SWITZERLAND’S WATCH INDUSTRY RISES AGAIN

One thing you’ve got to say for the Swiss watch industry: it’s resilient.

Twenty years ago, it was the world’s No. 1 watchmaker in volume, value and reputation.

Ten years ago, beset by what a leading Swiss bank called “a series of technological, economic and structural upheavals,” it seemed to be sinking into oblivion.

Now, it’s bounced back, thanks to major structural changes, innovative products and aggressive marketing. If no longer the world’s leading watchmakers, the Swiss have regained some of their market share. And they intend to keep it.

Downfall: In 1969, the Swiss were the king of the watch hill. One of every two watches (stuhrling reviews)– almost all of them mechanical movements — were Swiss-made. But that changed with the advent of electronic watches (quartz crystal analog and digital). Swiss technicians had been fiddling with the new technology, but the Japanese and Americans were the first to adapt it to the commercial watch market.

Many Swiss watchmakers thought digital and quartz watches were a fad, so they continued to concentrate on mechanical watches through the early 1970s. By 1975, they started to feel the heat as the U.S. and Japan snatched large chunks of the market. Swiss exports dropped 22% — serious for a land that exported 97% of its watch production — and sales in the U.S. — its largest market — were off 40%.

An enormous backlog of unwanted mechanical watches built up, tying up critical amounts of capital. Small companies closed, and for the first time in decades, Swiss watchmakers laid off workers in large numbers.

Making modules: The Swiss didn’t entirely ignore the quartz revolution. Major firms such as ASUAG, one of the country’s biggest watchmaking groups, made quartz modules (the equivalent of mechanical movements) for other firms’ electronic watches. And Ebauches S.A., a major movements producer, worked with Texas Instruments to produce liquid crystal display (LCD) digitals for a few Swiss brands.

But overall, the Swiss were slow to develop their own electronic timepieces and innovative, aggressive marketing campaigns. Other problems beset the Swiss also. Unlike the unified Japanese watch industry, the Swiss industry comprised hundreds of independent firms. And when the U.S. dollar was devalued in the mid-1970s, the Swiss franc sky-rocketed, making Swiss watches (read akribos watch reviews for more details) more expensive and less competitive in foreign markets.

In the late 1970s, the Swiss began to fight back. They invested heavily in electronic equipment, and by 1979 were making all their own quartz components. They entered the digital field in full force and put more stress on quartz analogs. The changeover to quartz technology also led to more coordination and consolidation among the country’s many small producers.

Facing `disaster’: But the changes came late, and the Swiss industry entered the 1980s facing its biggest crisis in decades.

In 1981, key Swiss watchmakers got a stern warning from Gedalio Grinberg, chairman of North American Watch Co., a successful marketer of upscale Swiss watches. He said the Swiss faced “disaster” if they didn’t challenge the Japanese advances in the low- and mid-price range in the U.S.

At the time, the speech seemed more epitaph than warning. Production of Swiss watches and movements was dropping (from 96 million in 1976 to a low of 45 million in 1983). Exports to the U.S. fell 50% from 1976-’81 (12 million to 6 million), and Swiss watch firms dwindled 47% from 1970-’79 (1,620 to 870).

Switzerland’s major watchmakers were in serious financial trouble. In 1980, SSIH, another large watchmaking group, lost some $80 million. In 1981, it got a $150 million credit transfusion in a rescue devised by a consortium of Swiss banks. Even so, SSIH and ASUAG lost a combined $50 million in 1982.

Shotgun wedding: In a surprise move the following year, ASUAG and SSIH announced they would merge to cut losses to Far East competition, to regain market share and to try to revitalize the Swiss watch industry. The merger included ETA, the largest Swiss movement maker and a subsidiary of ASUAG.

Actually, the merger was something of a shot-gun wedding, demanded by the bank consortium that earlier came to ASUAG’s rescue. The consortium wanted to help the two firms because they represented more than half the annual output of the Swiss industry. The bankers kicked in $300 million in credit in return for a streamlined, efficient firm with the product, financing and marketing know-how to compete with the Japanese.

The result was the ASUAG/SSIH Group, later renamed the Swiss Corp. for Microelectronics and Watchmaking Industries Inc. (SMH for short in English).

Enter Swatch: Even before the merger, ASUAG started to work on ways to beat the Japanese at their own game. In 1979, it developed the Concord Delirium, a luxury watch of record thinness (1.98mm) featuring a quartz movement integrated with the molded case, rather than assembled separately, then encased. If that one-piece construction could be applied to a mass-market watch, engineers reasoned, they finally might have something to use against the competition.

After almost two years of work, they came up with the answer: a one-piece, sealed, $30 watch called Swatch (short for “Swiss watch”). In a sharp departure from Swiss hand-crafted artisanship, Swatch watches come off an automated assembly line at ETA’s plant in Grenchen, Switzerland.

ETA test-marketed Swatch in the U.S. in late 1982 and formally launched it with an aggressive worldwide media campaign in 1983. The watch took the world by storm. Within in a year, Americans were buying 100,000 Swatches a month. Within five years, more than 50 million had been sold worldwide.

Fashion accessory: Swatch’s production was innovative, but even more important was its focus on watches as fashion accessories. Since 1983, Swatch has introduced more than 400 models in styles for every season, taste and activity. Among them have been the transparent Swatch, the Granita di Frutta Swatch (fruit-scented), Pop Swatch (oversized watches on elastic bands) and even metal-case Swatches.

The impact has been spectacular. Swatch almost single-handedly revived the fortunes of the ASUAG-SSIH group. In 1985 alone, Swatch watches accounted for most of the 12.2% increase in Swiss exports and led to the hiring of thousands of people in the Swiss watch industry.

It also spawned a variety of knockoffs and imitators, and led the movement of watch firms into nonwatch products such as clothing sporting watch logos. By the late 1980s, the firm opened Swatch boutiques in U.S. department stores and flirted briefly with Swatch merchandise (from sunglasses and towels to razors and phones), before deciding to concentrate again just on watch and watch accessories.

The innovation at SMH wasn’t limited to Swatch. Tissot, another SMH brand, brought out the RockWatch (case carved from granite), the ShellWatch and the Wood Watch. And Omega, SMH’s well-known upscale watch, streamlined its inventory and operations and made a strong comeback in the U.S. and globally in the late 1980s.

The innovation reached even the upper end of the industry. Most luxury watch manufacturers added quartz models to their lines, and some — such as Patek Philippe and Vacheron Constantin — started to use computer-aided-design technology to develop new citizen mens watches and movements.

Merging: Consolidation of the Swiss industry accelerated through the 1980s, especially among high-end watch firms.

For example, Audemars Piguet acquired 40% of Jaeger-LeCoultre. Top management acquired Girard-Perregaux then agreed with Italian jeweler Bulgari to set up a new firm to produce watch movements. And Mondaine Watch Ltd., best known for its mass-market M-Watch and its Gruen Swiss watch line, bought Lusa S.A, a Swiss watch-case factory.

But much of the consolidation was orchestrated by non-Swiss buyers. Sheik Yamani, former Saudi Arabian oil minister, acquired Vacheron Constantin. Cartier bought Piaget and Baume & Mercier (giving Cartier 40% of the global luxury watch market, up from 25%). Asia Commercial Co., one of Hong Kong’s biggest quartz analog manufacturers, bought Juvenia. And Stelux Holdings, one-time owner of Bulova and probably Hong Kong’s largest and best-known watchmaker and retailer, bought Universal Geneve.

The acquisitions and mergers have injected new funding into old-line firms, enabling them to improve or expand production facilities and marketing. By the end of the 1980s, it was apparent the Swiss had regained their footing in the slippery world watch market.

Bulova’s Caravelle caters to mass marketing

Bulova this Spring is launching its first clock line specifically targeted to the mass market, which the manufacturer says accounts for 30% of all clock business.

Shipment of the line begins June 1.

The Caravelle by Bulova collection features 37 wall clocks, with net costs ranging between $8-$20.

The line is being sold through reps specializing in mass merchants, rather than through Bulova’s own sales force.

“We are positioning ourselves where we feel the strength of the mass market clock sales are, and that is under $30 retail,” explained Bill Reibl, product manager for Bulova.

Needs Are Different

“Each different retail trade category has its own wants and needs, and we feel this one meets the mass merchant’s needs.”

Among those needs are self-sell-features such as packaging as well as a price point which is attractive to the mass merchant.

Clocks in the collection have varying shapes and colors, including polished brass and solid hardwood cases with warm pine finishes. The line offers a selection to enhance and complement any room.

Each unit in the Caravelle wall clock line is individually packaged in a self-sell 4-color laminated box, ready for immediate display. The box has a full color photograph of the clock with features listed prominently on the package front. The end flap includes the model number and color of the clock for quick identification, while the back panel shows how the clock could fit into various settings in the home.

Reverse Flap Feature

The package also features a reverse flap feature.

“We want to get our story across with the packaging which features self sell concepts,” Reibl explained. “We are positioning Caravelle by Bulova as a competitive product line. It is being supported by Bulova’s reputation for quality and service. Bulova has been in clocks since 1929, so we have the reputation.”

Bulova is developing Fall planogram programs for the retailers with 4- and 8-foot gondolas to display the clocks.

The Caravelle clocks feature quartz movement like cheap nixon watches, full numeral dial with color-coordinated hour, minute and sweep second hands as well as protective crystal glass lens.

Carousel cases are yellow, white, blue, almond and dark brown. Yellow and white cases come with white dials and black numerals; the white case comes with white dial and red numerals and the blue case has white dial and blue numerals. The almond and dark brown cases feature almond dial and dark brown numerals. Clocks have a 7-inch diameter and are 1-1/2-inches deep.

Bulova this Spring is also debuting a number of other clocks.

A new shape has been added to Bulova’s Dimension series of ultrathin wall clocks. Available in three SKUs, the clock is square in a picture frame design with an inner border. Another new feature is a sweep second hand. All clocks feature crystal covers and battery-operated quartz timing.

The three new Dimension SKUs are available with white case with red inner rim, white dial and contrasting red numerals and hands; dark brown case, brushed goldtone rim with gold linen dial, dark brown numerals and hands; and black case with brushed silvertone rim, black numerals and hands on a white dial. Retailing for $29.95 each, Dimension clocks are now available in 15 different shapes and colors. The clocks measure 9-3/8 inches in diameter by 13/16-inch deep.

Bulova is introducing two new clocks to its seven unit Leanline quartz clock line. The new Leanline quartz clocks, available in bold blue or red, is targeted to coordinate with bright kitchen decors. The clock has a contoured case with full numeral dial and sweep second hand covered by a glass crystal. Available in two models, Leanline has a blue case with white inner rim, white dial, blue hands and numerals; or red case and white inner rim with red hands and numerals against a white dial.

Bulova’s Century 2 LCD quartz calendar desk clock can display any calendar month from the year 1901 through 2099 on command. In daily use, it provides a constant readout of the year, month, date, precise time and current month’s full calendar. Additional features include memory alarm, selectable 12/24 hour displays, day search and speed set. The clock is in hairline brass finish amd measures 3-1/2-inches high by 4-1/2-inches wide by 2-1/4-inches deep and retails for $49.95.

The Paragon executive desk clock is styled in brushed brass case with suspended solid mahogany side panels. Additional features include applied hands and gilt hour markers on a silver-white brushed dial, raised crystal, and quartz accuracy. Retailing for $99.95, the clock measures 6-1/2-inches wide by 4-1/4-inches high by 2-inches deep.

Bulova’s Pocketeer boutique alarm clock has a fob ring top and platform base and is sculptured in brushed and polished brass, expected to receive many positive bulova reviews. Decorative black Roman numerals and arrow hands mark the time on a snow white dial. Retailing for $45.95, the Pocketeer is 4-3/8-inches high by 3-5/8-inches wide by 1-3/8-inches deep.

Revising Schoolhouse

A new version of the popular Schoolhouse clock is also being debuted by Bulova. The Julliard with Westminster chimes is crafted in solid tropical hardwood with a sugar maple finish. The cabinet features a hinged glass door, diamond-cut brass bezel, brass sweep second hand and pendulum. Suggested retail is $125.

The Dias wall clock is crafted of solid oak with a hazelnut finish. A solid oak bezel, framing the full length glass crystal, is hand applied. Highlighted is a floating, brushed brass finished chapter ring. The clock measures 24-1/2 inches high by 10-1/4 inches wide by 4 inches deep and retails for $175.

Bulova’s Stage pendulum wall clock is tailored in hard maple wood, has a brushed brass dial with high contrast black numerals and a red sweep second hand. The lower cabinet has a black panel to accent the pendulum’s glow. With a suggested retail of $125, the clock measures 18-5/8-inches high by 9-inches wide by 3-inches deep.

The Illusion wall clock is crafted in solid pine and hand rubbed to a rich maple finish with a mirrored inset in the pendulum housing that reflects the pendulum’s swing. It features rounded profile sides, a spun brass pendulum, diamond-cut brass bezel, cream dial, black Roman mumerals with minute track and red sweep second. The wall clock meaures 21-1/2-inches high by 9-1/2-inches wide by 2-inches deep and has a suggested retail of $89.95.

The Diana French carriage clock has a curved hood case in a high polished goldtone finish. It also has brushed goldtone dial, spun silver chapter ring with black Arabic numerals, the Tempus Fugit insignia and Moon Phase crescent. Retailing for $49.95, the clock measures 7-1/8-inches high by 4-1/8-inches wide by 1-7/8-inches deep.

Updated Alarms

Bulova’s Litealarm series of travel alarm clocks, retailing for $19.95 each, have been updated to offer quartz movements. Styled with polished metal frames, look-of-leather cases in blue, black and brown and matching dials that light up at the touch of a finger, the clocks measure 2-3/4-inches high by 3-inches wide by 2-1/2-inches deep.

Nothing’s like the real thing, except a fake

True thinks her $30 gold-faced Rolex knockoff is about as classy as the real thing, which averages $7,000. “I can’t afford the real thing so I go for the fakes.”

After buying the knockoff from a friend, Ms True (a fake name but a real person) started to sell replica Rolexes to people in the Markham, Ont., office where she works as an executive secretary. The bogus watches go for $30 to $50 each, although street vendors sometimes sell them for $100 and more.

Ms True carries a few samples in her purse and passes them around to colleagues. Then she picks up her orders from her friend, who sells the imitations at the Pickering flea market every Sunday.

Ms True earns from $5 to $20 a watch – generally not a big moneymaker, but she enjoys it. And she feels no guilt about the manufacturers of the genuine goods who have been scrambling for a number of years to stamp out the phoney dealers.

Indeed, the makers and distributors of a whole host of goods – everything from T-shirts to jewelry to handbags – are spending millions of dollars to try to stem the flow of forgeries of their items.

Is all this corporate money being spent in Canada on the legal battle against fakes really worth the trouble?

The fact is, having people parading around in sweatshirts or hats emblazoned with Polo, Labatt’s Blue or Madonna is simply free advertising – whether the merchandise is real or not. Some businesses would pay a small fortune for such promotions.

Reproduction watches, while not boosting a brand as blatantly, may spur some consumers to save up for the legitimate item.

All marketing has a price. Sure, a lot of the bogus goods aren’t up to the standards of the authentic articles. Certainly the watches are nowhere near the quality of the real thing.

But people who sell knockoff watches don’t purport to sell the real thing. Customers buying these imitations at such low prices can’t expect as much.

This week in Toronto, a group of licencing agents, manufacturers and distributors – the likes of Walt Disney, Columbia Pictures and Hugo Boss, to name a few – held a press conference to publicize their latest efforts in the fight against fake merchandise.

As other businesses have done in the past, the group had obtained a Federal Court of Canada order in the summer banning dealers from selling the imitation goods. Subsequently, law enforcement officers seized 30,000 unlicenced articles worth more than $500,000 retail.

But the problem persists. Sad as it is, people want to be seen wearing a Chanel T-shirt or Vuarnet sunglasses. The market is alive and well.

And copying popular originals – a way of life in the fashion industry – can’t be nipped in the bud with a court injunction.

Some high-end retailers, Holt Renfrew among them, openly tout their own knockoffs of the expensive designers. One Canadian clothes designer recalls creating a unique cape-like effect on a dress; but a competitor promptly made a copy of the style and beat the original designer in getting the dress into stores – and at a cheaper price, too.

There’s something to be said about the flattery of being copied.

Notes Peter Kunz, whose company distributes Piaget, Concorde and Movado watches, among others: “If I would see that they’re producing fake Cartiers and fake Rolexes and not copying ourwatches, I would say, ‘What are we doing wrong? Why are they not doing this with our watch?.’ It’s a bit of a backhanded compliment, maybe.”

Mr. Kunz’s firm, North American Watch of Canada Ltd., doesn’t bother to go after the counterfeit culprits. The pursuit is too expensive and the place to attack the problem is at the source, usually manufacturers in Asia where the watches are produced.

It is questionable whether the trade in bogus watches is stealing away sales from the genuine dealer. After all, as Ms True says, most people buying the fakes just can’t afford the authentic.

Mr. Kunz adds: “A person who is going to buy a knockoff isn’t going to spend $20,000 for our watch.”

The Piaget starts at about $5,500. The most expensive ever sold in Canada, studded with diamonds and rubies, was bought for $275,000 by a Kuwaiti prince in Vancouver 2 years ago. That prince undoubtedly wouldn’t comtemplate a counterfeit.

Watchmaker spied to fix prices, court told

A manufacturer of luxury watches sent spies into a Toronto jewelry store as part of a scheme to fix retail prices, a court was told yesterday.

In a statement submitted to District Court Judge Stephen Borins, federal prosecutor David Littlefield said Les Must de Cartier Canada Inc. cut off supplies of new watches to Oliver Jewellers and insisted on the store submitting its proposed advertising for approval.

The statement was filed with the court after Sheila Block, the lawyer representing Cartier, entered pleas of not guilty to two charges under the Competition Act involving alleged price-fixing between 1982 and 1986.

The store’s problems with Cartier began after it ran a series of advertisements in The Globe and Mail announcing that all of its stock, including Les Must de Cartier, was on sale for 10 days at 50 per cent off.

Mr. Littlefield said Mr. Djaoui told Barbara Oliver that she could not have any watches until the ads were pulled. Mrs. Oliver responded by removing the Cartier name from the ads.

Mr. Littlefield said evidence will show that Cartier’s interest in its products’ marketing extended to the company exercising ”omplete control”over the advertising in exchange for paying part of the cost.

The prosecutor said that when Mrs. Oliver and her husband, Russell, went to Mr. Djaoui’s office in May, 1982, they were told they would get no more Cartier products until they signed an agreement to submit all advertising involving the Cartier name to the firm for approval, ostensibly to protect the company’s trademark interests.

In 1985, when the jeweler had difficulty getting a steady supply of Cartier’s Panthere watches, Mr. Djaoui said he was still concerned about the store’s pricing policies and admitted he had sent spies to the store.

”hese spies reported back to him about Oliver’s big discounts on the Panthere line,”Mr. Littlefield said, adding, ”n internal memo to Djaoui from March 1, 1985, confirmed that Djaoui had someone secretly shop the Oliver’s store to monitor its prices.” Mr. Oliver complained to the federal Department of Consumer and Corporate Affairs, which advised him to try to tape record one of his telephone calls to Mr. Djaoui.

The prosecutor said a transcript of a call made shortly afterward shows that Mr. Djaoui’s message ”as very clear.

The accused would not tolerate any sale advertising that used Cartier’s name.” The trial continues today.

Spend a few minutes on cheap time

The problem is always the same. Whether the purchase at-hand is a new car (Corvette or Cavalier?), a vacation (Cancun or Cleveland?) or replacing a wristwatch (Cartier or Cardinal?), how do you find something that mixes quality, style and individualism, but leaves the line-of-credit intact?

At least with watches you’d think the search would be a snap. Browse through a department orjewelry store and you’ll see enough watches to dress up a nation of wrists. The trouble is if the watch isn’t expensive, chances are it looks more suited to the school yard than the workplace.

Don’t despair. Here are three of the many good watches that look good and will demonstrate to your colleagues that you want value for money spent – a hallmark of the thrifty nineties.

If you were in elementary school in the late 1950s or early 1960s, your first watch was probably a Timex. Priced low and advertised heavily, a Timex was how young people told time before the Swatch. Today there are 225 different Timex watches, all of them priced under $100.

While some Timexes look like cheap watches trying to masquerade as expensive models, that’s not the case with Model No. 41711.

This is a no-frills watch priced right at $39.95. Its simplicity makes it surprisingly stylish and popular. The watch has been on the market for five years, almost twice as long as the average Timex. The case is plastic, the band is nylon, the colour of the band and the face is khaki. The watch has a sweep second hand but no date window.

Inside there is a quartz movement and it’s water resistant to 30 metres. Its numbers glow in the dark, but that’s the end of its features. This is not an heirloom in the making, but it is guaranteed for a year. Timex watches are available virtually everywhere.

If a Timex doesn’t fit your dressed-for-success look, consider an upgrade to the Eddie Bauer field watch, available for both men or women. Strapping one of these around your wrist will set you back $100, but it will also suggest a relatively healthy financial situation.

According to research from Eddie Bauer, the sports outfitter, its typical catalogue customers are in their 40s, married and with a household income of more than $50,000 (U.S.). (In-store customers tend to be several years younger.) The Field Watch has a French-made quartz movement. The face comes in black or silver and both the hands and dial are luminous. The case is hardened stainless steel, there’s a second hand, a scratch-resistant crystal and a date display.

Water resistant to 45 metres, the watch comes with a choice of three interchangeable nylon bands (olive, black and chestnut), or a single leather band. The company even replaces the battery and crystal, free and forever. The watch is available at any of the 19 Eddie Bauer stores in Canada or through its catalogue operation at 1-800-426-8020.

If only a Swiss-made watch will do, consider the Swiss Army Brands Original Series 2000 watch, which sells for $175. Introduced in 1989, this watch has bold analog hour markings in black, with the 24-hour clock in smaller numbers in red.

There is a date window and a sweep second hand and the tips of the hands and hour markers are luminous. These watches also have a hardened mineral crystal, stainless steel snap back and are water resistant to 100 metres.

There are 10 variations of this basic design. There are both men’s and women’s versions (large or small face). The bezel (the ring around the watch face) can be either stainless steel or enamel and comes in silver, black or red. There is a choice of two water-resistant leather straps or a nylon mesh strap. All bands have a stainless steel buckle.

Swiss Army Brands watches are sold at Birk’s, Eddie Bauer stores and other jewelry and department stores.

A single pair of shoes can provide an entire picture

From flip-flops slapping on the sands of Malibu to stilettos clacking on New York pavements, what you wear on your feet says a lot about who you are.

That’s the thinking behind Stepping Out, a footwear exhibition at the University of California, Davis, Design Museum that explores the language of soles.

“Behind every pair of shoes we can have a story – social impact, religion, culture, economy,” says Adele Zhang, a curator of the shoe show. “So, a single pair of shoes can provide an entire picture.”

Stepping Out, running through July 12, features nearly 70 pairs of shoes culled from the university’s extensive textile holdings that range from functional to fabulous.

Some examples: ornately beaded native American moccasins, Japanese straw snow boots (which look oddly trendy), an artist’s rendering of a shoe in barbed wire that should strike a chord with any woman who’s ever been stuck walking blocks in the wrong pair of heels, and a selection of mid-20th-century pumps that conjure up air-kissed encounters of ladies who lunch.

Men’s shoes are also represented, from a sensible pair of lace-ups to a rather fabulous pair of boots, part of a Bolivian dance costume, that are decorated with bells down the side.

Some shoe stories aren’t pleasant. A poignant item in the collection is a tiny, ornate shoe designed to be worn by a Chinese woman who’d undergone the painful and deforming practice of foot-binding. Being able to wear the best walking shoes for plantar fasciitis marked you as a member of the upper class, notes Zhang.

Other shoes recall distant times, such as the dainty boots once worn by a 19th-century lady.

And some are just fun, such as the gold-spangled platform sandals that would have been right at home at Studio 54, but turn out to hail from Pakistan.

The idea of taking shoes seriously is a fairly new one, says Elizabeth Semmelhack, curator of the Bata Shoe Museum in Toronto, who sees shoes as a “really interesting stepping stone into larger cultural issues.”

Shoes reveal social standing – well-heeled, down-at-heel – and also indicate what kind of life you lead.

“If you’re wearing silk shoes, you’re not clomping in the mud. If you’re wearing a high heel – all of these things signal how far you don’t have to walk, how long you don’t have to stand for,” Semmelhack says.

Even in the modern world, best shoes for bunion retain their semaphoric qualities. “A boss who shows up in a suit with his wingtips shined is sending a different message than one who shows up in his jeans and his tennis sneakers,” she says.

Our Sea King helicopters are a greater threat to their pilots than the enemy

With the drums of war beating in our ears, we must face the uncomfortable but undeniable fact that the dedication of our fighting men and women is beyond question, while most of their equipment is beyond salvage.

A case very much in point is the CH-124, better known as the Sea King. Some 41 of these ship-borne helicopters were built for the Royal Canadian Navy by United Aircraft in Montreal between 1963 and 1969. Over the past 40 years, these Flying Wallendas have become unguided missiles, more dangerous to their pilots than their enemies.

A dozen Sea Kings have self-destructed, killing 10 crew members. Since 1993, when the current government moved into power, Jean Chretien has done nothing about this urgent problem except to cancel the $5.8- billion deal for 50 EH-101 ultra-modern choppers ordered by the Mulroney government to replace the outmoded Sea Kings. That act of political revenge cost taxpayers $478 million in penalty payments charged by the contractors.

Ever since, the Prime Minister has been under pressure to replace the Sea Kings. During his time in office there have been 22 major incidents including forcing these aerial coffins to abort missions or carry out emergency landings, once on a Halifax golf course. They have endured so many close calls that it is nothing short of criminal to ask our pilots to continue flying them. The surviving 29 Sea Kings, which are still marginally operational (though it takes 30 hours of maintenance to keep one airborne for 60 minutes) could be deployed in the next Gulf War, if there is one. They would be more of a liability than an asset.

What’s not generally appreciated is that these choppers are not a luxurious appendage to the patrol frigates that carry them. In any hostile situation, the best drones with camera are the fighting warships’ essential eyes and ears. William Kinsman, who once commanded a frigate and continued to advocate a strengthened navy after his retirement in 1972, put it best when he testified before a Commons committee in 1998. “It took 15 years to design and build the 12 Canadian patrol frigates,” he told the MPs. “It had been planned that their capability in any of their foreseen roles would be increased tenfold by the addition of the EH-101 helicopter, which was the only helicopter with the design capabilities to meet the operational requirements. These are excellent ships. They must be given that essential, over-the-horizon capability which a high-performance helicopter can give them. In any operation the ships may be called upon to undertake, whether it is involved in aerial surveillance or anti-missile or anti-submarine protection of other forces, new, suitable, best quadcopters to replace the Sea Kings must be acquired as soon as possible.”

That was five years ago and nothing has been done about it since. Now, Defence Minister John McCallum has waded into the issue, and the outcome of his intervention may be the ultimate test of his so far brief but stormy stewardship. The question is no longer whether to replace the crippled birds, but what the criteria will be for purchasing their replacement: will it be lowest price, or best value?

As in all important issues, Chretien has been front and centre in making sure he gets his way. In this case, that has involved responding positively to the repeated lobbying of French President Jacques Chirac on behalf of N.H. Industries, a French company sworn to delivering the lowest priced aircraft. The other two likely bidders are the Americans through Sikorsky Aircraft Corp., of Stratford, Conn., and EH Industries, the British conglomerate tapped for the original order under Brian Mulroney.

Here is where the politics comes in. Shortly after Chretien took office, the Department of National Defence urgently required 15 search and rescue helicopters to replace its Labradors, which had the distinction of being the only aircraft still aloft that were older and more useless than the Sea Kings. National Defence once again picked the EH-101, though in a cheaper version that became known as the Cormorant.

Now, the generals and admirals want to replace the Sea Kings with a variant of the same British choppers, but the Prime Minister has dug in his heels. To allow that would only prove he was wrong to cancel these same choppers in 1993, and to pay that huge penalty for doing so. It is an open secret in Ottawa that the PMO ordered DND to lower its operational (not safety) requirements for the new order, to closer meet the specifications of the French choppers. Raymond Chretien, the PM’s nephew who happens to be Canada’s ambassador to France, has been boasting privately that the order is in the bag, because the French model will cost the least.

This leaves McCallum in a tight spot. He has not publicly declared his intentions, but he is well aware that the strategic planners at DND have unanimously opposed (in writing) the procurement-by-price-alone policy. The notion that major long-term purchases should be based on value rather than cost alone is being quietly supported by Auditor General Sheila Fraser. In an April 6, 2001 letter to Senator Michael Forrestall, she emphasized the importance of “obtaining value for money” and used such code phrases as “full life cycle costing” and “risk analysis” to make the point that price alone should not be the determining factor in major government contracts.

John McCallum, who seems doomed to controversy (the fate of any Ottawa politician determined to actually do something), faces the added problem of challenging the Prime Minister’s will on the issue at the same time as he is seeking a generous addition to defence funding in the coming federal budget.

Even if McCallum gets his way, it would take at least four years before the new choppers are delivered. We must pray there will be pilots to fly them.

Controversial spray emphasized Worm-control options spark conflict

Ontario’s Ministry of Natural Resources has unveiled its proposals to control a serious spruce budworm problem in Northwestern Ontario, immediately igniting the conflict already smoldering here among Government, the forest products industry and worried citizens.

Two of the ministry’s four proposals, outlined here yesterday, call for the chemical insecticide Matacil to be sprayed on 26,000 hectares of forest in the Thunder Bay District under licence to Great Lakes Forest Products Ltd.

They also call for Bt (Bacillus thuringiensis) insecticide derived from natural bacteria to be sprayed in provincial parks and Government tree farms.

The other two proposals would use only Bt and no commercial forests would be sprayed at all. Another set of proposals calls for insecticide spraying in the ministry’s Nipigon District, on forests licenced to Abitibi-Price Inc.

Ministry spokesmen said the Government is not endorsing any of the options. It is waiting to hear from members of the public, who have 30 days to comment on them.

But ministry spokesmen and printed material supplied to reporters emphasized the need to spray Matacil.

Bruce McGauley, supervisor of the ministry’s do your own pest control section, said in an interview, “I think a lot of people are showing us they have very little regard for their forests, because they are willing to go only with Bt.” Although Bt is less harmful to the environment, it is almost twice as expensive to spray and about 10 per cent less effective over time than Matacil, Mr. McGauley said.

The provincial New Democratic Party, local environmentalists and paper workers have all expressed opposition to chemical sprays. “It’s obvious they (the Government) has already decided that they’d like to spray with Matacil,” said Bruce Hyer, a spokesman for Environment North, a citizens group. He said it would kill or damage other insects.

Floyd Laughren, NDP natural resources critic, said the forestry companies should be forced to harvest balsam fir, because it is a favorite food of the budworm.

Mr. McGauley, however, said the companies are being encouraged to accelerate their harvest of balsam fir, but the pulp and paper mills are not designed to handle large quantities of balsam fir.

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Watchmakers Turn to Women

As growing demand from emerging markets fuels the women’s watch arena, brands are courting female customers with increasingly sophisticated offerings.

Long limited to quartz or battery-powered watches, women’s ranges are now expanding to include mechanical pieces as technical as anything available to their male counterparts.

“There’s a whole trend of women wearing some of the styles that normally a man would wear,” said Fflur Roberts, head of global luxury goods at Euromonitor International.

Watches in general are seen as an investment as opposed to maybe a bag, which is fashionable for a season, or some very trendy piece of clothing. They’re looking to buy something that holds its value,” she added.

RenA[c] Weber, analyst at Vontobel, said that although it is hard to quantify the absolute value of watches bought by women since they also purchase timepieces designed for men, women now buy an estimated 20 percent of all mechanical watches sold worldwide, versus 15 percent five years ago.

“In Europe or the U.S., there was not a lot of interest in mechanical movements from the women’s side, but now, as Asian markets, and especially China, get more important, they also have an interest in mechanical movements,” he said.

Looking ahead, Weber expects to see strong growth in timepieces embellished with diamonds. “Again, this is also driven by Asian demand,” he said. “The women’s watches will on the one hand feature more mechanical movements, and there will also be more offerings in terms of diamonds.”

It’s no accident that when Omega unveiled its Ladymatic range, its most important launch of 2010, it picked Shanghai as the location.

Omega chief executive officer Stephen Urquhart said the line, which uses Omega’s patented Co-Axial escapement technology, reflected “a growing awareness among women that there is more to a watch than its appearance.”

The Ladymatic ranges in price from $6,400 for a model with a steel case and leather strap, to $36,800 for the version with a gold bracelet and diamond bezel.

“I think this is the first time ever, and I say this in all modesty, that a brand has brought a watch to the market that states, with great substance, that a woman can buy a watch with a movement as good, durable and reliable as the best men’s watch out there,” Urquhart said.

Patek Philippe, whose grand complications take up to 18 months to deliver, is also expanding its women’s offerings. Among the novelties it presented at the Baselworld watch fair last March was a ladies’ wristwatch with minute repeater, which retails for 350,000 Swiss francs, or $381,556 at current exchange, and a ladies’ split seconds chronograph, costing 435,000 Swiss francs, or $473,393.

“The demand is there and it will not stop,” said Patek Philippe chairman Thierry Stern. “For me, it’s logical, it was not a surprise. Why should [women] always wear a quartz movement? It’s stupid to think like that. I would say it’s old-fashioned.”

Others said that while they were taking note of the phenomenon, they did not expect growing demand for mechanical watches to reshape the women’s segment.

“It’s in the infancy stages. We are getting ready, but we think there is going to be a gradual change,” said Philippe Leopold-Metzger, ceo of Piaget. “We are convinced that women will continue to be interested in the concept of jewelry watches, and in decorative pieces over performance.”

With its large selection of diamond-pavA[c]d pieces, Piaget appears ideally positioned to capture new business in Asia. It is also developing new products specifically tailored to that region, such as its upcoming Dragon & Phoenix collection of jewelry and watches celebrating the Year of the Dragon in 2012.

The Chinese market for women’s luxury timepieces is set to grow by an average of 12.1 percent a year between 2010 and 2015, according to a forecast by Euromonitor International. This compares with forecast average annual growth of just 1.1 percent in the U.S. over the same period.

Indeed, Leopold-Metzger said he was concerned about mature markets like Europe and the U.S., where Piaget is facing competition from fashion brands such as Chanel and Christian Dior, which are heavily advertising their more accessibly priced ceramic watches.

“We will probably lose a little bit of market share, but we are not planning to change our strategy. Our philosophy is based on exclusivity, and we are not going to start producing steel watches set with diamonds in order to compete in that price range,” he commented.

Competition for the female dollar is certainly heating up in slower-growth regions like North America, where the overall retail outlook remains fragile as stock market swings play havoc with consumer confidence.

Johnny Wizman, president and ceo of Luxury Montres LLC, the exclusive North American distributor for Bedat, said overall U.S. demand for watches has been softer than expected since Baselworld, with sales year-to-date broadly flat versus 2010, versus earlier forecasts of a 10 to 15 percent increase.

Nonetheless, he believes that updated versions of Bedat’s best-known designs are addressing a gap in the market, especially with bigger brands such as Chopard and Cartier streamlining their North American retail distribution. This has allowed Bedat to open up smaller markets such as Calgary, Canada, or Napa Valley, Calif.

“Most of the best-selling women’s watches out there are really in a sense men’s watches shrunk down, diamonds put on, colored straps, and those are some of the best-selling watches,” said Wizman. “We have zero focus on men’s products. There is a huge void which we are filling.”

James Seuss, ceo of U.S. multibrand watch retailer Tourneau, is among those specifically targeting female consumers this year.

“The watch world has concentrated in the past so much on men’s pieces,” Seuss said. “We’re really looking to see, whether it’s Patek Philippe or Rolex or Dior or Chopard, what are those great women’s stories and how can we communicate it and get women really involved and interested in the watch world?”

He cited Hublot, one of the sponsors of New York Fashion Week, as another brand that has introduced compelling options for women with its oversize Tutti Frutti models, which come in a rainbow of shades.

Hublot ceo Jean-Claude Biver said the line was “practically unsellable” in China, where consumers have more conservative tastes, but was flying off shelves in South America and the Middle East.

“Nobody else is doing anything like it. We’re in a sort of unique selling proposition that women like,” said Biver, who believes that women buy more timepieces than men and also influence their partner’s choice of watch. To wit: Biver relies on his wife’s advice when it comes to picking new colors for the Tutti Frutti range.