Just finished this article from the New York Times; apparently some Swiss brands are finding marketing value in increased transparency concerning sourcing of components and materials.

Some highlights:

The Swiss have long had a reputation for being discreet when it comes to business. (Think banks). And their watch industry is no different.

But growing pressure for environmental and ethical accountability — from activists, investors and consumers — has convinced a few brands that it is time to reveal where they obtain some of their raw materials.

They are fighting the industry’s deep-rooted tradition of discretion, a practice born of watchmakers’ fear that identifying suppliers will reveal details of their expertise and give rivals an advantage.

Many, however, are secretive for a very different reason: They are reluctant to admit their “Swiss Made” watches contain numerous components manufactured in China. These aren’t legal concerns: Swiss law dictates that at least 60 percent of the manufacturing costs of a product must be incurred in the country for it to qualify for the label.

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“The real transparency challenge of the watch industry is beyond those important points, the ethics of the supply chain — it is the integrity of Swiss Made,” Jean-Christophe Babin, chief executive of Bulgari, said on a video call earlier this month. “When you find watches at 500 Swiss francs [$530] that claim to be Swiss made with mechanical movements, you can reasonably believe there’s a miracle behind it. Because I’ve never been able to do that, and I am 20 years in the Swiss watch industry.”

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Mr. D’Amore created his own label, called TTO, for Total Transparency on Origin. And Code41 is equally transparent about another sensitive topic: pricing.

On its website, the brand included a table that lists all the components and processes that went into its latest crowdfunded timepiece, the NB24 Chronograph, along with their prices and origins. For instance, the watch’s Swiss-made movement cost the company $1,056 (including taxes), while the titanium case, dial and packaging — manufactured in China — cost $167, $56 and $22. In total, the watch cost $1,474 to produce.

Below the table, the brand explained that it arrived at a retail price of $3,500 by adding what it called a “minimal markup” for profitability.

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Whether they like it or not, Switzerland’s biggest watchmakers may soon have no choice.

In November, Swiss voters rejected the Responsible Business Initiative, a proposal by a civil society coalition that would have required Swiss companies to conduct due diligence on human rights and environmental risks throughout their supply chains, and publicize their reports. But a counterproposal from the Swiss Parliament that would require companies to ensure the traceability of their supply chains, and make their reports publicly available for 10 years, is expected to become law in 2022.

That means even the notoriously tight-lipped Rolex, the world’s biggest brand by sales — a Morgan Stanley report on Swiss watches published last month found that the company now has an estimated market share of 26.8 percent — will need to make its business more transparent.

“They can’t claim they’re a private company because no one’s asking for their trade secrets,” said Milton Pedraza, chief executive of the New York City-based Luxury Institute. “They will have to answer. There’s no place to hide.”

 

Sales? Do they actually sell watches?

And it seems that the writer hasn't heard of Casio.

 

I think the writer meant to say

-a Morgan Stanley report on Swiss watches published last month found that the company now has an estimated-market share of 26.8 percent of wait listed customers.

 

Is transparency so vitally important in this instance?

 

Unfortunately there have been too many cases of companies turning a blind eye to sub standard conditions, child labor, forced labor, etc when sourcing. You would hope this is not the case with the watch brands we are fans of but you never know.

 

I'm guessing they are closer to 80% if we only include waitlists. With the exception of plug-in electric vehicles, most manufacturers attempt to alingn their production capacity with the projected market demand.

 

Now a whole watch can be made in China for $399 and if putting it together is $601 in Switzerland it’s Swiss made.

 

Agreed. There are far worse businesses out there for sure - fashion/clothing being the primary one I'd say. But even things like electronics recycling and ship recycling are notoriously exploitive when done in 3rd world countries (when rich countries send their problems to other countries).

Although the watchmaking end of things might be small in the larger picture, if it can be identified, I would make a point not to patronize the brands that are involved in this behaviour.

 

Huge discrepancy with what can be called “Made In USA” with what is allowed in the Swiss Made description. Bout time the Swiss are called on it.

 

Well, some in the industry have tried. It was largely Swatch that pushed to get it up to the current 60%...

 

You see less pure 'Made in the USA' labels now, instead you'll see labels like 'Handcrafted in the USA with US and imported parts'. If any electronic parts are in the product it is pretty hard to source all of them in the USA now, and that runs afoul of the 'Made in USA' label.

 

This has been going on for a while. I knew a textile manufacturer who made clothing for some very big names. He had a facility in Saipan using mainland Chinese laborers and cheap imported materials, but because Saipan is an American territory- a “Made in USA” label was able to be applied.

 

Yet RGM/Weis etc....cannot use the term even with 90%+ content and labor since it is literally impossible to locally source 100%. Germany is also loosey goosey.

 

I have a friend who works for a local coffee roastery. They have a store-front, online presence and booths at the local farmers market. One market they tried to get into told them that because they didn’t source the beans locally, they could not be considered a “local business”...they tried explaining that coffee does not grow (nor chocolate) in the lower 48...but they could not understand.

 

This was a great post. The movement for more corporate transparency in all industries, including with respect to international supply chain, is only going to increase. M

 

Agreed. Educated considers want to know where there money is going. They can try to hide supply chain or vendor info all they want- it will just make them look cagey as we will find out. Internet sleuths are far better at digging up information than lawyers are at hiding it.

 

Strange tendencies in this Pravda newspaper article.
Where is diversity and inclusion (of watch parts)?
Politburo can express dissatisfaction.