Re: New Proposed "Swiss Made" Regulations

On Sep 30, 12:38 am, "Jack Denver" <nunuv...@xxxxxxxxxxxx> wrote:
I'm not sure this is possible given the nature of economics. It's true that
given modern mechanized manufacturing techniques, labor forms a very small %
of overall manufacturing costs. Nevertheless, the country whose wages are 50
cents/hour (China) will always have a competitive advantage in the modern
economy compare to the country where wages are $20/hr (Switz.), no matter
what the volume is.

There is no doubt that Switz. has the advantage in creativity and marketing.
And its a good thing - in the modern economy that (and not manufacturing,
which is almost an afterthought nowadays) is where the $ is. There is
something called the "smiley curve" because it is shaped like a smile. It it
the curve of value-added in the life cycle of a product, from development to
manufacturing to sales and marketing. The Chinese have the unfortunate honor
of occupying the middle of the smiley curve today - the lowest part of the
curve - the manufacturing phase, where, even though this is where the
product is physically formed, is where the least amount of value is added.
This explains why , even though entire sectors of manufacturing have
relocated to China, the US and Western Europe remain prosperous and China is
still developing. For example, if you take a $20 printer cable, the
Chinese factory only gets to keep maybe $2 out of that $20 and the other $18
remain in the West. So I'm not sure taking this crumb away from China will
really accomplish all that much except cut the profits of the smaller
manufacturers - they will be able to substitute Swiss goods but at some
cost. The consumer will pay either in the form of higher prices or else
reduced quality (because the manufacturers will be required to "cut corners"
to go to 80% Swss and still maintain their price point).

"SWG" <swisswatch...@xxxxxxxxxxx> wrote in message

news:1191091904.224594.45160@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

On Sep 29, 12:27 am, "Alex W." <ing...@xxxxxxxxxxx> wrote:
"Revision" <ttsrem...@xxxxxxxxxxx> wrote in message

news:46fd3894$0$26410$88260bb3@xxxxxxxxxxxxxxxxxxxx

At this point I would like to alleviate all your doubts. The new
regulation shall in any case not decrease the quality of the genuine
Swiss Made watches, on the contrary it shall be a blessing for the
customers. Nowadays, Swiss case, dial and hands makers are perfectly
able to compete with equal quality Far Eastern goods, providing they
can work on similar quantity lots.

The learning curve initiated by Swatch 20 years ago (Swatch watches
cost the same now as they did 20 years ago). The new ruling shall help
strengthening the lower and medium price Swiss Watch range position of
the bigger brands (Tissot, etc), as well as induce a new
competitiveness in creativity and marketing the smaller ones that want
to survive.

Jack, your macro economics are just fine and apply for plenty of
manufacturing where a lot of a rather low precision assembling is
involved. As demonstrated firstly by Dennison's Waltham, and ever
since developed, the high precision necessitated in watchmaking can
only be reached by sophisticated machinery manufacturing and
assembling methods, where the expertise of a few workers is
predominant, eg Swatch production lines could not be run more as
efficiently in China as in Switzerland.

The only two sectors where FE was competitive, was the polishing of
cases and the manufacturing of watch dials. Modern automated polishing
methods have now become very efficient, whereas Swiss watch dial
making companies have developed integrated systems of manufacturing,
lowering the cost of not made of Switzerland to an acceptable degree.

Many high tech metal working companies in Germany have also learnt
their lessons and are rapatriating their manufacture back to Germany.

This is part of the irony of the smiley curve!

.

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