A business consultant in Switzerland, Hayek’s firm was asked by the nation’s banks in the early 1980s to help liquidate two bankrupt Swiss wristwatch manufacturers, which had collapsed thanks to cheap digital timepieces from Asia. Hayek was optimistic about the ability of Swiss firms to compete, if only they would offer low-cost alternatives in addition to pricey top-of-the-line watches. He joined the two companies together into a conglomerate called “SMH Swiss Corporation for Microelectronics and Watchmaking Industries Ltd.” and bought a controlling share (and became CEO). SMH’s new cheaper offering — called “Swatch” for “Swiss Watch” — was a hit, and rescued the Swiss watchmaking industry, including well-known brands like Omega, Longines, Hamilton, and others, which are now owned by Swatch. (The company was renamed “The Swatch Group Ltd.” in 1998.) Hayek also played a key role in developing the Smart Car: “smart” actually stands for “Swatch Mercedes ART” and part of the idea was to use the Swatch-derived concept of interchangeable body panels. He died June 28 from heart failure at 82.
From This is True for 27 June 2010