The Swiss Quartz Crisis and the Hamilton Watch Brand
In 1971, Société Suisse pour l’Industrie Horlogère (SSIH) purchased the Hamilton Watch brand from Bruen and used the company’ name to sell quartz watches in the 1980s. I bought three of those from American Express’s Christmas Catalog. They were limited editions of reissued designs from the 1920’s to the 1950’s.
The original Hamilton Watch Company went through an inverse corporate reorganization during the early 1950’s. The company that once stressed its place as the watch of railroad accuracy became a conglomerate and viewed “watches” as one of its many product lines. The investment community didn’t understand what seemed so obvious to management in Lancaster, Pennsylvania. To accommodate the worldview of the stock exchange, the company eventually changed its name to HMW. The watch division and the original brand name ended up in Biel, Switzerland owned by SSIH holdings.
An Opportunity Missed
A Hamilton team in Lancaster developed a new generation of electronic watches. That technology became dominate around 1977. SSIH failed to recognize the potential.
The Japanese seized the moment and became leading watchmakers around 1977. The succeeded by using modern manufacturing methods and emerging technology. Looking back, SSIH may have regretted their disinterest in the Pulsar division of Hamilton’s parent company. Seiko bought it instead.
The Swiss industry-wide depression looked like this: In 1973, the number of watch companies in Switzerland stood at 1600 and dropped to 600 by 1983. Employment went from 90,000 to 23,000.
Pulsar would have given SSIH a couple of advantages aside from a new competitive product. Pulsar used modern manufacturing methods and had a specialized supply chain. The supply chain may have been the most important commodity, especially in the area of digital displays.
In the Ambulance
In 1983, the Swiss Government and Banks forced SSIH and ASUAG* to merge leading to the formation of the Swatch Group, Ltd. After the merger, movements were the main product of the new entity .
Hamilton was one of only two viable finished watch brands the company owned. Rado was the other. The Hamilton brand had a nice foothold in the US market and continued to sell briskly. As one of 19 brands, however, it didn’t come close to fixing the financial difficulties in the Swatch Group.
*Created in Switzerland by the Government and Banks during Great Depression of the 1930’s.
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| Registered Masterpiece* |
In 1985, Hamilton created a marketing campaign around reissued vintage designs as retro watches became a fad. Hamilton had molds from the 1920’s through the 1950’s. Playing on this resurgence of retro designs, the company replicated:
- Ardmore
- Boulton
- Cabot
- Piping Rock
- Spur
- Wilshire
- Ventura.
- Masterpiece
*(1985 Hamilton Registered Wristwatch manufactured by Société Suisse pour l’Industrie Horlogère (SSIH) prior to the merger with Swatch.)
Hamilton’s retro strategy worked. As late as 2007, Hamilton released a retro watch, the Ventura to honor the 50th anniversary of the electric watch.
For the U.S. market, stainless steel quartz and automatic versions were released with a production of 1,957 each; for the Asian market, yellow and rose gold plated Ventura models were released with a total production of 1,000 each.
In 2009, Hamilton released three new Ventura models in celebration of what would have been the 75th birthday of Elvis Presley. Presley wore a Ventura in the movie Blue Hawaii. Celebrating Presley’s birthday somehow didn’t connect with me, but it worked.
Quartz Technology
During a period between mid-1950 and 1960, a consortium of Swiss firms developed the first quartz watch. Seiko also build a quartz: the Crystal Chronometer QC-951. This portable clock was used as a backup timer for marathon events in the 1964 Summer Olympics in Tokyo.
In 1969, Seiko release a quartz watch called the Astron. The first Swiss quartz analog watch – the SA Beta 21 containing the Beta 1 movement arrived at the 1970 Basil Fair released by Omega Electroquartz.
In 1974 Omega introduced the Omega Marine Chronometer, the first electronic watch ever to be certified as a Marine Chronometer. Two years later Omega introduced the Omega Chrono-Quartz, an analogue/digital chronograph, succeeded 12 months later by the calibre 1620.
Even with a foothold in developing the quartz movement, the Swiss industry hadn’t tooled up to make quartz watches. By 1978 quartz watches overtook mechanical watches in sales strengthening both the Japanese and American watch industries.
Swiss Crisis Became Hamilton’s Crisis
Economic turmoil became the new Swiss reality
The Swiss bought up the US industry beginning in 1942 -1973. The United States took back its sales and product through the use of microelectronics fuel by the military and NASA.
The major players in that short-lived resurgence included Texas Instruments, Fairchild, and National Semiconductor. Each began mass production of affordable digital quartz watches. In 1978, Hong Kong exported the largest number of electronic watches in history causing US semiconductor companies to pull out of the watch market entirely. With the sole exception of Timex, the remaining traditional American watch companies, including Hamilton, went out of business and sold their brand names to foreign competitors.
Swatch
By 1983, the quartz crisis reached its pinnacle. Efforts to modernize production began to work and by 1984, the Swatch Group showed a profit.
Swatch built its first global brand, a watch sealed in a plastic case. During the next two years, the company sold 2.5 million watches.
The US domestic market treated the Swatch as a fad.
Swatch helped the Swiss, but didn’t “rescue” the industry. Instead of innovation, consolidation and brand management rebooted the Alpine Nation’s key domestic product.
Hamilton’s Revival
As a subsidiary of the Swatch Group Ltd., Hamilton actually made generic watches between 1971 and 1983. Swatch positioned the company in the mid-range of affordable brands. Other than using product names from the past in portfolios such as the “Timeless Classic,” “Jazzmaster”, “Venturer” and so forth, the company designs have trumped technical innovation. Swatch focused on marketing and continued to use their standard movements.
That’s the situation today.
Some thoughts about today’s Hamilton
If you think a Hamilton watch produced by the Swatch Group is something special, think again. Today’s Hamilton is a highly managed brand. The brand managers seek to establish an emotional connection between you, me and a generic watch with a logo. They try to connect the original Timekeeper of Railroad Accuracy with a brand name that has little, if anything to do with the original innovative American watch company.
Swatch emerged from the quartz crisis using brand management. They used that to revive Hamilton, but nothing special about today’s Hamilton watches exists. Does a Hamilton factory exist? Not really. They take an ETA movement, put in a case designed by some group somewhere, put a dial with Hamilton painted on it and put the watch in a box marked Hamilton.
Is that really the legacy of the greatest American watch company?
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