of the polishing machines? A bit more than a Porsche.  To see a dozen pivot burnishing machines in a room not larger than our small office is like seeing 12 Porsches parked in a driveway.

There were other departments which I am not going to talk about. Each of them would require a separate write-up. For example, the parts pressing unit which housed two dozen stamping presses with in-house developed automation.  Or a ball bearing assembly line.  However, the department that was probably most exciting was the manufacturing lab employing the latest wire-cutting technology. The process itself is rather simple: a string of wire the thickness of a human hair is charged with an electrical current. The metal is submerged in oil and then can be 'machined' with incredible precision. This process allows for manufacturing of some of the most complex components -  levers, springs, clips, all the way to chronograph crown wheels. A part which would require 20 hours by hand can be produced in 20 minutes. The application of this technology is still new in the watchmaking industry and the first major 'branching out' from the traditional metal work. Each machine costs $400,000 and they have seven of them, run by two engineers.

As George Daniels painfully  figured out, and famously proclaimed, the final finishing is the crown jewel of watchmaking. Making a perfect part means not just a good working part but, above all, a beautifully crafted part.  Again, I was enjoying watching the craftsmanship of two well-aged watchmakers who polished tourbillon cages by hand. I only stood there for less than a minute, admiring but not intruding, silently.

The finished components finally make their way to 3 assembly rooms:  the general, master and tourbillon room.

The general watchmaker's assembly room employs watchmakers with less than 10 years’ experience, the master room is where three master watchmakers assemble 'complications'. And then there were only two watchmakers in the tourbillon room: a man in his early 30s and a young lady in her late 20s. Both interrupted their work to greet me and to show me the masterpiece they were assembling. Obviously, the company treats them like minor royalty, working independently, at their own pace, free to pause and chat.

The entire tour de manufacture lasted for over 2 hours and was concluded in the meeting room where it started. My host then asked: "So, Nikola, now that you've seen our capabilities, what can we do for your Rebelde project?".

The time for courtesy, accolades and admiration was over. In front of me were 4 trays of watch movements, ranging from a simple chronograph to an astronomical tourbillon, each in a different colour, finish and grade. And I could have ANY of them, manufactured in house, finished as per my request, in any quantity my heart desired, signed "Swiss Made for Rebelde", delivered in 6 months’ time, to be housed in the case of my own design, fitted with a rebelde dial, on the rebelde strap.

I really had no idea what to say at that moment, but my first request was for a glass of a cold sparkling Swiss water.

There was no mistake -  I was given the opportunity of a lifetime to forge a small but crucial partnership with a true, small, independent Swiss watchmaker, who was ready to take my order. And it was clear that if I missed this opportunity, the next one may come - never.

"At this stage of rebelde brand development, a simple 3-register automatic chronograph would be a logical step forward. (Stop talking now- the left side of the brain was screaming in my head!) And since our customers are rather pragmatic, practical, no-fuss Aussies (yes, blame the customers!) a rather conservative Geneva waves finish would be sufficient. "

"Any special requirements in regard to the logo on the rotor weight?"

"A red star", I replied.

"Quantity?"

While the meeting room had no windows,  I swear, somewhere in the distance I could hear the cow bells. I could clearly see the rolling greens of the Swiss Jura, the smell of cheese, the blueness of  Neuchatel lake, and the snow  covered mountain peaks of Mont Blanc. 

"200".

"Very good" said the host and we shook hands. "Your invoice will be mailed to you after the holidays. Have a safe trip home".

'Remortgaged the home', said the left brain lobe.  'Or as the Swiss would say, ‘Maison abandonnee' - concluded cheerfully the right lobe.

But I had no time to listen to either - just 19 kilometres down the road was Jerome's machinery warehouse. The gear hobber, here I come!

[to be continued]

Happy collecting,
Nick