While some brands, like Breitling or Panerai, did their best to integrate their production as much as possible, some others, like IWC for example, did not seek to develop new "in-house" movements, to compensate for a possible ending of the precious 7750 and 2824 deliveries. Whether they are ants or cicadas, hard workers or lazy, nobody saw the existing core problem coming, which actually has to do with the "heart" of the watch.
Indeed, the end of the Swatch group deliveries had been well anticipated by the "chip makers" (like Tech Ebauches, Sellita, Technotime, Concepto, etc.…), who created a "CNC" Maginot line. But the fate of Maginot lines is to be by-passed: Finally, the problem generally comes from the sets and specifically from the hairsprings!
In fact Nivarox, the main provider, is a subsidiary of the Swatch Group.For a few months, there was a rumor about a potential wave of panic related to the hairsprings: it stated that this component, as tiny as it is vital, as cheap as it is complicated to industrialize, would be missing with a cruelty worthy of the quartz crisis. This anxiety became palpable when Nivarox informed TAG Heuer that the deliveries would stop.
Today, a watchmaker who wants to produce watches independently must invest in equipments. Yet, to be ready there are only three ways:
Produce Elinvar hairsprings oneself: if it is the most common and the safest solution in terms of brand image, but it is also the most complicated to implement. Indeed, the material's recipe is not a secret, Elinvar alloys are utilized in precision measurement tools like industrial scales, precision gauges, etc. Hence, this precious isotropic steel alloy is produced by a few factories, most of them German; for example, one could think of the Precision Engineering/Moser shareholder, who has been producing this material for a long time.
The product is available, the Elinvar spiral recipe can be found in all the good watchmaking cook books. But the missing part is the "Chef"! Only a few carefully selected members of Nivarox, submitted to levels of security and to confidentiality rules that would make a CIA agent turn pale, know the secrets to making the magical hairsprings produced by the ETA's subsidiary.
The brands who offer alternative hairsprings, like Atokalpa or Technotime, spent years to produce good quality hairsprings, and the proportion of waste "seems" to have been higher than the Swatch Group's ("seems", because what happens at Nivarox is a mystery to everyone).
So, to summarize:
Determining the right alloy is almost easy, and in any case a hairspring only weighs a few tenths of a gram, therefore it takes very little material to determine the right mix. Finding the machines for laminating, wire drawing and hairspring counting is far more complicated, as they are not produced anymore and most of them were destroyed during the quartz crisis. For example, Technotime bought machines from the ex-Eastern Bloc, where they were utilized to produce Poljot and consorts. Finding the "Chef" who will perfectly master all the steps in the production is almost impossible; one has to train people internally. The implementation of a hairspring production plant is a long process, as it takes several years of development to achieve a high and constant level of quality (actually consistent enough for the pairing and the hairspring/balance tuning to take less than one day per watch).
Yet, like the recent "TAG case" just demonstrated, most of the brands cannot spend the 5 or 10 years required to integrate a whole production chain.
Buying hairsprings from providers other than Nivarox: in spite of the quality of their production, the likeable Helvetian sub-contractors cannot supply quantities large enough for big brands such as Tag Heuer (or Breitling). TAG, as always the first in every domain, just announced that they will buy their supplies from Japan. Because the only continent that produces hairspring in large quantities is Asia. For example, one could think of the Chinese company Sea-Gull, whose production figures are bigger than those of ETA. Or of SeikoSha, which is also a very good alternative, as its Grand Seiko watches are expected to achieve better chronometric performances than Rolex.
The Helvetian brands that will source their products in Asia, will symbolically trample the "Swiss Made", by fitting the Swiss watches with the only part that until now, was 100% made in Switzerland.
This decision might lead to extremely damaging consequences. One already sees some small brands claiming their canton of origin, since "Swiss Made" no longer carries with it the same implication of an AOC for watches. Indeed it will be the end of a kind of ambiguity; but the overall watchmaking industry benefits from this vagueness; and the entire field, including those who do what it takes, is at risk of being penalized by a blurred brand image.
Producing silicon hairsprings: it is currently the biggest topic in watchmaking since the advent of quartz. To best understand what is at stake, one has to understand that the preparation of silicon compared to that of Elinvar is like Molecular Gastronomy opposed to the great chefs' "Nouvelle Cuisine". Or even, if one is a gossiper, McDonald's vs. Fine Cuisine. While manufacturing Elinvar demands a genius cook able to feel the materials, to observe clouds to know the atmospheric pressure, the fabrication of silicon hairsprings takes a valedictorian trained in cutting-edge technologies and able to run the chemical deposition of material with precision down to the micron, following shapes determined with the rigor of mathematical equations. The benefit of using silicon is that one can implement a manufacturing chain far faster. The expertise of "silicon chip" makers, the masters of "wafer" technologies like Intel, AMD and several others, can apply to the fabrication of hairsprings. Therefore this strategic component can be produced in large quantities far quicker than Elinvar.
The other benefit brought by silicon is that the quality of the hairsprings is totally uniform and standardized by the utilization of masking technology and of photolithography. Hence, the slow and difficult pairing phase is no longer necessary (the differences in hairspring qualities are compensated by appropriate balances). Thus, even the balance production process is simplified. The main problem with silicon is met during the assembling phase, where the very brittle hairspring must be fitted into its final slot without shocks.
To best understand the two "quick" options, silicon & Asia, let's take a careful look at the Tag Heuer case:
The rumor states that LVMH's legal department more or less challenged their counterpart at Swatch Group.
LVMH wanted to speed up the process of contract renewal for the deliveries of Nivarox escapement sets.
But the Swatch Group lawyers outsmarted those of LVMH: they cut the sets deliveries to Tag Heuer, without second thought. Considering the suddenness of the announcement, TAG did not have the time to develop its own Invar sets. Therefore, there were only two options: Asia or silicon. To compensate for the withdrawal of Nivarox, TAG once again called upon Seiko (and this after the caliber 1887) to get out of this tricky situation. From now on, one part of its hairsprings will come from Asia, and the remnant from the Swiss house Atokalpa.
To address the problem, Tag could almost have developed homemade silicon; but they chose to rely on Seiko, on the one hand because it was obviously simple from a logistical standpoint, and on the other hand because the image of silicon may have been deemed dangerous to the brand. Actually, the crucial question raised by Tag's choice is: what does a "region of origin" mean? Is it the traditional technologies, implying the utilization of a plain alloy and lots of handiwork, but made in Asia? Or does it mean a totally normalized product, built in a clean room, coming from the cutting-edge industry but "made in Juras"?
Obviously, the other reason to reject silicon certainly was a question of reliability.
The fundamental obsessions at Rolex are reliability and minimal repairs. As a matter of fact, it is one of the reasons why their production processes are widely automated. Rolex is undoubtedly the most automated of the mid-range market brands in the Swiss watchmaking industry. It is obvious that Rolex made the reduction of costs a priority. But there's more! Rolex engineers spend their time burying innovations. These developments, which would have benefited certain independent brands for years, are buried by Rolex without second thought.
This policy of generalized industrialization and of slow innovation, of course comes from the necessity to bring down the after sales servicing figures. The brand with a crown would never launch an innovation without making sure to master the consequences from A to Z. One even knows that the brand is very advanced on the matter of silicon, but sticks however to the excellent Parachrom, rather than taking chances with silicon. In addition, it is common knowledge that Omega, like De Bethune or other "early adopters", already bore the difficult development of this cutting-edge technology. For great watchmakers (such as Journe or Flageollet), Abraham Louis Breguet's ultimate Grail was to use less lubrication, which is a source of problems and of dirt accumulation into the mechanism. For example, with the Extreme Lab, Jeager LeCoultre tested the "fat-free" watch (with limited success). If the silicon technology breaks through, there is no doubt that the JlC EL will go through the roof at the Christie's auctions 50 years from now, since the watch will be emblematic of the beginnings of this "fat-free" technology. But today, with the waterproof watches and high quality lubricants, does the development of a lubricant-free technology still make sense?
The greatest technical achievements , like the Citroen DS, the iPhone 4 , the Concorde or printing, were very difficult to develop, which frustrated many clients (-guinea pigs). But these long development phases have been laboratories for innovations, which were reused in hundreds of new similar products (for example, the technologies developed for the Concorde are still utilized in today's airliners). The equivalent in watchmaking is the Omega 8500, with its silicon hairspring, its coaxial escapement and its double barrel; it is currently the pinnacle of the mainstream watchmaking technology, but it inevitably suffers from after sales servicing figures higher than the Rolex 3135. So, are we ready to potentially sacrifice long term reliability in order to benefit from a state-of-the-art product?
Furthermore, when one talks about watchmaking, the cutting edge technology does not carry the same meaning!
In the automotive field or the mobile phone industry, the equation is relatively straightforward; the goal is "mainly" to reach the most advanced technology. "Mainly", because if some automakers, leaders from a technological standpoint, are successful, their German counterparts, who are not always as technically advanced, are even more successful!
In the end, the Teutonic cars take the advantage thanks to their uninterrupted reputation for reliability, prestige and to the tradition relative to the German luxury car industry. From the communists to the capitalists, from the industrialists to organized crime, all of them did put their illustrious bottoms on the Mercedes-Benz stiff leather. A French rap band (NTM) even sang its ode to the "Benz-Benz-Benz". Why? Because Mercedes-Benz is a symbol of tradition. And tradition has a value common to all cultures.
And the reason why I talk about tradition is because it is the key to the rebirth of mechanical watchmaking. In a world where everything moves faster and faster, where one lives in an opulent society governed like a drunken ship, it is reassuring to remember our grand-parents' sacrifices, which allowed for the creation of this opulence. The mechanical watchmaking's Kryptonite was quartz. And there are odd resemblances between quartz and silicon: silicon is the main component of the micro-processors that power all our computerized systems, especially the Casio G-Shock. But also (and especially?) the fabrication process of a quartz watch is totally standardized, exactly like the fabrication of silicon sets (as opposed to the artisanal manufacturing of a mechanical watch...). Ironically, a well tuned silicon system is amazingly efficient; proof is that Technotime, Chopard and Tissot, when using silicon hairsprings, won the last International Chronometry Contest. Yet, the other technology which provides incredible precision with a silica core is of course the quartz!
The best illustration of this phenomenon is Patek Philippe: the aura of the most prestigious of all brands relies on an uninterrupted tradition of mechanical movements and embarks upon the quest for the best possible quality, by employing the most qualified workmen in Switzerland. So, do we really want a cutting-edge technology, especially this cutting-edge, in a traditional watch?
Watchmaking only makes sense if one agrees to stop technical advances at a given date. Would Abraham-Louis Breguet have integrated silicon in his watches by means of the adapted tools, during the French revolution era?
Who knows! Especially as silicon does not allow for any intervention by the watchmaker: as it is brittle, it can neither be decorated, nor adjusted.
In short, silicon raises the metaphysical question of when does the hard-line mechanical watchmaking stops evolving; does silicon have its place in a traditional watch?
The butterfly effect is when a minor decision leads to major consequences. The ironical side of the story is that the "savior" of traditional mechanical watchmaking could become, after a few generations, its gravedigger. The decision to cut the deliveries of Nivarox sets could boost the switching to silicon. But the latter is double-edged! It could be the greatest revolution in watchmaking since Huygens (well, at least since the Invar), but it also could be the high-tech product that totally depreciates the Swiss watchmaking tradition...
We are lucky to witness the greatest revolution in watchmaking since the end of the 60's and the advent of quartz;
like all revolutions, their outcomes are uncertain. Will silicon join the heaven of brilliant but fundamentally "ill-adapted" or unwished for technologies? Will it be embraced because it can lead toward new chronometric heights?
Will it crash against the breakers of reliability's craggy coasts? Will it rescue the Swiss Made from the Dragons' jaws or definitively spoil the already worn Helvetian watchmaking's brand image?