Interview with Rolf W. Schnyder
By Su JiaXian
© November 2008
SJX: What do you think of the watch press nowadays? There are so many magazines, on the internet, everywhere.
RWS: Far too many. Frankly many of these magazines are just there to make money. They are just there because they know in the luxury watch industry the margins are bigger and people want to be inside the magazine with photos. Especially those in Switzerland, and those in China, they don’t reach people. You don’t know how many are printed. I prefer if a magazine is distributed with a reputable magazine or paper, so you know the circulation. But in Switzerland there are so many watch magazines, I think the watch companies that get it, we get it free, so many of them.
In other cases, the ones in the US, that is different. The watch retailers, they don’t like it if they have a watch magazine with an ad of brands they don’t carry so they hide it. Because if they give the watch magazine then the customer says, “I like this one, how about it?” They also don’t like it if you advertise one retailer, because you know Americans phone from one state to the other [to buy]. Because if you buy from one state, and then they just send you the box, you don’t pay the state taxes. So there the watch magazines, they sell them as newspaper. It’s true. It’s very tricky.
We don’t tag [retailers] in magazines, we do referrals. We only put our own [contact details] in the States, and we distribute ourselves in there. You need very good trained people to do that on the phone. So when somebody phones, first we ask in which magazine did you see the ad, so we know very well the effectiveness of various publications. Then we ask for the [caller’s] name, and tell them we can send you a catalogue, because this model also exists in steel or in gold, and we also have not only the marine chronometer but also the marine chronograph. Let me have you address and we send you the catalogue. We send the catalogue and do a referral [to the closest dealer]. Every dealer in the States we know what they have in stock. Then we send [the catalogue] by bonded delivery, so the next day we receive the receipt that they have received it, then we phone up and ask have you received the catalogue? What did you choose? At the same time we copy the retailer we have referred to and make sure he has the piece [in stock]. It takes time, but it works very well. If it’s local newspapers where the retailer pays half, then we go along with that, but that’s for local.
This is very funny, one night I came with Patrick, very late we came into New York, about 7:30, we stayed at the Plaza on Fifth Avenue. We went to see if Kenny is still in the shop [name of watch retailer]. We walk around the block, there he was in the back with no more lights but we could see him .We tapped on the window, we went in and had a coffee. He started talking, he told me, the stupid Swiss, they don’t know how it works. They put my [shop’s] name [in the advertisement], that’s good for me because they bring me a customer and I can sell him what I want. When the people call and they say “I saw that watch in the magazine, how much is it?” and I say $12,000, but they say “Oh that’s so much.” But then I tell them I have another brand, it has the same thing inside but costs much less. [The brands] bring me the customer and I sell him what I want. (laughs) Then he also said never put 800 phone numbers, because then people just phone you and waste your money. If they are really interested, let them phone you and spend the money. That evening he was very proud to tell us about how the Swiss have no clue how it works in the States. I listened, I really listened.
SJX: There are so many magazines, and even in non-watch magazines there are so many watch advertisements. How do you stand out?
RWS: I choose [carefully], we are very particular where we are. We are not everywhere. In those countries where we decide by ourselves, we know the effectiveness. For us the Robb Report works very well, we see the recall rates. Even the American Express travel, what is it called, that magazine?
RWS: Yes, Departures, it’s expensive but good recall rate is very high. But otherwise we are quite choosy where we advertise. When it’s your money, it’s not just you had a budget and you spend it, it’s your money. You still have to negotiate, it’s very important.
SJX: Now let’s talk about some of your watches, which is your personal favourite?
RWS: They’re like children you know, I love them all. (laughs)
SJX: So which is your favourite child?
RWS: Right now I wear the Sonata. This one is the latest one, the Silicium. It’s the first one. But why I also like Sonata, it’s very useful because I have my second time zone which is very quick to change. The alarm I don’t really use so many, I have my body clock. (laughs) But the Sonata expresses what Ulysse Nardin does in terms of aesthetic design, mechanical uniqueness and its materials. It has all three elements in it. Plus it’s got a romantic chime.
SJX: So this watch has silicium parts, quite a few of your watches have silicium.
RWS: Yes but this one has more than that because it is also the dial. Of course the escapement is also in silicium.
SJX: So do you think silicium is the way of the future?
RWS: It’s certainly one of the ways of the future. Not for everything, but for many things, like the hairspring.
SJX: More and more brands are using silicium, Patek, Rolex apparently too.
RWS: There are only two producers of silicium at the moment, one is TSCM, where we were first [but no longer], they continued and they produce for Rolex. I don’t think Rolex will produce it. We recently met the person who was head of research in Rolex, he retired recently. He was rather frustrated because all his many, many things invented never got to use.
SJX: So you should hire him.
RWS: Yes but he’s retired. That’s really amazing but that’s true. At Rolex before they change anything, my god that takes ages.
But we didn’t want to be excluded [from using the new material], so we put this factory into a new building which is coming up. I didn’t want to be excluded when suddenly others come and say we have a patent on this and that, and we can’t use it. That’s the danger when some of these new developments are with the big groups, others don’t get it.
Our products are open, we supply other companies. And we have now formed the hairspring club, for high-end watch companies that can become a member and will be supplied hairsprings in silicium. Because in any case such an investment wouldn’t make sense just for one company.
SJX: Silicium now is used in the escapement, the hairspring, pallet fork…
RWS: Many other things you can use it also. Whenever you need high precision you can use it. But silicium also doesn’t require lubrication and it’s very flexible. The hairspring that’s going to be the main product I would say. We have done the other technology, where you use silicium first and you grow in nickel-phosphor with LIGA technique [Lithographie, Galvanoformung, Abformung], a second component right onto the piece.
SJX: That’s what you used in the Freak right?
RWS: In the special Freak, the Innovision. And you know I don’t think you need silicium for every part. And [critics] say that’s no longer handmade, but then the other [traditional] parts also not handmade. (laughs) They are machine-made. If you make small quantities, you decorate or angle by hand. In large quantities even that [decoration] is not really done by hand. The moment you have large quantities to produce, you make a machine which does this work. But if you have small quantities, you cannot make tools and machinery especially for a component where you only have need for a small quantity. The less you produce, the more handwork is involved. But even these independents, they have many parts made in Mimotec in nickel-phosphor because it’s easier to make them that way and more precise, than to have them made by electro-erosion which is very expensive.
SJX: Now where do you see the next wave of innovation in watch movements? It started with silicium in the escapement and what’s next?
RWS: We will go a bit further with growing diamond on silicium, the Diamonsil.
SJX: Used for what part of the watch?
RWS: That one I won’t tell you. [smiles] It will be amazing.
SJX: When will it be launched?
RWS: I think next year.
SJX: At Baselworld?
RWS: I don’t know if it will be in Basel. You can’t just switch so quickly to that part because it will not be in the same dimensions because with that technology you gain a lot of space inside the movement. So you have to create a movement that incorporates the part from the start, because you are not just replacing this part with a similar sized other part. The advantage is that you can make the same function inside the movement in a smaller size.
SJX: Silicium and such innovations are necessarily in expensive watches for now. Do you see them being used in entry level ETA movements with silicium?
RWS: Well, ETA is also going into silicium.
SJX: So one day you could find silicium in a one or two thousand franc watch?
RWS: I don’t know what the policy of ETA will be. But from what we understand, ETA and Nivarox, new developments are for their own brands. We don’t know if the will keep it for Breguet or Omega, or lower like Certina.
SJX: But what about for yourself? Will you put silicium in your Marine Diver for example?
RWS: We will put it where it is needed. It doesn’t make sense just to change for changing sake. We only do it where it brings something. If I make a new movement, now I am working on the 161, which is the offspring of the calibre 160 which was our anniversary watch.
But we now produce that in a larger quantity, making your own calibre always cost far, far more money, far, far more. That’s why watch brands which do not sell at a certain price cannot make their own movement, it’s simply impossible. A whole new movement costs you roughly four times more. And you know I would say the 2892 or 2894 are perfect calibres. It’s a very good movement and still one of the best movements. But now we have to make our own. That is going to be very costly, but at Ulysse Nardin we can absorb it.
If you’re not at that price level you will have a problem. And many of these companies which have never been into making movements, or even modules for movements, they have no idea. They just think you have the machine you also make your own movements.
We still work with lots of subcontractors, so that’s ETA but less now. Rolex also buys from subcontractors. The whole industry was organised like that before, you had the ebauche factories, ETA was Fabrique de Ebauches ETA, it was an ebauche factory which worked for the whole industry.
Only during that crisis during the seventies, it was snapped up. At that time [Ernst] Thomke was running ETA, but you also had A. Schild, Fontainemelon, they all belonged to the ASUAG group, which later melded together with SSIH which was Omega and Tissot. Only later they made only ETA [branded movements] and all the others took down their names.
I remember at one point Thomke was furious because he made a development of a new small quartz movement. Then he found out in Basel that FHF, which belonged to the same group, funded it and they already didn’t have enough money at that time to produce. That’s why I started making the complicated quartz movement for ETA in Kuala Lumpur. They had no money to invest. They said if you can invest we can send you machines but they had no money to invest. So we made the movements, we made all the Flatlines at that time in KL. Now they make it in Bangkok. But then in Basel he found out that one of same group secretly made the same thing as him, they used up spare cash and then he really hammered them. He got it through that they always [had to] be coordinated and avoid duplication.
SJX: On that topic, you said back then they didn’t have enough money, but today the industry is awash in money. Business is good. Because of that do you think people will be less innovative than before? It’s so much easier to make money now.
RWS: Of course. When it was quartz, it cost a lot of money because the quartz movements at the beginning were thick, then they became slimmer and slimmer and slimmer, so the cases also had to be adjusted all the time. You had to retool again because it was not the same dimension in weight. I was in those days I had a case factory as well, it was very tough.
Now yes, mechanical watches came back but not all companies [are successful]. Depends on how you manage your company. You manage your funds available. Some tried to grow too fast and wanted to grow too fast and wanted to be in ten years where the others were in twenty five years. Then you have a problem. So it’s not that all of them are swimming in money. It’s also good financial management and to tailor your investment to what you can afford. Otherwise you lose very quickly your freedom because you need outside funds and you are in this situation where you have to report.
SJX: Is there anything you would like to tell the readers of the forums?
RWS: Well they are very well informed. (laughs) There was a very good story just recently on the innovation of silicium and the Freak. It was really well researched I must say. I copied it to all my sales and marketing people and I told them to read it. I said that gives you excellent know how and knowledge to answer questions.
SJX: Some people from the industry have told me that sometimes the people on the watch forums are too well informed, so it can be difficult to deal with them. What do you think of them?
RWS: Well they not too well informed, but they are well informed. These are the only bunch who go to Basel and get to know and inform themselves. You also cannot tell them nonsense, they find out very quickly. And then you have people like Bernard [Cheong], he’s probably more in watches than in the clinic. He loves it, it’s his life. But I appreciate this relationship because there we have people who understand what one is doing. And for Ulysse Nardin, for a company our size, we need more proportion…
(At this point Mr Schnyder’s wife, Chai, comes into the room to hand him some documents.)
SJX: That’s a very interesting watch you’re wearing.
Chai Schnyder (CS) : Oh you like it? This is the perpetual.
RWS: Yes, the lady version.
CS : I was at Redwood City in Silicon Valley and they were telling me that the Hewlett Packard CEO was also wearing something like that and I saw that there was the possibility to put extra diamonds on it. This was for our tenth anniversary.
RWS: Ladies always love extra diamonds.
(Ms Schnyder leaves the room.)
RWS: I feel as an independent I think we have done, without exaggeration, incredible work in pioneering, opening doors, inspiring other artistic people in the industry. The Freak has changed the landscape of watchmaking, of aesthetics in watches. Nobody has dared to make a movement like that. But aesthetically others got inspiration. And the Astrolabium was the beginning of the renaissance of mechanical watches, because that’s a product that had not been done before, not in a pocket watch. We have contributed a lot to the industry and we don’t think just for ourselves, we are very open, to share. Of course we can’t share it just with everybody; they have to be of a certain level.
SJX: Thank you for your time.
Copyright November 2008 - Su JiaXian & PuristSPro - all rights reserved
Comments, suggestions, and corrections to this article are welcome.This message has been edited by SJX on 2008-11-30 05:05:02