Panerai Movement Scandal?

“The new P.9200 caliber used in Panerai’s recently introduced chronograph family is a basic ETA 2892-A2 with Dubois Dépraz chronograph module,” pereszcope.com reports, kicking off the Panerai movement scandal. The problem? By giving the movement an “in house” Panerai designation, the Swiss-not-Italian watchmaker stands accused of misrepresenting a garden variety movement – and charging through the nose for it. For example . . .

the Panerai Luminor Chrono Goldtech™ Blu Notte at the top of the post runs $26,700. At the lower end of the range, the new steel cased Luminor Chronos (PAM01109, PAM01110, PAM01218 and PAM01303) go for as “little” as $9.4k.

ETA sells the movement powering the watch to manufacturers for $585 (or less) per piece. There’s nothing particularly wrong with the well-established “workhorse” movement, and the Dubois Dépraz chronograph module isn’t cheap. But the base movement is nothing special.

You can buy an ETA 2892-A2 in any number of timepieces by Longines, Bell & Ross, Hamilton, Breitling, IWC, OMEGA, Tudor and more. The recently introduced $5,900 Mille Miglia Classic Chronograph Raticosa is so powered.

“Having such a movement in a $10k or $27k watch could be compared to opening the engine hood of your Porsche 911 only to find out it has a Peugeot 3-cylinder engine,” Mr. Perezstroika writes, ignoring the fact that plenty of watches in the $10k price range use the same movement.

This Panerai movement “scandal” treads familiar ground. I examined the debate over modified (ébauche) vs. in-house calibers in my post In-House Movement – What’s Up With That? Setting aside Panerai’s pricing and marketing considerations, we’re left with a simple question: is a modified ébauche like the P.9200 an in-house movement?

In the field of watchmaking, this is one of the most whiny arguments ever heard, especially as those who discuss it usually have little to no knowledge of watchmaking history. So before we examine Panerai’s potential perfidy, let’s make another small excursion into this mechanical minefield.

Switzerland and the établissage

First, it’s necessary to understand what is meant by the term “établissage.” It refers to a practice Swiss watchmakers have been relying on for generations: assembling watches from stock parts (or movements) produced by other specialized manufacturers. A watchmaker that uses this production method is called an établisseur.

All Swiss watchmakers – and I do mean all – have relied on this practice. The first Patek Philippe Nautilus and Audemars Piguet Royal Oak mounted a movement made by Jaeger LeCoultre. The first Reverso of the JLC Grande Maison mounted a movement made by Tavannes. Those who speak of in-house or “manufacture” movements should remember this before speaking.

Secondly, both “manufacturier” (in-house) and “établisseur” watchmakers have a long, noble and ongoing history of buying parts from specialized manufacturers. The best watch cases were made by Borgel. The best dials from Stern. Bottom line: what you see on your wrist and think is an in-house manufactured watch is largely an assemblage produced with parts from all over the world (cough, including China, cough).

What really matters is how these pieces are put together.

Virtually no house, save the worst assemblers, has ever cased a movement without even looking at it. The Swiss may have a thousand faults, but this isn’t one of them. Even the cheapest movement is normally inspected, tested and personalized in some way by the etablisseur, if only by printing their name on it.

True story. Many manufacturers make purely cosmetic modifications, usually decorating the movement to add to its visual appeal (a practice that exploded with the introduction of exhibition casebacks). But in some cases they get deep into the movement’s substance, such as adding modules for complications (as Panerai did) or swapping out parts.

Frankly, it takes an expert to figure out exactly how a company modified a
workhorse movement, such as the ETA 2824 used by Sinn. Other than relying on the manufacturer’s information – normally a closely guarded secret – there’s only one surefire way to tell what’s been done: dissect both modified and unmodified movements and compare them to each other.

Is a manufacture movement better?

The unspoken assumption surrounding the Panerai in-house movement scandal: an in-house movement is better – worth more money – than a modified movement. This ignores the fact that most movements on the market today are derived from each other. From an engineering standpoint, the vast majority of “in-house” movements are variations on a common theme. History is our guide . . .

Once upon a time, calibers weren’t designed on a computer. Gauges were drawn by hand with a square and compass. Rather than designing something new, watchmakers tended to modify existing designs – precisely because the manufacturers of the different parts needed to complete the caliber had a catalog of standard pieces.

When the Quartz Crisis hit in the 70’s, the companies producing watch parts fell from 1600 to 600 in ten years, with the consequent technical impoverishment of the entire watch and movement supply chain. ETA, which gathered dozens of manufacturers within it, cut the number of calibers produced with a scythe, dropping by more than three quarters, laying the foundations for its current hegemony of the movement sector.

Current day watchmakers have less of a parts palette from which to build a “new” movement. Some manufacturers (e.g., Rolex and Grand Seiko) produce all their parts in-house and work assiduously to improve and innovate on their movements’ basic designs. And that’s worth something. But so is a properly modified ETA movement.

How much is “in-house” worth relative to ébauche? Panerai knew the answer to that question: more! Hence the Panerai movement scandal: the company chose to obscure its new chronographs’ movements’ derivation while promoting it as an in-house movement, increasing the watch’s desirability and thus Panerai’s potential profit.

Wrong answer. In a world where the Internet is the ultimate bush telegraph, Panerai should’ve known it couldn’t pull the proverbial wool over consumers’ eyes. Claiming that the movements are in-house – when photos clearly show they are not – is not only wrong, it’s stupid.

A company working in the luxury sector cannot afford to be stupid. A large (the largest?) part of an upmarket watch brand’s appeal/sales comes down to the consumers’ perception of exclusivity. If an exclusive watchmaker is caught selling “cheap” goods for a premium price, the damage to their reputation is both large and long-lasting. As we shall see.