Watch companies worship commemorations. In this age of hyper-marketing, any commemoration distinct by five is deserving of firecrackers and commemorative restricted releases. (Just commemorations distinct by 25 used to get that treatment.)
There is, though, an industry achievement coming up that isn’t probably going to get a lot of consideration. Indeed, the lone individual giving it any thought likely could be little ole me.
Twenty years ago, on June 24, 1998, the world’s largest watch company changed its name from the SMH Group to the Swatch Group. While little recalled today, the choice was questionable at that point. Particularly inside SMH. On the off chance that you were a chief at, say, Omega or Longines or Blancpain or fill-in-the-clear, you weren’t so obsessed with your multi-billion-dollar parent company changing its corporate character to that of a $45 plastic watch.
Nicolas G. Hayek. (Photograph: civility Breguet)
As the twentieth commemoration of the name change draws near, I am aware of that discussion. That is on the grounds that I restricted the move, and, in a ludicrous new development, SMH Chairman Nicolas G. Hayek, Sr., became persuaded that I was leading an investor rebel against it.
First, some background. I began my watch reporting profession not long before Hayek showed up on the Swiss watch scene in the mid 1980s. Hayek, obviously, is a Swiss watch legend. He is rightly hailed as the friend in need of the Swiss watch industry during probably the breaking point in its set of experiences, the quartz-watch emergency. The instrument with which he did it was SMH, a company he considered and drove from its creation in 1983 out of two giant Swiss watch firms that were hemorrhaging red ink.
Hayek was perhaps the most splendid, capable, alluring, competitive, combative, and effective men at any point to go to a watch production line or chief suite. (What’s more, one of the most entertaining. No falsehood: He was once included in a Swiss TV program called “What Makes Nicolas Hayek Laugh.”) I covered his whole watch-industry vocation intently, from the mid 1980s until his demise at work at Swatch Group central command in Bienne on June 28, 2010, at the age of 82.
Hayek hosting French president Jacques Chirac (left) and Swiss Federal Councilor Flavio Cotti at SMH headquarters.
But there was a word related peril to being the ringside journalist at the heavyweight watch champ’s big sessions. Hayek had a fighter’s impulses. “Remember, I am a fighter,” he advised me once, in an uncommon break in his activity filled profession. “In the event that there is no fight, I become extremely exhausted. That is the thing that Nick Hayek has been missing recently,” he complained. “No fights.”
In covering him for a very long time, one couldn’t abstain from periodically getting yanked into the ring and compelled to fight with him. It had happened to me in 1992, when he was irate about an article I composed that he thought about unreasonable. We argued about it on the telephone and in a vain exchange of letters. He cut me off for some time. Eventually, we fixed it up, however the experience was unpleasant.
With the Swatch Group name change contention, it happened again.
The Name Game
It all began on February 19, 1998, when SMH reported its monetary outcomes for 1997, and some other news. The company had a great year. It announced record deals, passing the 3 billion Swiss franc mark interestingly, with operating benefit up 53.6% and net benefit up 24.5%.
It additionally declared that Nick Hayek, Jr., Hayek’s child, had been elevated to the top occupation at the Swatch brand.
Then came this: “At the present meeting, the Board of Directors chose to propose to the General Meeting of Shareholders to change the name SMH into ‘The Swatch Group of Switzerland SA.’ Or into another name including the name ‘Swatch.’ The Group Management Board has been approached to submit proposals.”
The front of the last SMH yearly report (left), showing model Tyra Banks wearing nothing yet a Swatch Skin watch; the main Swatch Group yearly report (right).
It took me a moment to deconstruct those three sentences. What they implied was that Hayek had chosen to dump the SMH name. He and the directorate had charged the SMH’s 10-part management board to submit proposition for another name. That board comprised of the association’s top chiefs, as Blancpain CEO Jean-Claude Biver, Rado boss Roland Streule, ETA strongman Tony Bally, and head of legal issues Hanspeter Rentsch, just as Hayek père et fils. The last decision would be submitted to the company’s investors for endorsement at its yearly meeting in June.
The look for another name had one standard: it needed to contain “Swatch.” Why? The assertion clarified: “The current name is extremely complicated, and the contraction is hard to comprehend in the different fundamental languages. With the decision of ‘Swatch’ included the group’s name, the overall reputation [sic] of the brand is thought about.” (“Notoriety” is a helpless interpretation of the original German content. Swatch was acclaimed, not infamous. Reputation implies troublesome fame.)
This thought struck me as hasty for bunches of reasons. In those days I was editorial manager of a watch exchange magazine called American Time. I likewise composed a watch section for each issue of a sister distribution, National Jeweler, an adornments industry news newspaper. I chose to address the proposed name change in my segment in NJ.
I was very much aware that the Swatch brand had an uncommon significance for Hayek. It assumed a critical part in the restoration of Swiss watch fortunes and the ascent of SMH during the 1980s. However, it had been a long time since Swatch was dispatched, and the watch was not, at this point a sensation. By the last part of the 1990s, deals had followed off despite solid competition from Fossil, Guess and other Hong-Kong-made design watches. (As Professor Pierre-Yves Donzé notes in his 2014 book, “A Business History of the Swatch Group, “By and large, deals of Swatch watches didn’t proceed on a similar level as during the initial 10 years of the brand’s existence.”)
A original 1983 Swatch. (Photograph: civility swatchandbeyond.com)
An early Swatch Automatic. (Photograph: civility SwatchAndBeyond.com)
Moreover, by 1998, the mechanical watch renaissance was well in progress. Hayek realized that, obviously. He and Swatch were instrumental in it. He dispatched the Swatch Automatic in 1991, he advised me on a few events, to keep creation of hairsprings going at SMH’s Nivarox-FAR during the lean long periods of the quartz era.
Around a similar time, he agreed to procure for Omega the Co-hub technology that George Daniels had been shopping around fruitlessly in Switzerland for a very long time. Omega, crushed by the quartz emergency, was mounting a comeback as a mechanical watch. (In the second 50% of the following decade, it would represent 33% of the group’s watch deals.) truth be told, in 1998, SMH was celebrating Omega’s 150th commemoration, highlighted by the distribution of a 487-page hardback history of the brand called “Omega Saga.” To me, the timing of the name change appeared odd.
A straightforward Swatch phone.
I likewise understood how Swatch affected Hayek actually. Swatch was a highly beneficial, progressive item, indeed, however to him it was substantially more. It addressed a modern way of thinking, a model for how first-world economies could compete with low-wage makers without sacrificing their mechanical bases.
“Swatch is a convincing argument for maintaining a modern base in the highly evolved countries of Europe and North America, and for preserving our craftsmanship customs,” Hayek wrote in 1992. “On the off chance that we permit our plants to move away, and to take our skill with them, we risk losing our autonomy altogether. Swatch has demonstrated on numerous occasions that with a touch of imaginative innovativeness, and the will to succeed, it is in reality conceivable to create a preferable item here at home over should be possible elsewhere on the planet, and at a superior price.”
Hayek signing a Smart smaller than usual vehicle, created by SMH and Daimler-Benz.
Hayek’s prosperity competing against Far Eastern producers with the 100%-Swiss-made Swatch brought him popularity and praise among the business and political elites. In October 1993, at Harvard’s Graduate School of Business Administration, he gave a talk named “The Rise of Swatch and the Revitalization of Western Competitiveness.” (I was there. He talked in front of an audience to a group of people of financial specialists for an hour without notes and got a roaring standing applause toward the end.) He gave a comparative discourse to the European Commission in Brussels at the greeting of then Secretary-General Jacques Delors.
In the 1990s, Hayek endeavored the duplicate the model in different fields. He dispatched Swatch telephones and a company called Swatch Telecom. He went into a joint endeavor with Germany’s Daimler-Benz to build up a metropolitan little vehicle that he named the Swatchmobile. The Micro Compact Car company, settled in Bienne, chipped away at the model of what is currently the Smart car.
Smart vehicles: the name is an abbreviation for “Swatch Mercedes art.”
He likewise savored playing the part of Mr. Swatch at occasions around the planet. Maybe the most well known scene was the point at which the gray-whiskery, pear-molded, 68-year-old SMH administrator brought the Olympic light through Atlanta on its way to the Olympic Stadium for the 1996 Summer Games, where interestingly Swatch – not Omega or Longines – was the authority clock. Hayek’s own relationship with the Swatch brand ran profound. After the Games, he disclosed to me the amount he appreciated bantering with individuals along the light course who were cheering on “Mr. Swatch.”
“Mr. Swatch” carrying the Olympic light through Atlanta in 1996.
I saw the entirety of that. In any case, I additionally realized that, for a great many people, Swatch was not a way of thinking of life or a winning monetary model for the West. It was a fun, crazy, economical quartz design watch. That’s it in a nutshell. Subsequently, the name didn’t belong in lights on the group’s central command building in Bienne. So said I, anyway.
April Fool's Day
The section showed up, maybe fittingly, in the April 1, 1998, issue of National Jeweler. The title was “SMH To Become ‘The Swatch Group,’ Or Something Like That.” You get the gist of it in the following selection, which is the way the segment ended.
I can comprehend Chairman Nick’s and the board’s disappointment with the SMH designation. The initials represent Société Suisse de Microélectronique et d’Horlogerie. All alone, the initials pass on nothing, in contrast to, say, Disney or Nike or Gap. Furthermore, the short and punchy Swatch is a great name for a watch.
The opening of the writer’s original article, which showed up in the April 1, 1998, issue of National Jeweler.
However, since the time the Swatch marvel of the mid-1980s, SMH has been enticed to stick it on everything. The splendid Max Imgrüth, the principal head of Swatch USA, was the main Swatch brand extender, putting it on T-shirts, umbrellas, pens, fanny packs, you name it.
But the top Swatch brand extender is Hayek himself. He gave us Swatch phones, pagers and Swatch Timing, which supplanted Swiss Timing, which used to time athletic occasions under the Omega or Longines mark. He’ll before long have the brand on a vehicle. Using it to recognize the whole group, notwithstanding, is going excessively far. I realize Swatch is SMH’s treasure trove. I realize it made watch history. I know the amount Mr. Swatch (a.k.a. Scratch Hayek) loves it.
‘Hayek gave us Swatch phones, pagers and Swatch Timing, replacing Swiss Timing,’ I composed. ‘He’ll before long have the brand on a vehicle. Using it to recognize the entire group, be that as it may, is going too far.’
Nevertheless, the view here is that Switzerland’s top watch group, parent to Omega, Longines, and Blancpain, can show improvement over receive the name of a thing perpetually acclaimed as a $45 plastic, but progressive, watch.
Call me old-fashioned.
The champ of the Swatch-amacallit challenge (Swatch Unlimited? MicroSwatch Inc? Swatch R Us?) will be uncovered at the investors meeting on June 24.
Let the campaign begin! SMH investors, join together! Vote No on June 24!
Hayek, looking unamused.
‘You scrutinize our thought,’ Hayek shouted, ‘however you don’t offer any suggestions of your own. OK, since my thought is nothing but bad, advise me: what should I name my company?’
On Monday morning, April 13, 1998, the day after Easter, I was working in my office and the telephone rang. I replied and a female voice with a German-Swiss pronunciation said, “Mr. Thompson, if it’s not too much trouble, hold for Mr. Hayek.”
It was not incomprehensible for him to call me. It was uncommon, however it occurred. It very well may be tied in with something I composed. It very well may be something else. This time, I realized it was about what I wrote.
After a couple of moments, he was one the line: “Hi, Joe Thompson!”
“Good evening, Mr. Director. Are you working on Easter Monday?” In Switzerland, Easter Monday is a holiday.
“No,” he said, merrily. “I’m at my home in Cap d’Antibes. It is an excellent day, I am in my pool [suddenly the tone got hostile] and I am wondering what to name my company!”
“So you saw the column.”
[Screaming now] “YES! What’s more, IT IS COMPLETELY NEGATIVE. YOU SEEM TO HAVE SUCH A GREAT INTEREST IN THIS MATTER, AND YOU CRITICIZE OUR IDEA, BUT YOU DON’T OFFER ANY SUGGESTIONS OF YOUR OWN. OK, SINCE MY IDEA IS NO GOOD, TELL ME, WHAT SHOULD I NAME MY COMPANY?”
The call had come out of nowhere, and my reaction was basically that of the carefree Ralph Kramden, during the 1950s sitcom The Honeymooners, at whatever point he ended up in his very own fix making: “Homina, homina, homina, homina, homina… ”
Hayek had a point. I had not given a huge load of thought, or even an ounce, to another name. I just thought the Swatch choice was a mistake.
Hayek Sr. in his Swatch Group office, wearing a Swatch watch, talking on a Swatch phone, with a model of the Swatchmobile on the windowsill, and another Swatch telephone on the work area. (He is likewise wearing an Omega Seamaster Titanium.)
With my cerebrum issuing nothing yet “hominas” because of the startling inquiry, the watch gods mediated. Out of the blue, I heard myself say, “All things considered, in the event that it was me, I’d consider it the Hayek Group.”
Silence. (Where’d he go?) Then, delicately, pleasantly, he said, “That is a good thought.” But the second passed instantly and the anger returned. “Yet, you realize I can’t do that! The Hayek Pool just controls 36% of the company offers, and I can’t put my name on the group.” (The Hayek Pool alludes to a group of financial backers, driven by Hayek, who held a controlling portion of voting rights in the group, an aggregate of 35.5% in 1998. Hayek himself held 28.5%, which is the way he got to be a billionaire.)
“Well, what might be said about the Omega Group? Omega is too known as Swatch is.”
[Screaming again.] “SEE THIS JUST SHOWS YOU DON’T HAVE ANY IDEA WHAT YOU ARE TALKING ABOUT! MANY, MANY COMPANIES HAVE ALREADY REGISTERED THE OMEGA NAME AND WE ARE NOT ABLE TO USE IT.”
“Well, for what reason do you need to change everything? What’s going on with SMH?”
[Screaming stronger now.] “On the grounds that NOBODY KNOWS WHAT IT MEANS! Furthermore, THE INITIALS STAND FOR FRENCH WORDS THAT DON’T MATCH THE NAME IN OTHER LANGUAGES!”
With that, I had depleted my stock of futile suggestions. He had come to his meaningful conclusion. It was a short fight: a TKO in the first round.
As the champ moved back to his corner, and I was crawling out of the ring, he said something shocking. Twenty years on, I actually can barely handle it. In a tone that was practically agreeable, he said, “However you continue to hit us. That is the thing that we need.”
With that, he hung up and I murmured a little supplication of gratitude to the watch gods for the Hayek Group answer. It certainly tempered the anger a piece. Also, saved me another spell in the Tower.
I thought that was its finish. I was wrong.
The Campaign Trail
Nine days after the fact, the Basel Fair opened. Back then, SMH held a worldwide managers’ meeting in Switzerland only preceding the reasonable. At the reasonable, a few SMH heads revealed to me that Hayek had referenced my resistance to the name change in his discourse to the group. A few group didn’t comprehend the choice to change the company name, Hayek advised them. They ought to anticipate inquiries regarding it and be set up to respond to them. Somebody who didn’t get it, he advised them, was me. The reference wasn’t antagonistic, they said. Simply a warning to them to expect questions and give good answers. (Thus, presently I am a banner kid for a “No” vote in June, I thought: That’s strange.)
It got stranger. In May, I had another call from SMH. This time it was Yann Gamard, CEO of SMH Group U.S. at the Weehawken, NJ, central command. I knew Yann well, yet he never called me.
“Hey, Yann, what’s up?”
“I am simply calling to perceive how the campaign is going.”
I had no clue about the thing the man was talking about. I had proceeded onward to different stories, different segments. Campaign? Did he think I was running for sheriff of Overland Park, KS, where I then lived?
“What campaign, Yann? What do you mean?”
Hayek with Yann Gamard (right), CEO of SMH’s U.S. subsidiary.
“The campaign against the corporate name change. I just got off the telephone with Mr. Hayek and he needed me to check with you about it.”
I was befuddled. Valid, the section finished with the line “Let the campaign begin!” But I never envisioned anybody would take it in a real sense. Or then again think I was spearheading it. I disclosed to Gamard that there was no campaign, unquestionably not by me, in all likelihood not by anyone. I had no offers in SMH, no votes, and no clout.
Furthermore, the name change was a fait accompli. What Hayek needs at SMH, Hayek gets. It was Hayek himself who kidded that the initials SMH represented Sa Majesté Hayek.
“It was only a segment, Yann,” I said. “Simply a little assessment segment, there’s nothing more to it. There is no campaign against the new name.”
He said he would let Mr. Hayek know.
On June 24, SMH formally turned into the Swatch Group. Most likely the Chairman let out a huge sigh of relief.
With that, the scene ended.
Sort of. There is a postscript. Two, actually.
Just 15 months after the fact, the Swatch Group gained Groupe Horloger Breguet from Investcorp, a Bahrain-based speculation company. That drove, I am told, to a twinge of regret on the Chairman’s part about the name change.
The day of the declaration of the Breguet obtaining, Sept. 14, 1999, Jean-Claude Biver was in Munich for a meeting. At the point when Biver heard the news, he promptly called Hayek, and said, “I need it!”
Jean-Claude Biver (in a 1997 photograph) revealed to Hayek that he needed to run the recently procured Breguet brand. “No,” Hayek advised him. “This one is for me.”
“No,” Hayek advised him. “This one is for me.” (Hayek revealed to me the story; Biver affirmed it later.)
“I had a dream of how I could manage it under my own management,” Hayek advised me in 2004. “I chose to change essentially the entire Investcorp group and assume control over the CEO position.” His demeanor was, he said, “It’s my business now. I’m going to show you how you can manage such a brand.”
In truth, according to Swatch Group gossip, what Hayek truly needed was not Breguet, but rather Nouvelle Lemania, the Vallée de Joux development maker, which was important for the Breguet Group and made the developments for the Omega moon watch. Hayek’s goal was to secure that essential cause of provisions for Omega. At the point when I got some information about it, he delayed slightly and said “I needed both Lemania and Breguet.”
When the Swatch Group procured Breguet in September 1999, Jean-Claude Biver called Hayek right away. ‘I need it,’ Biver said. ‘No,’ Hayek advised him. ‘This one is for me.’
But he conceded he didn’t completely comprehend Breguet’s potential toward the beginning. “After I bought it, I understood abruptly I have pearls here,” he advised me. “I have the ideal item you can cherish. Allow me to disclose to you what Breguet is. Breguet for me is the best marriage of technology and art.”
Hayek changed Nouvelle Lemania in the Vallée de Joux into Manufacture Breguet.
Hayek, the impassioned industrialist, had caught the Breguet bug. Breguet, he understood, could be the group’s high-mechanical, extravagance watch hotshot that Blancpain had never entirely managed to become.
Investcorp had destroyed Breguet. They promoted it as a game watch: 80% of its advertising was for the Type XX chronograph, a pilots’ watch presented during the 1950s. Furthermore, they moved a great deal of product through gray market channels.
Hayek continued to sink a fortune into reviving the brand and spotlighting the horological genius who established it. He advanced Abraham-Louis Breguet as the innovator of the tourbillon and started a tourbillon fever. He transformed Nouvelle Lemania into Manufacture Breguet and dispatched a progression of developments and upgrades to the plant. He made a Breguet Museum in Paris and turned into an aggressive buyer of original Breguet models at closeout. He had Manufacture Breguet produce a definite reproduction of the legendary “Marie Antoinette” grand complication pocket watch of 1827 (No. 160) that had been taken from a Jerusalem exhibition hall in 1983 was all the while missing. (It was later recovered.)
Hayek, as CEO of Montres Breguet, with the Breguet No. 1160, a careful copy of the “Marie Antoinette” watch of 1827 that was taken in 1983.
The change was complete by 2002. In May of that year, Hayek held a gala dinner at Versailles Palace to praise the 200th commemoration of the innovation of the tourbillon by Abraham-Louis Breguet. He gave a passionate discourse honoring “Breguet, the craftsman who turned into an entrepreneur.”
“An business visionary for me has consistently been and is a craftsman, a maker, a trailblazer, who propels all individuals around him and makes new riches and new work environments,” he said in his discourse at the occasion. “A-L Breguet realized how to make magnificence, delight, bliss. Be that as it may, he additionally made new openings and new abundance for countless individuals and straightforwardly assisted with advancing society.”
In Breguet, Hayek the business person saw himself. Mr. Swatch was presently Mr. Breguet.
In 2003, Hayek Senior ventured down as CEO of the Swatch Group, handing the reins to Nick, Jr. Yet, he never gave up the CEO position at Breguet.
A few years after the fact, I ate in Lausanne with a top Breguet leader, whom I had known for a very long time. He had worked at other notable Swiss brands and been brand manager in the U.S. for one of them. Hayek had enrolled him to help restore Breguet. At supper, unavoidably, we discussed Hayek, Sr. At a certain point, the 1998 name change came up.
“I think he regrets that now,” my companion said.
The incongruity was rich and I was unable to stand up to. “You know, in the event that he had quite recently tuned in to that imbecile watch journalist in the States, he wouldn’t have any regrets now,” I said. “However, noooooooo.” He laughed.
Swatch Group central command in Biel/Bienne, Switzerland.
This is gossip, obviously. I don’t know for sure that Hayek came to regret the name change. Be that as it may, the hypothesis isn’t inactive: it comes from an all around set source. It is absolutely conceivable that, subsequent to positioning Breguet at the group’s apex, he encountered similar disappointment as SMH CEOs whose brands appeared to be optional to mass-market Swatch after 1998.
The second postscript is this: In 2014, Marc Hayek, Hayek’s grandson, the CEO of Blancpain (he was additionally CEO of Breguet, succeeding his grandfather) held a Blancpain press occasion at the Hayek family compound in Cap d’Antibes, France. There he uncovered the Blancpain Fifty Fathoms Ocean Commitment Bathyscape Flyback Chronograph watch. I was among the crowd of press invitees. There I happened upon the pool where Hayek, Sr. made the Easter Monday call. I remained at poolside and, with a grin, remembered the day I ruined Mr. Swatch’s swim.