On Watches, Presidents and Politics

Swiss regulators ban most ETA sales in 2020

On Buttigieg, Yang, and Watches for Presidents

The other day, Slate published an article with a pretty funny premise — is Pete Buttigieg an anonymous Wikipedia user who’s editing Mayor Pete’s own page, as well as related pages? Slate lays out a pretty convincing case, but I’ll leave that controversy for the Politicos and politicos.

What was even funnier was an innocent article I published back in April serving as evidence to incriminate Mayor Pete (and his supposed wikipedia user name, Streeling). As I reported back in April when Buttigieg announced his campaign, Pete placed a silhouette of his Skagen watch in a “design kit” he released when he officially announced his presidential campaign, a watch given to him by now-husband Chasten. As Slate wrote:

More recently, in February of 2014, Streeling also did some minor upkeep on the Wikipedia page for Skagen Denmark, a Fossil-owned watch company. A few years later, Buttigieg’s then-boyfriend, Chasten Glezman, would propose to him with none other than a Skagen watch. And this year, Buttigieg’s presidential campaign would release what is essentially a Mayor Pete mood board for supporters to design against. That design kit includes, again, a Skagen watch.

As I wrote in April, Skagen was founded in 1989, but was acquired by Bedrock Brands (which also owns Fossil, Filson and other brands) for $237 million in 2012, and operations are now overseen out of its headquarters in Richardson, Texas. As I’ve written before, Fossil’s owner (who later founded Shinola) has found himself in trouble before, dishonestly leveraging American nostalgia by labelling products “made in America” to sell Shinola watches, a tactic that’s caught the ire of even the FTC (more on this and another Presidential candidate in a moment).

A Skagen is a fine choice for a watch for a Presidential candidate — minimal, inoffensive, seemingly free of controversy. As Pete tells it, this was the “equivalent of an engagement ring” for him and his husband. OK, that’s a sweet story, and as we’ve mentioned before, we at Rescapement are big advocates of engagement watches as the male corollary to the traditional female engagement ring.

But, Presidential candidates must be extremely aware of the optics and message sent by every single thing they wear, say, or do. For example, former President Obama famously wore a Tag Heuer during his time as a Senator, but swapped it out for a low-key watch gifted to him by the Secret Service during his time in the White House. Post-White House, he’s been known to wear a Rolex Cellini around town. Same goes for the Timex Ironman Bill Clinton has swapped out for more haute horology in his post-White House years. Pete finds himself in almost the opposite position: he’s already wearing a cheap, battery-powered watch, but it’s marketed by a parent company (Bedrock, via its involvement with Shinola) that also uses American nostalgia to push an outdated and dishonest ideal of Americana. I don’t totally begrudge Mayor Pete for wearing a watch with sentimental value, but he should look a bit deeper into the story of Bedrock and Shinola before tacitly endorsing them.

On Andrew Yang and Shinola

In a recent sit down with the Des Moines Register’s editorial board, Democratic Presidential candidate Andrew Yang was asked why he didn’t wear an Apple Watch.

“This is a Shinola watch,” Yang exclaimed. “I’m friendly with the Shinola guys and gals.” The interviewer had noticed the watch had stopped moving and that the battery needed to be replaced, indicating that Yang was wearing one of Shinola’s quartz-powered watches.

“The least I can do is advertise for a good, American company,” Yang continued.

As it turns out, Yang looks to be quite friendly with the higher-ups at Shinola. Back in 2016, when he was still at his non-profit, Venture for America, Yang wrote an article for Entrepreneur titled “How This Detroit Startup Got People to Pay for a Watch Called Shinola”.

In the article, Yang goes on to tell the mythical tale of Shinola’s founding, dating back to 2011, when Tom Kartsotis, who’d been at the helm of Fossil (and parent company Bedrock Manufacturing Company) for 26 years set out on a new adventure in the Motor City. Yang ends his laudatory post about Shinola and Kartsotis:

But no one has impacted the national conversation around the Detroit manufacturing revival like Shinola. Shinola wasn’t born of a government policy or tax incentive -- it was born of an American entrepreneur’s desire to build things in America again. They’re meeting a demand that no one knew existed -- creating great products and providing hundreds of jobs to people that need them.

Indeed, it’s stories like this that inspired Yang to run for President and they’re his central theme as he campaigns around the country. But, an important piece of the story is missing.

Shinola, American Made*

One of the best — and most influential — pieces of journalism from now defunct Complex offshoot Four Pins is the 2014 piece “On Shinola, Detroit’s Misguided White Knight”. The article begins by pointing out the fundamental problem with Shinola: “Like anything in this world that sounds too good to be true, Shinola's press kit is full of asterisks.” One asterisk being: *The watches aren’t manufactured in Detroit, but they are assembled here from parts made overseas from their partner, Swiss-based watch manufacturer Ronda AG.

“All of these asterisks wouldn't be necessary except that Shinola's entire presence is predicated on its ties to the City of Detroit,” the article continues. The justification for the cheapest men’s watch — similar to the Brakerman that Yang says he bought in that 2016 Entrepeneur article — being more than $500? American manufacturing costs more; revitalizing Detroit costs money.

Shortly after Yang wrote his piece about Shinola, the FTC rapped the company on the wrist for the very American-made marketing that was central to the brand’s value statement and justification for inflated prices.

In June 2016, the FTC held that Shinola “overstated the extent to which certain Shinola-branded products … are ‘made’ or ‘built’ in the United States.” This forced Shinola to change its advertising and claims of origin on its products. Shinola had been using the slogan “Where American is made” on many of its products, and added a “Built in Detroit” designation to its watches for good measure. This wasn’t really a surprise, as a year early, the FTC had warned Shinola that its “Built in Detroit” slogan was misleading consumers given that critical watch parts came from overseas.

For apparel or accessories (including watches, as this case taught us) to bear the "Made in USA" designation, the products must originate in the United States or be only “one step removed” in the supply chain. According to the FTC, "Made in USA" means that "all or virtually all" of the product has been made in America. This is an extremely high bar: all significant parts, processing, and labor must be from the U.S — there should be only negligible foreign content.

According to the FTC’s findings, “all materials [Shinola] uses to make certain watches were imported, some belts contained 70 percent imported materials and overseas steal is used in certain bicycle parts.” While founder Tom Kartsotis says no deception was intended in connection with its promotional and marketing materials, his company still dropped the “Where American is Made” slogan.

Shinola also said it would begin to redesign watch faces to add “Swiss and Imported Parts” below the controversial “Built in Detroit”.

Shinola, still deceptive

Well, Shinola seems to have figured out another way to test the FTC. Now, most of its watch faces simply say “Detroit” under Shinola or the watch name. Sure, it’s not a claim of origin like the old “Built in Detroit” was, but is the effect any different?

Take Shinola’s Runwell, an automatic watch, powered by a Sellita SW 200-1 (a fine Swiss movement at the right price). On the Runwell, Shinola moved the “Detroit” from the 6 o’clock position it favors in other models to the 12 o’clock position. Shinola knows exactly what it’s doing: a “Detroit” under automatic might imply an automatic movement from Detroit, which would certainly raise flags with its friends over at the FTC. In fact, the FTC even says that a reference to a U.S. location or headquarters may imply a “Made in USA” claim and violate regulations if not true. Through its 11 years as a company, Shinola has learned exactly where the line is and has become adept at toeing that line.

Shinola and Yang

Bringing watchmaking back to the United States is a huge, exciting opportunity, and I applaud each and every company making legitimate steps towards achieving that. American watchmaking has a storied history, highlighted by brands like Elgin, Hamilton, and even Timex, that all fell victim to the quartz crisis, either selling to foreign conglomerates or just winding down.

But if Shinola’s marketing and branding efforts are fooling a smart Presidential candidate like Yang, surely they’re also fooling consumers across the country into buying something that’s less American than it purports to be.

Many of Shinola’s watches are quartz powered, but its opportunistic American-made marketing tends to suggest a laboriously handcrafted mechanical timepiece more evocative of the heyday of American manufacturing’s glorious past.

Listen, Shinola’s not the only company selling $500 quartz watches nowadays; any number of companies with a big marketing budget and sleek Instagram page might attempt the same. But, the most irksome part of the Shinola story is how they’ve shoehorned it into a larger economic and political narrative about revitalizing America and bringing jobs back to the United States. And like many that have succeeded in selling stories about making America great again, Shinola continues to be more shine than substance. Shinola’s trying to tell you that just by being in Detroit and telling the city’s story, it’s already better than those other companies selling you similar products. It’s using Detroit as a pawn to push an outdated ideal of an America that no longer exists — and that for most people, never really existed at all.

All I’m asking is that our Presidential candidates think a bit more deeply about the watches they’re wearing, the companies making them, and what they say about the current state of American manufacturing. Because if Buttigieg’s or Yang’s endorsing of a company like Shinola is indicative of a mere superficial concern about the manufacturing Midwest they purport to represent, perhaps they’re pushing lies no better than Shinola’s.

For our two articles on watches and Presidential candidates see:

And finally, what watches are other Democratic Presidential candidates wearing?

For more on every Presidential watch ever worn, read Eric Wind’s wonderful article: Your Complete Guide to the Watches of United States Presidents.


Swiss Competition Commission Bans Sales of Most ETA Movements in 2020

Meanwhile, in Switzerland, the Swiss Competition Commission (Comco, also referred to by German acronym Weko) will ban Swatch Group’s sales of subsidiary ETA’s mechanical movements to most watchmakers in 2020 while Comco contemplates a final resolution to the long-running saga between the Swiss antitrust regulator and Swatch Group.

Comco’s ban makes an exception for small and mid-sized companies (defined as companies with less than 250 employees) which are customers of ETA. This addresses a core concern of the market that these small businesses would be largely shut out of sourcing mechanical movements if ETA were facing an outright sales ban. A total ban would have likely affected these companies most, as larger conglomerates like Richemont-owned Cartier and Chopard or Rolex-owned Tudor would have more immediate component alternatives.

“Is there really going to be a shortage of watch movements? I’m not sure. There’s also a grey market and brands have built inventories,” Weko director Patrik Ducrey said to Reuters.

A Swatch spokesman said to Reuters that ETA sold most of its movements to big customers and it expected it would not be able to deliver any next year as a result of Weko’s action.

According to Comco, the ban is based on the belief that if ETA were allowed to continue selling movements through 2020, it would have a continued negative impact on the movement manufacturing sector of the watch industry.

Ironically, this ban now reverses the position both parties took in 2002, with Swatch Group wanting to stay in the presumably profitable movement supply business and Comco worried Swatch Group’s continued domination of that sector is untenable for competition in the industry.

This year was set to mark the end of a deal reached between Swatch Group and Comco at the end of 2013 which called for the gradual reduction of the conglomerate’s supplying of ETA movements to third parties until the end of 2019. Under the deal, Swatch Group was allowed to reduce the level of movements it supplied to its third-party customers fractionally every year through 2019. It was the result of a long-standing investigation and bitter back-and-forth between Swatch Group and the Competition Commission, dating back all the way to that original 2002 dispute. The idea was that this deal worked for both the market and for Swatch Group: allowing Swatch Group to reduce supply to third parties would facilitate other market entrants (e.g. Sellita), with the commitment ending in 2019 giving Swatch Group and Hayek the carrot of flexibility to choose its customers in the future.

So, it’s official: Swatch Group is temporarily suspended from selling ETA movements to third parties in 2020 for unspecified “factual reasons”, with a final decision on this ongoing matter expected by summer 2020.


Q1 2020 Partnerships

We’re finalizing partnerships for the first quarter of 2020. If you or your brand is interesting in partnering or collaborating with Rescapement to develop content or tell your brand’s story, please reach out (rescapement@substack.com) to receive our partnership information sheet.


Ticks & Tocks

📊 Chrono24’s top watch trends of the year. ⛳️ In the room for the Phillips Game Changers auction. 🤣 Eddie Murphy returned to SNL, Rolex on wrist. 🏅 Hodinkee goes a week on the wrist with the Black Bay 58, one of the best modern watches out there. 📚 The gospel of wealth according to Marc Benioff. 🕵️ Can monoculture survive the algorithm? (must read)

For Christmas: Fake tree or real tree?

Thanks for reading!

-Tony

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