Are there shades of grey for in-house movements?
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Thread: Are there shades of grey for in-house movements?

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  1. #1
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    Are there shades of grey for in-house movements?

    This post will be a bit unfocussed, but has a basic question at its core. I've been on a steep learning curve, so if I make any howlers here, please correct me *gently*

    It seems to me there are four possible relationships between a movement and the rest of the watch:


    1. A manufacturer buys a suitable movement for their watch, and installs it.
    2. A manufacturer has a department making movements, and another department designing and building watches. The relationship between the two parts of the process are no closer than in no.1, but the movement is called "in house", and has an the benefits of quality control that come from controlling all elements of production
    3. A manufacturer has a completely symbiotic relationship between these two departments: the movement designs are responding to needs created by the watch designers, influenced by feedback from the builders; the designers are constantly trying to make the most of the movements being developed. This shows the true benefits of an in-house movement.
    4. A manufacturer takes an existing movement, but reworks the parts so much that the some of the benefits of no.3 appear here too.


    Aside from QC, in examples of no.2, what else does having an in-house movement bring to the table?

    One of my grail watches is the Vacheron Constantin Patrimony Contemporaine; would that watch fit into no.2 or no.3?
    For no.4 I was thinking of the German producers Dornbluth and Hentschel (who have both gone on to develop their own movements as well) Dornbluth use modern movements, Hentschel use NOS

    Are there manufacturers who are clearly examples of no.2? What would be a consensus opinion of these producers?
    Are there large-scale manufacturers who are resolutely no.3 throughout their range?
    Last edited by Der Amf; October 20th, 2013 at 20:40. Reason: typo

  2. #2
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    Re: Are there shades of grey for in-house movements?

    I think it would be hard to know whether an in house manufacturer is 2 or 3, or even whether one or the other is a standard setup. I would assume that 3 is more common than 2, if indeed 2 exists.

    The question of what an in house movement brings is a good one - simple 2/3 handers with average power reserves and accuracy don't really seem worth the markup over an eta. However if it's complications that you're after sometimes you have to go in house (or at least 'non eta' - dubois depraz big date modules etc).
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    Re: Are there shades of grey for in-house movements?

    Quote Originally Posted by Der Amfangreisemann View Post
    This post will be a bit unfocussed, but has a basic question at its core. I've been on a steep learning curve, so if I make any howlers here, please correct me *gently*

    It seems to me there are four possible relationships between a movement and the rest of the watch:


    1. A manufacturer buys a suitable movement for their watch, and installs it.
    2. A manufacturer has a department making movements, and another department designing and building watches. The relationship between the two parts of the process are no closer than in no.1, but the movement is called "in house", and has an the benefits of quality control that come from controlling all elements of production
    Which are none if you buy movements from a decent source and QC them yourself

    A manufacturer has a completely symbiotic relationship between these two departments: the movement designs are responding to needs created by the watch designers, influenced by feedback from the builders; the designers are constantly trying to make the most of the movements being developed. This shows the true benefits of an in-house movement.
    A good designer will try to make the most of any movement. And the designers don't really have any special needs in 99.99% of cases: it's a watch, it tells the time.
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    Re: Are there shades of grey for in-house movements?

    For your number 3, I think of Rolex and the recent creation of models such as the Yachtmaster II and the Skydweller.As for your 4, I immediately thought of Dornbluth, and then noticed you had the same example ;)
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    Re: Are there shades of grey for in-house movements?

    I think it's debatable whether you can call the Dornblüth movement a modified stock one, actually. At this point they are making nearly all the parts themselves, even if they are still using a similar layout to the original Unitas. But you have to realize that there are hardly any movements out there that came from nothing; everything was based at least loosely on an existing movement. Many of the movements out there that we don't hesitate to call original share more similarities to a preceding movement than the Dorn does to the Unitas.

    As for the advantage of an in-house movement, there isn't really one unless you highly value uniqueness. An in-house movement may be designed so that it has distinct advantages over a certain stock movement, but this is not inherent in the concept of an in-house movement; it's perfectly possible to make an in-house that's worse than the stock ebauche. The main relevant difference of an in-house movement is that it moves more of the profits "in-house," and saves money for the manufacturer. They can claim a higher added value to their product and charge accordingly, without diluting their profits by involving another party. I partly blame Rolex and their advertising for this new trend; they are the kings of cost-cutting and profit margin maximization. There are plenty of respectable brands that have used outside movements in great watches, but Rolex seems intent on passing off their profit-making move as a mark of quality. In-house movements can be very good, but in-house purely for the sake of in-house is pointless.
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  7. #6
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    Re: Are there shades of grey for in-house movements?

    Quote Originally Posted by Der Amfangreisemann View Post
    This post will be a bit unfocussed, but has a basic question at its core. I've been on a steep learning curve, so if I make any howlers here, please correct me *gently*

    It seems to me there are four possible relationships between a movement and the rest of the watch:


    1. A manufacturer buys a suitable movement for their watch, and installs it.
    2. A manufacturer has a department making movements, and another department designing and building watches. The relationship between the two parts of the process are no closer than in no.1, but the movement is called "in house", and has an the benefits of quality control that come from controlling all elements of production
    3. A manufacturer has a completely symbiotic relationship between these two departments: the movement designs are responding to needs created by the watch designers, influenced by feedback from the builders; the designers are constantly trying to make the most of the movements being developed. This shows the true benefits of an in-house movement.
    4. A manufacturer takes an existing movement, but reworks the parts so much that the some of the benefits of no.3 appear here too.


    Aside from QC, in examples of no.2, what else does having an in-house movement bring to the table?

    One of my grail watches is the Vacheron Constantin Patrimony Contemporaine; would that watch fit into no.2 or no.3?
    For no.4 I was thinking of the German producers Dornbluth and Hentschel (who have both gone on to develop their own movements as well) Dornbluth use modern movements, Hentschel use NSO

    Are there manufacturers who are clearly examples of no.2? What would be a consensus opinion of these producers?
    Are there large-scale manufacturers who are resolutely no.3 throughout their range?
    It's hard to say, yet there can be no doubt that the infrastructure needed to design, build, implement and support high-end mechanical movements is expensive. So the business model that we see of aggregating similar sorts of high-end watchmakers under one conglomerate roof or holding company makes sense as it will allow the companies to exploit synergies and share knowledge among themselves. If you can get access to it (either yourself if you have the skills, or via a watch guy), try to get a look at both sides of the baseplate. Quite often the name of the actual maker will be there, regardless of what name is engraved, painted, etched, etc. on the more public face of a movement.

    Read this story about Cartier's entry into the world of manufacture. (http://www.watchtime.com/featured/cartier-complicated/) Very early into the story, you'll see exactly why it's very hard to say that this company does its own movements and that company doesn't. My take on what I read is that a watch factory has any number of watch makers on the payroll. Any given maker in the factory might be designated as the lead maker on this or that brand's products. Periodically, the various brand leaders meet to discuss what they are doing, what's working, what's not and so on. I think it also safe to say that any brand having a unit in the manufacturing operations has to comply with some broad standards and methods in order to take advantage of certain economies of scale, and to manage around or suffer under (perhaps?) the facility's overall constraints and optimizations, be they the result of engineering, management, the supply chain, or whatever. The aesthetics are probably managed/governed by someone from outside the actual manufacturing group, but certainly with coordination and input from the lead watch makers regarding materials, time and effort, as well as the pros and cons of any given design feature. I suspect that much of that last set of discussion is driven by budgets and profit profiles, as well as to some extent the need to comply with or desire to establish this and/or that brand identity and marketeing traits.

    Going with the ideas I posited above, I would suspect that when a new company enters the fold they do so and land somewhere on a continuum. The four models you presented are examples, IMO, of landing points on that continuum. Over time, a brand may move from one point to another, or it may produce offerings that land on several points on that continuum, depending on it's customer, market position, and the overall goals for that brand as part of the larger group. Your thread title refers to shades of grey. That continuum is where you find your lighter and darker shades.

    There are certainly other models and strategies available to a large group like Swatch and Richemont. An entire manufacturing facility could be dedicated entirely to a single brand. It cold be that key parts of a watch's movements are made by the members of a brand fabrication unit, but the more routine and mundane elements of the construction are passed off to a central assembly or fabrication unit. There are any number of ways the overall manufacturing process could be managed, and in truth, I don't know how each entity does it. What I do know as an enterprise transformation management consultant is how manufacturing, finance, marketing and HR all collaborate (or sometimes don't, which is often why I'm involved) to produce stuff. (I help my clients manage change resulting from M&A, enterprise-wide, global IT implementations or just the general desire to restructure and/or develop process improvements).

    Daniel Roth, and others like him, can sit at a workbench and crank out two or three watches a year, making every little piece and part himself by hand. And he can sell each one for $100K+ or whatever he and his customer agree on. (You can bet there's some price dickering between him and a customer.) They can make a very nice living doing so. Not one of the larger companies can use that model on all their pieces and expect to remain a going concern. The VCs and PPs, Rolexes and Omegas, et al have to find ways to scale the manufacturing and sales process so that they can make money. Yes, they will all have their one or two or five piece limited editions (or custom request peices), but those pieces absolutely will not keep the lights on for the entire company, even if they are profitable as individual sales. Richemont has a 60% interest in Dubuis business. (Richemont adds Roger Dubuis to luxury list - FT.com)

    Here are a couple more links that speak to stuff going on in the industry. If you actually do care about who makes what bits inside your watches, you'll want to follow this and other industry websites and publications. In short, you need to follow the business of watches, not the hype and glamor that is the public face of horology.
    http://en.worldtempus.com/article/in...comes-tangible
    http://en.worldtempus.com/article/in...acility-874331

    As you can see, I'd at one point spent a lot of effort trying to track down just what is what. I finally came to the decision that I didn't have the time or energy to become that knowledgeable. I buy watches to please only me. So it really just doesn't matter. Moreover, until one is paying astronoic sums ($50K+) for a watch, one isn't going to get anywhere near the level at which it does matter what's inside. People on WUS and other forums go on occasionally about "investment" and watches as if the two are related. The sole investing related thing I can say about watches is that llike any other investment instrument that declines in price, they are a bad investment. Yes, you can buy certain pieces and they will appreciate in value, but those tpes of pieces aren't ones anyone here (I don't think) is talking about or buying. Things like Steve McQueen's Rolex, or Breguet's Marie Antoinette or Sympathique, or Patek's Caliber 89. If you want to invest in a watch, but the stock, not the watch.

    OFF TOPIC:
    Sure, it's possible to occasionally buy watch X and then later sell it for a higher price, in something similar to the way folks flip houses. But my familly's business is real estate development and I can tell you for a fact that there are two huge differences between flipping real estate and fllipping watches: (1) there is nearly always a ready market for just about any parcel of land and/or buildings, and (2) when a property is acquired, the investor puts resources into that property to improve it and then sell it at a higher price at a profit. I have yet to find the "flipper" who buys a watch to then improve on it and sell it again.

    BACK ON TOPIC:
    Here then are some other thoughts:
    • I think it naive to believe, lacking evidence to the contrary, that any watch company that is part of a group doesn't employ strategies 2 and 3. What would be the point of being in the group if they couldn't benefit from doing so? And why would the umbrella company want to have so much duplication of capability among the group members? In the case of the most high end of those subsidiary units, it's highly likely that there's a huge amount of cross over, especially when we're talking about the lower end of the high-end brands' price range, which I would arbitrarily put at something like $15K or less. Take Omega's co-axial 8500. It's not solely an Omega creation; several members of the organization collaborated closely on its development. The Richemont group acquired Minerva and that was a key driver to Montblanc's development of it's Villaret and the MB NR watch movements, for example. That's clearly a strategy number four approach, I'd say. Do other members of the Richemont group use Minerva's stuff? Do they use VC's innards? What is the relationship between the movements in JLC, VC, Piaget, MB etc? How did Cartier acquire the in-house capability?
    • Production of the movement: Did you know that for a time JLC produced the movements for PP? Did you know that Plan-les-Ouates is where VC and Piaget movements are made? Their factories are practically next door to one another. (Patek is down the road.) It's hard to imagine that VC, JLC, Piaget and MB aren't sharing something among themselves.
    • I know for a fact that some Ralph Lauren watches use JLC and IWC movements. RL's tourbillion even has the Ralph name engraved on the movement right there for all to see, but neither Ralph Lauren nor the Richemont Group, with which the group is joint ventured, had anything to do with its creation, other perhaps than management oversight. La Fabrique du Temps is who made it and they make Louis Vuitton's movements too, and LV own LFdT. So what that means is now, LV is officially in your group 3 above. Tag is part of the LVMH group.
    • Look at some of Bulgari's watches. We all think of Bulgari as a jeweler more than anything else. I'd be most of us would love to get a watch with a Daniel Roth movement inside it. Well there are two ways to do that: (1) buy a Bulgari, or (2) buy a Jean Daniel Nicolas. The situation is much the same for quite a few of today's other highly regarded watchmakers. (Jean Daniel Nicolas Watches: The Real Daniel Roth Brand | aBlogtoWatch)
    • At the moment, everyone's all agog over who makes what movement and where that movement ends up. It won't surprise me if at some point we don't see the big name, high dollar brands telling us which of their watchmakers made this or that watch. I would suspect that what will happen is that some individuals will obtain some level of noteriety and will get collections named after themselves and sign their name on the movement for all to see. Nevermind that there are tons of movements that aren't any different and that those persons made, but that don't have their name on the thing.
    • Another marketing trend I can see coming is the idea of X by Y. For example, Rado by Omega to signify that Rado's case has Omega's innards. Or Glashutte Original by Tiffany to signify GO's watch designed externally by Tiffany.



    This might be helpful to some degree, but keep in mind it's a bit old now, and mergers and acquisitions have occurred since it was posted: https://forums.watchuseek.com/f2/what...ts-122395.html

    Here're other links I found some time back when I was trying to get to the bottom of the same question you posed (more or less): Category:Watch movement manufacturers - Wikipedia, the free encyclopedia
    Watch Manufacturers and Watch Movements - webWatchWorld
    My top 10 brands 2013 with affordable in-house movements | Watch-Insider.com ("affordable" being relative.)
    Compagnie Financičre Richemont SA - Our Businesses

    All the best and I hope my thoughts have helped you resolve your quandry in some small way.
    Last edited by tony20009; October 21st, 2013 at 01:50.
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