Jean-Daniel Pasche: pre-SIHH interview to start 2016

According to the Swiss federation of employers (the Convention Patronal),about 10,000 jobs were created these past four years, which puts the number of jobs in the Swiss watchmaking sector at around 60,000.This is phenomenal growth.On the export side, the decline is close to the 3.2% mark, a figure that only refers to the first ten months of 2015 and compares with the 2014 results.

Can we hope for the best?

Usually, the grades of a poor student are diluted in the great mass of results produced by the good ones. So the average figure does not care much about the geopolitical contexts, whose high figures compensate for the lower ones while the problems of the world resolve themselves or change hands.For 2015, the ne’er-do-wells of the market are Hong Kong, where decline came very close to the 39% mark, and the USA, where the drop stood at 12.2% for the month of October. These are disappointing figures, obviously.As for France, the poor showing in October, with a decline of 7.1%, was barely noticed, since Europe remains a very promising region with overall growth of over 3%.

So, the industry is just not going to give in to discouragement on the eve of the "wonder week," the SIHH – Salon International de la Haute Horlogerie – especially if we start toying with the idea of setting the numbers produced by the Swiss Customs Administration in the medium term.Indeed, since 2000, the figure for watch exports went from CHF 10.22 billion in 2000, at the beginning of the third millennium, to 22 billion in 2014.

The hyper-president: discreet and determined

As an expert in all matters related to intellectual property, Jean-Daniel Pasche will, as always, be present at the next inaugural activities in the sector.The watch industry, in a bit of a state, has now become accustomed to receiving him, to letting him express the views of the Federation, which he always does with great warmth.He is everywhere, and while his simplicity is very pleasant, he is also extremely determined.  His struggle is praiseworthy: He defends the interests of anyone, member or non-member, active in this industry, which continues to be one of the most important economic areas of Switzerland.

Here and there, we are hearing complaints about the state of business.Is there any truth to them?

The increase in exports continued through 2014, making it the best year in the history of Swiss watchmaking, with a total sum of CHF 22.3 billion.The fact that the Swiss National Bank discontinued its policy of maintaining a minimum exchange rate for the franc is weighing heavily on the development of the watch business, together with the drop in consumption in China, in Hong Kong, and in Russia.This has resulted in a slow-down in exports in 2015 of a few percentage points.

Jean-Daniel Pasche

Who are the ones in particularly dire straits?

Beyond the results, which are relatively good, considering the economy and the bases for comparison, the situation is quite different from one company to the next.Some are doing well, others are in trouble.Many of the stakeholders in the watch industry are resorting to partial unemployment or even redundancies.The situation is more difficult for suppliers.

And what about the future?

We are well aware that our industry is subject to cyclical hazards.Nevertheless, I feel confident about the future of Swiss watchmaking, since it still has lots of potential for development.

How are your other major projects doing, “Swiss made” and “Swissness”?

The Parliament accepted the Swissness project in June, 2013, and on September 2, 2015, the Federal Council scheduled its entry into force for January 1, 2017, with a transitional lag of two years, that is, for the end of 2018. This means that a minimum of 60% Swiss value will enter into force on those dates.The consultations on revisions that apply to the ordinance governing the use of the term “Swiss” for watches are taking place at the present time.It’s no surprise that the 60% rate will be introduced into the ordinance for the sake of coherence.Furthermore, the revisions will introduce a requirement stating that the technical development of the watch and the movement will have to be done in Switzerland.The Federal Council is expected to adopt this revision in the spring of 2016. So we are already on the last lap of this project, which actually started in 2007.

Is the exception for watchmaking perceived as such by those who run the country?Can it be compared to other sectors?What does it have that other sectors don’t?

The authorities are sensitive to the interests of the watchmaking industry.Even though this industry is relatively modest in terms of figures at a global level (60,000 jobs and exports of about CHF 22.3 billion), it does enjoy a stellar reputation by comparison to its size.It gives Switzerland a brand image that is recognized worldwide.One finds Swiss brands all over the place and our government is also proud of that.It's also the only industrial sector in which Switzerland is a global leader.  It's an industry characterized by a mix of tradition and innovation, as well as technical skill and esthetics.But even if the authorities do take the interests of the watchmakers into account, the industry is not more privileged than others, and it really does have to fight for its concerns.

Lately there has been a lot less of talk about counterfeits.Have you let down your guard?

Counterfeiting remains a priority for the FH, and we continue to be active around the world.Thanks to our online ad tracking, we were able to block over 500,000 ads for counterfeits since the beginning of the year.The Swiss customs seized hundreds of fake watches during their controls in 2015. We also had hundreds of thousands of replicas seized in China, Saudi Arabia, Spain, Dubai, Morocco, Turkey, Russia, etc.We regularly organize seminars to train local officials, like the customs and police, in France, the USA, Dubai and elsewhere.

Can one become a member of the Federation of the Swiss Watch Industry without being a brand?

The FH has about 500 members, a little less than half of which are brands that sell finished watches. The rest are suppliers or other watchmaking organizations.

What are the advantages for a watch brand to join the FH?Can a brand survive without being a member?

A Swiss brand can continue to exist without being a member of the FH as long as the FH continues to exist because other brands are members.Any established brand in Switzerland benefits from the FH, member or not.(Editor's note: please read the  separate box on the roles of the FH)The companies are members because they feel it is important to support an organization that defends the industry's collective interests.When they are directly affected, these companies can't defend themselves alone, or can only do so with difficulty.

www.fhs.ch

http://www.fhs.ch/fre/statistics.html

Main roles of the FH

The primary role of the FH is to defend the collective interests of the industry and it is the only organization doing so in its field.Some examples:
 

• Ensuring that the rules of origin anticipated in free trade agreements (with China, Japan, South Korea, Hong Kong, Mexico, the European Union, etc.)  are compatible with the needs of Swiss watchmaking and to obtain a lowering of tariffs in the countries in question.
• To establish the technical norms for the Swiss watch industry (NIHS), as well as ISO norms covering watchmaking, and to reply to norm projects proposed by our competitors (Japan, China, the European Union).
• To intervene in the project aimed at amending the anti-trust law in order to maintain the distribution agreements.
• To obtain exemptions from European laws aimed at prohibiting or limiting the use of substances that are indispensable to watchmaking.
• To facilitate the export of watches made of precious metals to Russia (reciprocal agreement).
• To intervene in cases of misuse of the Swiss made label and to push for legislative revision to reinforce protection of that label in Switzerland and worldwide.
• Supply statistics for watchmaking.
• To lobby for watchmaking in the field of political economic affairs in Switzerland (relations with Europe, energy, foreign trade, tax policies).
• To intervene whenever Swiss watchmaking is faced with an obstacle.

Examples of the benefits of membership

• Legal advice and information on legal matters specific to watchmakers, analysis of distribution contracts, among others.
• Direct information on any legislative change happening in the world that could affect watchmaking activities.
• Direct access to information on the markets regarding taxes or special regulations.
• Access to an frequently used database on watch statistics in Switzerland.
• Problems with customs officials.
• Combating counterfeit models.