It was 1982 and the Swiss watch industry, once the most prestigious in the world, was on its deathbed. Overall, sales had slumped by a quarter in just a year. In the lower and middle price markets, Swiss watches had almost disappeared from the shops.
The cause was the Far East. Hong Kong, which had only entered the market in 1976, had become the centre for inexpensive digital quartz timepieces. Switzerland could not compete with Hong Kong's inexpensive labour pool. It had also lost much of its share to Japan, which in 1980 was second in the world in the number of watches produced. Although the Swiss has invented the technology, they had fallen victim to the quartz crisis.
Yet a saviour was about to arrive, in the unlikely form of Nicolas Hayek. Born in Lebanon, Hayek had emigrated to Switzerland as a child. By the early 1980s he had established himself as founder and chief executive of the consulting firm Hayek Engineering. With the giant of Swiss watch manufacturing, Allgemeine Schweizer Uhrenindustrie AG-Société Suisse pour I'Industrie Horlogére (ASUAG-SSIH),losing money so badly that there seemed to be little point in continuing, the company's bankers intervened, calling on Hayek to help them assess the ailing businesses' prospects.
In time, Hayek would come to be described as "one of Europe's most colourful entrepreneurs" and, along with Albert Einstein, one of the most notable figures in Swiss history. More simply, he is the man who became the Face of Swatch. This week, the Swiss watch industry - now thriving and vibrant again - mourned Hayek, who died of a heart attack at the age of 82. In the words of one Swiss newspaper, Hayek "pushed the great wheel of progress when it was blocked by obstacles". Johann Rupert, the head of the rival watch company Richemont, whose brands include Baume & Mercier, called him "the driving force behind Swiss watchmaking; its leader and its saviour. Our industry has lost one of its champions, respected by everyone who dealt with him; a man of honour, gravitas and great personal charm."
Born in 1928, Hayek was the son of an American Lebanese dentist. His mother was from the northern province of El-Koura. The family was Greek Orthodox and moved to Switzerland when Hayek was seven. He studied science and mathematics in Beirut and France and, in 1957, he founded Hayek Engineering. Hayek had developed a reputation as a keen strategic thinker who was able to pull off what many deemed impossible. Hayek prided himself on the fact that he still had "the fantasy of a six-year-old child". His consulting firm advised Philip Morris, Dow Chemical, Volkswagen, the city of Zurich, and the Chinese government.
Hayek's watch brief hinged on two things - a revitalisation of flagship brands such as Omega, and the success of a new, low-priced plastic watch that had been developed under the direction of Ernst Thomke at ASUAG. Executives proffered two solutions - to sell SSIH and ASUAG to the Japanese or to move Omega down-market, using its prestige to go head-to-head with Citizen and Seiko. Hayek railed against this proposal. "Omega is one of the Swiss watch industry's great brands. Its history goes back to 1848. You should visit the watch-making museums and look at the pieces Omega made 50 or 100 years ago. They are wonderful. Few brands had or have Omega's potential power," Hayek said.
Instead, Hayek slashed the number of models, ended all licensing agreements, returning the brand to its roots. There were product launches, innovative marketing and manufacturing improvements. By 2008, Omega generated sales of more than US$1 billion (Dh3.6bn). As for Swatch, Hayek would modestly share the credit with 45 others. Engineers, led by Elmar Mock and Jacques Müller, worked with the head of ASUAG in the late Seventies to develop it with Thomke and the marketing consultant, Franz Sprecher, who devised the name - a contraction of "Swiss Watch". Thomke established five rules for their watches - they must be stylish, inexpensive to make, competitively priced, durable and a technological leader.
Speaking to the Harvard Business Review, Hayek stated: "We were selling an emotional product. You wear a watch on your wrist, right against your skin. You have it there for 12 hours a day, maybe 24 hours a day. It can be an important part of your self-image." So attached was Hayek to his timepiece that he habitually wore two watches on each arm - a few Swatches and an Omega. Sometimes he was seen wearing as many as eight.
Slim, transparent, multi-coloured, hip, endlessly evolving and inexpensive, the Swatch was a phenomenon. Its beauty was not just in the look but also in the merchandising. Rather than bombard the airwaves with advertisements in its German launch of Swatch, SMH built a giant working Swatch. It was 150 metres high, weighed 13 tonnes and was suspended from the tallest skyscraper in Frankfurt, the headquarters of Commerzbank - so very Hayek.
In 1985, ASUAG-SSIH underwent a name change to Société Suisse de Microélectronique et d'Horlogerie - SMH. He half-jokingly clamed it stood for Sa Majesté Hayek (His Majesty Hayek) and became its chief executive and chairman. Apart from Omega and Swatch, the group encompassed Longines, Rado, Tissot, Certina, Mido, Jaquet Droz, Hamilton, Pierre Balmain, Calvin Klein and Lanco. It bought Blancpain and Glashutte Original. In 1999, Hayek acquired the prestigious but moribund 235-year-old brand Breguet from a consortium in Bahrain. He became its chief executive as well and took much pride in burnishing the reputation of the watch which had graced the wrists of Napoleon, Churchill, Pushkin and one of the tsars. He told the Wall Street Journal: "We are talking about certain luxuries that you can afford. It is like having a Gauguin at home."
His home was beside a lake in the village of Meisterschwanden, near Zurich. Marianne, his wife of six decades, had converted a two-and-a-half acre plot into a public playground, where he delighted in the sounds of birds singing and children playing. Hayek's appreciation of beauty extended beyond his wrist. Through Breguet, he sponsored the restoration of the Royal Hall in Harrogate - Britain's only remaining European-style Kursaal, having earlier spent US$8 million in restoring the Petit Trianon in Versailles. The latter seemed perfectly appropriate as one of the first Breguet was a gift to Marie Antoinette.
Hayek liked to display what he called "an exaggerated amount of self-confidence". "I want to look in my mirror every morning and say, 'You're great'." In a country where discretion and a certain blandness are viewed as virtues, he was bold and outspoken, especially in regard to that other cherished Swiss institution, banking. The cover of Swatch's 2008 annual report read: "Warning! This publication is not recommended for the acrobats and jugglers in today's financial circus." Hayek told an interviewer: "In Switzerland you don't criticise banks very easily. I have always criticised them. I don't need them; 1957 was the first and last time in my life that I took a loan from a bank or anyone else. I am not going to be manipulated or controlled by them." He regarded so many of Europe's large institutions as rigid as prisons. "We kill too many good ideas by rejecting them without thinking about them, by laughing at them," he said.
Not all of his visionary ventures were triumphs. He saw his idea for a compact two-seater, inner-city hybrid car come to reality. The Smartcar, originally dubbed the Swatchmobile, was launched in 1998 in conjunction with Mercedes. However, sales slumped and eventually Mercedes bought him out, modified the design and raised the price. He continued to embrace innovation. A recent venture was Belenos Clean Power, an alternative energy development company, whose fellow director is a sometime Swiss resident, George Clooney.
This year Forbes magazine ranked Hayek 232 on its list of the world's billionaires, with assets valued at $3.9 billion (Dh14.3bn). In 2008, Swatch stood as the leading global watchmaker, with 19 brands, 5,000 stores, 26,000 employees, sales of 300 million and profits of more than $720 million. And yet his grandson, Marc, chief executive of Blancpain, told the Wall Street Journal recently how his grandfather used to make him go out into a field and catch mice - their canton was paying half a franc for each one. The grandson of a billionaire catching mice for a bounty? "He was teaching me that no matter how wealthy you are, you have a responsibility to the community."
The standard answer Hayek would give to questions about his retirement plans was: "Have you ever asked Picasso when he will stop painting?" Although he had stepped down as chief executive of the Swatch Group in 2002 in favour of his son - also Nicolas - he remained chairman. His daughter, Nayla, also on the board, has been named as the company's new chairwoman. The face of Swatch and the man who put Switzerland on more wrists than others, died as he had lived - at work.
* The National