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Anthony Cousins Letter

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I have been aware of this "battle" for a long time but more or less forgot about it.

The SWATCH practice is a violation of US Antitrust as I understand it, but on the other hand, any supplier has the right to refuse parts/service to any potential customer. Obviously, refusing everyone results in you no longer having a viable business, so if Swatch wants to "win" they simply need to restructure such that they do not sell parts or movements to third parties at all, and officially/completely become the movement manufacturer for the brands under the Swatch umbrella. Obviously they cannot afford to keep such a beast fed going that route or they would have done it long ago.

Complete stop flow of parts outside would do it. Then the "minnows" would be able to fill the need for third party parts and movements.

A couple other thoughts come to mind: Start a new movement company, here in the US, to make movements. We could do the Stelita thing and copy the expired patents of old Eta movements, or just cherry pick design features of quality movements and incorporate them into something "new". I like this second idea best. Address all the shortcomings known and make a really bomb-proof movement (which would end up looking a lot like a Seiko I imagine since those run ~25 years between services)

The other thought is to just make parts that fit the expired patent Eta movements. So "aftermarket" compatible parts, not unlike several companies do for Rolex movements, since they slammed their doors in everyone's face. No different than brake pads and rotors, [pistons, camshafts etc. for a Ford, not made by Ford.

Anyone interested in option 1, please reach out to me. That is something I have wanted to do for a long time actually... Option 2 would be a lot easier. Just need a management company to be formed and then have sub tier suppliers manufacture parts where we can provide prints as well as example parts quite easily.

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Unfortunately I don't think the repair & servicing of basic mechanical watches is as viable it used to be. I have given what I think as very reasonable quotes but have had customers declining my price. The Swatch embargo has driven up prices for spares hence my prices have risen so customers are declining to have them fixed. I might be a very keen competent amateur but I am not working for nothing.  
For the high end watches Rolex/Omega etc there is a still a good market if you can obtain the spares.  Strangely there does seem to be a market for clocks.

 

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The Reality behind the COMCO and EU decisions.

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The Reality behind the COMCO and EU decisions

One of the problems of being engaged in legal action, especially in other countries, is that it is very difficult to talk publicly about topics and evidence that are likely to form part of your submissions to the Courts. You don’t want to disrespect the legal process by pre-empting the deliberations of the Courts with a public debate.
 
However, if another entity makes a significant public pronouncement on one of those topics, then the need to respond in kind becomes overwhelming. This is the case with the recent announcement by COMCO, the Swiss Competition Authority, that it would not be conducting a full investigation into the issue of Watch Parts and Independent Repairers.
 
Last Friday, Cousins sent an Open Letter to COMCO requesting that they rethink this decision. The letter is reproduced (see attachment) for all to see, so I will not detail its contents here. Suffice to say that those who would have the industry believe that the EU has approved the restriction of parts supply by the Swiss watch brands, and declared this practice to be legal, have not properly interpreted the findings from the EU Commission and Courts.

Furthermore, those who then use that same wrong interpretation to justify their own refusal to investigate are only compounding the error.
 
Once again I assure all of you in the Independent Repair Trade that Cousins is still in the thick of the fight, still confident of its position, still seeking the most competitive market for the end consumer, and still determined to ensure that the evidence is correctly delivered and evaluated in the most appropriate legal forum.
 
Your feedback, as always, is welcome.
 
Kind Regards
 
Anthony Cousins
Managing Director, Cousins Material House Ltd.

www.cousinsuk.com

Edited by Vich
link reproduced at bottom

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latest I have received :-

Updating You on our Two and Half Year Court Case

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Updating You on our Two and Half Year Court Case

I was watching the TV news coverage of the singer Cliff Richard’s lawsuit against the BBC a couple of weeks ago. When the reporter commented that the case had already lasted four years, and the BBC was considering whether it would appeal against the judgement, it highlighted three things to me. Firstly, just how long law suits take, secondly, how much quicker we are working through our case with Swatch, and thirdly, how important it is that our customers understand where we are in the legal process, and why it takes this long.
 
Sir Cliff’s case had one court action and, in the end, no appeal. Our case has had several more steps as a consequence of Swatch’s attempts to have a matter of British law decided in a Swiss Court. It is worth me taking a couple of moments to explain what those steps are. There are three of them that we are going through, and they are known as “Admissibility”, “Jurisdiction”, and “The Merits”.
 
“Admissibility” is all about whether or not the case has a proper legal foundation. If you look at the news story we released on the 28th of June last year, you will see that the Bern Commercial Court ruled that the case was not admissible under Swiss rules. Swatch appealed against this decision to the Federal Supreme Court, and in April this year that court ruled that the Bern judges had correctly applied the rules, but that these rules were now out of date when compared with other countries. They changed Swiss case law, allowed Swatch’s appeal, and sent the case back to Bern for the next stage.
 
“Jurisdiction” is about whether or not the court where the action has been brought has the right to hear such a case. That can be because of the nature of the case (you can’t try a murder case in a Parking Tribunal), or for geographic reasons. Three companies in the Swatch group brought the claim against Cousins. Swatch AG who are the holding company based in the Bern district, ETA who are based in a different Swiss district, and Swatch UK who are registered in London. The Bern judge decided that he does have jurisdiction to hear the case brought by the holding company, but does not have jurisdiction over the other two. Unsurprisingly, both ourselves and Swatch have appealed against the parts of that judgement that we do not agree with.
 
The current state of play is that both Swatch and Cousins have submitted their appeals, examined each other’s documents, responded to the Federal Supreme Court on them, and are now in the final stages of adding any additional remarks before the appeal judges consider and publish their verdict. We hope this will come in the next few months, and will finally decide whether the final stage known as “The Merits” will be heard in Bern or in London. “The Merits” is when the court hears the arguments about the details of the case and the laws which are alleged to have been broken, and ultimately issues its verdict.
 
On the face of it, it seems ridiculous to the average person that legal matters take so long to resolve. However, our case has been through two lower court stages and two appeals in the last 30 months, and when compared with four years for Sir Cliff’s single stage, I hope our customers will see that our legal team are pressing on as quickly as possible.
 
I look forward to updating you again when the result of the latest appeal comes out.
 
Kind regards

Anthony Cousins
 

 

  Cheers, Vic

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It's difficult for me to understand SWATCH's logic. In other words, what do they gain by cutting off all parts and movements to third parties? Typically an authorized repair service quotes higher prices for repairs than a comparable independent watchmaker, all things else being equal. If customers are already shunning repairs from independents over the rising cost of parts, it's irrational to expect that they will be okay with even higher costs by turning to an authorized repair center. 

Independent parts for non-patent protected movements are already in distribution. Even more will be so in the coming months and years. Again, how does this possibly benefit SWATCH? Soon enough, high quality counterfeit parts will be in the distribution chain if they aren't already. In effect, the Swiss are creating a market for counterfeit watch parts and seem quite content about it. One way or the other, they are pricing themselves out of the market that they helped to create. The consumer won't suffer long. There are already far too many options available from the far east.

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There has been many posts on this forum with most agreeing with your conclusions Don. Unfortunately it was a corporate decision and once made it was non-reversible. The big mistake Swatch made was they had already monopolised the mechanical watch movement market and instead of concentrating their R&D on the smart watch market they pursued expensive court proceedings. If they had developed a swappable/repairable smart watch movement they would have completely sown up the market. 

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15 hours ago, TexasDon said:

It's difficult for me to understand SWATCH's logic. In other words, what do they gain by cutting off all parts and movements to third parties? Typically an authorized repair service quotes higher prices for repairs than a comparable independent watchmaker, all things else being equal. If customers are already shunning repairs from independents over the rising cost of parts, it's irrational to expect that they will be okay with even higher costs by turning to an authorized repair center. 

 

I think its a general trend in high end watches, more company's are investing in Boutique shops, cutting out smaller retailers who can't afford the vast investment in upgrading their retail shops. The larger company's like Omega and Rolex have increased prices over the last 15 years at least beyond inflation, I bought a brand new bi-metal Submariner about 15 years ago at a cost of £3,680 the new model is £10,350 even adjusting for inflation that is a massive increase in price, these company's want to have their cake and eat it and tightly control every aspect of their business including servicing and repair.

I think for the larger company's point of view it preserves the air of luxury and exclusivity if you can sell half the number of watches but at twice the price and make them unaffordable to many but still be able to milk all you can get out of those that are willing to pay, and one way of doing that is controlling retail suppliers, servicing and repair options.

It should stimulate competition eventually. Other companys are now investing in movement production and selling to independents which can only be a good thing in the long run.

But even if Cousin win I think Swatch will make the cost of parts so high as to make it unviable for small repairers to compete and all the legal wrangling and costs brought about by it will be ultimately in vain.

 

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I find all of this a shame. In the end there are only losers. There will be a time when mechanical watches will be a thing of the past and the people to repair them will become less and less and the skills will be lost.To my mind and observations Swatch are just accellerating the inevitable demise of the mechanical movement.  Eventually mechanical movements will become just antiques to sit in some collection somewhere.

I got into watch repairing recently and have bought some quite expensive kit. Cousins is my go to place for parts, tools and oils. I hope that Cousins win this battle and quickly. I would hate to see my hard work and like minded folks hard work in learning these skills go to waste because of somebody's dream of controlling all they survey.

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In spite of the designer label persona high end mechanical watches have, in the end they are an overpriced novelty. By today's standards of accurate timekeeping they do not come close to an inexpensive quartz movement. With the additional consideration of having them "serviced" every few years, once the cost of maintaining them becomes unbearable  people will lose interest in buying them.

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I would have to agree that an inexpensive quartz movement will keep good time and probably better time than an old mechanical at least until the battery goes.  However, I am not sure whether you are postulating that, that fact, will mean that people will no longer be interested in mechanical watches.

I would say that there is broad spectrum of people that like the heartbeat of a mechanical watch and like repairing them as a hobby and this forum bears witness to that. The fact that a watch can possibly be repaired even by a hobbyist is an attraction to anyone who likes to reduce an item to its mechanical components and rebuild it. 

I will not be around say in 50 years time to see if I am right but I have a feeling that they will be around for a while yet and antique mechanical watches will still be desired by some.

Perhaps we can meet in the afterlife and discuss it further :D

Cheers,

Vic

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Vic,

A high end mechanical watch can certainly be a beautiful work of art. When I look at Vianney Halter's Space Watch I am in awe of the genius and craftsmanship he put into that product. As beautiful as that watch is no body who's livelihood, or perhaps their life, would consider it to be an accurate time keeping tool by today's  standards.

A few months ago I submitted a post titled WHAT IS A CHRONOMETER?, I started to study navigation at that time and was supersized to learn that the beautiful mechanical chronometers (made by Hamilton and others) are no longer used.   Even with the event of GPS technology, large ships and experienced sail boat operators still practice navigation using a sextant and a quartz time piece. The recommended time piece in every navigational book, I have seen so far,  is a quartz watch. A person who can afford a $600,000  sail boat can certainly afford a $35,000 Rolex. In fact, they may already own several of them. That will not be the watch of choice to calculate their position if the electronic navigation system goes out. The reason behind this is  the inaccuracies of mechanical watches can put someone hundreds of miles away from where they think they are.

 Quartz watches are extremely accurate and extremely rugged. If someone put on the Space Watch and hit a few golf balls I do not think the watch would survive the experience. If they did the same thing with an $8.00 quartz watch (including the band) it would probably nave no effect on the watch. Even is it did you would only be out $8.00.  That said, a nice mechanical watch is still a beautiful thing.

david

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