Thursday, December 6, 2007

Watch Brands History - Article 10 (IWC)

An interesting fact you may or may not know: International Watch Company (IWC) is possibly the only major Swiss watch company whose founder was an American! During the 1860's, three manufacturers dominated the American watch industry: Elgin, Howard and Waltham. Combined, these firms produced upwards of 100,000 pocket watches. Times were changing in the industry as pocket watches went from being a status symbol that only the wealthiest individuals could afford, to an everyday item available to the middle class. As a result, production methods had to be improved; for example, most parts for watches were still being made by hand. Costs were also high because the pool of available, qualified watchmakers was relatively small. In Boston, Massachusetts, Florentine Ariosto Jones, who had worked in the American watch industry for a number of years, keenly observed the failure of Aaron Lufkin Dennison, a leader in the watch business, whose efforts to move production to Switzerland to benefit from lower wages and Swiss watchmaking know-how, failed miserably. Undaunted, Jones took over the failed enterprise and soon set up his own company in Switzerland. His plan was to assemble watches in Switzerland and import them into the United States, hence the name International Watch Company.

Fortuitously, Jones made the acquaintance of one Johann Heinrich Moser, a watchmaker whose hometown of Schaffhausen was conveniently located near the Rhine. Following Moser's advice, a dam was built in order to harness the mighty river and generate hydro-power to drive the machines used in manufacturing facilities throughout Schaffhausen. A watch factory was built in Schaffhausen to take advantage of the cheap hydro-power and production commenced in 1868. Despite the company's unique business plan, the enterprise was doomed from the start. For one thing, Jones had trouble selling the watches in America, due to a high tariff on imported finished watches. An even worse problem: Jones was undercapitalized and encountered technical problems with the machines. By 1875, he was scrambling to find new investors, amid allegations by disgruntled stockholders that the company was on the verge of collapse. Inevitably, the company filed for bankruptcy and Jones was forced to relinquish control of his company.

A Swiss consortium acquired IWC's shares and put another American, Frederick Seeland, at its helm. Although the company's fortunes improved somewhat, the improvement was not deemed sufficient enough. As a result, the company was put up for sale again. This time, one of IWC's stockholders, Johannes Raschenbach-Vogel, bought the company at auction for 280,000 francs. Technical achievements and increased sales soon followed with the production of the first pocket watches with digital time indication, as well as development of the famous Calibre 52 movement, which at the time was quite revolutionary in its concept and construction.

Although the company experienced significant growth, following World War I, the company's fortunes again hit rock bottom under the proprietorship of Ernst Homberger-Rauschenbach. Fortunately, a major modernization effort paid off when the advent of World War II resulted in increased military demand. It was thus during World War II that IWC created the first oversize anti-magnetic pilot's watch, followed by the famous Mark X, featuring its new in-house movement, Calibre 83. In 1944, IWC had a close call when the Allies mistakenly bombed Schaffhausen. As luck would have it, the factory narrowly escaped destruction.

In the aftermath of the war, International Watch Company lived up to its name and became a company of international scope. Exports to the United States increased and the brand became best known for its specialty watches, such as the Mark XI and Ingenieur - the first automatic IWC with a soft-iron inner case that protected the movement against magnetic fields - as well as for its elegant dress watches. Needless to say, vintage IWC's from the 1940's and 50's are highly collectible today and in great demand, as they are somewhat under-priced compared to other high-end watch brands of that era.

In closing, the company's philosophy is best summed up by IWC's current CEO, Michael Sarp, who recently stated: "We shall produce watches of the highest quality with unique technical and design characteristics and thus continue to experience the pleasures of innovation." If you should have an opportunity to examine an IWC, you will quickly realize that Mr. Sarp speaks the truth.


1 comment:

j_luxwatch said...

Thanks so much for posting this. It's very interesting to see how each brand started & made it's mark in the industry. I have my eyes on a Cartier watch that I saw on
I just can't resist. I think I am going to just cave in and buy it. Now there is a good example of a strong brand that has dominated the industry.