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ETA SA Manufacture Horlogère Suisse

ETA SA Manufacture Horlogère Suisse
Mau Briones

This article will discuss three different topics:

  • Early history of ETA SA
  • Why ETA will no longer supply 3rd party watchmakers
  • Why ETA movements will only be available in Swiss watches

EARLY HISTORY OF ETA

ETA SA Manufacture Horlogère Suisse ( ETA SA Swiss Watch Manufacturer ) designs, develops and produces quartz watches and both hand-wound and automatic-winding mechanical ébauches and movements. Commonly referred to as ETA, the company is headquartered in Grenchen, Switzerland and a wholly owned subsidiary of THE SWATCH GROUP LTD.

ETA is the result of the successive consolidation of the Swiss watch industry. Before becoming a single undertaking in 1985, the ETA SA brand consisted of  several ébauche factories across the whole Swiss Jura arc, grouped together under the name Ebauches SA.

1856 – J. Girard and U. Schild establish a movement manufacturer which becomes ETERNA in 1876.

1924 – The Swiss Watch Federation is created to unite some watch making companies.

1926 – Ebauches SA is founded by FHF, A. Schild, and Ad Michel to create a strong union of ébauches makers and end the pricing war.

1930 – SSIH is created by watchmakers Louis Brandt, Omega, and Tissot to consolidate watch brands and high-end movement makers.

1931 – ASUAG is established to overview and control the Swiss watchmaking industry.

1932 – FAR and FBR are established within ASUAG to contain lever assortment and balance wheel manufacturing. On the same year, ETERNA creates ETA SA as its ébauches making facility while ETERNA SA remains as a watchmaker.

1983 – SSIH and ASUAG merged under the supervision of Hayek Engineering. On the same year, the SWATCH brand premieres based on movement designed by ETA engineers.

1985 – Nicolas Hayek buys 51% stake in SSIH-ASUAG and transforms it to SMH and later renamed to SWATCH GROUP in 1997.

Nicolas Hayek and SMH decided to dedicate their available resources to a single company. They heavily invest in the expansion of ETA and eventually become dominant in the watch industry. ETA becomes the most powerful manufacturer in the Swiss watch industry with estimated annual production of 5-6 million units of mechanical movement.

ETA WILL NO LONGER SUPPLYING THIRD-PARTY WATCHMAKERS

It was all started in early 2002-2003 when Swatch Group announced its decision to reduce its deliveries of completed movement and its assembly kit for third-party watchmakers and ultimately end all deliveries by 2020. Sellita and La Joux-Perret resist this; it ended with Sellita taking action and referred the case to COMCO. Sellita, being the acting spokesperson of major brands took two actions: with COMCO to strictly frame this progressive withdrawal of ETA to deliver movements to watchmakers and the launch of a program to develop its own movements, setting 2019 as the cut-off date. To deal with the threat of Swatch Group, many major watchmakers like Richmont, Tag Huer and Rolex started to gear up their industrialization plans and win back their autonomy by cutting ties to ETA.

In 2012, after 10 years, COMCO, through legal action allowed the Swatch Group to apply its 15% reduction of deliveries of mechanical movements to different brands using them for their own timepieces and 30% reduction to customers who also have a movement production unit but do not make their own completed watches. The obligation of ETA to deliver to third-parties runs until December 31, 2019.

ETA MOVEMENTS WILL ONLY BE AVAILABLE IN SWATCH PRODUCTS

Nicolas Hayek said that Swiss watchmaking companies must begin to invest in their own movement-making capabilities because it was detrimental to the long-term health of Swiss watchmaking industry to rely on one supplier only, which is the ETA. We can say that Hayek wanted to give the Swatch Group the right to decide whom it would or would not supply with its movements and components. By 2020, ETA movements will only be available in Swatch products. Swatch Group will not be selling to everyone but only to their traditional watchmaker clients like Patek Philippe and Rolex’s Tudor.

With this shocking event, affected watch brands will have to stop relying on a single external supplier. They can either work together to create a new matrix of companies to re-allocate the responsibilities of creating movements and components or fight on their own, put up and heavily invest in their own movement manufacturing capabilities.

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