Compared to U.S., Switzerland is Low Cost

By May 24, 2007General

Swiss_Flag_75.gifWho knew it would take a trans-Atlantic flight and drive to the foot of the Swiss Alps to expand on what American manufacturers already know: U.S. structural costs are prohibitive to foreign investment in
the United States.

This became clear while touring the Swatch Group’s factory in Grenchen, Switzerland.

Swatch Group includes such prestigious brands as Swatch, Omega, Rado, Longines, and Hamilton, among others. If you don’t shop on Rodeo Drive and hadn’t heard of some of these brands, don’t worry. Neither had we.

Hanspeter Rentsch, a member of the executive group’s managing board, provided an excellent tour of the pristine facility that makes some of the world’s most precise timepieces (the latest can hold accuracy, without a battery or movement, for more than 60 hours). Outside of Switzerland, the Group manufactures watches in Malaysia, Thailand, Italy, France and Germany. Notably absent from this list: the United States.

His rationale for not manufacturing in the United States? High tax rates and not enough skilled workers for a process requiring complete precision.

The Swiss company is quite neutral when commenting about its manufacturing relationship with the United States, but doesn’t his answer harken back to of NAM’s 2006 Structural Cost Study?