Switzerland: Nervous Ticks

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Fate has been less than kind to some of Switzerland's cherished enterprises. Foreigners are slicing into the Swiss cheese business with their own ersatz varieties; spies who used to patronize hotels in Geneva and Zurich have decamped to Vienna and Berlin; the U.S. Government is threatening to tighten up on Americans' use of secret Swiss bank accounts. Worst of all, the Swiss watch industry, for 300 years a source of national pride and world prominence, is facing an upsurge of international competition.

Last week, as 200 Swiss watch manufacturers gathered to introduce their new models at the Basel Trade Fair, the prime topic was how to handle the foreign challenge. Though sales of their Watches continue to grow at a rate of 6% annually and last year reached $521 million, the Swiss are understandably worried. Their exports have declined from 74% of the world total in 1966 to 72% last year, and well-financed, technologically advanced outsiders are eager to reach for more.

Foul! The most feared competitor is Japan's highly automated watch industry, which has captured 8% of the global market and is growing fast, mainly with jeweled-lever watches that generally sell for $30 or more. Last year the Japanese jolted the Swiss by winning all but one of the prizes for wristwatches in Geneva's chronometer competition, the horological equivalent of the Olympic Games. The Swiss are still crying foul. The Japanese watches, they say, had oversize balance wheels for better performance and were never intended for the mass market. "When you think of how the Germans lost out to the Japanese in the camera industry, you see why the Swiss watch industry should be so concerned," says Robert Forster, marketing vice president of Omega.

Swiss watchmakers are also being pressed by the Soviets, primarily in the less expensive lines. The U.S.S.R. has 6% of the world export trade for watches, and dumps another 3,000,000 movements a year that sell for as little as 500 apiece, mostly in Asia and Africa. Often these cheap pin-lever works turn up in bogus Swiss casings with labels that might easily be mistaken for some of the world's best-known brands.

In their richest export market—the U.S.—Swiss watchmakers face rising competition from domestic manufacturers in all price lines. U.S. Time Corp., which prices its Timex models as low as $7.95, claims to sell more than 50% of watches bought in U.S. stores. Bulova, biggest American producer of jeweled-lever watches (1969 sales: $159 million), is an increasingly tough competitor in the medium-and high-priced range. Swiss manufacturers lost their technological lead when Bulova developed the battery-powered Accutron a decade ago. The company has since sold more than 1,500,000 Accutrons and brought the price down as low as $110.