Watch factory for the world?


Hong Kong watch producers are now a dominant industry force, with a big stake in the U.S. market. Innovation, education and acquisition have helped them outgrow their image of low-end imitators and challenge established Swiss and Japanese competitors. But there could be trouble ahead

Pssst! Wanna buy a Hong Kong watch? That’s a foolish question. Whether you know it or not, you probably do own one, or at least a watch with parts made in Hong Kong.

In less than 20 years, Hong Kong watchmakers have changed from an enclave making cheap knockoffs into a world-class industry. They produce components and assemble them for well-known labels in Europe and America. They own prestigious Swiss brands. They’re major buyers of Swiss and Japanese movements. And they’re already cultivating two of the next century’s most important watch markets: China and the European Economic Community.

Hong Kong supposedly has one unchanging characteristic: that it’s always changing. So, too, is its watch industry. The following reports depict an industry at a critical stage, facing problems involving design quality, an acute labor shortage, rising costs and the pending return of China’s sovereignty. To survive, the industry must continue to change.

Monkey King to Lion: Two ancient Chinese symbols define Hong Kong’s watch industry.

One is the Monkey King, a delightful storybook character known to every Chinese child. A seemingly comical figure at first, the Monkey King always defeats his opponents with shrewdness, agility and surprising strength.

Like the Monkey King, Hong Kong watchmakers repeatedly confound their critics. Twenty years ago, a handful of small firms made 3 million watches a year in a city a third the size of Long Island, N.Y. At the most recent count, 1,300 companies have 27,000 workers making 438 million watches, clocks and components each year. Operations are in Hong Kong and China.

Today, Hong Kong watchmakers can aspire to the other symbol: the stone lions, seen everywhere from bank entrances to curio shop shelves, the ancient symbols of the supreme power of the Chinese.

If not kings of the watch world, Hong Kong watchmakers vie with the Swiss and the Japanese for the title, and like those imperial lions, they seem to be everywhere.

Since 1978, they’ve been the world’s largest exporter of watches by volume and, since 1987, the second largest (after Japan) in terms of value. Last year, that value increased 24%, to $2.1 billion, up from $1.7 billion in 1987. (Note: All monetary figures in this report are in U.S. dollars, not Hong Kong dollars.)

`Stuhrling original review watches’: Hong Kong watchmakers produce custommade components and/or watches for well-known labels in Europe and America, including Armitron, Gitano, Helbros, Jules Jurgensen, Elgin and Waltham. Upscale brands such as Cartier, Longines, Tissot and Omega get at least some of their watch cases from Hong Kong, says Jamson T.N. Wong, chairman of the Federation of Hong Kong Watch Trades & Industries and managing director of the Thong Sia Co.

Indeed, Hong Kong components are part of so many watches that Fred W. Bopp, vice president of international operations for Gruen Marketing, speaks of “an international” watch, combining products of Japan, Hong Kong and Switzerland. “Swiss and Japanese buy cases and watch bracelets in Hong Kong, and dials here, in Taiwan and in Thailand,” says Bopp, also managing director of the firm’s new watch production operation in Hong Kong. “So, more watches have the same contents.”

On its own turf, the watch trade has become one of the lions of Hong Kong’s economy. It’s the third largest industry in the colony (after clothing and electronics) and one of the strongest.

Exports overall have slowed recently, but akribos xxiv watch review and clocks continue to show what the Hong Kong Trade Development Council calls “robust performance.” Indeed, many major watch firms reported exceptional growth in 1988. Asia Commercial, a big manufacturer of private-label watches, doubled annual profits to $7 million on sales of $136 million, increased quartz analog exports 80% and set up additional production lines to meet demand. Stelux Holdings, an international conglomerate and probably Hong Kong’s best-known watchmaker, reported a record turnover of $78 million and a record net profit of $28 million. Turnover in the watch division specifically grew 31%.

The strong performance is partly due to the continuing flexibility of Hong Kong’s watch trade (most of the 1,300 firms have fewer than 50 workers) and continuing improvement in production and quality control at major firms (about 200 firms with 75% of the trade’s employees).

Another factor: the weak U.S. dollar (to which Hong Kong currency is pegged) keeps prices competitive. Several firms say that in the past two years, they’ve gotten more orders that would have gone to Switzerland and Japan if those countries’ currencies weren’t so strong.

But much of the growth has been fueled by the steady improvement–in type, quality and value–of Hong Kong watches since 1986.

Going upmarket: The cheap digitals on which Hong Kong built its reputation in the 1970s and early ’80s represent a rapidly shriveling segment of total output. Worldwide exports of digital watches from Hong Kong have dropped 33% since 1985, from 250.6 million to 169.2 million in 1988 (through November, the most recent figures available at press time).

Meanwhile, quartz analog watch exports grew 116%, from 52.7 million to 114.1 million units. Last year’s tally alone was 48% higher than 1987’s.

In the U.S. market–Hong Kong’s largest–digitals dropped 37% from 1986 to 1988, from 93.6 million to 59.4 million. Quartz analog imports grew 83%, from 29.3 million to 53.5 million.

As quartz analog output has grown, so has quality. In the past three years, many manufacturers have moved firmly into better-priced watches ($50 to $200 at retail). Consider Gordon C & Co. Ltd., one of Hong Kong’s fastest-growing upscale firms. The firm produces watches retailing for $100-$500 for its U.S. and European customers and assembles its own movements in Switzerland. Gordon Chow, owner and general manager, plans to start producing his own line of 18k gold watches within two years. A few firms already produce jewel-encrusted timepieces, complete with luxury-level price tags.

The upgrade is due partly to the watchmakers’ remarkable ability to respond quickly–often within a few months or weeks–to changes in consumer demand.

“Hong Kong factories adapt very fast to market fluctuations,” says Jamson T.N. Wong, the watch federation chairman. “If someone says, `Analog is good,’ almost everyone moves to analogs. If you say `Digitals are good,’ people will move back to digital.”

Sophisticated fashion and multifunction watches are popular now, so they dominate Hong Kong’s output. “In general, people want design-oriented products rather than ordinary, simple ones,” says Roger H.S. Tsui, president of the Hong Kong Watch Manufacturers Association and managing director of Remex Holdings Ltd., which produces more than 12 million quartz analog watches a year.

But much of the improvement in product is spurred by one simple economic fact: Hong Kong watchmakers as a whole can’t afford to stay in the price basement any longer. They remember how price-cutting and cut-throat competition undermined the boom in cheap LCD (liquid crystal display)watches in the early 1980s. And they know the same thing can happen with cheap quartz analogs because of a new round of price-cutting and competition from watch industries in Thailand, Malaysia, South Korea and Taiwan.

`High costs’: The biggest goads prodding Hong Kong into a higher-priced market, however, are sharply rising operating costs (last year the inflation rate hit 9%) and an acute labor shortage.

The city is an expensive place to live and work. `Things aren’t very cheap anymore,” says Charles A. DuBois, Far East manager of the Swiss Watch Industry Information Center in Hong Kong and a resident since the mid-1970s. “I’m surprised they can still produce cheap watches in such quantity with the high rents [charged now in Hong Kong].”

The cost of imported watch parts has risen steadily in the past couple of years, especially movements (15% to 25% of the cost of a Hong Kong watch), most of which are bought from Japan and Switzerland. The use of better materials (i.e., metals instead of plastic) has added to production costs.

But it is labor costs–about 68% of a Hong Kong firm’s operating costs, excluding purchases of materials and industrial services–that have soared most, due to Hong Kong’s strong economy, rising inflation and labor shortage. In 1987, for example, wages for workers at the Hong Kong plant of watchmaker Seiko Instruments Electronics rose 14%, says the Japan Economic Journal. Today, per capita wages in Hong Kong average $9,600 (U.S.), the highest in Asia.

“Our labor isn’t cheap anymore, so we have to go for the higher price [watches],” says Samson Sun, permanent honorary president of the Federation of Hong Kong Watch Trades & Industries. “Hong Kong manufacturers overall can’t survive selling watches for $2 or $3 each. We have to go into medium label analog quartz, in the $8-$40 range.”

Labor shortage: Soaring wages have made it difficult for Hong Kong factories to hold onto workers, who often follow the rising wage rate from plant to plant, even if the wage raise is only 20 cents.

Such labor volatility aggravates what most watchmakers, and other manufacturers, say has become Hong Kong’s biggest problem in the past two years: an acute shortage of skilled workers, especially for hands-on jobs such as assembling watches.

The city also must deal with a “brain drain” of professional managers and executives. But it is the shortage of skilled workers–Hong Kong’s official unemployment rate is only 1.9%–which has hit the city’s labor intensive industries, including watches, the hardest.

The annual turnover in employees at Remex, for example, is 40%. “Our personnel department has a very tough job,” says Philip Chan, one of the firm’s directors. “We try everything [to hold onto them, including] incentive plans, cash bonuses, piped-in music [in the work area], recreational activities, a TV in the changing room [where employees put on slippers, white coats and hats before entering to reduce dust in the assembly area], to watch programs at lunch break.”

Like many other watchmakers, Remex employs mainly young women, who are prized for their sharp eyes and nimble fingers. But most are single and leave to have children after they marry.

Even so, Remex’s situation isn’t as bad as that of some other Hong Kong manufacturers. A recent Hong Kong manpower survey of all city industries found some firms with annual turnovers of 100%!

Because of the labor shortage, many Hong Kong watchmakers have been unable to increase their production capacity, says Roger Tsui, president of the watch manufacturers’ association. It has become very hard, for instance, to find skilled makers of watch cases and watch bands. Indeed, the shortage became so acute a year ago that for a while, many Hong Kong watchmakers simply stopped taking orders they couldn’t fill.


Rising costs and labor shortages have taken the edge off Hong Kong’s price competitiveness. But Hong Kong manufacturers have a handy remedy that others only dream of: abundant, inexpensive labor at their back door in the 1 billion-plus residents of the People’s Republic of China (PRC). As a result, some industry experts estimate that up to half of Hong Kong’s larger watchmakers, like other Hong Kong manufacturers, have set up factories or moved their operations to the PRC. There they can “take advantage of the more reliable labor situation,” as Nh Chue Meng, chairman of Stelux Holdings, puts it.

Nearby Guandong and Fujian provinces alone boasted 390 watch and clock factories by the end of 1988, according to published reports. Most are located in the PRC’s “free economic zones” in the Pearl River Delta, within 20 miles of Hong Kong. Business there has boomed in the past few years as Hong Kong wages soared and its labor supply dwindled.

Most of the city’s major watchmakers, such as Stelux and Asia Commercial, have major manufacturing operations in the PRC. But sent back to Hong Kong for finishing and assembly. The digitals, especially, are high-quantity, minimum-skill, labor-intensive products well suited to the current level of watchmaking skills of workers in the PRC’s economic zones.

But production of quartz analog watches in the PRC is increasing, as the skill level of the workers there rises. Industry analysts expect further significant increases over the next few years. Asia Commercial, for example, recently opened two new three-story plants, with a total of 180,000 sq. ft., the first of several on a 450,000-sq.-ft. site. The plants will manufacture watch bands and produce up to 5 million quartz analog watches ($10 each, factory cost, over $40 retail).

Industry analysts say China is the key to Hong Kong’s continued price competitiveness in watches. “With the labor supply, and the cheap overhead we can get from China, I think the Hong Kong watch industry faces an even brighter future than before,” says Jamson N. T. Wong, chairman of the Federation of Hong Kong Trades & Industries.

The shift of more labor-intensive operations to China will continue, but few industry analysts expect all of Hong Kong’s watch trade to move to China.

“The majority of production will remain in Hong Kong. Low-end products will switch to the PRC and Thailand, but quartz analog and the mid-level products will continue to be assembled in Hong Kong,” says Roger Tsui, managing director of Remex Holdings.


Hong Kong’s Director of Industry, K.Y. Yeung, recently told the Hong Kong Watch Manufacturers Association that, “Competitiveness in our major overseas markets is increasingly influenced by…quality and originality of design.”

On quality, watchmakers both within and outside the city’s industry contend that Hong Kong watches are the equal (or very close to it) of Swiss and Japanese watches at comparable price levels. Most of the city’s large firms keep close control over production and employ stringent quality control procedures.

For example, Remex, which produces 12 million watches annually and is one of the city’s few movement manufacturers, has quality control checks on every unit at each stage of production, plus random sample evaluation. Components must meet precise specifications; quartz analog movements, for instance, are rejected if their accuracy varies more than a half second, plus or minus, per day.

In addition, more big firms now use state-of-the-art quality testing equipment (usually from Japan and/or Switzerland) to monitor all specifications, including water-proof testing of assembled watches and checking the gold plating of cases.

Automation also plays an increasingly important role. Several big firms have added semi-automated assembly lines to meet growing production demands, and use computer-aided design programs.

(Full scale automation, as found in Japan, is unlikely soon, however. Many Hong Kong watchmakers say that would deprive the labor-intensive industry of its flexibility and ability to provide short-notice custom orders in which the trade specializes.)

Smaller firms are improving the quality of their production, too, with help from the Hong Kong Productivity Council. The HKPC’s metals division provides consultants and laboratory services to help small manufacturers improve surface finishing of watch cases and bands, and to produce tiny parts such as watch hands by metal stamping and photochemical machining. It also provides diagnostic and testing services.

In addition, this year the Hong Kong Vocational Training Council plans to set up a sheet-metal processing training center to train technicians in the fabrication of high precision watch movement parts.

Upgrading design: But the jury is still out on whether Hong Kong can upgrade the reputation and innovation of its watch designs as effectively as it has other aspects of its trade.

A number of individual Hong Kong watch executives are as familiar with the elements of good watch design as any in Neuchatel or Tokyo. C.P. Wong, managing director of Stelux, literally grew up in the Swiss watch trade. Roger Tsui, managing director of Remex, is a graduate of Swiss watchmaking schools.

But overall, Hong Kong has been a follower, not a leader, in watch styling. The digitals on which Hong Kong built its watch industry between 1974 and 1982 didn’t really require any design originality. And for those and other watches, Hong Kong firms made what clients demanded, or copied whatever was successful on the market.

The nadir came in the mid-’80s, when several Swiss watchmakers accused some 50 Hong Kong firms of copyright infringement. Though the defendants said they followed generic fashion trends and most of the cases were dismissed, the incident was sobering for the entire Hong Kong watch industry.

“It alerted us that we should be creating our own styles here instead of copying or imitating them from somewhere else,” says Samson Sun, permanent honorary president of the Federation of Hong Kong Watch Trades & Industries. To date, however, none of Hong Kong’s schools has a program in practical watch design.

Creating designers: So, in the past four years, the Hong Kong watch trade has taken steps to train home-grown designers and to upgrade its design standards and quality.

More companies now send their designers to foreign trade shows to keep them abreast of trends in fashion, watches and jewelry, and to local seminars sponsored by industry associations to upgrade their skills. Several have in-house programs, or underwrite special training overseas. Managers and salespeople are encouraged to provide input and information on styling trends.

The Hong Kong Watch Manufacturers Association now has a short course of its own, and is talking with the Hong Kong Polytechnic School about adding watch design, says Roger Tsui, HKWMA president.

Another step is the annual Hong Kong Watch and Clock Design Competition, started in 1985 to encourage originality and innovation. It is sponsored by the HKWMA, the Hong Kong Federation of Watch Trades & Industries, and the Hong Kong Trade Development Council. Winners receive cash prizes and all-expenses paid trips to the international watch fair in Basel, Switzerland.

Designing for customers: To some extent, the effort is paying off. “The position of designer has become quite important in our industry” in just the past couple of years, says Roger Tsui.

Virtually all major watchmakers now have one or more fulltime designers on staff, usually native Hong Kong residents. Gordon C. & Co., a winner in last year’s design contest with its stainless and gold-plated multi-function moonphase watch, has four. Remex has three. Asia Commercial employs 10 designers and draftsmen.

Smaller firms which can’t afford full-time designers subcontract, and more designers are moonlighting. “Quite a lot of designers are selling their designs to manufacturers,” notes Tsui.

A measure of the extent to which Hong Kong firm have become style conscious is that fewer now wait for clients to come to them. Instead, “more and more watchmakers are creating their own watch designs and promoting them to their customers, who are importers or retailers in other countries,” says Warren W. L. Hui, managing director of Prosperity Watch Co., and chairman of the watch industry advisory committee of the Hong Kong Trade Development Council.

In addition, “More importers are coming to us and saying `Show us what [designs] you have,’ instead of saying `Make this,'” from their designs, he says. At Asia Commercial, a major private label manufacturer whose customers include Armitron, Pierre Cardin, Elgin, Sharp and Waltham, “50% are designed by us and 50% by the importers,” says Wu Sik Lan, deputy general manager. Out of 515 new models produced by Asia Commercial in 1987, for instance, about 300 were original in-house creations.

An ironic measure of the improved originality of Hong Kong designs is that in a few isolated instances their styles “influenced” designs of new watches from Japan and Switzerland.

“It shows Hong Kong designs are being noticed by watch manufacturers of the world. If Hong Kong has a good idea or good design, they don’t mind using it,” says Warren Hui.

Still, Hong Kong watch manufacturers have a way to go, say both industry analysts and spokesmen.


Recently, the Minister of Trade for Singapore urged a conference of southeast Asian countries with growing watch industries to imitate Japan and market their own brands of watches internationally.

That would seem a logical step for Hong Kong watchmakers, considering their position as the world’s largest producer of watches, their global contacts and the recent improvement in the quality and value of their timepieces.

Indeed, the same idea has occurred to some of them. Various watch firms have registered some 700 possible brand names in Government House in Hong Kong. A few larger firms already have brands which they promote in home and foreign markets. These include Asia Commercial’s Accord, Prosperity Watch’s Intima, and Stelux’s Swatch-like Smash.

Yet overall, Hong Kong watchmakers are reluctant to develop and promote their own new brands. Risk is a big reason. “To build up a name, you have to invest a lot in advertising, with no guarantee of success,” explains one privately.

Then too, admit some watchmakers, many people still associate “Hong Kong watches” with cheap knockoffs, an image which can be a detriment to sales. Certainly there’s little desire to build brand business in the U.S. Hong Kong is a major supplier of private label goods in this country and doesn’t want to rock its profitable boat.

“Hong Kong firms have very good and close connections with private brand name owners and importers in the U.S.,” says Jamson T. N. Wong, chairman of the Federation of Hong Kong Watch Trades & Industries. “They’re good customers. Why compete with them?”

So, rather than start new brands from scratch, major Hong Kong watchmakers are expanding their markets in other ways.

Several are taking what one laughingly called “the easy way”–acquiring well-established, usually Swiss, brand names, as a path into upscale markets.

Stelux Holdings is a leader in this. It acquired the Swiss brand Titus & Solvil in the 1970s, two Swiss watch case factories, a dial producer and also, Bulova (which it later sold in 1979). Late last year, it added Universal Geneve to its fold.

Other transactions in the past year include Asia Commercial’s purchase of Juvenia and International’s acquisition of Camry.

They aren’t the only ones with Swiss or other holdings. According to Stelux’s C.P. Wong, as many as 25 major Hong Kong firms may have full or partial ownership of upscale brands. But, he says, many don’t publicize that because of the negative impact it might have on those brands. As Wu Sik Lun, deputy general manager of Asia Commercial Co. Ltd., explains, “many people recognize Switzerland as the number one watchmaker in the world so any watches coming from there have more prestige, while Hong Kong timepieces are still treated as low-end watches.”

Asia Commercial illustrates why large Hong Kong watchmakers are buying established upscale brands and how they will use them. It already is a major producer of private label watches, with an international client list that includes Armitron, Pierre Cardin, Gitano, Quelle, Elgin, Sharp and Waltham. But selling only to importers, who own the brands, and only in low- to medium-price watches has its limits.

So, for the past couple of years, Asia Commercial has “been negotiating for…a number of well-known brand names to enhance its penetration of world markets and achieve a higher margin in sales of its products in these major marketplaces,” said Asia Commercial Chairman Eav Yin in a recent report to stockholders.

It was successful in acquiring Juvenia, a luxury Swiss brand established in 1860, from Ebel, another well-known Swiss firm, for some $3 million late last year.

In addition to expanding its market, acquisition of Juvenia will provide Asia Commercial with needed expertise in designing and producing high-end watches, says Wu Sik Lun, deputy general manager of Asia Commercial Co. Ltd.

Retailing watches: Another way of expanding one’s market is to sell direct to the public, bypassing the importer and wholesaler.

Stelux Holdings has added watch retailing to its assembly and manufacturing operations. In 1985, it cautiously opened its first watch stores in Hong Kong, under the name City Chain.

“It had a staggered start,” recalls Albert Gazeley, executive director of Stelux. “The first year, we weren’t sure whether we should stay in because it upset a lot of our customers. But Mr. [C.P.] Wong [Stelux’s managing director] decided to take the big step, because going direct to the customer was the way to go, to cut out the wholesaler and offer more competitive prices in the market.”

The watchmaker’s retail efforts had “a few lumps and bumps” as it experimented with a variety of retailing, including selling in store corners and under-the-stairs boutiques. When the chain’s sales started to grow quickly, “we reassessed our situation, kept what was working and settled on [using] higher class, better shops, with better styling and more established brands names.”

By late 1988, there were close to 60 stores in Hong Kong, plus eight in Singapore, 12 in Taiwan, and several in Malaysia. The stores’ exteriors are almost all glass windows; their interiors use mirrors and stainless steel, and look bigger than they actually are.

In his annual statement to shareholders, Ng Chue Meng, chairman of Stelux Holdings, reported that City Chain is “setting new sales records month by month and based on this consistent performance, we expect the retail watch division to be an important profit contributor…for the long term future.”

According to another Stelux report, Europe and the U.S.–possibly Hawaii–are “under consideration” as future sites of the watch store chain.

“We’ve had a number of people ask us about franchising in America, so we know we’re onto a good thing. But we’re not in a big rush [to do that] until we have everything here tied down,” says Gazeley.

For the next couple of years, at least, C.P. Wong told JC-K, Stelux will concentrate on building its presence in Europe and Far Eastern countries.

“For the time being we have no plans to enter the U.S. in any significant way, other than in making watch bands for famous watch companies and producing private labels for people there under OEM [original equipment manufacturer] agreements.”

One reason Hong watchmakers may be less anxious to develop new business in the U.S. may be that some of them now consider the European Economic Community (composed of 12 west European nations), southeast Asia and especially China to be more viable markets than the U.S.

“The U.S. market is slowing,” says Philip Chan, a director of Remex. “We think the buying power there is decreasing, and we are looking more to the European markets.”


A tall, gleaming, blue glass tower has risen above Hong Kong’s skyline in recent months, literally overshadowing Hong Kong’s nearby Government House. It’s the new and imposing home of the Bank of China, operated by the People’s Republic of China (PRC), a symbol of China’s already-large influence in Hong Kong. It is also a constant visual reminder that this “most capitalist city in the free world”–as a western industry analyst calls it–will return to the PRC’s sovereignty in 1997.

Like that gleaming blue tower, the 1997 return looms over the thoughts of Hong Kong’s residents, as well as its business activities. “The shadow of 1997 covers everything,” says a leading Hong Kong watchmaker privately.

Publicly, businesspeople and government officials downplay concern. But June’s brutal massacre and crackdown by the PRC on students and workers calling for democratic reforms only increased the anxiety of Hong Kong businesses and residents about how a hard-line Chinese government could handle their city. The Hong Kong stock market plunged 40% between May and early June, exit visa requests rose sharply, and hundreds of thousands demonstrated in Hong Kong. Many of them called for renegotiation of the 1997 treaty.

“Let’s be frank,” a government official told JC-K. “Two-thirds of Hong Kong’s 5.6 million people are refugees [from China] who are all-too-familiar with what happens when things go wrong in the [PRC]. There is trepidation. It’s foolish to say people aren’t concerned how things will work out after 1997.”

Such suspicion is understandable, says Tony Miller, assistant director of the Hong Kong Department of Trade.

“The official relationship [between China and Hong Kong] has changed so fast that some people have trouble accepting that we now have a normal situation. Twenty years ago, there were bombs and riots [when Mao’s Cultural Revolution zealots stormed into Hong Kong]. Ten years ago, the situation was still extremely abnormal. High PRC officials coming through Hong Kong did so as quietly as possible, and we pretended they weren’t here.

“These days, though, when a senior PRC official comes through town, he goes to Government House for tea and talks with government ministers! It’s all quite natural.”

Brain drain: Many in Hong Kong aren’t so sure, and aren’t waiting to see what happens. There already is a serious “brain drain.” That’s what Hong Kong residents call the growing flow of professionals leaving the city for other countries since Great Britain agreed in 1985 to return Hong Kong to China. More than 45,000 people now leave annually–so many, in fact, that Emigrant, a new magazine just for them, has appeared on Hong Kong news stands.

Canada, Australia and New Zealand are popular destinations. They offer quick entry based on education, occupation, work experience, fluency in English and/or for “business immigrants,” those with sound business plans and sizable investment funds. The U.S., by contrast, uses quotas and requires family ties or skills in a scarce occupation.

City officials downplay the brain drain. They note that Hong Kong has a history of immigration (as South China’s transit point for refugees); that only half of those leaving are adults, and that many aren’t business or management professionals.

Even so, in a city which already has an acute labor shortage, loss of many managers and top-level personnel is serious. In one major watch corporation alone, 80% of the 60-plus executive officers have emigrated to Canada, Australia or the U.S. Many watch manufacturers who “want to expand and need management people find there aren’t enough to fill the vacancies,” says Roger Tsui, president of the Hong Kong Watch Manufacturers Association.

Returns: That’s the bad news. The good news is that the brain drain isn’t as damaging, yet, as it seems. The government is creating education programs and building a third university to train home-grown technicians and business professionals. Also, many migrating managers and execs return alone to their Hong Kong firms after they’ve settled their families in free, stable countries elsewhere and gotten second passports. “Getting residents’ rights or a second passport is insurance against the future [after 1997],” one watch company exec told JC-K.)

Meanwhile, in true Hong Kong style, many watchmakers are using this mini-diaspora to create new markets and foreign sales networks, and to get closer to sources of technical developments and fashion trends, says Jamson T. N. Wong, chairman the Federation of Hong Kong Watch Trades & Industries.

Formerly, “Hong Kong watchmakers were concentrated in Hong Kong. They didn’t move out [or] have offices overseas. Now, because of 1997, they have to emigrate somewhere. Wherever they go–the U.S., Canada, Australia and Europe–they set up offices, become marketing people and start networks of salesmen to prepare for after 1997,” he says.

In addition, frequent trips to and contacts with overseas offices and relatives keep them well informed on fashion trends and technological developments.

“Wherever something develops, Hong Kong people are there–family, wife, employee, someone–and they call immediately and say, `Someone here is doing something you should know about.

It’s in the newspaper,'” says Wong. All this “makes the Hong Kong watch industry more efficient in understanding and selling to the world market.”

Bulova tests market for new Accutron

One of the most famous brand names in watch history may be back on U.S. jewelers’ shelves before year’s end.

Bulova Corp. is test-marketing Accutron watches through ads in Discover, GQ, Smithsonian and Gourmet magazines. People may order the new 23k gold micron stainless steel watches by mail directly from Bulova. There are six bracelet or strap models (four men’s, two women’s) priced from $249 to $499.

President Andrew Tisch says Bulova isn’t going into the mail-order business permanently and bypassing retailers. Rather, the direct-mail ads are designed to “test the viability of the [Accutron] name and public reaction to it,” he says.

If the review bulova watches is positive, Bulova could distribute Accutron watches to jewelers later this year, he says.

The Accutron name and logo have a long history at Bulova. The original, introduced in 1960, was revolutionary. It had an electronic tuning fork oscillator that eliminated the escapement and balance, and was the most accurate watch of its time. It made such an impact that a stylized design of the Accutron tuning fork was Bulova’s logo until the late 1980s. It remains the logo for the new watch, which uses it in place of “12” on its dial.

Bulova tried to reintroduce Accutron as an upscale Swiss line in 1981, shortly after the Loews Corp. bought the firm. That effort failed in the U.S., though Accutron watches continued to sell in Europe.

The new Accutron is a thin, sleek, intricately designed watch with a sophisticated quartz movement accurate to “99.999% or three seconds a month,” says the ad. Its only connections with the earlier models are the name and logo. According to the new ads, it takes “over five months to build, finish and test” each Accutron.

Bulova proceeded with the ads after testing consumer and retailer interest through “focus groups” in late 1988. Tisch says the firm found Accutron is still “a strong, established name” with consumers, an important asset considering that firms spend millions of dollars to create brand recognition.

But retailers are more cautious. “The retailer’s first statement is, `Show me that it will be successful,'” says Tisch. “This [market test] is a way to do that.’

The ads began a three-month run in national magazines in May. The test could be extended.

Tisch won’t define Bulova’s criteria for success in the test. But he says the first weeks brought good results: “We’ve gotten a very positive response, even more than we expected, in terms of orders and inquiries.”

Cartier’s watch – A “crashing” success

Did it melt, like the watches in Salvador Dali’s 1931 surrealist masterpiece, The Persistence of Memory? Or was it run over, preferably by a sleek black Daimler Princess limousine on Jermyn Street? Or was it, indeed, the result of a traffic accident, a crash, and somehow returned to its maker for warranty repairs, as a sardonic gesture, which, in turn, inspired a master designer who imagined a working mechanism out of this distorted wreckage?

There are more myths than realities to what is surely one of the oddest wrist watches in production by any company, much less Cartier. Called the Crash Watch, it was designed in 1965 by Rupert Emerson, a staff designer who spent more than four decades with Cartier in London. Based upon a damaged watch (and not – despite the obvious similarities – upon the celebrated Dali image of the melting watch), it took two years to perfect its no less unconventional mechanical movement.

Originally issued in a limited edition of 12 watches in 1967, and available in recent years only on special order, it is now being reissued in a limited edition of 400 for the world. The two watches allotted to Canada have already been sold (for $19,500 each, including GST); but a few still remain in Paris, from where it can be special ordered. For the really special customer, including Elton John, who got one as a gift from Cartiers to celebrate his 45th birthday, a jewelry version of the Crash Watch can also be special ordered, its surreal shape adorned with 139 diamonds, and priced at about $41,000.

Another Cartier watch that boldly struts its stuff with a gaudy air of extravagance is the new Pasha 3 Time-Zones watch. The latest addition to the Pasha line of Cartier watches, it takes its name from an earlier era – well before Timex made waterproof watches for every Mixmaster in the land.

In 1933, the Pasha of Marrakech wanted a waterproof watch to wear while swimming in his pool. He took his order to Louis Cartier, who created a one-of-a-kind gold waterproof watch.

In 1985, the present proprietors created a new family of watches, each waterproof to 30 metres. Inspired by a 1943 model, the new design evokes post-Art Deco Modernism, with its over-sized bezel surrounding a round face, typically with more than one dial. Its assertive complexity and bulk makes the Pasha Cartier’s answer to the busy, traditionally macho watch styles of Rolex.

With more to look at than most TV shows, the Pasha 3 includes two additional watch faces for the extra two time zones, and a third dial for telling the calendar date, plus a black oblong area that shows the phases of the moon.

All this technology comes in one of the world’s largest wrist watch packages. Calculated to make your average chunky Rolex look downright demure and petit, the Pasha 3 weighs in at nearly 150 grams, with a diameter of 38 millimetres and a thickness of seven millimetres. Sadly, I should add, it is all made possible by a quartz movement; but I, for one, would have liked to hear this beast ticking.

For all of its features and bulk, the visual design of the Pasha 3 Time Zone is surprisingly delicate-looking, with its grainy silver dial, Roman numerals, a blue sapphire cabochon on its winding stem, and two push buttons to control the second and third time zones, one with a yellow sapphire cabochon and the other with a grey chalcedony cabochon. The price, including GST, is $33,000.

The Crash Watch and the Pasha 3 Time Zones watch are available at Les Must de Cartier, 102 Bloor St. W., Toronto.

Shoe collection no footling pursuit

Collecting shoes came naturally to Sonja Bata.

As a young bride, she shopped diligently, buying scores of shoes that she then handed out to designers at Bata factories all over the world as aids for developing new lines.

As Mrs. Bata became more knowledgeable about different kinds of footwear, the leap from buying to collecting was a natural progression.

“Shoes tell you more about people and their history than any other artifact,” says Mrs. Bata, whose collection, started after her 1946 marriage to shoemaker Thomas J. Bata, has grown to some 8,000 pairs of shoes.

There are wooden Egyptian sandals with big toe-knobs made in 2,500 B.C. There are 17th-century leather cavalier boots. There are straw boots from the Ukraine, embroidered animal hide boots from Afghanistan, brass shoes from Korea and workingmen’s clogs from 19th-century Europe.

There are celebrity shoes for bunions: a pair of black satin boots worn by Queen Victoria, garish sequined platform boots worn by Elton John, pink ballet slippers worn by Karen Kain, hand-tooled cowboy boots worn by Robert Redford. There is also a Terry Fox running shoe.

There are shoes worn by Venetian courtesans, by Japanese geishas, by U.S. infantry soldiers. There are pairs of the grotesquely tiny shoes worn by Chinese women whose feet were bound to make them more attractive.

There is also the most comprehensive assortment of footwear worn by North American Indians and the native peoples who inhabit the world’s circumpolar regions.

You name them, Sonja Bata has them.

Needless to say, the collection long ago outgrew the Batas’ spacious Bridle Path residence and had to be moved to the Bata headquarters in Don Mills where the shoes sit on shelves in a climate-controlled area of the basement.

But, given the historical and anthropological significance of her collection, Mrs. Bata believes it would be a shame to keep the best running shoes for plantar fasciitis under wraps, as it were.

“When you get shoes of historical interest – coronation shoes or wedding shoes of famous people – you can’t help but to dream back to that period and wonder what was it really like, what was the ceremony like, who was there, what was the whole environment like.

“So the challenge in designing the shoe museum is to put that across to the viewer. We can’t just put these historic shoes into a glass case and let people read the labels. If we did they would have great difficulties relating to them,” Mrs. Bata says. “It cannot be static. It must be exciting, people-oriented.”

So in 1979, she set up a foundation for the express purpose of establishing the first shoe museum in the Western Hemisphere. To date, her efforts to get the $6-million project off the drawing boards have been stymied – first by anti-apartheid groups critical of Bata Ltd.’s employment practices in South Africa, then by bureaucratic red tape from Toronto’s City Council.

In March, the Ontario Municipal Board approved a mid-town hotel complex that, pending the granting of building permits from City Council, will contain the Bata shoe museum. Says Mrs. Bata: “It will be a world-class museum that I feel will be popular. After all, shoes are something that everyone has to have and to which everyone can relate.”

The big windup in men’s watches

My 1937 Bulova Art Deco watch is the most elegant thing I own. It has a narrow hexagonal dial, a stepped gold case and a matching band that extends the design around the wrist. It would have been pricey when new – over $500 in today’s money – but I got in on eBay for about the cost of a new quartz Timex. I’m definitely putting on the Ritz when I wear it, but I don’t strap it on every day, because I have about a dozen other watches, most of them old mechanicals.

There are a lot of guys out there like me, some of them willing to spend as much on a watch full of moving parts as I ever would on a car. Like me, they probably started getting interested in watchesas items of adornment just as cell phones began making them obsolete.

“I have between two and four digital devices on me that can tell me what time it is,” says Stephen J. Pulvirent, the 23-year-old associate editor at, an online magazine about high-end mechanical watches. Strictly speaking, a wristwatch is “superfluous,” he says, but that’s part of the reason it has become an expensive necessity for the 300,000-odd readers who check out Hodinkee each month. Enthusiasm for old-time watchworks has driven up the total value of Swiss mechanical exports by 362 per cent since 2000, while the dollar value of exported Swiss digital watches has stagnated.

Luxury timepieces have been around since the first clocks were made, but this kind of fascination for outdated watch technology is something new. It’s part of our digital-age romance with many things from the mechanical era, but it’s also related to the drift toward everything casual in the way men dress. At a time when many a man finds a sports jacket too dressy or a tie too formal, watches, whether cheap or dear, are increasingly a focal point of style and display.

“Men don’t get to wear a lot of jewellery,” Pulvirent said. “Cuff links, maybe, and perhaps one ring.” Rolex has made itself part of the business uniform, as a symbol of success that everyone understands.

But that’s not what interests the average Hodinkee reader, who is 35 years old, has a household income of over $250,000, and is apparently eager to know the fine details of new issues from the coolest Swiss makers. The point is to express something about your knowledge and taste, Pulvirent says, not to show that you’ve made it.

Resurgent mechanical watches have reshaped the industry in Switzerland, which is to watches what Scotland is to whisky. In 2013, mechanicals accounted for only 27 per cent of exported Swisswatches, but 78 per cent of dollar value, according to the Federation of the Swiss Watch Industry. The average price of a Swiss watch has doubled in the past 12 years, driven largely by high-end mechanicals.

Neckties used to be a relatively cheap way to flaunt your style, in a flash of colourful silk that offset the conformity of a sober wool suit. The watches covered by Hodinkee do the same for the casual generation, for a lot more money. Most are updates of classic watches, such as the new Tudor Heritage Ranger, a $3,000 remake of a manually-wound, military-style watch from the 1960s; or the Omega De Ville Tresor, a subtle throwback to mid-century dress style, at $14,300. The De Ville Tresor runs on a self-winding rotor, as many watches did 50 years ago, but unlike pieces from that period, it and many other retro mechanicals expose their internal workings through a sapphire crystal back.

“If you’re paying for a mechanical watch, you want to see that movement,” Pulvirent said. An exposed movement lets the wearer into one of the open secrets of Swiss watchmaking, he says, which is that makers traditionally fussed over the finish of their movements “not for the wearer to appreciate, but for other watchmakers.” It’s a gear-head’s dream, also expressed by the “skeleton” faces of watches that show the works from the front.

“A man’s watch is a miniature expression of his gadget-loving personality,” says Mitch Greenblatt, co-founder of, a watch store and blog that might be described as Hodinkee’s wilder, more penny-wise cousin. The status-flashing conservatism of a Rolex, Greenblatt says, “makes my skin crawl.” Watchismo caters to more adventurous tastes, with unusual digital watches whose time displays may be so novel that practice is needed to read them.

The Devon Tread 2 is an outsized mechanical that tells time using two perpendicular “time belts” that run on sprockets like film.

“When you wear that watch and go to a party, you become a rock star,” Greenblatt says.

The striking digital designs at Watchismo are the descendants of the Swatch watches of the 1980s, which successfully put forth the idea that a boring interior – the minimal, interchangeable works of a digital watch – could have a fun and exciting wrapper. Ironically, many of the watches jockeying to prove their distinction in the luxury mechanicals market are using movements sourced from a single supplier: ETA, which is owned by Swatch Group. That situation has provoked a new fetish for movements built entirely in-house – something staid old Rolex has been doing for decades.

One thing I’m not in tune with about many of the new watches is their size. Perhaps because so much stylistic weight is being displaced to the wrist, even retro designs today are noticeably bigger than the originals. Watchismo carries one oversized Sisu model that weighs a full pound – just the thing with which to thump your chest as you roar out your masculinity.

My 1937 Bulova is tiny in comparison; when I first wore it, a woman I know even asked whether I was comfortable with something so borderline feminine. I told her that a lot of men who bought that model when it was new also signed up to fight Hitler.

Both Pulvirent and Greenblatt predict smaller sizes ahead, though they also know that the Asian market may have other ideas – and the Asian market absorbs more than half of Swiss watch production. I’m happy in any case to stay just where I seem to be: near the forward edge of the retro watch frontier.

Swatch proves timely for watch industry

The phenomenal success of Swatch, the trendy plastic Swiss-made watch that comes in a wild variety of colors, has been heralded for reviving Switzerland’s struggling watch industry. But its influence has been international.

Major watchmakers such as Timex Corp. of Middlebury, Conn., and Hattori Seiko Co. Ltd. of Japan immediately scrambled to get their own plastic timepieces on the market and benefit from this new demand.

Sales increases are estimated at anywhere from 6 to 15 per cent, mostly as a result of the sudden urban demand for fashion accessories that also happened to tell the time.

“It has basically revitalized quite a traditional, quiet industry,” said Andrew Menceles, president of Cosmoda Design Inc. of Toronto, which distributes the Swatch line in Canada.

The watches, which are made by Swatch SA of Switzerland, were largely responsible for the big jump in exports of Swiss watches last year: a 41 per cent increase to 25.1 million units.

Timex does a quarterly survey of 4,000 Canadian households to gauge the watch market. It estimates that industry sales totalled $260-million in 1985, up about 6 per cent in both retail and unit sales.

“I think the Swatch and all those types of watches have contributed to that little bump,” said Patrick Morris, president of TMX Canada Inc. of Markham, Ont., which distributes Timex watches in Canada.

Watchmakers are, of course, asking how long this sales phenomenon can be sustained. Swatch is credited with starting the trend, but most other companies have had their own products on the market for 18 months. Sales are expected to remain strong for at least one more year.

Mr. Menceles is reluctant to say how many Swatches were sold in Canada last year because he does not want retailers to discover what percentage of the total Canadian supply they received.

But he did say that Cosmoda’s quota has increased three times from the 1984 levels and it can sell every watch it can get. International production levels have reached about 1.5 million watches a month.

“Basically, it generated additional watch business for everyone,” said Rodney Smith, president of SC Time Inc. of Toronto, which distributes Seiko, Pulsar, Lorus and Lassale watches in Canada.

Virtually all of the major watchmakers jumped on the bandwagon, selling their own colorful plastic timepieces for between $30 and $50. Not since the arrival of the digital watch almost 10 years ago had the market seen such a sudden jump in consumer demand.

Swatch has spent heavily to market its product in major Canadian centres, urging trend setters to “Swatch yourself” by wearing several watches. And it is keeping a high profile among younger consumers by sponsoring events such as freestyle skiing and concerts by the Thompson Twins.

But because Cosmoda’s quota of Swatch watches has limited the supply in Canada, many sales have gone to competitors. Mr. Menceles believes consumers buy the other watches only because they cannot get a Swatch, but he said people will also wait until they can buy the brand name.

Judging by sales jumps at other companies, however, not everyone is concerned about sporting one brand name over another.

To maintain sales, Swatch has embarked on an extensive merchandising plan that involvesmanufacturing clothing that bears the Swatch trademark, along with sunglasses and umbrellas. Cosmoda has also sponsored a Canadian student design competition and will make and distribute the winning products in Canada.

His competitors agree that the demand for fashion watches will continue for another year. They also predict that the market will shift away from an emphasis on bright colors toward the design of the watch. Ultimately, watchmakers expect the Swatch revolution to end.

“The president and the chairman of the board will put them back in the drawer and go back to their Rolexes and Piagets,” said Paul Sagar, director of marketing at TMX Canada.

The increase in fashion watch sales has not been to the detriment of traditional, more expensive watches. Most of these watches are purchased as gifts to mark occasions such as birthdays and graduations. Demand has remained stable for Seiko watches, Mr. Smith of SC Time said.

TMX Canada thinks there is enough strength in the Canadian market to begin distribution of the Tissot line of Swiss watches this fall. They will sell for between $100 and $3,000.

Time for vintage watches

Los Angeles as time goes by, vintage watches seem to be looking better and better. There is a demand today for watches with personality and character. As a result, interest in classic wristwatches has been booming – and for as many different reasons as there are collectors.

Voice instructor Florence Heller says her interest in classic timepieces is sentimental. Her husband recently gave her a 1953 Evans with red and white rhinestones in place of the numbers on the face. “I like it because it puts me in touch with my past,” she says. “It reminds me of when I was going to high school. It’s a man’s watch but I have great fun wearing it. It looks good and it makes me feel good. It’s also a great conversation piece, something people always seem to notice.”

Eric Schwartz, a manufacturing executive, says nothing pleases him more than getting dressed up and putting on one of the 22 vintage watches he has collected over the last six years. “I like watches that are straightforward,” he says. “I look for ones that are sleekly styled and elegantly understated.” His collection runs the gamut from a 1920s Elgin to a 1940s Hamilton.

Juraj Miklas, head chef at a trendy Beverly Hills restaurant, says he collects wristwatches for the unique pleasure they give him. “I appreciate the work that went into making these watches,” he says. “I like to touch them, to wind them, to study their shapes.” Among his collection of 60 watches are a 1917 stainless steel Patek Philippe and a 9-karat gold Rolex from the 1920s.

Ken Jacobs is a clinical psychologist who turned his hobby of collecting vintage watches into a thriving business. A few years ago, he began selling off extras by maintaining a display case at a small shop on Melrose Avenue. A few months ago, he opened his own store on that street. It’s called Wanna Buy A Watch? and has been jampacked during the Christmas shopping season.

“Nobody buys one of my watches for the purpose of telling time,” says Mr. Jacobs. “People buy them because of the thrill they get from putting them on.” Mr. Jacobs, who seeks out watches that are strong in visual appeal and exquisite in styling, says he is fascinated by a watch’s detailing and history. He also goes to great lengths to have them restored to their original splendor. Among his favorites is a 1930s Gruen “wristsider.” Also called a “driver’s watch,” it’s worn at the side of the wrist, which, “made it easier for a guy tooling around in his roadster to tell the time.”

Among his women’s styles, priced from $100 to $400, are a number of delightful art deco designs. Some have enameled motifs, others sparkle with precious stones. Many have faceted crystals. For men, in prices ranging from $100 to $300, there are oversized timepieces from the early 1900s that resemble scaled-down pocket watches.

While Ken Jacobs deals mostly in one-of-a-kind styles, Lance Thomas deals in volume. He is proprietor of Village Clockworks in Santa Monica, and his comprehensive collection of 2,000 watches even includes some that have never been worn and can still be purchased with their original cases. Among his most popular styles are rectangular “tank” style watches from the 1930s and 1940s. Other vintage timepieces bear the status names of Bulova, Rolex, Elgin, Waltham, Longine and Hamilton. Gold-plated and gold- filled versions for both men and women start about $100. The same brands in solid gold bring $300 and up. And for the customer in search of something truly unique, there are hundreds of unrestored watches that can be put together in any variation of colors and styles.

“Vintage watches have a certain mystique that seems to attrack people for very personal reasons,” says Mr. Thomas. “I don’t want to sound silly, but I realy believe that a watch that has been stared at by past generations retains some kind of psychic energy that is very alluring and magnetic.”

Rats on the run: a patrol defends Alberta against furry rodents from the east

The pest control officers drove along gravel roads, past fields colored dull gold with the stubble of last year’s wheat crop. It was early in May, and the snow was off Alberta’s rolling prairie farmland. So the officers had no time to waste. The Norway rats, those varmints from the east that snuck across the Saskatchewan border last fall to take up winter residence in Alberta hay bales and grain bins, would soon be dispersing their young. The officers were armed with shotguns and .22-calibre rifles and converging on a farm near the town of Bodo, 230 km southeast of Edmonton. It was there, just across the road from Saskatchewan, that farmer Blaine Wandler’s 11-year-old son had found a rat under a woodpile a week earlier. A subsequent inspection of the site uncovered a veritable infestation. “If they disperse, if we miss any today,” said Don Dallyn, one of three full-time and three part-time officers who maintain a vigil along the Alberta-Saskatchewan border, “we probably won’t find them until next spring.” By then, he said, a pair of rats ensconced in a nice, roomy grain bin could produce 400 to 1,000 offspring.

Norway rats–one of the most destructive rodents known to mankind–first arrived on the east coast of North America by ship from Europe about 1775. They advanced inexorably westward, by as much as 15 km a year, eating and contaminating crops, chewing up walls, undermining buildings and sewers, and spreading disease. But in 1950, when the rats crossed into Alberta, provincial officials drew a line in the prairie soil. They established a cordon sanitaire that now stretches 25 km wide and 500 km long, from Cold Lake in the north to the U.S. border in the south. Ever since, pest control officers have patrolled that buffer zone–baiting, poisoning, shooting or gassing every last rat that has put its furry paws on the Alberta side of the border. “One way or another,” says Michael Dolinski, head of Alberta Agriculture’s rat control program, “every rat that ends up in the province, ends up dead.”

The Alberta government spends $250,000 a year on rat control, even at a time when Premier Ralph Klein’s Conservative government has made deep spending cuts in other departments. Dolinski argues that the program is well worth it. If rats were to infest Alberta, he maintains, they could cause $25 million a year in damage to crops and buildings. In fact, experts estimate that, worldwide, rats consume or contaminate one-fifth of all field crops. And in neighboring Saskatchewan, where rats invaded in the 1930s, the provincial government, rural municipalities and the Saskatchewan Wheat Pool spend more than $700,000 a year in rural areas alone on home pest control. Most of that money goes towards controlling the rat population–although officials have little hope of ever eradicating them.

The border patrol is a point of pride among Albertans. But outsiders often scoff at the province’s claim to be one of the only inhabited regions on earth that is free of Norway rats. “You proclaim something like that, everyone’s on your case,” says Dallyn. But he says that rats multiply so quickly, it would be impossible not to notice if even a single pregnant female had penetrated into the Alberta interior. “It would be a matter of a year or two,” he says, “and everybody would know about it.”

The success of the Alberta rat control program relies on a simple fact of rodent life. For all their resilience, for all their ability to propagate, the rats have a critical weakness: they cannot survive the harsh prairie winter without the shelter and food they find where humans live. In order for rats to invade new territory, human settlements cannot be farther apart than the distance the rats can travel in a year. Along Alberta’s southern border with Montana, where farms are few and widely dispersed, the rats have never established a foothold. Nor can they advance across the uninhabited forests in northern Alberta, or the mountains along the western border with British Columbia. The central part of the border with Saskatchewan, thick with grain and cattle farms, is the rats’ primary point of penetration.

Just a few kilometres from that frontier, in their pretty white farmhouse near Chauvin, Alta., live Don and Bette Dallyn. Parents of five grown children and grandparents 11 times over, the Dallyns are the first husband-and-wife team in the history of Alberta rat control. “And you’ll find us a bit zealous,” said Don Dallyn, 59, who took over rat control in the Wainwright municipal district 18 years ago when the couple gave up dairy farming. Bette, 56, began working the Provost area, just south of Don’s district, six years later. “We had kids young,” explained Don. “When our kids grew up, Bette wanted to do something different.”

Pest control is no work for the faint of heart. And when Bette Dallyn was first hired, some of the farmers in the area wondered if she was up to the job. “I was accused, being a woman, of being afraid of mice and rats,” she said. “One guy tried his darndest to get me to pick up a mouse. Finally, I picked up some babies and I said, `Ah, we’ll have these for supper.’ ” She was joking, of course. “But I proved a point that day,” said Bette, clearly pleased with herself.

Most of the rat control officers’ work involves bait: rolled oats dusted with icing sugar and laced with warfarin, an anticoagulant that makes the rats’ blood run thin and kills them in about six days. The officers distribute the bait to farmers and lay out extra bait when they suspect an infestation. They also do a visual check of every possible rat refuge–from barns to abandoned shacks. Bette checks about 700 sites annually in her 594-square-mile district, three checks a year for the sites closest to the border. Her first year on the job, she found 146 rat infestations. Last year, she was down to 10. “That does not, of course, account for all the rats who ate the rat poison and died before anyone noticed them,” she cautioned.

Blaine Wandler tipped Bette off to the infestation on his farm. Although he lives in Bette’s district, eradication is always a group effort. And so Don Dallyn and two officers from Vermilion River County to the north–Orest Popil, 39, and Glen Garton, 35–came to help. About 200 m from the gravel road that serves as the Saskatchewan-Alberta border were three red grain bins. As Don Dallyn circled them, his trained eye caught the rodents’ telltale signs: rat droppings, a worn path between the bins, a scrap of plywood with rat-tooth marks. Bette figured the rats got in there last fall. “If I’d have found them in the winter, we’d have baited them,” she said. But the snow was too deep to check the bins then. And with the coming of spring and pregnant female rats ready to move on, there was no time to play around with slow-acting poison.

The group first attacked the scrap wood piled beside the bins. Bette Dallyn, Popil and Garton stood poised, guns trained, as Don lifted a sheet of plywood and two rats came scurrying out from underneath. Bang! Cows wandering by on the other side of a barbed wire fence paused to turn curious heads.

It was slow work–one board at a time–and tough shooting, with the rats twisting and running in all directions. The officers used shotguns with very fine pellets and .22s loaded with bird shot–“No ricochets that way,” said Don Dallyn. He recounted one hair-raising incident when a farmer, eager to help, got his own rifle from the house–loaded with solid-point bullets. “Orest and I were in the granary when he shot right through it,” said Don. “That’s why we like to use our own guys.”

Clearing the rats from the woodpile took all morning. Afterwards, the officers checked a site they eradicated the previous week. They found no new sign of rodents and there were smiles and “job-well-dones” all around. Then they drove into Bodo, to the Oilmen’s Diner Restaurant for lunch. The Bodo area is mixed agricultural and oil country, with oil wells dotted around the farmers’ fields. Dressed in their bright-blue coveralls, the pest control officers were conspicuous among the farmers and oilmen at the diner. But then, they are used to standing out from a crowd. “The good thing about the job is that you’re always the life of the party,” remarked a jovial Popil. “People are always asking you, `Are you for real?’ ”

For real, yes, and in poor economic times, at least, even envied. Full-time officers make $26,000 to $31,000; part-timers are paid a prorated salary. And 60 people applied for Garton’s part-time job when he got it last summer. Garton, who also farms 600 acres, says his family has long been supportive of rat control. “My dad said that we’ve had only two rats on our farm,” he said proudly. “He killed one with a pitchfork. The other,” Garton added with a grin, “he chased back to Saskatchewan.”

After lunch, it was back to the Wandler farm and the grain bins. When bins are full, rats do not usually enter them. They burrow underneath, then chew holes in the bottom of the bins. That way, grain filters down to them all winter long. Wandler figured he had lost a few bushels of grain. “But it’s not what they eat so much,” he said. “It’s the damage they do that’s so bad–they chew up everything in sight.” He would have to repair the bins, he said. And then he would have to prop them about six inches off the ground to ward off future infestations.

The actual eradication used homespun technology. As Wandler watched, Don Dallyn attached a black rubber hose to his car’s exhaust pipe, then shoved the other end of the hose under one of the bins. The rodents would either suffocate, or come out to face a firing squad. As the car exhaust started to take effect, Bette Dallyn, Popil and Garton levelled their guns again. One pink nose came out of a hole. Bang! “Head shot,” said Garton. Bang! Bang! “Good shot, Bette,” shouted Popil. And so it went, gassing and shooting, until the four rat control officers were satisfied that they had eliminated the latest threat to Alberta’s rat-free status.

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Preparing for a stepped-up war?

When ten new UH-1H combat helicopters arrived here from the United States in early September, reporters were looking the other way. Yet the Vietnam-era Hueys represented a 42 percent increase in the Salvadoran Air Force’s complement, bringing the total to thirty-four. U.S. officials say that ten to fifteen more are expected by the end of the year.

Charmed by President Jose Napoleon Duarte’s promises to bring justice and peace to his people, members of Congress voted on August 10 to provide him with $70 million in supplemental military aid. The Hueys are highly visible tokens of their support.

But they also mean that the four-and-a-half-year civil war could enter a new, bloodier phase–particularly if the peace talks between President Duarte and the rebels fail, as many here predict. The helicopters will be used to implement a counterinsurgency strategy that has long been advocated by U.S. military advisers here. It calls for carrying the war to the rebels and their civilian bases of support in the northern and eastern provinces. Unarmed civilians living in rebel-held areas who refuse to move to government refugee camps will be subject to direct attack.

The Hueys will be used to counteract the element of surprise the rebels have employed so effectively in the war. By attacking government installations when least expected and then ambushing the reinforcements that are sent in, they have been able to inflict severe casualties. The Salvadoran Army plans to respond to such raids with lightning attacks. The new strategy involves flying troops over rugged terrain where they would otherwise be vulnerable to ambush and depositing them where they can block the guerrillas’ escape.

But U.S. counterinsurgency specialists also advocate using the best drones to airlift small units of elite troops deep into rebel-controlled territory, where they can strike at the heart of the enemy’s logistical support system. Such forays will compel the guerrillas to protect the unarmed peasants, known as the masas (“the masses’), who live with them and provide them with food and supplies.

Although U.S. officials deny that the helicopter-borne assault teams will be used to terrorize civilians who back the guerrillas, government forces are already rehearsing the tactic. On August 30, around the time the shipment of Hueys arrived, army units launched helicopter assaults on the townships of Las Vueltas and San Jose Las Flores in rebel-controlled zones of Chalatenango province.

Journalists who arrived on the scene ten days later were told by local peasants that at least thirty-seven women, children and old people had been killed in the operation. According to the villagers,helicopters bearing Salvadoran troops, led by the U.S.-trained Atlacatl Battalion, stalked a group of several hundred peasants who were escorted by a small force of armed guerrillas. The peasants described their bewilderment and terror as they saw the best quadcopter land troops on hilltops all around them, cutting them off. When the soldiers closed in, some people panicked and plunged into the rapidly flowing Gualsinga River, where several drowned. Others were cut down by machine-gun fire or taken prisoner. (Forty-eight of those captured were later turned over to the Red Cross.) The remaining civilians escaped when the guerrillas fought their way out of the army cordon.

Journalists at the site found evidence confirming the villagers’ reports, including five badly decomposed bodies of women and children lying near the river. U.S. officials said they were reluctant to comment on the alleged massacre until the Duarte government had conducted an investigation. When President Duarte returned from a Latin American tour on September 20, he announced that the probe had uncovered no evidence of army wrongdoing. Quite the contrary, he said: the valiant soldiers had rescued thirty-eight fleeing peasants who were trying to cross the Sumpul River, on the Honduran border. His account failed to explain the five bodies found beside the Gualsinga River.

The presence of armed guerrillas among the peasants appears to have softened the implication of a massacre. No one disputes the fact that the rebels had returned the Salvadoran troops’ fire. But the civilian survivors insist that it was a massacre.

When the army adopts the new counterinsurgency tactics, incidents in which armed guerrillas and civilians are taken by surprise in their home territory by heliborne assault units will occur with increased frequency. U.S. officials claim, however, that in small-unit engagements, Salvadoran troops will be able to distinguish between combatants and unarmed civilians.

“You can see who you’re fighting, who’s carrying an M-16 and who’s carrying an M-60 machine gun,’ said a U.S. official. “It’s pretty clear he’s a guerrilla.’

But the peasants of Las Vueltas and San Jose Las Flores, and the rest of the estimated 150,000 to 200,000 masas who live in guerrilla-held areas, might be forgiven if they do not share that faith in the Salvadoran Army.

“It looks like they want to eliminate all of us so that there are only people like them left,’ I was told by a 50-year-old woman who survived the attack. She repeatedly referred to the army as “the enemy.’

Catholic Church sources believe the helicopter attacks are intended to drive away the civilians who provide the rebel combatants with food, intelligence and logistical support. “The helicopters are a new way to terrorize the masas,’ one church human-rights observer told me. “In order to depopulate the zone, they will hunt down the masas. They will capture who they can, evacuate them and exterminate the rest.’ Church officials recount that in the past, large-scale search-and-destroy operations and aerial bombardments were used by the army to kill or frighten away the civilianpopulation in guerrilla-held zones. More than a half-million peasants have fled to displaced-person centers in areas, but those who remain appear willing to endure the hardships of fleeing before army sweeps and digging tunnels to escape bombardment rather than accept “sanctuary’ in the refugee centers sponsored by the U.S. Agency for International Development.

While admitting the theoretical value of isolating guerrillas from their civilian supporters, U.S. Ambassador Thomas Pickering denies that the United States is encouraging the army to target civilians in order to defeat the rebels. In the past Pickering has cited the 500,000 refugees who have come over to the “government side’ as a sign of waning popular support for the guerrillas. Asked about the wholeasle dislocation of civilians in El Salvador, Pickering said, “That has happened as a matter of course. It’s a tragic set of circumstances. It’s part of the war, but it’s not part of a policy.’

The objectives of Salvadoran military commanders may sometimes depart from U.S. policy, however. In a communique issued on September 15, El Salvador’s Independence Day, the army’s Third Brigade, which is based in San Miguel, declared its intention to “liberate the peasants of the East who live in caves and caverns.’

“We have the fraternal obligation,’ the statement continued, “to call upon our brothers yet in slavery under the subversive, terrorist yoke.’

Pickering said the issuance of the communique had nothing to do with the army’s adoption of thehelicopter-assault strategy. But U.S. officials say the Third Brigade has pioneered the heliborne techniques and other aggressive tactics. Reportedly, the San Miguel garrison will soon acquire seven of the new choppers. (The State Department denies this.)

Those familiar with the language of psychological warfare and the particular brutalities of the Salvadoran war will have little trouble reading the army’s call as a final warning. There is still time for the masas to come down from the mountains and join the privileged half-million. The remaining peasants–armed or unarmed–who refuse to heed the call of freedom can expect to be considered “enemies of the fatherland’ and treated accordingly. The lucky ones will be captured.