...Harvard Business School 9-400-087 June 12, 2000 Rebirth of the Swiss Watch Industry, 1980–1992 (A) “Time is fast running out for the ailing Swiss watch industry.”1 —The Globe and Mail By the end of 1983, Hayek Engineering, a Swiss consulting firm founded by chairman and CEO Nicolas Hayek, was becoming increasingly involved in solving the mounting problems facing the Swiss watch industry, which was on the brink of disaster. Hayek Engineering had initially been recruited by the creditors of the two largest Swiss watchmakers, ASUAG (Allgemeine Schweizerische Uhrenindustrie AG) and SSIH (Societe Suisse pour L’Industrie Horlogere), to formulate a strategy to deal with changing market conditions in 1981. Since then the firm’s involvement with the industry had grown steadily. The firm’s influence had also been increasing since earlier that year, when the banks had agreed with its recommendation that SSIH and ASUAG merge. Although Hayek Engineering was acting as a consultant, Nicolas Hayek, its CEO, would come to have a significant role in supervising the merger and in helping to lead the newly-formed company forward. With the formalities of the merger completed, in December 1983, the new company and its consultants were confronted with a number of new issues. The company faced restructuring challenges and management shifts. But more importantly, it still faced the foreign competition that had decimated the Swiss presence in the inexpensive and middle-range watch...
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