from Arthur B. Sinkler This special "Tari:ff Edition" has been Prepared to answer questions on this issue Which is Vital to Hamilton and the jeweled American watch industry, I commend it to Your attention. timely TOPICS April-May 1964 in this issue . • • Letter from the President 3 Is Made In U.S.A. Here To Stay? . 4 Who's Who in the Swiss Watch Cartel . 6 Glossary of Terms .................... 12 Watches, Tariffs and the Law . 14 Honor Roll Anniversaries . 15 Cover: Magnified 30 times, "Hamilton-U.S.A.'' is easy to read on the popular grade 761 ladies 22- jewel movement. Will the · "U.S.A.'' remain on the bridge of Hamilton watches? The cover article be­ ginning page 4 offers some facts on the question. Editor ... ._ .................. Richard F. Charles Photographers: Harold W. Richter-Wallingford, Rob­ ert Taylor-Lancaster Regional Corresp0ndents: L. J. Lane--Canada, Mary Burgess-Milford, Conn., Trudy Born-Bienne, Swit­ zerland, Mary C. Gestey-Wallingford. Gestey-Wallingford. Reporters: Lancaster-Wally Bork, Sally Bushong, Max Caldwell, Ray Ellis, Ron Fenstermaker, Sam Gast, Marilyn Kuntz, Charles McCamey, Thomas Reese, Frank Remley, Ronald Roschel, Carl Yecker, Wallingford-Alfred Draghi, Fred Long, Robert Mc­ Guire, Jean Case. timely TOPICS is published bimonthly for employees of the Hamilton Watch Company, its divisions and subsidiaries by the Public Relations Department. CCopyright 1964 by Hamilton Watch Company, Lan­ caster, Penna. Contents may be reproduced with credit. 2 HAMILTON WATCH COMPANY LANCASTER, PENNSYLVANIA Arthur'.1 8. Sinkler PRESIDENT To: All my Fellow Employees This issue of timely TOPICS is arriving in your homes just prior to the company's appearance before the Tariff Commission in Washington beginning May 12. On that day Hamilton, Elgin and Bulova will appear to present the watch industry's case for the preservation of domestic watch manufacturing. You will be reading much about this case in the newspapers. The basic facts of the matter, together with opposing points of view, are included to give you the fullest possible understanding of the s itua ti on. For a quick summary of our activities see the section titled What Are We Doing on page 13. Sincerely, Arthur B. Sinkler HERE TO STAY? "YES!" say Bulova, Elgin and Hamilton as the remaining U. S. jeweled watch makers battle the Swiss Cartel. AREL y DO COMPETITORS in the same business watch imports has been harmful to the watch R agree on major issues. But on May 12 the business, has held back quality product develop­ three American watch manufacturers-Bulova, ment and denied the American consumer the best Elgin and Hamilton-will put competition aside watches at the lowest cost. Further, they con­ and appear jointly before the Tariff Commission tend, the tariff increase hasn't helped those it was to prevent the Swiss watch cartel from gaining designed to aid (the domestic manufacturers) complete control of the U.S. market for jeweled and has additionally stimulated large-scale smug­ lever watches. gling and abusive use of legal loopholes. The Swiss watch cartel has been attempting for The U.S. watch manufacturers point out that years to gain complete control of the American any across-the-board reduction of duties will watch market because it is the largest and most make it economically impossible to continue profitable. With the passage of the Trade Expan­ watch manufacture in this country; that pro­ sion Act of 1962 and the advent of the "Kennedy duction capacity is now at a point of irreducible Round" of CATT negotiations, "The Swiss have minimum; that any such action would hand the decided that now is the time to strike and knock Swiss the full monopoly which a Federal Court us out," says Hamilton President Arthur B. Sink­ decree, recently issued, was designed to prevent ler. "They want to close our research laboratories, and, finally, that the U.S. would wind up as the disperse our engineers, and take the whole Ameri­ only major nation with no jeweled watch manu­ can market for themselves." facturing industry. This reservoir of skills and So once again the domestic manufacturers will facilities wo'uld thus be unavailable for defense journey to Washington in defense of a meager needs in time of emergency. They add that the 153 of the jeweled lever watch market and pre­ Swiss already enjoy all but a small percentage of vent what has traditionally been anathma to our the U.S. market but are seeking 1003 domination. government and American consumers: monopo­ listic control of a market or product. Pertinent Background Review The Gist of the Situation The three jeweled watch manufacturers, The Swiss watch industry, through its govern­ Bulova, Elgin and Hamilton in 1951 produced ment, has pressed the U.S. State Department to over 3,000,000 movements and employed 8,400 reconsider the 1954 escape clause action which watch workers. By 1962, production had declined raised duties on most categories of watches. The to about 1,300,000 with employment down to Swiss say that the 1954 increase in tariff on approximately 2,500 watch workers. 4 timely TOPICS Voicing concern for the American jeweled watch industry, the heads of the remaining domestic manufacturers appeared jointly before the U.S. Tariff Commission. From left: Henry Margolis, Elgin president and chairman; Arthur B. Sinkler, Hamilton president and chairman; and Gen. Omar N. Bradley, Bulova chairman. U.S. Technology: On a production-hours-per­ "This complaint attacks restrictive controls upon movement basis, American plants of the three the American jeweled watch industry which companies are operated with slightly greater ef­ have retarded the growth of the industry and weakened its competitive position. It is impera­ ficiency than comparable plants in Switzerland. tive that our domestic watch industry be fre e This includes the three plants which the domestic from practices which curtail domestic produc­ companies own in Switzerland. Furthermore, tion and restrict the importation and exporta­ United States watch technology is equal to, and tion of watches." in many cases, surpasses that of the Swiss. In recent years domestic producers have become Despite this decision, the cartel is continuing the leaders, as evidenced by the Hamilton electric its efforts to drive what is left of the U.S. industry watch and the Bulova electronic "Accutron," both out of business and obtain the remaining 153 of which were researched and developed to a of the U.S. jeweled watch market. production basis in this country. The Swiss as yet have not marketed a successful battery-powered Defense Importance: The domestic watch wrist watch. manufacturers are currently doing vital design, Swiss Cartel: The high degree of Swiss domi­ research and production work on a wide variety nation of international trade in jeweled watches of military and space projects. Supporting this is generally attributed to the close control of diversification of domestic producers into defense production and marketing exercised by tlie and space assignments are the constant techno­ Swiss Government in collaboration with various logical and production demands of watch manu­ groups of producers and wholesalers of parts, facture that sustain and nourish the mici·o­ watch tools and machinery. (This, in part, ex­ miniaturized skills. If domestic manufacture is plains the restrictions on production of watches eliminated, it will not be possible to maintain and exportation of parts and machinery.) these trained people and facilities, thus making The Federal Court in New York, after eight the U.S. the only major power to eliminate a years of legal battling on an anti-trust case, re­ domestic industry under the banner of free trade. cently held that this cartel imposed severe re­ Other nations-Russia, France, Japan, Great strictions against American companies, and had Britain-have taken vigorous and successful crippling effects which violated the U.S. anti­ action to develop and to maintain domestic trust laws. The nature of the restrictions were de­ watch-making industries. scribed by the U.S. Department of Justice when Regardless of all other arguments, the NUB it filed the suit. of the matter is this: If the Swiss succeed in ob- April-May 1964 5 Who's Who Effective control of the manufacture and dis­ tribution of Swiss watch products is achieved by the watch cartel exercising total control in Switzerland and extending its control to Swiss watch sales organizations in other countries including the United States. The Collective Convention (center of chart) is the basic contractual agreement between the three main manufacturing units (Watch Federation, Ebauches, S.A., and United Parts Manufacturers). Through this agreement the cartel regulates production, arbitrates dif­ ferences and conducts inspections and in­ MADE IN U.S.A. (continued) vestigations. Other important cartel affiliates are: Swiss Watch Chamber: an association of taining a reduction or elimination of tariff watch industry organizations functioning as duties, the link between the Swiss Government and the watch industry. The Chamber also ad­ (a) The President would, in effect, be handing ministers regulations governing exports, de­ fends the watch industry and studies foreign the Swiss Cartel the very monopoly which the competition. Federal Court's recent decree is designed to pre­ Superholding Organization: Swiss corporation vent, and organized in 1931 to control production of the most essential watch parts. ( b) The U.S. would wind up as the only major Ebauches, S.A.: owns or controls stock of power with no jeweled watch manufacturing other corporations engaged in the manufac­ industry available for marshalling in defense ture of incomplete jeweled-lever watch move­ ments (known as ebauches) in Switzerland. emergency situations, and Organized in 1926. ( c) We would face the unique and disturbing United Parts Manufacturers: an association of situation where foreign interests, giving nothing manufacturers of parts other than ebauches, organized in 1927.