Bonus: Reviving the U.S. Watch Industry – Josh Shapiro (J.N. Shapiro) – Episode 41
To mark 250 years of American independence, we're revisiting one of our favorite conversations: our sit-down with Josh Shapiro, the American independent watchmaker behind the Resurgence — the only watch that currently meets the U.S. Federal Trade Commission's standard for "Made in America." It's a fitting week to ask a question that feels newly urgent in an era of tariffs and reshoring: what would it actually take to bring watchmaking back to the United States at scale?
Josh takes us from the industry's staggering height — when American factories employed over 100,000 people and produced millions of chronometer-grade watches a year, so far ahead that the Swiss crossed the Atlantic in 1876 to study our methods and race to catch up — through the forces that dismantled it: the pivot from pocket watches to wristwatches, an aggressive Swiss cartel, Depression-era trade deals, and a postwar collapse that was already terminal long before the quartz crisis delivered the final blow. Along the way he explains why the single hardest thing to rebuild isn't machinery or capital, but people, and why "Swiss Made" and "Made in America" are two very different promises.
Told through the lens of building the Resurgence in his Los Angeles workshop — the CNC machines, the $150,000 balance-staff breakthrough, the North Dakota jeweler he coaxed out of retirement — this is a clear-eyed look at the slow, deliberate work of rebuilding an industry from the roots up, and what any of us can do to support it.
Openwork is a weekly podcast about how the watch industry actually works. An unfiltered look behind the scenes — no press releases, no hype, and no sponsored takes. Hosted by Asher Rapkin and Gabe Reilly, co-founders of Collective Horology. Available on Apple Podcasts, Spotify, YouTube Music, or wherever you get your podcasts.
You can find us online at collectivehorology.com. To get in touch with suggestions, feedback or questions, email podcast@collectivehorology.com.
Hey, it's Gabe. Now, yes, it's summer hours here at the Openwork podcast. And so that
means new episodes every other week. We'll, of course, be back next week with a new episode.
But this week, we've got a bonus episode for you. It's a very topical one, as we just celebrated
250 years of independence in the United States. This was a recording we did last year with
American independent watchmaker Josh Shapiro. It's a wide ranging conversation about the
American watch industry from where it was at its height, employing over 100,000 people,
most of them watchmakers, producing over a million watches a year. And really, it was
the envy of the global watch industry, including the Swiss watch industry. In fact, the American
approach to watchmaking in many ways inspired and informed the Swiss industry and where
it is today. So we talk all about the history of American watchmaking. And of course, we
also talk about the present of American watchmaking with Josh, who's, of course, producing the
only watch considered by the United States Federal Trade Commission to be American made
the only fully US made watch. That's, of course, his resurgence watch. And we also chat about
where things are going. So a very relevant conversation given the goings on this summer,
of course, we'll be back next week with a full new episode of Openwork. But in the meantime,
we hope you enjoyed this conversation from Openwork episode 41.
This is Openwork, a look inside the watch industry, a podcast from Collective Horology.
I'm Gabe Reilly, co-founder of Collective.
And I'm Asher Afton, co-founder of Collective. Collective Horology is an independent watch
retailer based in Southern California. We carry a wide range of independent brands,
including Chappeck, Gaga Laboratorio, J.N. Shapiro, and more. To learn more about us
and check out our available inventory, visit CollectiveHorology.com.
Asher, your ears must be burning because speaking of J.N. Shapiro, we have none other than Josh
Shapiro himself with us today to talk about watchmaking in America, specifically what's
required to bring watchmaking at scale back to the United States. It's a hot topic these
days, particularly with US tariffs, which have been dominating the news. And of course,
they're intended at least in part to bring manufacturing back to the United States. With
that in mind, we thought it would be worth taking a look at what would actually be required
to restore the American watch industry.
So our guest today is Josh Shapiro, an American independent watchmaker. He's based in Los
Angeles and together with a team of watchmakers, engineers, and machinists, Josh has been bringing
watchmaking at the highest level back to the United States. In fact, his latest creation,
the Resurgence, is currently the only watch to meet the standard of made in America as
defined by the United States Federal Trade Commission. Josh, welcome to Openwork. We're
really, really happy to have you.
Pleasure to be here, guys.
Thanks, man. I want to dive in with some history and it's important for us to ground what we're
going to talk about here in what was a critical and I think a significant industry in the
United States up until a point. So I'd love for you to just give us a little bit of an
idea, paint a picture for us of at its height, what was the American watch industry like?
Yeah, sure. Absolutely. And just first off real quick, I'd like to thank both of you
guys for having me on. You guys are doing a huge part in restoring American watchmaking.
We've been working together for a long time and I think we all have similar dreams and
goals and it's been a lot of fun working with you guys. I'm not even bitter at all that
I'm like the 10,000th guest on this podcast.
The 41st guest, Josh, 41st.
So American watch industry at its height was probably the early 1900s. At that point, Waltham
was at its strongest and the entire manufacturing process that Waltham had developed had already
spread to Elgin, was spreading to Hamilton and the US was cranking out millions of extremely
high grade pocket watches. These pocket watches were chronometer grade, beautifully decorated
and made in a way that millions could be produced. And it was so influential that it influenced
the entire way that things were manufactured in general, influencing companies like Ford.
Josh, I remember when, gosh, we first met, this must've been back in 2019, you were still
making watches literally in your garage, which was just cool. And it's amazing to see
how far you've come, which I'm sure we'll chat about. But I remember on the bench in
your garage were a number of Hamilton pocket watch movements. And I'd never really taken
the time and I suspect a lot of watch collectors haven't really taken the time to kind of look
at those kinds of watches and movements. And I remember just being blown away by the
level of decoration and finishing and asking you, like, are these some kind of special
watches here or watch movements here? Like these are incredibly beautiful. One of them
was like hand engraved. And I think another was using like some kind of dam skinning process
and they're just really these wild, beautiful movements. And you're like, not really anything
special. No, like Hamilton was kind of the gold standard and was known around the world
for their decoration and finishing. And really the American watch industry was sort of the
envy of the world at its height. And I guess that may be one of the things the American
watch industry was known for, but at its height, what set the American watch industry apart?
What made it unique? You mentioned some of the things that are countries copied, but
like, if you think about today in automotive industry, the Germans are known for performance.
What was the American watch industry kind of known for and the envy of?
Yeah. So we were specifically excellent at time only watches that were extremely accurate.
And at the same time, these watches were also beautifully finished. So like you take like
a Hamilton 923, which I think about 5,000, 3,000 or 5,000 were made. And this is today,
this would be a 20, $30,000 movement. And they were able to mass produce those. And
then they had their, 923 was the highest grade and they had their 921, which was nearly as
nice and they made about 50,000 of those. And they had their 917 and they made hundreds
of thousands of those. And so extremely accurate, extremely high decoration. The areas we never
really got into were complications. That was the realm of the Swiss. And then the decline
of American watchmaking was wristwatches. That was a huge pivot for those companies
to make from pocket watches to wristwatches, which we can discuss more later. That was
the beginning of a decline and sort of Swiss ascendancy.
Can you tell us a little bit about what this era of industrialization looked like? And
the reason why I want to go here is eventually we're going to get to what the modern industrialized
watch industry looks like abroad, certainly, and what it would take to come here. But in
this particular era, when you're talking about, you know, tens of thousands, hundreds of thousands
of pocket watches being manufactured, what did industrialization at that time look like?
What was the, what was the machinery? What was the workforce like? I mean, who were these
people and what did, what were these factories?
Yes. I think that's one of the coolest and biggest contributions that America had during
the industrial revolution. The watchmaking industry, many industries were making things
one at a time, very high on the craftsman side of things and kind of making things fit
and work together, even watches. And what the Americans were incredible at was figuring
out automatic procedures that were very repeatable for producing parts. And that would have a
huge influence on the rest of the world car industry. But in watches, for example, there's
a part called a balance staff and you can fit about a hundred balance staffs on the face of
a penny. It's a tiny, tiny, tiny part. And this week we were able to make these finally
automatically again in this country using really state-of-the-art CNC technology. And
in America, all the way back in the 1870s, they were able to make these tiny components
automatically again and again, hundreds of thousands of them without computers using
mechanical cams that were just super precise. And it was, it was, they were, they're producing
watches at the same level that we're able to produce today on state-of-the-art technology.
So the accomplishment was massive. And when the Swiss came and visited in 1876,
it was clear that they needed to change from their cottage hand-fitting industry
and upgrade their technology to what we were doing, where they were going to get left behind
by the U.S. Speaking of inflection points and turning points, what was it about wristwatches?
I mean, you mentioned that that was a turning point for American watchmaking. What exactly
happened there? How did we go from this kind of dominance and prowess you're describing with
pocket watches to trouble with wristwatches? What exactly happened?
Yeah. So I think that had to do with the way U.S. factories were set up versus the Swiss as an
industry. The watchmaking industry was one of several industries in the United States. And
these massive watch companies, Waltham, Elgin, Hamilton would do everything in one factory.
And they only really had a few different sizes of pocket watches. Most pocket watches were 16 size,
pretty large. The other most popular size was 12 size. And that was two sizes of watches that
they were super specialists on. And wristwatches, as they became more popular, were many different
sizes, many different case designs, many different dial designs. And so to retool, to reset up,
to do all these very different types of watches, it was really tough for these companies to switch
up their tooling and be able to switch over to different watches. Well, the Swiss had
basically a country of subcontractors. Every little village would have a different specialist
company. And for them, it was much easier. They're much more adroit at just being able to switch
components and bring it all together. And part of that was because the whole country was engaged
in this trade. That was one of their major industries. Whereas in the United States,
it was one of many different things we were involved in. So let's talk a little bit about
when that pivot started to happen. Now, you talked about it in relation to product.
So pocket watch to wristwatch, for example. I'm curious, were there other factors that started to
pull the industry away from America? Certainly, there was always a European watchmaking center,
but what were some of the forces that gravitationally pulled the business out of
the United States into the places that many people think of as the archetypal watch production
centers? The Swiss, the German, and then obviously down the road, the Japanese.
Yeah. So that's a great question. I think if what I'm about to talk about hadn't happened,
I think the US watch companies would have been able to transition and pivot into
wristwatches very smoothly and into more complications. But the Swiss were hyper
aggressive to other countries involved in watchmaking. They had a very clear plan,
and they even formed a cartel within the country where the government and the watchmaking companies
got together and made it so any Swiss company selling movements to other countries would be
made illegal or barred from doing that. And the Swiss became very protective of their industry
and very aggressive towards other industries. So they knocked out the French watchmaking industry,
the British watchmaking industry, and then the big prize was the American watchmaking industry.
When you say they knocked out, can you be more explicit there? What does that look like? Because
if you have, arguably, I can imagine someone listening to this saying, well, hang on a second.
If there is a thriving industry that's full of talented folks, and they were making these
incredible pocket watches, and sure, there's an engineering challenge in moving that skill from
one form factor to another, surely they're capable of it. What power did the Swiss have
over the Americans that allowed them, or the British, or what have you, to knock them out?
A large part of it is the ability to undercut prices. And the other aspect of it was to limit
any export from Switzerland of movements, cases, et cetera.
Were there Swiss ebauches that were being used, for example, in America?
Oh, yeah. Nicholas Bowman Scargill talked about this with Fierce. I think maybe with us directly,
he hasn't been on the pod yet. But Fierce used to get most of their components,
even if they were assembled in England, from the Swiss, for instance.
Got it. So it was more of squeezing the supply chain and undercutting costs,
essentially, as a method for extinguishing the industry.
Correct. And beforehand, before they formed the cartel, the Swiss were
very open to selling components so that other watch companies could build watches in other
countries. And then this cartel was formed and became very protective. And this cartel lasted
from, I think, the early 30s until the 1960s. There's another element to it, too, which is
relevant to today. In the late 1920s, early 30s, the US was very eager to export goods to
Switzerland. And so the reciprocal trade agreements there meant the Swiss wanted to be able to import
watches with very little duties, with very little tariffs. And what that meant for the Swiss was
they could chronically undercut US watchmaking in terms of price. And the quotas for how many
watches could be imported were loosened and loosened, so the Swiss could import more and
more watches. And we're talking the Depression days, so the US really wanted to sell things to
the Swiss. And so like, okay, that means we've got to import more watches as part of this agreement
to make this happen. And the victim of that was the US watchmaking scene.
They had a really hard time competing with Swiss pricing. And at this time, the Swiss weren't
making super expensive watches. It was a lot of inexpensive watches, which were at a lower
quality than the American watches. It wasn't until the 40s and 50s that you really saw the
vast majority of Swiss watchmaking sort of step up a notch. There's exceptions, of course,
like Patek Philippe, but the majority of watches weren't extremely expensive.
And then World War II is a whole nother thing. That's a whole nother deep dive what happened
during World War II. But already before the war, you were starting to see that the US market used
to be completely dominated by US watchmaking. Near 100% of watches made in the US, or sorry,
that were purchased in the US were sold from US manufacturers. And that number started to
dip down considerably that by the time you're in the 1930s, it's about 50-50.
Half the watches sold in the US were made in the US. And then World War II was a radical change.
During World War II, all the US watchmaking companies were only making watches for the
military. And at the same time, the Swiss were somehow exporting millions of watches,
even though they're surrounded by the Germans outside of Switzerland to the United States,
exceeding their quotas, selling at a much lower price than Hamilton, Waltham,
Elgin were selling their watches. And then if that wasn't enough after the war,
the Swiss refused to sell the US any machinery to make watches. And the US had worn out all their
machinery during the war creating it. And so all of those factors combined, and it was just the
US watchmaking fell off a cliff at that point. Waltham went out of business, Elgin and Hamilton
are in a big decline until both Hamilton and Elgin would be out of business in the 60s.
And that was all before what's known as the quartz crisis. I mean,
this stuff had kind of been done and dusted before then. I mean, I think I kind of knew that,
but I also sort of just associated the demise of American watchmaking with the quartz crisis,
but it sounds like it was in this sort of terminal decline for all these reasons beforehand. And
maybe the quartz crisis was like the nail in the coffin. And you knew it was dead as a doorknob,
whatever the expression is, six feet under. Bolivar was a quasi Swiss, quasi American company,
and they lasted until 1977. And that's the quartz crisis kind of knocked off Bolivar.
But Bolivar was kind of representative of what the Swiss were doing to get around
tariffs in general. They'd just start a company in the United States, send in Swiss movements,
people, or they wouldn't have to pay as much tariff on a Swiss movement. Then they'd assemble
in the U.S. that was Gruen, Bolivar, Durin, Wittenauer. All these companies were sort of
Swiss companies for getting around U.S. tariffs. They're also, the Swiss set up a lot of assembly
places in Puerto Rico, U.S. territories that were exempt from certain tariffs, so they could
assemble the watches there and then send them to the U.S. mainland. So the tariff discussions
we're having now were very much so happening in the 30s, 40s, 50s, and 60s. And the U.S. companies
were going to Congress and begging for protective tariffs. Please, please protect our industry.
And the U.S. at that point was like, business, business, business.
Yeah. You're raising a point that we're going to come back to, too. And I think we brought this
up on our tariff podcast as well, which is to say, the good faith argument for a tariff is to
protect an industry that's already entrenched, or one that is facing unfair, competitive
headwinds, let's say. And that actually sounds like it made a lot of sense in the era that you're
talking about, which is obviously different than the modern-day era. We've spent about 20 minutes
here talking about what this industry looked like and the challenges that we're facing it. But
essentially, we enter basically an American watch desert for decades after this.
What I grew up thinking was a quote-unquote American watch, like a fossil or whatever.
Might've been a company that was based in America, but the watches, most assuredly,
were not manufactured here. Hong Kong, yeah.
Yeah. And I think there's been these little fits and spurts of people making claims around
American watchmaking at scale. Shinola comes to mind in that situation. But enter Josh Shapiro.
A dapper, young, highly educated school teacher, loves sports cars, and decides one day he's going
to liquidate his watch collection because he wants to become a watchmaker. Now, describe that time.
It's about what? A little bit over 10 years ago, right? 15 years ago, give or take?
Yeah. I guess I started watchmaking as a hobby 14 years ago. Yeah.
So 14 years ago, you're looking around as somebody, as an aspiring watchmaker. What
does the American watch industry look like in 2011?
Yeah. I mean, I was very naive. Very naive. I think you have to be to try to do something
ambitious because you don't know all the heartache and sorrow and difficulties you're going to face.
In 2011, I was really in awe of people like Roger Smith and Roland Murphy,
that were sort of... Roger Smith had done tremendous work to... His mentor and teacher
was George Daniels. And George Daniels really took the big first step. And then Roger Smith
was able to create serial production watches. And Roland Murphy did a lot to progress American
watchmaking. So I was really in awe of these people and what they had accomplished. And at
the same time, I was starting to learn about the American watchmaking scene back in the
19th century and early 20th century. And in awe of that as well.
So you start. And I think there's sort of these various stories out there about you
as a watchmaker. And so I want to talk about you for a moment before we
broaden this out to the larger industry. You have a copy of George Daniels watchmaking.
You start working from that. But you also were apprenticed, did you not?
Yeah. So early on, around 2015, when I started really deep diving into guilloche,
I started learning and working a lot with David Walter. He taught me a lot about... David Walter
is an incredible watchmaker and clockmaker based in the Santa Barbara area. He was,
as in his 20s, he was working for Omega in their complications section.
And then he went back home to Australia and started making incredible clocks,
highly complicated, multi-hundred thousand dollar clocks. And when I met him 10 years ago,
he wanted to go back to watchmaking. And he can make a watch from scratch,
but he wanted engine turned dials. And at that point, I was just starting to
get good enough to do professional work. So I started working with him making dials,
but so much of dial making is machining and watchmaking. So I started learning a lot from
him as well to progress my machining skills. And then I started dabbling in
things like CNCs and all sorts of other areas, but he taught me so, so much.
So you take the knowledge that you've gained from David and you start making your own watches.
This is around the time that you and I meet, 2018 or so, where you're making the infinity series,
which is of course, at that point, an American made of Josh Shapiro made dial had some, you had
some other, some other folks working with you in the workshop on hands, I believe.
Yeah, Artur was working with me by that point.
So Artur was working with you at that point. I remember that's when we met him.
You were you, and then you were bringing in these really gorgeous movements from
urn for Dresden, UW. And we're making, and, and, and at certain points, I know you guys did some
extra decoration on those movements in certain cases and things like that, but really like a
lot of the focus was on the dial of the watch. And then the concept, and I suspect you've been
thinking about it for some time because you had mentioned to me that you had this aspiration
to make a fully American made watch. Now, at this point, I want to, I want to split
the conversation into two paths. I want to talk about what goes into making the resurgence,
because the resurgence, obviously it's not only a critical watch for you,
but it's very important watch. I would argue for the modern American watch industry.
And I want to, I want to think about that in parallel to what you had mentioned earlier
about the expertise that was originally germane to America around industrialized watchmaking,
because the two are related. The question that we hear the most or the assertion that we see
online the most is, man, we really should just be building this stuff here. How hard could it be?
You know, sure. We just need to invest in some machinery and the rest, but like everyone else
seems to have figured it out. Why can't we? So I wonder if you can speak a little bit about
what would be involved in the creation of an industrialized watch industry in the modern
sense here. And can you tell that story through the lens of what it takes to make the resurgence?
Because I think that's kind of an interesting way to look at it. Not that something at that level
would be considered an industrialized watch, but rather I suspect, you know, a lot of the,
I've been to your workshop, a lot of the machinery you use, a lot of the talent you have
would be the same, I suspect machinery and talent that would be applicable to
mass scale production. Am I making a legitimate assertion? Cool. So can you talk to us a little
bit about it that way? Sure. I think, let me address, I think it'll be easier if I address
the industry-wide, why we don't just have an American watchmaking industry pop up again,
right? We've got the machinery, we've got millions of people that are interested in watches in this
country. Why isn't it just popping up? And the answer is very, very simple. It comes down to
one word, people. At the height of American watchmaking, we had over a hundred thousand
people, if not more, as professionals in the watchmaking, manufacturing, regulating,
decorating, all these industries, a hundred thousand people. I read a newsletter from
Hamilton in the 1950s, and it was talking about how Joe Smith from the finishing,
from the Damascening department is retiring this month. When he started in the department,
it only had 20 people, and today it has 80 people, right? And this is in the 1950s.
And at the time I read that, it said 80 people, 80 people just doing Damascening for one company.
For those who don't know, that's the American version of Geneva Stripes, essentially.
Right. Exactly. Exactly. And I thought, that is many multiples, more people that are involved
in manufacturing, period, for watchmaking in the United States. And even in Switzerland,
they have a labor shortage. So that is one of the biggest, biggest, biggest problems with
being able to bring back the American watchmaking industry here. So we can make
hundreds of thousands of cases, but being able to finish those cases, put them together,
put them inside of watches that need to be regulated and timed and all these things,
that just takes a lot of people. China has a lot of people that are engaged in that
profession. Switzerland has a lot of people engaged in it. And Germany is close enough
to Switzerland that they can work together on that. Germany's industry survived a little bit
better. Japan was super dedicated from the late 1800s onward to having their own watchmaking
industry and has a huge labor force involved in that. US has very little. We have very few
watchmaking schools. Almost all the schools are run by Rolex or Swatch or Richemont and are meant
to create service technicians for those brands. And so people is the main issue. The people I have,
which is germane to the resurgence, I've worked extremely hard to find these people to develop
their talent, people I trust, extremely talented, some of the top guys out of the watchmaking
programs. I'm friends with a lot of the people at the watchmaking school. So I have a team of 15
people and I've had to work exceptionally hard to build that team. And we have the largest team
of people making mechanical watches in the country at 15, which is tiny. We're considered
a small, small business. I think the people thing is worth just zooming in on a little bit more
here. Because you pointed this out, it's not just people who have gone to watchmaking school,
because a lot of the watchmaking programs in the US, they're training service technicians,
someone who will sit in the service center in Florida or New Jersey or Dallas or wherever,
and they will service watches for the companies. And that's an important skill. And we need those
people and we don't have enough of them. But those folks aren't all that is needed to make a watch.
I suspect you have 15 people who work for you, but I also suspect you have probably contracted,
freelanced, hired out people who have all sorts of skills, whether that's in engineering and
mathematics, machining, people who can just service the machinery you have and keep it running.
Design.
Design, different crafts, craft people. Watchmaking, what's so cool about it is it's a very
interdisciplinary field, right?
Right, for sure.
So there's a matter of what you need to have a watch company, watchmaking endeavor, 15 people.
There's a whole other kind of set of talent for what you would need to have a really industrial
watchmaking company. So I'm assuming watchmakers are critical. What other kinds of people does
one need to have a watchmaking company?
Yeah, I mean, so I have three engineers on staff. Chris is a mechanical engineer. He does a lot of
the pad work to make sure that the watch movement isn't having any big problems or errors or
conflicts in it. I have Will, who's a material science engineer, and he does a lot of the
seat treating and hardening, tempering, lacquer coatings, all these different things that are
materials related. And then I have another engineer that's just in charge of doing people
engineering, like how do we put this watch together, sort of like advanced project management
stuff. And so like any manufacturing industry, all these things have to be there. And then we
have the machinists who are just focused on how we're going to make all these parts. And then we
have the watchmakers that are in charge of decorating and putting it all together. So it's
three separate departments that have to come together and work together.
So let's get into that. So there's a talent challenge, right? So let's put that in bucket one.
Yeah.
I'm curious, and there's another side of it too, which gets brought up, but I'd like you to tell
me if this is true or if it's not as much of an impediment as I would imagine, which is hardware,
like actual machinery required. So going into your workshop over the last few years, I've seen
the amount of CNC machines and various other pretty awesome toys metastasize pretty significantly.
And without going into the numbers you've shared with me, like it's a lot of money, man.
And you've built, you've invested quite a significant amount of cash into products that
aren't just purchased or leased or whatever. You also have all these service contracts associated
with them and significant education associated with them, right? Contrary to popular belief,
there is no make watch case button on a CNC machine. It's a complicated process.
So we have this one side of it, which is, all right, so there's no robust
pipeline per se for developing proper watchmakers versus technicians. So that's one challenge.
And then there's this other side. How big of a challenge is the investment in this equipment
or even the availability of this equipment? So far, I can't go to Home Depot and buy a
current CNC machine. I don't think I can. You can't. Okay. Yeah. I mean, millions of dollars
of equipment and then this interplay between manual machinery, watchmaker, and the machine.
So I'll go back to the balance staff. Balance staff is one of the most important parts in a
watch. It's also one of the tiniest parts of the watch. So it takes about an hour to make
one balance staff manually by hand. And that's how we were making them. And then from there,
this balance staff, which has little staffs on it that are the size of human hairs,
has to have those staffs polished. And that polishing process takes tremendous amount of
skill. It's usually done in a Jayco tool, which you can Google. That's a tiny little machine
that's bow operated. And there's about a 50% chance that one of those staffs could snap off.
So an hour for a part, and then it takes some serious hand finishing, and there's a high chance
you could wreck that part you just spent an hour on. So recently, after months of R&D,
we were able to make these parts on a Citizen L12. Citizen L12 is about $150,000 machine.
And we have two people that are dedicated just to that machine and just to figuring out how to make
these tiny parts. So now we can make a balance staff in a minute, which will then go to a
watchmaker that will spend another half an hour, hour on that part. And there are automated
processes that could take that balance staff and do it all automated. But I don't have the hundreds
of thousands, if not millions of dollars to automate that one process. So it still has to be
done by hand. So anyway, for the point, we had to buy a machine, cost 150 grand,
two dedicated technicians, plus working with an engineer, plus getting constant feedback from
watchmakers, all to make a part that will save us an hour per part that could still get destroyed
and finishing. But at least we don't have to spend an hour per part on it.
Okay, so one more question before we come out of this dark tunnel. So we have the staffing
and educational challenge. We have the prohibitive nature of the investment in the equipment. And
then of course, all those staff need to be present and specially trained to actually do that stuff
and utilize those machines effectively. So that you're actually outputting enough
componentry that you're able to make the watches you need to make. You are making these components
for a very, very, very high-end watch by any measure, the resurgent watch timepiece. Let's
say for a moment, let's pretend that you weren't making the resurgence, but instead what you were
trying to do was just a clone of an SW200, just for performance sake. What would be necessary to
do that? Because some of what you're talking about here is also the time required for finishing,
the time that makes some of these pieces elevated relative to a more pedestrian movement.
Let's say you were making a more pedestrian movement, like an old-fashioned beater of a
movement. Would it be that much easier? Or are we really quibbling around the edges here
when we're talking about being able to mass produce something like an SW200
versus the calibers that you're making? Or is it actually more rational and more possible?
It's the same issue. You could throw $20 million at it, but you'd still need a lot of people.
There's no getting around that. You need people to operate all the machines you just purchased.
You need watchmakers to be able to put these watches together. For all the sub-assemblies,
different aspects of it, a huge labor-intensive part of the watch that takes a tremendous amount
of very expensive specialized equipment is everything related to regulating a watch,
matching hairsprings to balances, all of that. Let me ask you the key rhetorical question.
If the work that you're doing and other watchmakers that are ambitious here in the United
States are also doing were to be the genesis of a new 21st century American watch industry,
do you think that that industry looks like what we had 100 years ago with a mass-market,
high-volume industry? Or is the reality that it's going to be something different,
and really what you're working towards is a whole other thing? What should people who say,
I want to support the American watch industry, picture as the goal in their head?
Yeah. I think I have to stay in the dark tunnel for one more moment.
I was trying to push you out, man.
I think there's an elephant in the room that most consumers don't understand. It's like,
why can't the US compete with Switzerland and create a big, large watch industry?
There's one big problem for that. Even if we could find the people, Switzerland
has a people problem too. Their solution for that is they go to China. They're able to leverage
China in order to make Swiss-made watches because the Swiss-made label is extremely weak.
And if you want to make a made-in-America watch, you cannot do that. And other companies,
like Shinola, have tried to dance around that and then get busted by the FTC.
But if you want to say made-in-America on a watch, it's really got to be made-in-America.
If you want to make a made-in-Switzerland watch, the majority of it can be made in China,
and you can do QC on that in Switzerland, and you've got a made-in-Switzerland watch,
and you can't compete with that in the United States unless we make our label weaker,
or we ban Swiss watches for having a misleading label on theirs.
Yeah. So let's go through the requirements. I have them here. And I think we've done this before,
but for a watch to be labeled Swiss-made, this is what the government in Switzerland requires.
The movement must be Swiss, meaning it has been assembled, inspected, and controlled by the
manufacturer in Switzerland. So just stopping there for a second, that means that any number
of the components of the movement could be from somewhere else. It just has to be assembled
and inspected and regulated in Switzerland. So right there, significant cost savings.
Components, so the movement and beyond, 50% of the value of all components in the watch must be
Swiss-made. So you can obviously have parts that are just a few parts that are made in Switzerland,
but because, to your point, the labor cost in Switzerland relative to another market,
say China, is so much higher, as long as the value is mostly from Switzerland, you could have
the minority of the components in the watch made in Switzerland and the majority made elsewhere.
Manufacturing costs, similar thing. 60% of production costs have to be generated in
Switzerland. Well, you could have a couple of the jobs done in Switzerland to get to that 60%
benchmark because of the differences of cost and labor. Technical development. Okay. So the watch
and its movement must be developed in Switzerland. There may be some loopholes there. You may hire
contractors for engineering or things like that from outside the market. I don't know what the
requirements are there, but technical development happens in Switzerland and final inspection.
So just like Swiss cheese, there are all sorts of holes when it comes to what can be Swiss-made.
Ah, I see what you did there. We mentioned this at the top of the podcast. Made in America, just to
be very clear about it, does mean something different. These standards are defined by the
Swiss government. This is what they will consider something to be Swiss-made and hold up to that
claim. But you did some research yourself, Josh, on what exactly would it take for a watch to be
considered made in America? And I think you're the expert in this. I'll let you explain it,
but it is worth underscoring the differences here because they are extreme. Yeah. I mean,
the Federal Trade Commission is really good with their broad documentation. You can go onto the
Federal Trade Commission and it'll show you many examples of what it means to be made in America.
But the barometer is all or virtually all. The gray area is what does that virtually all mean?
And it gives many examples of that. There's no specific guidance for the watchmaking industry
anymore. I asked for guidance from the Federal Trade Commission for guidance of what the
virtually all is referring to. So what I've done personally is I've based what we do off of
Hamilton. What was Hamilton doing at their heyday? What were they not doing at their heyday?
So, for instance, Hamilton at their heyday was importing jewels from Switzerland and sometimes
importing balance wheels from Switzerland. Everything else they were making. And so
I've sort of taken that as my guidance from them. And so we actually get our jewels made
in the United States. We make our own balance wheel, but our hairspring and mainspring,
we bring in from Switzerland. And then we do a lot of work on the hairspring itself.
Yeah. Just on the mainspring real quick, I know you had mentioned this to me at one point that
the mainspring A is one of the most difficult components of a watch to make, which is hard to
believe given some of the difficulties you've explained in other components today. But not only
is the mainspring difficult to make, but it's considered, I guess, like a battery for the watch
because it's a store of power, which kind of exempts it. And it's replaceable. You replace it
at services. Oh, it's like a consumable essentially. So in that sense, you could still have
a made in America watch, but what's considered the battery and a consumable could come from
somewhere else. Is that the case? Am I representing that accurately? Yeah, that's the case.
And it doesn't necessarily sit great with me. My ideal would be to make absolutely everything,
but mainspring, hairspring, jewels, crystals, rubber components, these are all completely
separate industries from metal machining and manufacturing, which is what our shop specializes
in. So like springs, sapphire, all these things are like left field. So it'd be a completely
different investment for me to invest in these things to be able to do them. So it's both a
limitation, but I feel very strong that if someone ever reported me to the FTC and the FTC came
knocking at my door and said, show us what you're doing, I don't worry about that whatsoever.
What the FTC doesn't like is when people will say, well, all the small components in the watch,
pinions, wheels, setting mechanism, all the stuff that we make, it's very easy to harvest those
from other watches. It's what many, many, many people do. It's normal. It's fine. But the FTC
doesn't like that in terms of American made. Sure, it's not expensive to get those components
from Switzerland or China, but that's not all or virtually all of a watch. If those components are
coming from other places, it doesn't matter. If you're making the bridges and plates,
even though those are large components, that doesn't constitute all or virtually all of those,
what goes into a watch. And so we make all those components. We make all the difficult steel
components, sliding pinion and winding pinion, all these components, pinions. We spend hundreds of
dollars, if not thousands of dollars in pinions in our watches, and we could buy them for dollars
from Switzerland or China. But those are integral parts that we can't say it's an
American made watch if we're not making them. Well, couldn't someone say, you mentioned rubies
that you're able to source them from, I guess, presumably some other company that has the ability
to make that stuff in the US. Couldn't someone say, okay, well, you focus on doing the watchy
stuff, your pinions and all that stuff. And then aren't there enough adjacent industries in the
United States for things like sapphire and rubies and silicone hairspray? Just call up the medical
device or the aerospace industry and get them to make you some parts. And maybe you've looked into
that. I mean, is that just wishful thinking to assume that all these other industries could just
magically backfill these kind of more esoteric parts? Yeah. So hairsprings, it's like almost,
there's just a few companies in the United States that still use hairsprings for certain
instruments and they do it in-house and they're way larger than watch hairsprings. So that's one
specialized industry. That's all in Switzerland. Mainsprings, there are companies in the US that
make springs, but they're massive. So once again, that's an industry that's completely specific
to Switzerland. Elgin created a special alloy for their mainsprings and that branch of their
company actually survived that makes specialized alloys of metals. But that company has nothing to
do with making mainsprings anymore. And then Jules, Jules come from a company called Microlap
and they were formed by Bolivar and the defense department in the 1950s. Bolivar wanted Jules
and the defense department wanted a stockpile of Jules in case we ever got cut off from
Switzerland again. And so for 20 years, this company made Jules for Bolivar and the defense
department. Bolivar went out of business, the defense department stockpile filled up. And so
they gave this company back to the people in North Dakota. And like you're saying, they made Jules for
the medical industry. And so a few years ago, I started hounding them to make watch Jules again.
And they laughed at me and said, we have to bring people out of retirement. And eventually I was
able to convince them if I placed a large enough order that I had to place a large enough order
because no one else is ordering them. There's no one in this country that's making thousands or
tens of thousands of watches that need Jules to support a company focusing on those things.
And then you sort of get into chicken and egg problems too. It's like, well, we think there's
a big enough market to support a massive US industry. No one knows for sure. And then in
order to support that, you need a huge investment and you need a huge number of people. So I know
that Vortec is working on being able to make a lot of watch cases. They're bringing in equipment
to do that. And I think that's one of the smartest places to start. They're focusing on that.
There are automated machines that you can set up to do case finishing. Assembling and waterproofing
them is still a lot of work, but that's one area to start. But movements are multiples more complex
than watch cases. So it's going to take a lot to bring that back on the mass production scale
in the US. Well, let's go back to Asher's question then, because I think it's a good one.
And I think we're starting to get the answer here, which is maybe it's not like, what is
your nirvana for what an American watchmaking industry looks like? Because let's just
accept, for argument's sake, let's say that the definition of made in America or made in the US
won't change and it will remain exactly as you've defined it. So maybe we need to
open our minds a little bit and not so much say like, the thing we need to focus on is
made in America watches, but the thing we need to focus our sights on is a growing and a thriving
American watch industry. Do you see it as something that just happens incrementally? Are there
certain milestones you'd like to see us reach? So for instance, like, hey, if we could get more
case making to start happening in the US, that would be a good, I'm making this up based on what
you said, that's a good first step. And maybe the next step isn't actually making movements,
maybe it's doing more dial manufacturing, because that's something that maybe is more attainable.
So do you see, maybe there isn't this nirvana, but do you see a couple of key phases or stages
you'd like to see the American watch industry sort of tackle one after another and kind of knock off?
So I think my philosophy with it, it's kind of developed and changed over the years, is I'm very
much into the slow and steady approach with this. I'm trying to build an infrastructure here in my
company that's like the ground, like the roots to be able to do something larger. And it's going to
take that. And then on top of that, I'm going to eventually have to open up a school that focuses
on the skills that are needed, that are unique to watch manufacturing, that are very different than
servicing a Rolex. And so that's going to have to grow and expand. And then not insignificant
is creating a market for people that even care. And because everyone says, oh,
they'd be excited for American watch, but the majority of people for the last 70 years have
just been buying Swiss, Swiss, Swiss, Swiss, Swiss for the high end. And to give people a reason beyond
patriotism to buy a US made watch is also going to take time. And so we're focusing on extreme
quality so that an American consumer feels like he's not losing out buying something from America
by not buying something from Switzerland or Japan. And you can see Japan has done that.
Japan has Seiko, Grand Seiko, Creedor, and they've really built up their industry in a lot of
different ways. So I want to ask you a question that's obviously very topical right now, which is,
you know, you represent a granted niche industry, but you are representing a manufacturing focused
business in the United States, manufacturing focused industry in the United States.
And at this particular time, in May of 2025, we are seeing the largest regime of protectionist
tariffs being applied to American industry that we pretty much haven't seen since the 1930s and
before. So I'm curious as somebody who is manufacturing in the United States and doing
so at an industry that is extremely young in its resurgence, what are your thoughts on this?
Are these tariffs helping you or hurting you? So if I existed in a vacuum and the United States
government were to only make one tariff, and that was directly aimed at Swiss watches,
that would be wonderful for us, right? That would protect us and force American consumers to say,
well, I don't want to have to pay this huge tariff to buy a Swiss watch. Is there anything
in the US? Yes, there is. There's one company that's made in America, US watches. I'm going
to spend my hard-earned money with them. But it's not in a microcosm. The tariffs are affecting
numerous different industries. And so I make a luxury product. I can't sell product into a
recession or depression. But the thought or idea of a tariff for me and the American watch industry
would be great in that way, but not in a global way. As a follow-up question, assuming that the
tariffs in this sense would be there to protect you as you grew and rebuilt an industry,
what else would you want to see from a US government to help you grow this industry?
A lot of grant funding. A lot of grant funding. Funding for the company and also funding for
labor, for education, for people. I think those things have to be all tied together.
Forget watchmaking. If you want manufacturing to come back in a bigger way in this country,
those things need to be in tandem with it. But I will say there's a big misconception,
and you'll see people on both sides of the aisle saying this, that it's not that American
manufacturing went away. It's that we've gotten so incredibly good at manufacturing that we don't
need as many people to do it anymore. One of the things you mentioned was this idea
of needing more than just patriotism as a reason to buy a watch or, frankly, anything that's
made in America. We talked about this at the beginning of the podcast. There were some real
things and some real ways in which the American watch industry and American watches really
stood out and were unique and compelling products. There's the vision of having an
industry and building up the talent and the resources and all those things.
But what would be the reason beyond patriotism to buy an American watch? What might be some of
the things a future American watch industry would hang its hat on? The way the Japanese do with
interesting movements like Spring Drive or interesting finishing like Sobatsu.
What do you think an American watch industry might have to offer that is unique?
CARRINGTON Yeah. It's all quality related. The FTC is really clear about that. When you see
made in America label, you can really trust that that thing was actually made in America and
everything that goes along with that. When something's made in China, you have no idea
what labor practices are going along with that. So, that made in America label means something
in terms of where the parts are coming from. Beyond that, Swiss made has sort of gone hand
in hand that this is a precision, high quality timepiece. Since that hasn't existed in the US
for a long time, or what has existed has been hybrid Hong Kong, things like Fossil and Shinola,
that what is American quality? We're so far away from Hamilton, Elgin, Waltham in their heyday
that there's hardly anyone alive that experienced those watches being manufactured in mass that can
say, wow, what an incredible watch that was just made here in this country. Look at the quality
of this thing. So, that's another thing too. It's got to mean something. That made in America label
has to be a sales point because it represents quality in a lot of different ways. That's why
people care about made in Switzerland. It's supposed to represent a tremendous amount of
quality. Otherwise, who would care about the label? Despite the fact, made in China has come
leaps and bounds if they're making things that are at such high quality that they're being labeled
as made in Switzerland. So, that label is important in sales, but then also fundamentally,
it has something to do with trust between you and the consumer. Is this thing really what it says
it is? Is it really that quality? Is it really coming from where it is? And so, all these things
get wrapped up into the made in label. So, for someone who's like, Josh, I love what you're
saying. I love what you're selling. Man, I wish I could buy a resurgence, but that's just not me
or that that's not me right now. What can the average person who's listening do to support
American watchmaking and the American watch industry? As we think have clearly learned,
this is a journey. It's a long-term journey. It's not going to happen overnight. It's going to
happen in fits and starts, but there are things people can do now and do today. So, for someone
who wants to support American watchmaking, do you have any advice? Yeah, I'd say go and buy another
watch from another American company because many of the brands in this country have that vision
and goal of doing more and more things here in this country. So many other brands are ambitious
about wanting to inch along and do more and more, whatever they can within their capabilities
and their partners. I'm not the only one in the country that's making cases in America.
I'm not the only ones that are making movement components in the country. So, there's a lot of
companies here that are really trying and trying to grow and do more here. Beyond just
Made in America or whatever it is, it's kind of the goal of any company to make the best
product they can. And sometimes that means bringing it in-house yourself so you have the
most quality control over it. There's a lot of great watch companies here. Here, here. Yeah,
even our friend Wesley Kwok, who we had on the podcast to talk about manufacturing in China,
notice his brand. They do all their assembly in the United States, right? It's just not possible
for them to make their parts here, but it is possible for them to do assembly here. And so,
they do that. And I think that is a journey we've seen so many watch brands, whether they're
partially American-made or whatever it might be, that they all seem to be on, which is trying to
do as much of it here as they can. So, I think that's great advice. And we have to start by
starting, as Asher and I like to say. And Josh, we just want to thank you for the part you're
playing in this, which is not only quite tangible and meaningful in terms of making watches in
America, but it's inspiring. And we're excited to see what you do, but we're also excited to see
who you inspire and what comes next. So, thank you. Guys, thank you so much for having me here.
Well, thanks for listening. Openwork is a production of Collective Horology.
You can learn more about our guest, Josh Shapiro, at JNShapiroWatches.com. And of course,
you can find us along with Josh's watches at CollectiveHorology.com. To get in touch with
suggestions, feedback, or questions, email podcast at CollectiveHorology.com.
Meow.