Here are some interesting snippets from Mr. Hayek’s address to shareholders of the Swatch Group on May 12 in Basel.
..... we decided not to exercise pressure on our partners and retailers. During the crisis, a large number of these partners had envisaged selling the watches held in their stock and substantially reducing their purchases from the different brands of our group. We did not wish to force anyone with conditions of having to buy an entire collection or of purchasing in the usual quantities. Unlike certain other watchmaking companies, we thus showed great understanding for their purchasing reticence.
Thirdly, Swatch Group decided not to adhere to the “End of the World” mentality and not to give in to the predominating world catastrophe scenario by placing our partners under strong pressure to sell at all costs, offering terms of consignment, for example, or unacceptable discounts, far lower than the cost of production itself. It was not in our mind set to liquidate our quality products in the prevailing panic.
Over the last few decades, Swatch Group – your group – has developed the vast majority of the expertise and production resources for mechanical watchmaking movements and complications in Switzerland. During the crisis faced by the watchmaking industry in the 1980s our group was obliged to bear all the risks on its own and to take full responsibility for saving all the important production centers, such as Nivarox- FAR and ETA amongst others, since no other watchmaking company wanted to join forces with us. Throughout all these years we have been forced to deliver our products, and in so doing also our know-how, to almost all the companies who asked for them; this situation created an entry level far too low for any company wishing to enter our industry, even those with no connection to the watchmaking industry. For over 20 years we have been requesting that these watchmakers develop their own production facilities for their timepieces, or at least part of them, which would indeed be feasible if they deployed the appropriate means, and this in the interest of the whole Swiss watchmaking industry.
The major traditional Swiss watchmaking brands who have their own Manufactures, and who are traditionally supplied in part by us, agree with us on this point and support and encourage us in our actions. We have therefore commenced discussions with the appropriate Swiss authorities to correct this obligation to deliver to everyone.
http://people.timezone.com/jmerino/Hayek%20Speech.pdf
