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Discussion Starter #1 (Edited)
In the past 2 years since 2010 there has been a lot of controversy in ETA's decision to slow down, and eventually halt sales of ebauche and sales of complete movements.
The Swatch Group will be allowed to provide fewer watch movements to its competitors as of January 1, 2012. - swissinfo
Swatch case: Extended ruling is latest twist in movement war

There are some who believe it is the Swatch groups greed, and abuse of power that drives the halting of movements. Why leave a business they control with an iron fist, 80% of swiss brands using ETA movements and pretty much the entire world dependent on Nivarox.

If we look at Swatch Group's history we see Hayek played a key role as CEO, and pretty much the man responsible for saving the Swiss industry we find that Hayek's ideas for ETA may have not been what it is today.
Hayek believed that ETA should not be dependent on any one supplier as to prevent production from halting (something which would be critical for the swiss industry's rise).

Nick Hayek (Jr.) had made a comment to Wall Street Journal:
"We do not want to be a supermarket, forced to deliver to everyone whatever they want. The supermarket era is coming to an end," he told the Wall Street Journal.
By Nick Hayek Jr, sourced from Swissinfo.ch
That means any reduction in Swatch Group’s supplies has severe consequences. On the other hand, the company argues that it has become a “supermarket” – in the words of Nick Hayek, chief executive, vulnerable to the vagaries of competitors skittish about ordering but have avoided investing in their own manufacturing capacity.
By Ft.com
Even what appears to be taking a jab at other manufacturers like Sellita/Soprod for using ETA's designs perhaps, however it is unclear:
He feels it is high time other Swiss watch manufacturers step in to invest more in technology and innovation to produce watch micro-components. Swatch believes other manufacturers are not doing enough to upgrade their machinery and processes and therefore do not share risks.

What is clear however is for the past 2 decades the Swiss industry in the mid and low end has been darn stagnant. No changes to movements, or horological leaps. The same movement designs for the past 2-3 decades, whether they come in an ETA flavor, or a Sellita or Soprod flavor. There is simply no variety in the market.

This MONOPOLY is simply unsustainable in a global economy with China's and Japan (Seiko/Miyota) at the heels of Swiss horology.
You have the Chinese (Seagull and Hanzhou) able to clone and modify the 2824-2 and other ETA movements, all the while using money from revenue in watch sales and ebauche sales to fund in-house movements like Seagull's Moonphase ST25's and Beijing with a whole array of in-house movements including high end minute repeaters/tourbillons/perp. calendars and more.
While Seiko is simply playing quiet, and slowly but surely raking in more sales.


Now with ETA's plans to slow down sales, it will hurt smaller companies whom did not prepare as they will not be able to source movements as easily as before, specially with alternatives that have over a year in wait or are too scarce to source.
This move will also force many other larger companies to invest in in-house movements, or rethink their Swiss-made labels and succumb to buying Asian movements (Chinese or Japanese).
Whether this is good or bad for the Swiss industry it is unknown.

What is known however is there is an unprecedented opportunity for a maverick company to take up the monopoly that ETA is leaving behind willingly and pave a new wave of Swiss horology!
 

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Thanks for posting this. I think Swiss ETA watch movements will be a more high-end, almost haute horology commodity, and in-house movements will take the place of where ETA movements are now. I think a lot more manufacturers are going to do what Seiko and Citizen have been doing, which is just making their own movements and being self-sustaining. The small companies will either close up shop or use different movements.
 

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Most companies will try and stay in business first by using other movements, before calling it quits. There will be a weird transitional period where they try to maintain current lines without an available supply of ETA movements. As we saw in another post there is a significant lead time in acquiring other Swiss Movements. Assuming that the Asian movements are readily available, the companies will have to reinvent themselves and rebrand using Asian movements or try to slide by for a few months without any inventory.... should be interesting.
 

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Thanks for posting this. I think Swiss ETA watch movements will be a more high-end, almost haute horology commodity, and in-house movements will take the place of where ETA movements are now.
ETA movements are decent workhorse movements, but they by no means represent anything even vaguely approaching haute horology. With their supplies outside the Swatch group curtailed, they will get replaced with Asian clones with the final finishing steps done in Switzerland, so that they can qualify for the "Swiss Made" mark. Even if the basic ETA movements become exclusive to Swatch, I will never truly think of them as in-house movements.
 

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Discussion Starter #5
Thanks for posting this. I think Swiss ETA watch movements will be a more high-end, almost haute horology commodity, and in-house movements will take the place of where ETA movements are now. I think a lot more manufacturers are going to do what Seiko and Citizen have been doing, which is just making their own movements and being self-sustaining. The small companies will either close up shop or use different movements.
Very unlikely. You forget Swatch group is composed of Tissot, Hamilton, and Mido.
None of the three have the reputation to sell as haute horology.
Chances are prices may drop in the three brands I mentioned in an effort to bully out other brands. But who knows. I am unsure if Hayek Jr would be that heartless, after all his father Nicholas Hayek sr. just saved the Swiss industry in the 1970-1980s.

Most companies will try and stay in business first by using other movements, before calling it quits. There will be a weird transitional period where they try to maintain current lines without an available supply of ETA movements. As we saw in another post there is a significant lead time in acquiring other Swiss Movements. Assuming that the Asian movements are readily available, the companies will have to reinvent themselves and rebrand using Asian movements or try to slide by for a few months without any inventory.... should be interesting.
Exactly. Should be very interesting.

ETA movements are decent workhorse movements, but they by no means represent anything even vaguely approaching haute horology. With their supplies outside the Swatch group curtailed, they will get replaced with Asian clones with the final finishing steps done in Switzerland, so that they can qualify for the "Swiss Made" mark. Even if the basic ETA movements become exclusive to Swatch, I will never truly think of them as in-house movements.
They can represent haute horology but of course it will be difficult to market this, Omega is the only one close to being right up there but they're going in-house everything (including the entire regulation machine and mainspring).
ETA 2892 is considered one of the most accurate and are very well respected movements, and can be taking to very very high levels of finishing.

We will see what they get replaced with, either way it should be very interested in the low end.
 

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ETA 2892 is considered one of the most accurate and are very well respected movements, and can be taking to very very high levels of finishing.

We will see what they get replaced with, either way it should be very interested in the low end.
Isn't the Sellita SW300 already replacing the ETA2892?
 

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Discussion Starter #7

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Very unlikely. You forget Swatch group is composed of Tissot, Hamilton, and Mido.
None of the three have the reputation to sell as haute horology.
Chances are prices may drop in the three brands I mentioned in an effort to bully out other brands. But who knows. I am unsure if Hayek Jr would be that heartless, after all his father Nicholas Hayek sr. just saved the Swiss industry in the 1970-1980s.



Exactly. Should be very interesting.



They can represent haute horology but of course it will be difficult to market this, Omega is the only one close to being right up there but they're going in-house everything (including the entire regulation machine and mainspring).
ETA 2892 is considered one of the most accurate and are very well respected movements, and can be taking to very very high levels of finishing.

We will see what they get replaced with, either way it should be very interested in the low end.
Good points, I stand corrected.
 

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ETA movements are decent workhorse movements, but they by no means represent anything even vaguely approaching haute horology. With their supplies outside the Swatch group curtailed, they will get replaced with Asian clones with the final finishing steps done in Switzerland, so that they can qualify for the "Swiss Made" mark. Even if the basic ETA movements become exclusive to Swatch, I will never truly think of them as in-house movements.
You're right as well. I have much to learn.
 

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My understanding is this was a bit of an ego motivated move on his part. Would it not make more business sense to continue selling the movements? I mean, a sale is a sale, kind of business 101. Capitalize on your product that's in high demand, I mean if I was the CEO of the Swatch group, I sure wouldn't have made that move.
 

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Discussion Starter #11
My understanding is this was a bit of an ego motivated move on his part. Would it not make more business sense to continue selling the movements? I mean, a sale is a sale, kind of business 101. Capitalize on your product that's in high demand, I mean if I was the CEO of the Swatch group, I sure wouldn't have made that move.
Business wise, you are right. But long term, with the Chinese/Japanse catching up with marketing and the Swiss staying stagnant.
It could be argued that ETA's decision is better made now than later.
 

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The non-Swatch Group brands will be fine. Even the micro brands. Expect them to switch to movements from Seiko or Citizen. Expect some of them to go with Sea-Gull, instead of those Japanese movements. One or two of the bigger, established, brands might do what TAG Heuer did years ago; and outright buy a movement from another brand. Tweak it a bit, put it in their watches, call it in-house. The rest of the established brands will turn to Sellita and the very few other Swiss movement makers out there who aren't part of the Swatch Group. Sellita and the others will likely charge a premium now that the demand is consistant but the supply for non-Swatch Group brands will have dried up. Oris is already using Sellita movements in their timepieces. Expect others to follow suit. It would be very unexpected if any of the established, non-high-end, brands actually introduced brand new in-house movements once Hayek Jr. gets his way. It's possible. But not likely. There are less expensive alternatives available to them.

Don is right, Hayek did this more out of an Ego trip than sound business strategy. His decision will ultimately lead to bigger profits for Citizen, Seiko, and Sea-Gull. With increased profits for Sellita and a few other independent Swiss movement makers.

This is what happens when you're the Big Cheese in charge of one of the biggest monopolies in the world. You develop an over-inflated Ego . . . and you never see the mouse coming right at you.
 

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Assuming that the Asian movements are readily available
Safe bet that they are. I'm sure Seiko, Citizen, and Sea-Gull are aware of Hayek's Ego trip.
 

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Many knowledgeable contributors have posted about this on the monster thread in f2. My take was and still is that if WUS found out about it 2 years ago, watch companies knew about it long before then. I feel they have missed a trick.
They should have setup a co-operative and built a factory to make their own movements for themselves. If Sellita can make a carbon copy of the 2824 then so could they, then marked their watches "Made Entirely in Switzerland", bringing out a wealth of literature explaining how "some" watches are only 49% Swiss etc. They should also have suggested that every single accredited watchmaker in the world become a member of this co-operative, with the promise to sell any and all parts in perpetuity.

This would have undercut Swatch Group and in one fell swoop could have simultaneously educated the public about how non-Swiss most 'Swiss' watches are and cut off, to a huge degree, Swatch Group's servicing and repair revenue.
It would have been entirely possible to have created a new Era in which owning an ETA was seen as somehow second-rate.
 

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Many knowledgeable contributors have posted about this on the monster thread in f2. My take was and still is that if WUS found out about it 2 years ago, watch companies knew about it long before then. I feel they have missed a trick.
They should have setup a co-operative and built a factory to make their own movements for themselves. If Sellita can make a carbon copy of the 2824 then so could they, then marked their watches "Made Entirely in Switzerland", bringing out a wealth of literature explaining how "some" watches are only 49% Swiss etc. They should also have suggested that every single accredited watchmaker in the world become a member of this co-operative, with the promise to sell any and all parts in perpetuity.

This would have undercut Swatch Group and in one fell swoop could have simultaneously educated the public about how non-Swiss most 'Swiss' watches are and cut off, to a huge degree, Swatch Group's servicing and repair revenue.
It would have been entirely possible to have created a new Era in which owning an ETA was seen as somehow second-rate.
That would be interesting...there's a LOT of moving parts to an operation like that and it would be tough to pull off.

I'm wondering if this move by ETA is an effort to up the perceived "exclusivity" of owning a "Swiss" watch. I'm just betting that prices on the Swatch group brands will actually go up. I kind of want a Tissot Le Locle and PRC 200...wondering if I should buy sooner as opposed to later...but I want other stuff more right now, so its not gonna happen that way. I'll probably regret holding off on that Hamilton I've been wanting too, LOL...
 

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Hi, problem is that supplies of Seiko & Citizen are also limited to third parties. The Tsunami catastrophe destroyed Miyota facilities and many Seiko movements got also lost in the process. They are still recovering from it and both Miyota and Seiko Time Module are fully booked for the coming 2 years.
 

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Hi, problem is that supplies of Seiko & Citizen are also limited to third parties. The Tsunami catastrophe destroyed Miyota facilities and many Seiko movements got also lost in the process. They are still recovering from it and both Miyota and Seiko Time Module are fully booked for the coming 2 years.
That's going to help Sea-Gull's profit margins.
 

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Seagull and Hangzhou (we tend to forget the later but Hangzhou plays also a very important role in movements world likely even more than Seagull).
 
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