The Swiss watch industry is fascinating to me. Maybe it is because I am not Swiss (I am Irish) and not from the world of watches. My background spans finance and the hotel industry in the main. So coming into this new world has been quite a journey for me. I have jumped across industries a bit would be an understatement. I enjoy exploring new sectors, one of the most fun I had to get to grips with was the Japanese Love Hotel Industry, but that is a tale for another day.
Where Am I Coming From?
As I learn more about the Swiss watch industry, it is remarkable how it has evolved over the last 150 years. In some regards, it has gone full circle to its origins. Another aspect of curiosity is how the wars in Europe were the most significant catalysts to technological development. I find it a little dispiriting that we humans can become so ingenious when the challenge is to be most efficient in killing each other. That is what I observe from history. Hopefully, that will change in the future.
Why do I say that war has shaped the world of watches so much? Let’s look back to the early 20th century, and gentlemen had pocket watches, and ladies wore wristwatches. Wristwatches were perceived as ladies’ jewelry and commonly worn by ladies on a necklace or the wrist. Speculation has it that the first wristwatch was a necklace watch, but the lady in question decided to wrap the chain around her wrist rather than her neck. I have no idea if this is true, but it is a story that caught my imagination.
Early 20th Century
The First World War ushered in a period of mechanical warfare, which required coordinated actions between disparate groups on the battlefield. The problem was that, in general, only the officers had watches, and these were pocket watches. I am not sure if you have ever handled a pocket watch, but it requires a bit of a process to hook it out of your pocket, flip it onto your palm and read the time. This dramatic process is lovely if you are sitting at dinner. The problem is that if you are lying face down in the mud with someone shooting at you, you may prefer to have your hands on your rifle than on your pocket watch. Another problem that befell watches in the early stages of World War One was that they were not water-resistant, so they needed to be cared for very carefully. Again this is not easily achieved on a battlefield.
The call went out to create a wristwatch that was also water-resistant. By the end of the First World War, wristwatches were more common on the battlefield, but alas, they still suffered from not being water-resistant. Waterproof watches only became possible in 1926 and would be the breakthrough that put Rolex on the map.
Rolex Makes Its Mark
Many people believe that Rolex invented the first water-resistant watch case, and I am sorry to tell you they did not. As you may know from reading my blog posts on the history of Heuer, I find the stories of these bands fascinating, and Rolex is no different.
Rolex started as a British watch company. It can trace its roots back to 1905 but did not sell watches under the Rolex brand until 1908. In these early days, Rolex did not produce its watches. Rolex imported Swiss movements and then cased them up in watch cases made by third parties. Rolex sold these watches to jewelers who placed their names on the watch’s face, how the horological glitterati would scorn such practices today.
A Waterproof Watch Case – The Oyster
The development of the waterproof watch case put Rolex on the map. Many believe that Rolex invented this technology themselves, but I am afraid that was not the case. Developing a waterproof watch case was a significant engineering challenge in the early 20th century. A waterproof watch case is something we almost take for granted these days, and our concern is whether we can dive to 100m or 300m with our watches on our wrists. Back then, this challenge was the cutting edge of technological advancement.
A case maker first made a water-resistant watch case available to the market in 1926, and Rolex jumped at it. By this time, Rolex was a tax exile in Switzerland due to exorbitant taxes and duties England was imposing on trade, a hangover from the First World War. Paul Perregaux and Georges Peret are named the inventors on the patent for a watch case that remained waterproof and allowed for adjustment. Rolex purchased these cases and marketed them very hard starting in 1927.
Between The Wars
This period between the First World War and the Second World War cemented Switzerland’s position as the pre-eminent location for the manufacture of watches. The watchmaking tradition in Switzerland dates back to the second half of the 16th century when the Huguenot refugees brought the skills to manufacture portable timepieces to Geneva.
However, it was the development of mass production processes by Frédéric Ingold and Georges Léschot at the beginning of the 20th century that Switzerland started to solidify its position for watch supremacy. They managed to increase productivity through standardization and the use of interchangeable components.
War Increased Demand – Initially
This reputation set them in good stead for the Second World War when it rolled around. Once again, the battlefield drove the demand for watches as more officers and men needed to have one on their wrist in battle. In particular, there was a demand for rugged watches that could survive in the harshest conditions. Switzerland was in an excellent position to meet this demand as they were a neutral country, so could sell to anyone, although their biggest customers were the USA and UK.
Switzerland was free to make and sell the watches to anyone, but deliveries were sometimes troublesome. For example, when shipping into the US, they could be shipped by a national flag carrier of either Switzerland or the USA. The Germans did not like this very much, so the watches would usually be transshipped through Vichy France, which was neutral, Spain or Portugal to reach their final destination.
The Unbelievable Offer
One of my favorite stories of the Second World comes from towards the war’s end. In 1942 the Germans invaded Vichy France, which rendered much of the transshipment impossible. It meant that the Swiss watch industry was looking for a new market to sell their goods to as they were cut off from their best customers in the UK and the USA. Rolex discovered significant demand on their doorstep and literally a captive market.
Stalag Luft III was a prisoner of war camp that housed approximately 10,000 allied airmen shot down over occupied Europe. Thousands more officers interned at various other prisons throughout the German sphere of influence. The prisoner of war camps was a market Rolex set its eyes on with an unbelievable offer.
Hans Wilsdorf, one of the founders of Rolex, was personally in charge of the sales to prisoners of war. He explained the offer to interested parties with the words, “…but you must not even think about settlement during the war.” As you can imagine, the offer of Rolex watches on a buy now, pay at the end of the war basis became very popular with over 3,000 Rolex watches delivered to British Officers in the Oflag VII B POW camp Bavaria alone.
How Would That Work Today?
It puts a smile on my face to try and think of a modern equivalent to this? Where would the UPS van pull up to if we were to deliver watches to a prisoner of war camp today? I am also amazed that the watches made it past the German guards. Indeed, a few got lost, but once again, from what I can understand, the majority of the watches made it to the prescribed location. And as for payment, I wonder how diligent all those officers were to pay for their watches on their return to civilian life. I am sure Rolex still has those details somewhere.
A Fundamental Shift
After the Second World War, the Swiss watch industry continued to build on the preeminence they had established during the war. They continued to refine their technical prowess, and the drive towards more accuracy continued. The advancements in material science from the second world war started to be deployed outside the military machine. The Swiss watch industry was seen as making practical instruments that were necessary for their owners. In some instances, as I have written about in the past, some well-known brands made more from selling stopwatches and timing equipment than selling watches.
It would take a crisis that shook the industry to its core and would reshape the Swiss watch industry away from practicality and into an industry to satiate luxury desire. And what a transformation it was.