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December 31, 2002

A public radio commentary

When the clock strikes midnight and a New Year begins, it's likely you noted the New Year's arrival on a Swiss-made SWATCH watch. To my engineer's eye, the SWATCH is an incredible watch, which may sound odd since the SWATCH is famous for being cheap, and mostly plastic. Here's the SWATCH story.

In the 1980s the Swiss watch industry was near collapse because the Japanese digital watch had taken over. Deeply in debt, the Swiss banks hired a man named Nicolas Hayek to wind down the industry.

Hayek owned an engineering consulting firm and had advised many companies, like BMW and Porsche, on how to make their products better. Hayek gave the banks advice that they didn't expect: He told them, don't shut down the Swiss Watch Industry, instead retool it to build the world's thinnest, cheapest watch. The banks opposed this idea, so Hayek backed the plan with his own money.

He hired Dr. Ernst Thomke to design the new watch. Thomke had worked as an apprentice mechanic in the watch industry, but had left many years ago to study medicine. He hesitated to leave his secure job and return to a dying industry, but when he saw how much the Swiss watch industry had decayed, he rose to the challenge.

To make a thin, cheap watch, Thomke and his engineers had to reinvent the watch completely. Traditionally, watchmakers start with a watch case and fill it piece by piece with parts, repeatedly flipping over the watch to insert new items. Thomke invented a way to make a watch in one continuous step, no time-consuming flipping needed. He designed a series of robots that created the plastic watch case in one swift move, embedding, in this case, many of the watches parts. This reduced the number of moving parts from from ninety to almost fifty, and lowered dramatically the cost of making the watch. Thomke's production line makes a SWATCH every three seconds - no wonder it's often referred to as "printing" a watch. In fact, so innovative is the process, but so simple the watch, that the patents the SWATCH company holds today are not on the watches, but on the robotics.

A SWATCH is often cheeky in design, poking fun at the stuffiness of traditional Swiss manufacturing. Yet, it made the Swiss, again, the world's largest watchmakers. Over 200 million SWATCHES have been sold since Nicolas Hayek suggested the world's thinnest, cheapest watch. SWATCHES are so popular now that collectors pay a premium for never opened boxes, even going so far as to dust for finger prints.

So proud is Nicolas Hayek of this achievement, he wears at least eight SWATCHES at a time - covering him from wrist to elbow on each arm. And he can afford these watches. Owning SWATCH has put him at No. 156 on Forbes Magazine's list of the world's billionaires.

Copyright 2002 William S. Hammack Enterprises