Waltham Watch Company

• 1. Introduction

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  The Waltham Watch Company produced roughly 40 million timepieces and precision instruments during its American operations. Watches and clocks formed the core of its output. The company also manufactured artillery fuses, automobile speedometers, compasses, and blood pressure gauges.

  Aaron Lufkin Dennison, the son of a Maine shoemaker, set this enterprise in motion. He had trained as a watchmaker and arrived in Boston in 1833. By 1849, he was convinced that the factory methods transforming American clock production could be applied to pocket watches. No one in the United States had yet made that attempt.

  Before 1850, Americans relied on England and Switzerland for their watches. The question his company would spend more than a century trying to answer was whether an American factory could match those imports.

• 2. Birth in Roxbury

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  In 1849, Dennison approached Edward Howard, a Boston clock and scale maker who had originally intended to build locomotives. Howard agreed instead to go into watches. David P. Davis brought manufacturing experience and Samuel Curtis provided financial backing. Together the four men raised $20,000 and incorporated as the American Horologe Company.

  Dennison drew a salary of $1,200 per year to head the project. His partners sent him to Great Britain to observe the trade and purchase supplies. He found the English watch industry far less mechanized than he had expected, and came back believing an American firm could compete.

  A 100-foot brick building rose on land in Roxbury, Massachusetts already owned by Howard and Davis. Both Swiss and American watchmakers were hired. The company's first product was ambitious: a model that could run for eight days without winding. About 19 pieces were made. It cost too much to produce economically and failed in the market.

  A second model with a 36-hour power reserve proved more successful. In 1853 the company rebranded as the Boston Watch Company. Dennison then selected the town of Waltham, Massachusetts as the site for a larger facility. Local residents contributed funds through a development entity he organized called the Waltham Improvement Company. One hundred acres were purchased and the factory opened in 1854. It began with 90 workers and an output of 30 watches per week.

  In 1856, the company issued $6,000 in notes to cover operating deficits, a sign of deepening strain. An economic crisis later that year collapsed watch sales across the board. The partners exhausted their personal savings and sold exclusive distribution rights to a New York wholesaler for $20,000. This proved insufficient. At the end of February 1857, the Waltham Improvement Company foreclosed on the factory mortgage. A sheriff's auction followed, and a New York watch importer named Royal E. Robbins purchased the Waltham property for $56,000.

• 3. The Soldier's Watch

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  Royal E. Robbins brought his brother Henry Asher Robbins and their partner Daniel F. Appleton into the management of the reorganized company. All three had extensive backgrounds in watch sales and the jewelry trade. They guided the company through the economic panic of 1857, which struck in the same year they took control.

  The American Civil War, beginning in 1861, changed Waltham's fortunes abruptly. Soldiers across the Union army wanted affordable timepieces. Waltham introduced a model called the 'William Ellery,' priced at $13, which became a fad among Union troops. By the end of the war, the Ellery represented 45 percent of the company's total annual sales.

  After 1865, Waltham built on its wartime reputation and became the primary supplier of railroad chronometers to railways across North America. The company also supplied railways in other countries. In 1876, the company displayed the first automatic screw-making machinery at the Philadelphia Centennial Exposition. It took the gold medal in a precision watch contest held there. By 1885, the company reflected its standing in the American market with a new name: the American Waltham Watch Company.

• 4. Ruin Beneath the Surface

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  Waltham's profitability collapsed with the Panic of 1907. Sales fell sharply and kept falling through 1908 and 1909. The sons of Royal Robbins, who had inherited their father's stake, quietly sold nearly all of their Waltham shares. Stockholders voted to end the company's wholesale arrangement with Robbins & Appleton, an independently operated distributor receiving a 6% commission on all Waltham output. Four longtime directors resigned and were replaced.

  Augustus P. Loring became the effective leader of the majority shareholders in 1910. Executive pay was cut and a vice-presidential position was eliminated. The aim was to break up what observers described as a privileged and complacent executive culture. The results were limited.

  When World War I erupted in 1914, the company moved quickly into military production. Waltham began manufacturing time fuses for artillery shells in 1915, automobile speedometers in 1916, and blood pressure gauges in 1917. Between 1915 and 1918, sales nearly doubled and earnings soared by 156%. Other American watchmakers stayed with conventional timepieces; the demanding work of artillery fuse production fell overwhelmingly on Waltham.

  A panel of consultants hired after the war found 25 separate departments within the factory. Each foreman ran his unit as an independent plant, setting his own production schedules and hiring his own personnel. Roughly 4,000 people were employed to do work that 2,000 well-directed workers could have accomplished. Unsold inventory reached $11 million and total debt stood at $8 million.

  One historian described the wartime era as one of 'wanton extravagance, gross inefficiency, and a marked lack of business foresight.' The postwar Depression of 1920-21 confirmed the problem when military and consumer sales collapsed together. In late 1921, the First National Bank of Boston and other creditors took direct control of the company.

  Gifford K. Simonds of Fitchburg, Massachusetts, a creditor-board director who had spent a decade running a family sawmill, was named chief executive. He walked through every part of the factory and spent three months working behind a retail counter to understand what consumers wanted. Simonds cut payroll by 1,000 positions, wrote down company assets by $3 million, and reduced production costs by 25%. He eliminated $800,000 in debt by January 1923. His creditors found this insufficient, and in February 1923 they replaced him with a new underwriting group.

• 5. Dumaine's Pivot

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  The new underwriting group was led by Kidder, Peabody & Co. They drove a financial restructuring with sharply different terms for different classes of investors. Large investors who could contribute new capital exchanged old shares at favorable rates. Small investors who could not were required to exchange ten old shares for just two and a half, losing 75% of their equity. Kidder, Peabody itself realized nearly $2.5 million in profit, dividends, and capital gain from the deal by 1928.

  Frederic Dumaine arrived at Waltham in February 1923 as the new chief executive. He found two-thirds of the factory standing idle. Postwar consumers were demanding small wristwatches at accessible prices, while Waltham remained configured to produce high-grade pocket watches. Swiss imports had increased nearly 500% between 1913 and 1920. Competitors Elgin and Hamilton had raised capital and modernized their plants in the meantime.

  Dumaine's first target was executive salaries, which had exceeded $100,000 annually for top executives in the preceding period. He eliminated private secretaries and replaced them with a shared office pool. The company later estimated that these administrative cuts saved roughly $1,000 per day. More consequentially, Dumaine redirected the company away from high-end pocket watches toward mass-market wristwatches at accessible prices.

  Waltham's pricing had long been set 15 to 25% above that of comparable competitors. Dumaine brought this premium down to just 5%, a first step toward parity with Elgin and Hamilton. One study of the company's management noted that the financial savings, though substantial, mattered less than 'the effect on methods and morale.' The expectation was now explicit: every employee must earn wages through results, not effort alone.

• 6. Summer of 1924

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  To bolster profitability, management announced wage cuts across the workforce in 1924, with reductions ranging from 10 to 40%. On the 11th of August 1924-75 workers in the Finishing department set down their tools in protest of an impending 10% reduction. The next morning, with the new wage scale in effect, 200 workers from the Finishing and Setting-Up departments stayed home.

  Within three days, 2,000 of the company's 2,900 total employees had joined the walkout. It was the company's first total work stoppage, ending more than 70 years of uninterrupted operations. Workers abandoned department-level organizations and formed a new body, the Watchmakers Protective Association, with affiliation to the American Federation of Labor anticipated.

  Plant superintendent I.E. Boucher declared that strikers were no longer considered employees of Waltham. Each had to apply individually for reemployment at the company's hiring office. He refused to meet with organized labor representatives, insisting on dealing only with workers one at a time. These measures deepened the conflict.

  On the third day, 2,000 people marched through the streets of Waltham to a rally in the city park. Workers with 50 years of company service were among those who marched. Packing clerks and stenographers joined in sympathy during the second week, shutting down most operations. The Machine department remained at work; its members belonged to a separate AFL-affiliated union and were waiting for national authorization to join the strike.

  Strikers who left the city headed for Elgin, Illinois, or Lancaster, Pennsylvania, to seek work with Waltham's competitors. In September, the union put forward a compromise proposal. Men earning more than $40 per week and women earning more than $20 would accept the wage cut. Workers below those thresholds would be exempt. Company acceptance seemed likely, and a celebration was planned for the 27th of September 1924.

  News arrived that evening that management had rejected the proposal. The counteroffer was a general 7.5% cut for all workers. The celebration turned into a riot. Thousands stormed the company gates and police broke up the confrontation in the early hours of Sunday morning. Strikers subsequently grew more aggressive toward those who crossed their lines, hurling abuse and stones and waving yellow handkerchiefs at replacement workers. Police vacations were canceled and patrols in the city were increased.

  The Massachusetts State Board of Conciliation entered the dispute in October, proposing a 5% cut for those earning above $18 per week. Neither side accepted it. Management held firm at 10% and workers held a mass meeting that gave the board's proposal no support. The strike continued through the end of 1924, with the company keeping operations running through its use of replacement workers.

• 7. Last Days in Massachusetts

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  Waltham's Massachusetts factory was wholly converted to military production during World War II. The company turned out timing devices for bombs and torpedoes alongside wristwatches for service personnel. It became a significant contractor for the American armed forces.

  A net profit of $211,200 in 1945 flipped to a net loss of $411,400 in 1946. The company continued generating losses in the years that followed. A flood of inexpensive Swiss-made timepieces on the American market was blamed for the worsening position. In 1949, the company closed its factory and declared bankruptcy. The crisis was triggered when the Reconstruction Finance Corporation denied the final $2 million installment of a promised $6 million loan. The historic Massachusetts facility was shuttered on the 3rd of February 1950, putting 1,200 workers out of jobs.

  In September 1950, a bankruptcy trustee authorized a limited restart of the factory. The purpose was to complete and ship 242,000 watches in time for the Christmas selling season. About 250 workers returned to finish, regulate, and package the partially assembled timepieces. The operation succeeded well enough for the trustees to repay $2 million to the Reconstruction Finance Corporation. An additional $250,000 was repaid by the 1st of May 1951.

  Federal bankruptcy judge George C. Sweeney approved the company's reorganization plan, concluding that careful management would allow Waltham to operate satisfactorily. The prediction proved accurate. Waltham earned a profit of $11,728 in 1951, its first positive result since the end of World War II. This compared to a loss of $430,000 in 1950. In the first half of 1952, sales of $2.3 million yielded a profit approaching $73,000. Korean War military contracts for precision timing devices and soldiers' watches added crucial revenue.

  In March 1952, the company announced it would begin importing complete watch movements from Switzerland rather than manufacturing them in Waltham. Trustees stated that buying Swiss movements and paying the duty was less expensive than producing the same mechanisms domestically. Walter Cenerazzo, head of the American Watch Union, called for a 'scientific tariff' to offset the price gap between foreign and domestic production. Congress raised the import duty on jeweled watches to 50%, partly on national security grounds. The protection proved insufficient.

  By 1954, the domestic watch industry's share of the American market had fallen from 52% in 1940 to just 18%. That year, Waltham's sales fell more than 35% from 1953 levels and the company reported a net loss of $210,000. Three consecutive years of profitable operations were reversed.

  In July 1955, controlling interest in the Waltham Watch Company was sold to the Bellanca Aircraft Corporation of Los Angeles. Bellanca had evolved from airplane manufacturing into precision instruments, radar equipment, and plastic parts. The new owner declared its intention to sell off Waltham's watch inventory and separate the watch manufacturing operation.

  In the fall of 1956, watch wholesaler Joseph Axler acquired 322,700 Waltham shares from a prominent broker, gaining working control. He pledged to restore the firm 'to its rightful place of leadership in the watch industry.' In July 1957, shareholders voted to rename the company Waltham Precision Instruments. A watch-focused subsidiary was to be incorporated as the Waltham Watch Company of Delaware.

• 8. A Name in New Hands

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  January 1958 brought a formal agreement between the Axler-led company and the Chicago-based Hallmark Watch Company. Hallmark was authorized to assemble watches from imported components under the Waltham name. Axler described the arrangement as a multi-million dollar royalty deal. By the spring of 1959, the Waltham name had been sold outright to Harold B. 'Harry' Aronson, president of Hallmark.

  Aronson became president of the new company, with Ben Cole and Morris Draft, both former Hallmark officers, on the board. Chicago attorney Seymour Rady served as vice president and chief counsel from 1957 until his death in December 1966. Aaron Thorne, formerly the Western regional sales manager for the Benrus Watch Company, joined as vice president in late 1959. He managed sales to the Western United States and Asia from a Los Angeles office.

  Franchised distributors paid roughly $1,200 upfront for display cases and starter inventory. These were placed in local drug stores, hardware stores, and appliance stores. Proceeds were split between the franchisee and the store owner. The operation was headquartered in New York under the name Time Industries, and hundreds of newspaper advertisements were placed across the country. The new emphasis was on lower-priced, broadly accessible products.

  In the summer of 1962, the company opened a factory in Neuchatel, Switzerland designed to produce up to 100,000 watch movements per month. The Waltham name also expanded beyond watches. In the fall of 1963, the company licensed it to the Samson Company of Chicago for transistor radios and tape recorders. The Federal Trade Commission scrutinized the company throughout the 1960s. Charges included misrepresenting the number of jewels in its watches and tagging merchandise with inflated prices bearing no relation to actual selling prices. The company was also accused of obscuring the true country of origin of its products.

  Sales grew from about $10.5 million in 1962 to $12.1 million in 1963, with net income rising by 70%. The following year brought total sales to $13.3 million and net income up another 35%. By 1967, Waltham had become a leading maker of dive watches. The company sold a 5-bar hand-winding model at $50 and a deluxe version rated to 300 feet for $120.

  In March 1968, President Aronson announced that a Swiss group had agreed in principle to acquire Waltham. The group was led by the Invicta Watch Company of La Chaux-de-Fonds. A formal tender offer at $16 per share followed in September. The purchasing entity was a Delaware-registered company called Iseca. Its backers included Invicta, H. Sandoz & Co., and Degoumois & Co. of Neuchatel. About 283,976 shares changed hands, of which 151,819 were held by Aronson's group. Aronson was retained as a paid consultant for six years at $30,000 per year. Total acquisition cost came to just over $6.5 million, financed partly by a $3.9 million loan from the Union Bank of Switzerland.

  Sales approximately doubled between 1968 and 1975, reaching more than one million pieces annually. By 1975, Waltham ranked as the third largest watchmaker in America, behind Timex and Bulova. The company occupied a 100,000 square foot building in Chicago formerly owned by the American Can Company. In January 1974, the Swiss parent group, the Societe des Garde-Temps, purchased rights to the Elgin Watch Company name as well.

  The Societe des Garde-Temps ceased operations in 1981, a casualty of the quartz revolution. Its brand names were sold separately. The Waltham name passed to a Japanese firm, Heiwado & Co., and became one of the most popular watch brands in Japan. In 2011, a majority stake in Waltham International SA was acquired by Italian-American entrepreneur Antonio DiBenedetto. The records of the original manufacturing company are preserved at Baker Library Special Collections at Harvard Business School. The collection spans 52 archival boxes and 111 linear feet, covering material primarily from 1854 to 1929. Every movement the company produced through the early 1950s carries an individual serial number engraved into the work, and volunteers have built a public database linking those numbers to specific models, production dates, and observed examples.