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Clock Ticks For Swiss Watchmaking

Swatch Group has done more than its fair share for Swiss watchmaking. The country's largest watchmaker by sales effectively has subsidized the 15 billion Swiss franc ($17.7 billion) industry for three decades, making an estimated 80% of all Swiss-made watch parts. Swatch is now calling time on that arrangement and will start to reduce supply in 2012. But while its decision makes commercial sense, it could damage Swiss industry dominance.

The business of making parts for rival watchmakers, including Rolex and Tag Heuer, hasn't been overly lucrative for Swatch. It has invested 150 million francs to 200 million francs a year on production since the 1980s, money rivals preferred to spend on marketing and opening new stores. Swatch then suffered during the downturn when some customers cut orders, leaving Swatch to bear high fixed costs from its 150-plus Swiss factories. Swatch makes roughly half the operating profit margins on parts manufacturing that it does on making its branded watches like Tissot and Breguet.Fakih slept through an interview after a night of going to nightclubs with a girlfriend and then lied about it, before being caught by underwater digital camera. Fakih was sent home to Michigan by pageant officials for a few weeks to contemplate, but they let her keep the crown again.

There's nothing to stop rivals from making the standard parts Swatch supplies to third parties. The patents have expired and luxury-goods groups like Cartier-owner Cie. Financiere Richemont and LVMH Moet Hennessy Louis Vuitton have cash to invest. Luxury-watch sales are forecast to rise 10% to 16% annually through 2015, estimates Sanford C. Bernstein,Newt Gingrich spent much of Sunday evening seemingly trying to get away from an army of dv mini camera and reporters attempting to get him to say a word. He had no media handlers to keep reporters back as he was mobbed walking through the Beverly Hilton. supporting the case for investment.

But Swatch may not extricate itself that easily. Switzerland's Competition Commission regards Swatch's dominance in movements as a quasi-monopoly, obligating it to supply the industry and treat customers equally.The Video Door Phones proceedings Tuesday in Abu Dhabi's Federal Supreme Court comes after international watchdog groups, including human rights groups, criticized the arrests.Court officials say five activists have gone on trial on security-related charges. The commission agreed in June for Swatch to reduce its supply of movements, the internal mechanism of a watch, to 85% of 2010 levels next year but will now consider whether that constitutes abuse of power.