An Inside Look At The Swiss Watch Industry

I Visited Tudor, Omega, IWC, & Breitling - Here Is What I Learned

Switzerland is the epicenter of “watches of espionage.” The relationship to watches is obvious. Based on a watchmaking tradition going back centuries, Switzerland is home to the majority of luxury watch brands from Patek Phillipe and Rolex to Tissot and Hublot. The country’s connections to espionage are less understood. A historically neutral country, Switzerland houses several international organizations including the United Nations in Geneva, and is often the location of high-stakes intergovernmental meetings both overt and clandestine. Traditionally loose banking laws have also made Switzerland a convenient place for individuals to store wealth, regardless of the origin of those financial gains.   

Needless to say, Switzerland is a country that I have visited many times and holds a special place in my heart.

W.O.E. at Omega SA in Biel/Bienne, Switzerland

The intentions for this trip were simple: to learn more about the Swiss watch industry and specifically brands that are closely aligned with our community. While Omega, Tudor, IWC, and Breitling are very different companies, the one thing they have in common is decades-old relationships with our community. Initially producing purpose-built issued military watches in the 20th century, today these brands are the leaders of modern unit watch programs. 

IWC’s pilot’s watches, Omega’s Seamasters, Tudor’s extensive dive line, and Breitling's aviation-centric collection are accurately depicted as luxury items today, but they were all once purpose-built tools. “Watches of Espionage” is in the DNA of each of these companies and I would go as far as to say they would not exist or be where they are today without military end users.

Breitling manufacturing facility in La Chaux-de-Fonds, Switzerland (W.O.E.)

I was fortunate to meet with CEOs, watch designers/watchmakers, suits, and most relevant to W.O.E., the individuals that run each brand’s Unit Watch programs. The experience gave me a deeper appreciation and respect for the craftsmanship and resources it takes to build and sustain a leading watch company. I realize how unique it is to be granted access to these closed-off facilities and this level of openness is not something I take for granted.

A Geography Lesson

Geneva, Switzerland.

Switzerland’s watchmaking industry is intriguing in that it spreads across the relatively small country’s varied geography and its many cultural boundaries. While many of the watch industry’s corporate headquarters are located in Geneva, Switzerland's second-most populous city, the majority of actual production including movements takes place in the Jura mountains spanning the country’s northwestern border. Traditionally, watchmakers expanded to this area to take advantage of an agricultural workforce that was dormant during the winter months, creating the “farmer watchmaker” heritage that many brands tout today.

Map of Switzerland’s watchmaking centers. (Credit: Federation Of The Swiss Watch Industry)

Swiss watchmaking also spans the country’s language barriers. Rolex/Tudor, which is headquartered in Geneva, is staffed primarily by French-speaking Swiss or French workers traveling across the border, but as you head north toward Biel/Bienne, Omega’s headquarters, language and culture shift to a blend of French and German influence. Breitling is also a brand of two cultures, with Swiss-German origins, a headquarters in German-speaking Grenchen, and a production facility in French-speaking La Chaux-de-Fonds. In contrast, IWC is located in Schaffhausen, near Zürich and just across the border from Germany, conducting nearly all of its business in German.

Form Follows Function - Purpose-Built Tools

Ander Ugarte (left) and Christian Koop are the head designers for Tudor and IWC, respectively.

One of the highlights of the trip was meeting with Christian Koop and Ander Ugarte, the heads of design of IWC and Tudor, respectively.  Intensely passionate and masters of their craft, each walked us through the process and attention to detail involved in designing a modern watch for brands steeped in heritage and tradition.  The DNA of iconic watches like the IWC Mark series and Tudor dive watches can be traced back to the divers and soldiers who wore them over half a century ago. While today’s watches trend to luxury items vs real tools, a common phrase I heard was “form follows function.” The watches are still designed with the end user in mind, just as they were a century ago.

Automation vs. Hand-Crafted

Modern watchmaking is a fascinating blend of cutting-edge technology and centuries-old hand craftsmanship. The two most surprising aspects of visiting the manufacturing facilities of Breitling, Omega, and IWC were the number of robots/automated steps in contrast with the number of steps still requiring human touch. The manufacturing facilities are reliant on technicians and watchmakers from the rural areas of Switzerland, who still work farmers' hours, just as they did centuries ago. 

Breitling watch technician.

Each morning, hundreds of watchmakers and technicians arrive at the facilities, don sterile antistatic white coats and clean Crocs or Birkenstocks, and spend hours tightening tiny screws to spec or attaching dials to movements. It is a painstaking process and a truly remarkable juxtaposition of futuristic cutting-edge technology and traditional watchmaking.

Trying my hand at watchmaking at IWC Schaffhausen.

The result is a watch containing hundreds of components, all working in sync to tell you the time. The watches are then shipped around the world through complex dealer networks and intermediaries for you to purchase. Seeing this process firsthand is a remarkable experience and gives me a greater appreciation for the technical and logistical prowess required in Swiss watchmaking.

Military Unit Watch Programs - Omega, Tudor, IWC, & Breitling

A “Unit Watch” is a timepiece that is customized by the manufacturer for members of a specific unit or organization. Customizations can include the unit’s insignia on the dial and/or an engraving on the caseback. When it comes to Swiss watches, Tudor, Omega, and IWC are the modern leaders in the space and we have profiled each program in past articles. 

An Omega Seamaster “Unit Watch” produced for the US Navy SEALs. (Photo Credit: James Rupley/W.O.E.)

A cynical analysis of these programs would conclude they are sophisticated marketing initiatives, meant to garner publicity through leaks on social media. While I would argue they accomplish this goal in certain instances, the reality is the brands are largely hesitant to publicly acknowledge the partnerships. Swiss brands have spent decades carefully curating a specific narrative to position themselves as aspirational luxury goods. “Tudors of Espionage,” “Sketchy dudes wear Breitling”, and an iconic image of Omega Seamaster on the wrist of a Secret Service agent after an assassination attempt run counter to these carefully crafted narratives. 

Diplomatic Security Tudor Black Bay 58.

Further, in contrast to smaller brands like Bremont which garner significant revenue from military programs, for the large Swiss houses, it is costly to divert resources to customizing a dial or caseback for a relatively small batch of custom watches, which are also often sold at a discount. In short, these programs likely aren't big money makers for brands that measure watch sales in the hundreds of thousands of units.

IWC Unit Watch for AH-64 pilots.

So why do large luxury watch brands bother with Unit Watches? As far as I can tell, these programs are passion projects for individuals within each company and they are somewhat controversial for some brands. I have spent significant time with the individuals in charge of the unit watch programs and they are fiercely passionate about them. They truly believe that they are serving a greater calling by producing meaningful tools and heirlooms for our community. Not surprisingly, these individuals also appreciate what we are doing at Watches of Espionage.

Watch Brands Are Businesses

This one is so obvious that it shouldn't have to be said, but it's a simple fact that many watch “enthusiasts” often forget. The purpose of a watch company is not to make watches, it's to make money. Many of the individuals who work at the major brands are suits, marketing professionals, and technicians who could work for any number of companies in the luxury goods space. While some of them are passionate about watches, the majority of them likely do not consume watch content on their personal time and are not “watch nerds.”

Swatch Group Headquarters, left is Omega building. (Photo CreditL Stefan Wermuth/Bloomberg)

To be clear, while I enjoy making fun of suits as much as the next guy, this is actually a good thing. If you love watches like I do, then you should want watch brands to succeed… at making money. Headwinds for the watch industry are at an all-time high with Apple Watch sales surpassing the entire Swiss watch industry. It’s not a foregone conclusion that the most iconic brands like Rolex, Patek Phillipe, and Audemars Piguet will be around in 2074. For the most part, modern watches are luxury goods, meaning they are unnecessary. If they are not profitable, they will disappear.

Watch nerds often shed crocodile tears on internet forums complaining about why brand X doesn't produce a specific watch or “listen to the community,” but the reality is brands generally make decisions based on mass market appeal. It may be a tough pill to swallow, but many brands do not care about enthusiasts, and from a bottom-line perspective, they shouldn’t.

Ownership Matters

As consumers, we often think of brands as discrete monoliths, independent entities that make design and product decisions in a vacuum. However, industry consolidation has led to four conglomerates owning the majority of the Swiss watch industry; Swatch Group, Richemont, LVMH, and the Hans Wilsdorf Foundation, the parent organization for Rolex and Tudor.

Somewhat dated graphic showing ownership in the watch industry (Image Credit: Tony Traina, Rescapement)

While in theory, the brands are independent or semi-independent entities, the reality is that Omega's decisions could impact the overall standing and profitability of Swatch Group as a whole, and IWC is just one node of the broader Richemont family. While Tudor often paints itself as an independent entity, when I visited Tudor HQS in Geneva, it was inside Rolex. It’s naive to think that there is no coordination between the companies. Breitling was purchased from the Schneider family by a private equity company in 2017 and whether we like it or not, the overall decisions of the brand are impacted by this ownership structure.

(Photo Credit: Rolex)

Conglomerates are a double-edged sword. On one hand, they offer access to capital and resources, Richemont and Swatch Group are multibillion-dollar conglomerates with robust infrastructure and supply chains. On the other hand, the conglomerates must ensure each company works towards the same goal, which likely limits independence and creativity at the brand level.

Coopetition - Competitors Or Partners?

Further, even between competing brands, there is a level of cooperation and sharing. Historically, the legendary Rolex Daytona utilized a chronograph movement supplied by Zenith. Even today, Breitling and Tudor, theoretically arch rivals, share movements, with Breitling utilizing several of Tudor’s base automatic calibers and Tudor receiving a modified version of the B01 chronograph caliber in return, a level of cooperation you aren’t going to see from Apple and Samsung.

Tudor's MT5612 is produced by Tudor and voluntarily shared with Breitling, a rival watchmaker. (Photo Credit: Monochrome Watches)

While they’re never going to admit it publicly, many of the biggest brands also look to the same suppliers for specific components from jewels to mainsprings to cases and bracelets to construct their “in-house” movements and complete watches. Third-party certifications like COSC and METAS are also utilized by multiple brands looking for a competitive advantage. Despite being fundamentally in competition, I heard several brand leaders admit the overall health of the Swiss watch industry is always in mind. A rising tide lifts all ships. For the industry to succeed holistically, the brands must balance being fiercely competitive with a measured level of cooperation.

While it was created in collaboration with Omega and an impartial third party, Tudor has also started instituting METAS testing and certification for some of its watches. (Photo Credit: Monochrome Watches)

Tribalism Exists at Every Level

Visit any social media watch page and the tribalism—visceral feelings for or against a specific brand—is evident. There are fewer general “watch guys” and more “Rolex” or “Omega” guys. The passion is real and watch nerds think their brand is the best and everyone else sucks.

The individuals I met at each brand were fiercely proud of the product they produce, which is cool to see. While they were professional enough to not bad mouth another company outright, it's clear that they truly believed their brand was the pinnacle of modern watchmaking. While this may sound like a negative, this intense conviction to be the best was inspiring. If I buy a Tudor, Omega, Breitling, or IWC, I like knowing that the people making it in the mountains of Switzerland are true believers.

Heritage Matters

Omega museum, Biel/Bienne, Switzerland

When you buy a watch, you are not just buying the components, you are buying a piece of history. One of the most educational aspects of the trip was visiting the museums of Breitling in Zurich, Omega in Biel/Bienne, and IWC in Schaffhausen. For the brands I visited, the history is rich and compelling, and on full display.

Breitling Emergency Prototype (Breilting Museum, Zurich Switzerland)

Of course, the brands emphasize certain periods and events to carefully curate a narrative, but they are still compelling because it’s authentic.  Omega’s museum had numerous watches worn by astronauts, soldiers, and spies, both real and contrived (Bond, James Bond). IWC was founded by an American soldier, Florentine Ariosto Jones who fought for the 13th Massachusetts Infantry Regiment during the Civil War and would go on to produce watches for both the Allies and the Germans during World War II, something the museum refreshingly does not gloss over. Breitling’s DNA is rooted in aviation, having provided issued watches during both World Wars decades before becoming a go-to option for those operating on the fringe of sketchiness in the 1990s and 2000s.

These museums are open to the public, and I encourage you to visit if you find yourself in Switzerland. The great thing about the country is you can get pretty much anywhere in a few hour train ride.

Left is an issued “MN” Tudor MilSub on an original strap, fashioned from parachute webbing. The one on the right was a unit purchase gift for a retiring officer. It was purchased through the MN Rolex-certified watchmaker, Yves Pastre who had a workshop in Toulon. (Photo Credit: Tudor Archives/W.O.E.)

Unfortunately, Tudor does not have a museum, but they did provide us access to their extensive archives of military-issued watches and prototypes. This will be the subject of a future Dispatch and the spice level was high.

Swiss Watch Marketing is Antiquated

I have written in the past about the sophisticated marketing machines behind the Swiss watch industry and this trip confirmed that thesis (Read Here). The major brands, including IWC, Tudor, Omega, and Breitling, have masterfully curated a narrative based on decades-old craftsmanship and history, that makes them leaders in a crowded industry.  In addition to co-opting watch media, they spend millions of dollars a year sponsoring sporting events, recruiting celebrity ambassadors, and producing slick marketing material.

Watches and Wonders, an international watch and jewelry industry organized by the Watches and Wonders Geneva Foundation. (Photo Credit: Wikicommons)

While I am by no means a marketing expert, I am intimately familiar with human nature. I get the feeling that the brands are reliant on what has worked in the past and not focused on the future, or for that matter the present. Celebrity ambassadors, event sponsorship, film product placement, and heavily-curated “new releases” are masterclasses in Marketing 101 but the modern consumer is savvy and the media landscape has changed.

Legacy watch publications have declined in recent years and have been replaced by a plethora of dispersed voices. There are TikTokers, Youtubers, and podcast hosts who are more influential than Tom Brady and even James Bond. The Swiss watch industry appears slow to adapt to the new landscape and continues to fall back on tried and true methods. Given its age, watchmaking as a whole is steeped in tradition and slow to adapt, especially when it comes to reaching the younger consumers the industry so desperately needs to continue.

W.O.E. in Schaffhausen, wearing the same IWC Mark XVII I wore while operational at CIA.

Does visiting a facility impact how I will cover them?

To date, we have kept the traditional watch industry at arm's length distance, something that frankly much of the industry is okay with. That said, as we have grown our audience we owe it to our community to present thoughtful and unbiased commentary on the watches and brands that are aligned with our ethos. I made some great friends and contacts on this trip and am grateful for the level of access I was granted. It will continue to be a balance between nurturing these relationships and remaining unswayed by the influence of the brands on content.

Despite some of the critiques above, my appreciation for the Swiss watch industry in general and these legendary brands in particular could not be higher. I am grateful for those individuals who made this trip possible and thankful for the time and effort of the teams in Switzerland.

There are several threads to pull on from this trip and we plan to write additional stories on IWC’s “Top Gun” unit watch program, recent developments in Omega’s unit watch offerings, and the real story behind the Tudor FXD.

Thank you all for the support, more to come.

-W.O.E.

*Note, as with all of our content, this is not sponsored by Tudor, Omega, IWC, Breitling, or any other brand.

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