Rolex, Swatch, Alarmed by Watchmaker Dearth, Spring for Schools.

27 february 2005

Article by: Bloomberg Feb. 17 (Bloomberg) -- Jordan Ficklin fixed watches in Tucson, Arizona, to pay his bills while he studied computer science at the University of Arizona. He's now in a Pennsylvania graduate school -- honing his skills with the tiny steel dials and gears of luxury timepieces. Ficklin, 25, turned down a software job after getting his degree in 2003. Instead, Rolex Group, seeking to ease a shortage of watchmakers that could cut into sales, is educating him for free. ``I really needed to have some physical results instead of just virtual results to show for my efforts,'' says Ficklin, who grew up in Las Cruces, New Mexico. ``Watchmaking is very misunderstood; people think it's almost a dead art.'' Rolex, Swatch Group AG, Breitling SA, Audemars Piguet and other Swiss companies are spending millions of dollars on schools to make sure the watches they sell in the U.S. can get fixed. The U.S. now needs about 4,000 watchmakers in addition to the 7,000 it has, says Jim Lubic, executive director of the American Watchmakers-Clockmakers Institute. As many as 4,000 will retire in the next 10 to 20 years. By contrast, about 140 students are now in U.S. watchmaking programs. The median age of people trained to repair coiled-spring wristwatches has climbed to 61 since battery-powered models arrived from Japan in the early 1970s, says the Harrison, Ohio- based watchmakers-clockmakers institute. ``We're almost missing a generation,'' says Charles Berthiaume, Rolex USA's senior vice president of technical operations. ``We have an unprecedented number of retailers looking for watchmakers.'' Still, any crimp in sales is yet to come: Swiss watch exports to the U.S. rose 13 percent to $1.5 billion last year, according to the Federation of the Swiss Watch Industry. Swatch Repair The number of U.S. watchmaking schools has fallen to 12 from about 40 in 1978, and only four now certify graduates to work on luxury Swiss watches, Berthiaume says. Swatch, the world's biggest watchmaker, plans to start a repair school in Secaucus, New Jersey, later this year that will certify six students at a time to work on its fanciest brands, including Blancpain, says Joseph Panetta, a spokesman. The Biel, Switzerland-based company also sells Omega, Longines, Tissot and its namesake plastic models. ``If you provide a premium product here, you have to be able to service it,'' Panetta says. ``When you buy a Mercedes, you don't send it back to Germany for repair. We can't sit on our hands and not address this.'' Microscopes in Amish Country Grenchen, Switzerland-based Breitling, with wares priced from $1,500 to $100,000 or more for jeweled models, joined Audemars, Richemont SA and Swatch in donating $500,000 to a program at Oklahoma State University in Okmulgee, Oklahoma, in 2002. Rolex, which invented the self-winding watch in 1931, pledged $1 million each to a school in St. Paul, Minnesota, and to another in Seattle. Rolex's two-year program in the Amish town of Lititz, Pennsylvania, began three years ago in a building designed by architect Michael Graves. The course, in which Ficklin is enrolled, teaches 24 students to make parts by hand and diagnose defects in coiled-spring technology that was developed more than 500 years ago. They spend 47 days practicing how to shape steel winding stems with a lathe, cutter and dies while looking through a microscope. A typical self-winding watch has 250 parts crammed into a space the size of a postage stamp. ``This is the traditional watchmaking process,'' says Hermann Mayer, 39, a native of Wuerzburg, Germany, who became the school's principal after studying German literature and working as a Volkswagen mechanic earlier in his career. ``You need really a couple of freaks who love working on these kinds of things,'' he says. Seiko Quartz To attract those candidates, Geneva-based Rolex waives tuition worth about $40,000 and provides a working environment complete with fresh-cut flowers in the bathroom and porcelain teacups in the lounge. The 10,000-square-foot (929-square-meter) Lititz building is a modern take on a traditional stone barn. It sits across the street from a Dodge dealership and is paneled inside in Swiss pear wood. Tokyo-based Seiko Corp., which created the world's first quartz watch in 1969, set up shop in the U.S. the following year and started selling liquid-crystal display digital watches in 1973. A subsequent deluge of cheap Asian watches choked demand for European products, forcing almost 1,000 Swiss-watch companies to close since 1970, according to the Bienne, Switzerland-based Swiss watch industry federation. ``The shortage tells people `Don't buy a Swiss watch,''' says Joe Juaire, 43, who heads a two-year watchmaking program at Minnesota's Saint Paul College. Demand for Diamonds His graduates receive an annual starting wage of about $38,000, Juaire says, and Swiss certification brings multiple job offers from independent jewelers, national chains and watch manufacturers. He expects salaries to increase at least 30 percent by 2007. The watchmakers are also haunted by the lack of repair personnel as the economy expands and demand for luxury products such as watches, diamonds and handbags rises. Tiffany & Co., the biggest U.S. luxury jewelry retailer, expects a profit gain of 10 percent to 12 percent in 2005, the company said last month. Antoine Simonin, 66, a consultant for the Watchmakers of Switzerland Training and Educational Program and a watchmaker for 50 years, says the industry's revenue growth will depend on more funding for schools that teach the traditional techniques. `Very Alive' ``They will see the results later on,'' says Simonin, who has also worked to help open schools in France, Germany, Japan, Sweden and China. ``Sales fall because of problems in after-sales service. Customers get fed up and buy somewhere else.'' Juaire says Rolex's donation to his school -- together with job losses that left Minnesotans looking for new careers -- have spurred interest. Five years ago, his workbenches were a third full. Last year, he had 170 applicants for the 12 spots in a class that started in January. ``Among most people, the perception is that mechanical watches are a thing of the past,'' says Ficklin, who will graduate from Lititz in 2006. ``But it's a luxury item and, for that clientele, it's a very alive thing.'' Article by: Bloomberg