SSIH – SMH

The forming of a collaborative network like SSIH (Société Suisse pour l’Industrie Horlogére SA) was already envisioned in 1925 as a conglomerate of several Swiss watch manufacturers in order to strengthen their position on the international watch market. One of the initiators was Paul – Emile Brandt of the Omega firm. First, the Swiss watch industry started to get under pressure by the fast growing American watch market. Later, towards the end of the 1920s, the world wide economy was showing some decline, culminating in the 1929 ‘Wall Street Crash’ which as a snow ball effect would affected the world wide economy by 1930. In view of these difficulties, in March 1930, the SSIH was registered and included Omega, Tissot and Lemania joining later the same year. Lemania would remain the major movement supplier for both firms for several decades to follow (5, 8).

The collaboration between Omega and Tissot would prove to be important within a few years of the founding of SSIH. As sales in South America decreased massively for Omega in 1934 due to the difficult economic situation, they decided to not abandon this formerly very lucrative market, but to introduce double signed Omega – Tissot watches, which would be less expensive in production and thus less expensive to purchase, to accommodate the decreased purchasing power. The watches would still bear the ‘Omega’ name next to the ‘Tissot’ branding, but the components would be of lower quality (7, 8): As an example, Omega caliber movements would have a Breguet overcoil balance spring, while the mounted Tissot counterparts had a flat balance spring (8).

The collaboration between the three firms would remain fruitful well through WWII and would contribute considerably in the development of highly successful chronographs, of which the Omega ‘Speedmaster Professional’ will become the most iconic representative.

SSIH – Quartz

Later, during the early 1970s it became clear, that the development of Swiss quartz movements needed to advance faster than predicted, as the Japanese concurrence issued ever cheaper quartz watches at an incredible pace. Although independently developing quartz movements since 1972 through different strategic collaborations, the SSIH conglomerate decided to merge the efforts of Omega and Tissot in developing quartz movements by founding a subdivision named ‘SSIH – Quartz’ in September 1974 (6). This division managed to develop very interesting and inexpensive movements, which, depending on the sophistication, would be used by Omega, by Tissot or by both firms in parallel. Unfortunately even this streamlined developmental and very prolific collaboration could not prevent the peak of the so called ‘quartz crisis’ between 1977 and 1979.

SMH

One of the most important periods of recent Swiss watch making history lies in the early 1980s, when it was clear that independent, highly specialised, often family owned watch and part manufacturers scattered all over the Swiss Jura, comprising the Vallée de Joux, the Bienne, Neuchâtel regions as well as Geneva further south, would not be able to counter the industrially centralised, well organised and fast rising Japanese watch industry. Also the two major Swiss watch making conglomerates ASUAG and SSIH were not prepared to what would be coming.

Despite the early signs in the late 1960s, the Swiss were taken by surprise by the rapid flooding of the market with cheap and qualitatively well made Japanese quartz watches and this shock perdured well into the early 1980s, when the Swiss were still betting on the quartz watch as the only luxury watch system for the future. But instead of following the Japanese on the path of fast and industrialised mass production, most Swiss firms clang to the development of very expensive, high end quartz watches, a strategy which almost wiped out the entire Swiss watch industry by 1982. Moreover, the dedication to the quartz system was suddenly so profound, that most watch manufacturers got rid of their machines to fabricate mechanical movements and parts. The situation degraded to the point, that Swiss banks would take the lead in finding a solution to save the industry. However, before taking any decision, the banks agreed to have the situation evaluated by an external expert firm: Hayek Engineering AG in Zurich.

The Hayek Plan

Nicolas G. Hayek, 1928 – 2010. Picture credit: (1)

The plan then devised by Nicolas G. Hayek, an entrepreneur and industrial consultant recruited by the Swiss banks during this so called ‘quartz-crisis’, foresaw the merger and subsequent reorganisation of the two biggest Swiss watch conglomerates ASUAG and SSIH in 1983. By doing so and by strategically adding specialised firms to the newly formed ASUAG – SSIH group, the plan would ensure the survival of the then crippled Swiss watch industry. ASUAG – SSIH would be renamed SMH in 1985.

Strategically this Hayek-plan would begin by strengthening the base of the Swiss watch industry with promoting the newly created and relatively cheap Swatch. The strategy also included a radical switch for marketing Swiss quartz watches. From the ‘high end’, ‘luxury’ and ‘precision’ driven marketing of the 1960s and 1970s the focus would now be shifted towards the Swiss quartz watch being a ‘fun and fashion’ statement.

Swatch

Swatch add for the US market showing the first 25 models. Picture credit: (3)

Introduced in 1982 as a Zero – Series of about 10’000 hand finished pieces in Texas (USA), the impact of Swatch on this test market was disappointing. Actually the new ‘fun and fashion’ marketing strategy was quite shy at the beginning and was undermined by the very sober appearance of the first 25 models. The negative feedback from the Texan test marked made sure that the designs would slightly evolve for the official launch of the brand in Switzerland in March 1983, but the true potential as a ‘fun and fashion’ watch would be attained in early 1984, when colourful, sassy designs and special limited editions were introduced, followed by amplified sponsoring of sports -and cultural events. In addition to latter, the model codes were complemented with cheeky model names, reinforcing the new marketing strategy. Starting from 1985 additional collaborations with artists, industrial designers and architects from all over the world would give rise to ‘art limited editions’ which are still highly collectable today (2).

Swatch models designed by Keith Haring and issued in 1986 as a limited, numbered edition. Picture credit: (4)

By 1986 Swatch ensured sales in the millions for SMH and was able to provide the funds needed for engaging in the renaissance of the mechanical watch, peaking in the acquisition of the Breguet brand in 1999 and thus adding one of the most prestigious, reputable and historic brands to the now called Swatch group (since 1998).

More about the development and evolution of Swatch and the presentation of some iconic Swatch prototypes can be found here.

Ref.:

  1. A Blog to Watch
  2. Swatch – Prototypes
  3. Stay-Tuned-To-Swatch
  4. Christie’s
  5. Watch Wiki
  6. Journal de Geneve, 6.9.1974
  7. Vintage Watch Straps
  8. Boettcher D., The Omega Watches ‘Marine’ and “Marine Standard’, NAWCC Watch & Clock Bulletin, February 2012