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What will happen when ETA stops delivering movements to UN?

June 22 2004 at 7:21 AM

Marcus Hanke  (Login mhanke)


Response to FAQ, reference and feature articles

First of all, ETA does not stop supplying movements at all, but wants (until now, this is decision is still not in force) to stop selling movement kits, that are small boxes, containing all the individual parts of the movement. What will be sold, are the completely assembled movements. Of course, this alone will cause some problems, especially for companies like UN, IWC and others, which traditionally only buy kits, in order to replace some of the parts and assemble the movement by themselves. These companies now would have to disassemble the movements delivered from ETA, which costs time and raises the costs.

However, this is not an imminent problem. Don't forget that you only get good prices from ETA, if you buy movements in large quantities. Ulysse Nardin has purchased far more movements than are needed within a shorter time, leaving them quite a substantial stock of movements kits, which is certainly good supply for the next years.

In long term, however, it should be clear that companies like UN will be forced to change their policy, towards a larger independence from ETA. First, the capability to develop and produce a movement in-house, is present, after UN has built up its new production facility in La Chaux-de-Fonds, not far from the old company building in Le Locle, where the parts are still assembled. Currently, UN produces all movements for the Freak and the Sonata there, as well as its various modules and add-ons for the ETA movements. The new facility offers enough expansion capacity, so it is just a matter of time, before other movements will be fully produced there. The movement design of the Perpetual GMT is full property of UN, and the production, while currently still done by LĂ©mania, can be executed elsewhere.

Finally, don't forget that ETA is not the only game in town, even it is by far the largest. Other companies are capable to develop and produce complete movements. One example is STT, the successor of the ill-fated Progress company. Its new selfwinding cal. 11.50 movement is said to be very good:


Picture copyright by Thomas Ernst, www.watchtime.ch

Then there is Indtec, another new movement manufacturer.

Until now, of course, these manufacturers still have a weak position against ETA, which will change drastically, as soon as ETA reduces its deliveries.

Anyway, it will be an interesting development to observe, and I am convinced that the high development competence of UN will guarantee an uninterrupted success.

Regards,
Marcus

 
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