Page images
PDF
EPUB

Mr. MARGOLIS. Not our sales, but our production has gone down. Senator THURMOND. Your production has gone down to that extent. You were forced to close your plant in Lincoln, Nebr.?

Mr. MARGOLIS. We were, sir.

Senator THURMOND. You did not want to close that plant, I am sure. Mr. MARGOLIS. You are quite right.

Senator THURMOND. In other words, you would like to have kept that plant and operated it, because you feel it is good for the country to have these watch plants and, from your own company's standpoint, you would like to operate and make a profit, I presume?

Mr. MARGOLIS. Indeed.

Senator THURMOND. And you have had to abandon the manufacture of men's movements entirely?

Mr. MARGOLIS. That is correct.

Senator THURMOND. Is that in all your plants, or is that just-
Mr. MARGOLIS. Entirely.

Senator THURMOND. That is in all your plants. And you have been forced to become an importer because of the impossibility to compete with the foreign movements being shipped in here?

Mr. MARGOLIS. That is correct. The watches are about 80 percent labor, and the costs abroad for labor are one-third our costs; just one-third.

Senator THURMOND. One-third. Well, you cannot compete with that. The only way to offset that would be to have a tariff high enough, or place a quota on the number that can come in, so that it will not destroy your business entirely, is it not?

Mr. MARGOLIS. That is correct, for all the watch companies left. Senator THURMOND. I believe that in your company last year you used-about half the watches that you sold contained imported move

ments?

Mr. MARGOLIS. That is correct, and ours is the lowest percentage of imports for the remaining jeweled watch companies.

Senator THURMOND. Yours is the lowest percent of imported move

ments?

Mr. MARGOLIS. That is correct.

Senator THURMOND. I can certainly sympathize with you in what you are going through, and it is my hope that the light will dawn some of these days on some of these people who are making policy decisions in our Government.

We are glad to have you here, and I congratulate you on your fine

statement.

Thank you, Mr. Chairman.

Senator SYMINGTON. Mr. Margolis, is there any estimate of those 46 million produced movements in Switzerland that are imported into the United States?

Mr. SINKLER. It is less than 10. I think it is about 8 million.
Mr. MARGOLIS. Jeweled, that is. Jeweled-lever watches.

Mr. SINKLER. I think it is 5 million more of the pin-lever. I think we are talking jeweled-lever now.

Senator SYMINGTON. Thank you.

General Bradley, does that complete the presentation?

General BRADLEY. That was the last witness we had suggested, Mr. Chairman. We do have, in addition to Mr. Van Haften, whom you

met this morning, Mr. Sites and Mr. Ensign, and we have two other people from Bulova, Mr. Bozzo, who is vice president in charge of manufacturing watches, and Mr. Harry Gewirtz, who is director of our research and development laboratories and our production and defense work. If there are any questions by any members of your staff on any of these exhibits, these gentlemen are all here and will be glad to answer your questions.

In addition to that, we have our executive vice president and general counsel, Mr. Flick, who went through all of the antitrust hearings. In case there are any questions on that, I think he might be able to help you on the record.

Other than that, we have no further matters to suggest.

Senator THURMOND. I have one question.

Senator SYMINGTON. Senator Thurmond.

Senator THURMOND. Mr. Margolis, maybe you can answer that, or General Bradley. How many watch movements are imported into this country annually from all foreign countries?

Mr. MARGOLIS. 13 million.

Mr. SINKLER. Watches of all kinds from all countries, 13 million. Senator THURMOND. 13 million imported from all foreign countries? Mr. SINKLER. All foreign countries and all kinds of watches-nonjeweled, jeweled, pin-levers, and jeweled-levers.

Senator THURMOND. Of the 13, how many are jeweled?

Mr. SINKLER. We have had 3 categories, Senator: 8 million jeweledlever watches, 5 million nonjeweled, pin-lever watches, and then another million jeweled-lever watches that have been brought into the United States from foreign sources via the Virgin Islands. They are now not listed as either domestic or imported, as the Tariff Commission defines it. They are parts that are assembled in the Virgin Islands and reexported into the United States.

Senator SYMINGTON. You talk of the Virgin Islands. Do you mean our Virgin Islands, or the British Virgins?

Mr. SINKLER. Ours.

Senator THURMOND. That is nine

Mr. SINKLER. Excuse me. I gave you the correct figures first. It was 8 million jeweled, 5 million pin-lever, for a total of 13 million imports.

Senator THURMOND. Let us see, 8 million jeweled

Mr. SINKLER. 5 million nonjeweled.

Senator THURMOND. 8 million jeweled, 5 million nonjeweled?

Mr. SINKLER. Yes.

Senator THURMOND. That is 13.

Mr. SINKLER. And the balance

Senator THURMOND. That would be 13 million. You said there were 25 ?

Mr. SINKLER. 13 million. Total U.S. consumption goes to about 25 or 26. We'll file these exactly, Senator, but the gap between 13 and 25 is made up of over a million watches through the Virgin Islands which are not categorized as being either domestic or import, and most of the rest is production of United States Time which is in question, because that is an assembly operation where about 55 percent of the parts are imported, 45 percent are domestic and they are assembled here.

Senator THURMOND. These from the Virgin Islands are jeweled and nonjeweled, are they?

Mr. SINKLER. They are almost entirely jeweled.

Senator THURMOND. When you get that up, if you send me a copy of that, I would like to have it. I would like to have a breakdown from each country.

Mr. SINKLER. Yes, sir; we shall file that with you.

General BRADLEY. I take it the committee is familiar with the Virgin Islands situation, where, when the Congress passed the law, they allowed for the import of movements from the Virgin Islands under certain conditions. About 5 years ago, imports were something like 5,000, I guess, and last year, they were more than 1 million. Most of the companies here have had to go down there for self-protection. We do not have to do too much on them. It is a rather legal question. If you would like to have it, we can file that statement.

Senator SYMINGTON. We can accept that if you would like to fiie it. Of course it is not a question of tarriffs with this committee. General BRADLEY. We can put a statement into the record. Senator SYMINGTON. Would you do that?

If Senator Thurmond approves, and I am sure he will, when you file the record for each country, Mr. Sinkler, would you also get up the estimated average hourly rates for each country?

Mr. SINKLER. I think we can probably do it for all of them except Russia, sir. Of course, no Russian watches are coming in, so they would not appear on the list.

Senator SYMINGTON. I imagine there is not much argument over there as to what the right rate should be.

Is Mr. Lazrus still here?

(The above information is given in app. II beginning on p. 270.) Mr. LAZRUS. Yes, sir.

Senator SYMINGTON. I was impressed with your statement. Is there anything you would like to say at this time, or file for the record?

Mr. LAZRUS. I think there may be some things, sir, that I would like a chance to think over, a couple of things, and to indicate to you, if we may, in a later filing for the record. [App. I.]

Senator SYMINGTON. Fine. We want to be sure we have been fair to all persons in this matter. If you will get in touch with Mr. Braswell, we shall be glad to file for the record any addition to anything you said.

Senator SYMINGTON. General Bradley, anything else?

General BRADLEY. No, sir.

Senator SYMINGTON. Thank you all very much for coming down. This has been an interesting hearing.

(Whereupon, at 3:30 p.m. the committee was adjourned, to reconvene subject to call of the Chair.)

APPENDIX I

MATERIAL SUBMITTED SUBSEQUENT TO HEARING ON BEHALF OF AMERICAN WATCH ASSOCIATION

BENRUS WATCH CO., INC.,

OFFICE OF THE PRESIDENT, New York, N.Y., August 19, 1964.

Hon. STUART SYMINGTON,

Chairman, Special Subcommittee,
Senate Armed Services Committee,

Senate Office Building, Washington, D.C.

DEAR MR. CHAIRMAN: At the close of the August 17 hearings on the alleged “defense essentiality” of the watch industry, you invited me to submit any additional comments or materials on behalf of the American Watch Association.

During my prepared testimony, the subcommittee accepted my suggestion that it incorporate in its printed record of the hearings (1) the Office of Defense Mobilization's 1958 decision that the domestic watch industry was not essential to the national security, together with the supporting letters, memorandums, and reports filed with ODM by agencies and individuals consulted in the course of the investigation and (2) a packet of charts and statistics submitted by the American Watch Association in recent testimony before the U.S. Tariff Commission to show that the domestic industry is not being injured nor threatened with injury because of import competition. These materials are attached. (Please note below my request that the charts and statistics be incorporated in the printed record following a statement regarding the economic condition of the domestic watch industry which I am also submitting.)

Because uncritical acceptance of mere claims of defense essentiality could dangerously undermine U.S. foreign economic policy and because this was the central issue of the 1956 study of the Joint Economic Committee, to which I referred in my statement, I also request that the Joint Economic Committee's report be incorporated in the printed hearings record of the Armed Services Subcommittee. Although it is true that the Joint Economic Committee's report, unlike the ODM report, is available elsewhere, we feel that it is important to provide a full background in the hearing record of this subcommittee.

Finally, because it is obvious that a number of subcommittee members have accepted the domestic watch industry's claim that it is in fact threatened with injury from import competition, I am also submitting for inclusion in the record portions of three statements made on behalf of the American Watch Association at recent hearings before the U.S. Tariff Commission.

Mr. Myer Rashish, a consulting economist, of Washington, D.C., demonstrated in May, conclusively, I think, that the domestic watch industry has substantially improved its economic position during the past decade and that, far from being injured by duty reductions, domestic producers would actually be benefited in several important respects by the withdrawal of tariff increases imposed by Presidential decree in 1954. Mr. Rashish also demonstrated that domestic producers are fully equipped to cope in the future with any intensification of import competition.

Thus, even if the domestic watch industry is, contrary to the flat conclusions of Government authorities, regarded as essential to national security, there is no factual basis for the claims that the industry is threatened by import competition. Domestic producers will continue, whatever happens to the tariff, to be in a position to make a contribution to U.S. national security. (I would suggest that the charts and statistics which we are submitting and which are referred to earlier in this letter should appear in the record immediately following the excerpt from Mr. Rashish's testimony, since he refers to these figures in his remarks.)

The claims of certain domestic jeweled-lever producers regarding the economic position of the industry are based on statistical juggling which they seek to justify by an extraordinary and totally fallacious notion of what constitutes the domestic watch industry. My testimony to the Tariff Commission of July 29, 1964, discussed the attempt by these jeweled-lever companies to rule the United States Time Corp. entirely out of the picture. Testimony by Mr. M. Fred Cartoun, president of the American Watch Association, also delivered at the July 29 hearing, effectively summarizes developments in the U.S. watch market during the last decade and exposes the misstatements and misconceptions on which the case of the jeweled-lever producers depends.

I would appreciate if these excerpts from statements by Mr. Rashish, Mr. Cartoun, and myself could also be incorporated in the record. Thank you for your courtesy. Sincerely,

Enclosures:

Office of Defense Mobilization:

Gordon Gray letter, February 28, 1958.

George B. Beitzel report, September 25, 1957.

C. Leigh Stevens report, June 5, 1957.

Defense Department: Quarles letter and tabs A through J.

Labor Department:

Siciliano letter, August 2, 1957.

Staff report, August 1957.

Senate Report No. 2629 (84th Cong. 2d sess.):

Joint Economic Committee report.

JULIAN LAZRUS.

Defense Essentiality and Foreign Economic Policy Case Study: Watch
Industry and Precision Skills.

Statements of:

Mr. Myer Rashish, May 12, 1964 (with charts and statistics submitted by AWA, May 12, 1964).

Mr. Julian Lazrus, July 29, 1964.

Mr. M. Fred Cartoun, July 29, 1964.

EXECUTIVE OFFICE OF THE PRESIDENT, OFFICE OF DEFENSE MOBILIZATION, WASHINGTON, D.C.

Gordon Gray, Director of Defense Mobilization, announced today his conclusion that imports of jeweled and pin-lever watches and clocks are not threatening to impair the national security.

Mr. Gray stated this conclusion in a letter to two trade associations representing the domestic horological industry, and to the Bulova Watch Co. It was based, he said, on his evaluation of the facts developed during an exhaustive investigation of the relationship of the domestic horological industry to military and essential civilian requirements in a future emergency.

He pointed out that in the years intervening since 1954, when this subject was last officially reported on by the Office of Defense Mobilization, not only has a marked reduction in mobilization requirements taken place, but a substantial expansion of precision skills and plant capabilities has become incorporated in our industrial economy.

The associations had filed petitions with ODM under section 7 of the Trade Agreements extension Act asking Mr. Gray to determine whether imports were either a threat to or a continuing impairment of national security.

Mr. Gray's letter, sent to the American Watch Manufacturers Association, Inc., is attached. Identical letters were sent to the Bulova Watch Co., and to the Clock & Watch Manufacturers Association of America, Inc.

EXECUTIVE OFFICE OF THE PRESIDENT,
OFFICE OF DEFENSE MOBILIZATION,
Washington, D.C., February 28, 1958.

Mr. PAUL MICKEY,

Vice President, American Watch Manufacturers Association, Inc.,
Washington, D.C.

DEAR MR. MICKEY: On December 26, 1955, the American Watch Manufacturers Association, Inc., and the Bulova Watch Co. jointly requested the Office of Defense Mobilization to "initiate immediate action under section 7 of the Trade Agreements Extension Act of 1955 (Public Law 86, 84th Cong.) to remove

« PreviousContinue »