Published: 04 Oct 2012 09:24 GMT+02:00 | Print version
Updated: 04 Oct 2012 09:24 GMT+02:00
Firms that relocate from Switzerland because of the strong Swiss franc are misguided, the head of the Swatch watchmaking giant Nick Hayek said in an interview to be published on Thursday.
Speaking to Zurich newspaper Handelszeitung, Hayek insisted that high productivity was more important than low labour rates because other countries could also see their running costs rise one day.
The Bienne-based giant's watches are still made in Switzerland and continue to sell for around 50 francs ($53) -- the same price as in the 1980s -- yet the firm still turns a tidy profit, Hayek said.
Around 90 percent of the company's profits came from abroad, Hayek said, while 95 percent of production was in Switzerland.
Conceding that the strong Swiss franc had affected margins, Hayek nonetheless supported the Swiss National Bank's decision to peg the currency at 1.20 francs to the euro given the "current catastrophic conditions".
Without the central bank stepping in to prevent the franc pushing past the current limit, Switzerland's manufacturing and tourism sectors would be doomed, Hayek said.
He added that the SNB's currency measure also served as an important reminder that manufacturing played a key role in the Swiss economy, amid continuing pressure by foreign governments on Swiss banks to release information about foreign nationals with accounts in Switzerland.
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