Swatch CEO ticked off about NSA spy scandal
Updated: 2014-02-07 08:57
The eccentric chief executive officer of Swatch Group, one of the world's top watchmakers, was so incensed by recent allegations of mass U.S. spying that he chastised a top New York official over the matter in a letter late last year.
Nick Hayek's comments seemed odd coming in response to a letter from New York State Comptroller Thomas DiNapoli, who administers the state's $161 billion pension fund.
DiNapoli had asked Hayek and nine other Olympic sponsors to take a stance against Russia's recent clampdown on gays ahead of the winter games in Sochi.
Most corporate executives balk at open political conflict. But not the cigar-chomping Hayek. He vigorously defended his Omega subsidiary's role as a politically neutral timekeeper at the Olympics. And that's not all. He also gave DiNapoli a dressing down over the spying scandal surrounding the U.S. National Security Agency.
DiNapoli released Hayek's comments this week, along with those from five other companies that responded to his request.
"As you claim you are an investor with Swatch Group you should be equally preoccupied about what has been publicized lately: the massive collection of data of the NSA worldwide including Switzerland," fumed Hayek, whose first language is not English, in a letter dated December 13.
"Swatch Group is an innovative industrial leader; at the heart of our success are very innovative products," Hayek continued. "The integrity of our confidential information is key to develop successful products. The practices that apparently have become a habit from organizations like the NSA can create huge damage to our company and our shareholders."
"As an investor you should have all interest to speak up loud about such potentially damaging practices coming from the USA," Hayek said.
New York state's pension fund, which has a history of shareholder activism, holds around 66,000 Swatch shares, according to a filing in March 2013, worth about $42 million (38 million Swiss francs) at today's prices. Swatch's market cap is nearly 30 billion Swiss francs. Swatch could not immediately be reached for comment.
Those who know the former helicopter pilot are unlikely to be surprised by his diversion. Last year he released a version of the company's annual report in Swiss German, a language for which there is no standard written form. He has also berated reporters while smoking a cigar at a press conference.
Hayek's comments may look out of place in a conversation about gay rights, but they do point to the real unease many Europeans feel over NSA spying in Europe, especially in a famously data-private country such as Switzerland with its large and secretive watch-making industry.
The Swiss, along with the Germans, have reacted very badly to the spying revealed by former NSA contractor Edward Snowden. Reports the NSA accessed servers of Internet powerhouses such as Google and Facebook have also raised concerns about whether the scandal will have a negative impact on U.S. tech companies operating in Europe.
Politics aside, Hayek runs a highly successful company. The Swatch Group said on Wednesday it expects healthy growth this year after watch and jewelry sales helped net profit rise more than 20 percent in 2013. Net profit was $2.13 billion (1.921 billion Swiss francs) for the year.
New York state's pensioners might want to think hard before divesting from growth like that.