From Jacques David to Nicolas Hayek- Third edition
Chapter 3: The watchmaking cartel (1920–1960)
The watchmaking cartel (1920–1960)
During the postwar euphoria watch exports grew from 13.8 million pieces in 1913 to 16.9 million in 1919. But in 1920–1922 the Swiss watch industry experienced a deep crisis. Watch exports suddenly dropped from 13.7 million in 1920 to 7.9 million in 1921 and 9.6 million in 1922, causing a large increase of unemployment. There were more than 30,000 jobless in watchmaking during the summer of 1921,166 and the Longines factory, one of the biggest in the country, fired 40% of its employees between 1918 and 1921.167 This crisis led to a shared will to profoundly reorganize the sector.
The consequence of these economic difficulties was a general decrease of prices, which in turn strengthened the crisis, with pressure on salaries, conflicts with trade unions, lack of liquid assets in companies and bankruptcies. Above all, the drop in prices affected subcontractors, who tried to sell off their stock and production, sometimes at a loss, with the aim of creating cash and avoiding bankruptcy. The disastrous effects of the competition between subcontracting workshops played a key role in the awakening of the necessity to adopt a corporatist policy which could help maintain them.
The 1920–1922 crisis had a second negative effect on the Swiss watch industry: it favored the emergence of competitors in other countries through the emigration of Swiss watchmakers, driven abroad by economic hardships. This phenomenon reinforced the feeling of...
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