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Nicolas Hayek and His Impact on the Watch World

He is considered to have rescued the Swiss watch industry and played a role in mitigating the massive damage caused by the quartz crisis in the 1980s. Learn how Nicolas G. Hayek and his plastic watches helped the Swiss watch industry regain its former glory.

Who was Nicolas Hayek?

Nicolas George Hayek was born in Beirut in 1928 to Greek Orthodox parents and did not move to Switzerland until 1949. Prior to that, he finished his studies in physics, chemistry, and mathematics in France. His education and his marriage to Marianne Mezger, the daughter of a Swiss industrialist (who played an instrumental role at the Eisengießerei Mezger AG in Kallnach), helped Hayek to quickly gain a foothold in Switzerland professionally and privately. As the result of a stroke his father-in-law suffered, he was forced to take over management of the company on short notice and began to take his first steps as an entrepreneur.

During this time, Hayek gained an insight into what was happening in the industry and subsequently worked as a manager and consultant for various companies. As a result, at the age of 35, he started his own management consultancy, "Hayek Engineering", based in Zurich. In 1963, his company was entered into the Swiss Commercial Register. 12 years after founding his company, in 1969, Hayek was granted Swiss citizenship. By the end of the 1970s, his consultancy had more than 300 international clients, including Mannesmann, Thyssen, Audi and Daimler-Benz, whereby Hayek earned a reputation as an ingenious corporate restructurer.

Breguet Classique 5327BB 1E 9V6 watch with silver dial and leather strap on a black background

"... What others call work is entertainment for me."

In 1983, the successful management consultant Hayek took on the ailing watch group SSIH, the ASUAG Group, and the movement manufacturer Ebauches SA (ETA) at the request of their lenders, all of which had suffered during the quartz crisis, and turned their corporate philosophies upside down. Modernised production methods brought new momentum to the companies. The development of the low-priced and internationally successful Swatch watches provided a powerful financial injection. He bailed out much of the Swiss watch industry by founding Swatch AG in 1985 and SMH (Société Suisse de Microélectronique et Horlogerie), which became the Swatch Group in 1998. Later, Hayek took on the brand Breguet with exceptional dedication, and in 2008 he personally saw to the restoration of a legendary pocket watch that was made by Abraham Louis Breguet.

Hayek's endearing habit of wearing multiple wristwatches on both wrists at the same time made the ingenious entrepreneur both renowned and well-liked.

Nicolas Hayek died of heart failure while working in Biel on June 28, 2010. He had never seriously considered retirement. At the time of his death, he was survived by his wife and childrenNicolas Hayek Jr., better known as Nick Hayek (who is currently the CEO of the Swatch Group), and Nayla Hayek (CEO of the jeweller and watchmaker Harry Winston) – with a fortune estimated at around $3.9 billion.

Breguet Heritage 5480BR 12 996 watch with silver dial and leather strap lying on a table

A triumphant campaign in the watchmaking world

In the 1980s, the government commissioned representatives of banks and the watch industry approached Hayek to address the problem of the severely struggling SSIH (Société Suisse de l'Industrie Horlogère SA) and ASUAG (Allgemeine Schweizerische Uhren AG). His assignment was to find out how different manufacturers could best turn a profit. Hayek was happy to intervene and immediately took the reins by focusing not on sales, but on restructuring the companies. A man of clear words, he blamed "miserable management and misjudgment of the competition" for the companies' weak position on the market.

"Switzerland lacks business entrepreneurs with courage, imagination, and foresight."

After his analysis of the problems, Hayek proposed merging ASUAG and SSIH into a holding company to make them profitable. However, as a result of the financial losses suffered by the quartz crisis, the banks continued to have grave concerns and were doubtful about the future of the Swiss watch industry. In 1984, they offered Hayek a majority stake of the newly formed watch group for 300 million Swiss francs, which proved to be quite a bargain.

The Swatch Group AG and the beginning of an era

In 1983, SSIH-ASUAG was founded, whose name changed again to Société de Microélectronique et d'Horlogerie SA (SMH) after Hayek's takeover in 1986, before it finally became "The Swatch Group AG" in 1998. Moreover, the notorious "Hayek Study" contained the idea of a "second watch", or watch for short, which would be inexpensive in production and distribution. This low-cost watch made of plastic was intended to bring in money principally through its high sales figures in order to help SSIH and ASUAG out of the crisis.

When the first Swatch watches, jointly developed by Swiss engineer Elmar Mock and watchmaker Jacques Müller, were released in 1983, they quickly became a hit. The 2.5 million unit sales target set for 1984 was far exceeded, with a production run of 3.7 million Swatch watches sold. The enormous success of Swatch's plastic watches was partly attributable to the fully automated production process and the reduction in the number of components.

The Swatch as the lifebuoy of an industry

The success of the Swatch allowed Hayek to turn his attention to the other brands within the holding company and, consequently, to attend to their affairs as well. The logistical reorganization was followed in 1990 by the image change of the various brands. Hayek gathered all the individual brand managers around one table and found a suitable segment for each manufacturer. The intention was that the separate brands of the Swatch Group should no longer be in competition with each other, but instead support each other. Thus, the distinction "Swiss Made" returned to prominence in the world of watches.

Today, the Swatch Group encompasses a total of 17 watch brands and employs more than 31,000 people in over 50 countries. With net sales of 7.313 billion Swiss francs in 2021, it's financially stronger than ever. To what extent the MoonSwatch, unveiled in March 2022 as part of a collaboration between Swatch and Omega, will prove to be a curse or a blessing remains to be seen. But initial achievements indicate that it is unlikely to be a curse.

Breguet marine watch 5827BA 12 9Z8 with silver dial and leather strap on a leather coat

Nicolas Hayek and Breguet

Hayek harboured a strong fondness for the watchmaker Breguet. In an interview, he summed up his enthusiasm this way:

"The Breguet company was created by an artist, by a man entirely to my taste, with my entrepreneurial spirit and enthusiasm."

After Hayek acquired the Breguet brand with the Swatch Group in 1999, he devoted a great deal of patience, time, and passion to the brand. He was more concerned with reviving the watchmaker than in simply saving it from bankruptcy. With its own unique values, Breguet embodied everything that Hayek stood for with his name. One thing that the entrepreneur did not want to happen under any circumstances was to be forgotten, which is why he poured his heart and soul into the brand. In fact, he himself ordered the restoration of the legendary "Marie Antoinette" pocket watch, which was personally made for the young queen by Abraham Louis Breguet and had previously been lost.

"One car, two people, and a case of beer"

Hayek and Mercedes-Benz

The success Hayek had achieved with the Breguet brand was not enough to satisfy him. His vision was not limited to the watchmaking industry. He approached a number of car manufacturers with the concept of an energy-saving, micro-compact vehicle with an environmentally friendly hybrid drive. This pet project, the "Swatch-Mobil", was based on the slogan "One car, two people and a case of beer" and was in complete contrast to the emerging trend of the time to increase horsepower on the road.

In the early 1990s, the Swiss industrial magnate Hayek teamed up first with VW and then with his favourite car manufacturer, Mercedes-Benz, and together they began designing the car. In 1997, however, Mercedes-Benz unpleasantly surprised Hayek by presenting him with a car that lacked many of its innovative elements. One of its biggest shortcomings was that the car was no longer powered by electric hub motors, but had a conventional combustion engine onboard. This decision displeased the management consultant and he sold his shares in the project. From both a financial and an emotional point of view, this was the right move, as the "Smart" model (which is meanwhile built exclusively with an electric motor, by the way) was not a big success. The Smart developed into more of a loss-making business for Mercedes-Benz – quite the opposite of the Swatch.