The encyclopedia · Strategy & Leadership · Product decision · 1925–2010
Laco made pilot watches for the Luftwaffe — then the quartz crisis destroyed it
Laco was one of Germany's oldest watchmakers, known for WWII pilot watches. The quartz crisis killed production, and the company declared insolvency in 2009.
Laco Uhrenmanufaktur · Durowe · Kienzle Uhren · 2009-06-30
What happened
Laco was founded in 1925 in Pforzheim, Germany, by Frieda Lacher and Ludwig Hummel. The company began producing wristwatches and soon became known for its pilot watches, supplying the Luftwaffe with B-Uhren (navigation observation watches) during World War II. By the 1960s, Laco had expanded into electric watches and produced its own movements through its subsidiary Durowe.
The quartz crisis of the 1970s devastated Laco. Japanese quartz watches were cheaper, more accurate, and required less craftsmanship than Laco's mechanical watches. Production declined sharply as consumers abandoned mechanical watches. Laco struggled to compete, and by the 1980s the company was a shadow of its former self, surviving on a shrinking base of mechanical watch enthusiasts.
On 30 June 2009, Laco filed for insolvency. The company was briefly taken over by Kienzle Uhren, but Kienzle itself went into liquidation shortly after — a failed rescue that compounded Laco's problems. In 2010, Laco was restructured with just eight employees, returning to its core competency of pilot watches. The brand survives today, but the company that once employed hundreds and supplied a world war is now a micro-boutique.
Why it happened
- The quartz crisis of the 1970s destroyed Laco's market — Japanese quartz watches were cheaper and more accurate, and Laco had no answer, as its entire identity was built on mechanical craftsmanship.
- Laco failed to diversify or innovate — unlike competitors that introduced quartz lines, Laco stayed committed to mechanical movements and watched its market share evaporate over three decades.
- The Kienzle rescue (2009) was a failed lifeline — Kienzle itself went into liquidation, proving that Laco's management had chosen a partner as weak as the company it was meant to save.
The lesson
A company that built its identity on a single technology has no fallback when that technology becomes obsolete. Laco made magnificent mechanical watches — and had no answer to quartz.
Aftermath
Laco survives today as a micro-manufacturer based in Pforzheim, producing replica pilot watches for enthusiasts and collectors. The company employs a fraction of its wartime workforce and operates primarily through online sales. The brand that once supplied the Luftwaffe and produced its own movements via Durowe is now a niche heritage label. The Durowe movement factory is closed, and Laco uses Swiss ETA and Sellita movements in its watches. The story is one of survival, but at a fraction of the scale and relevance Laco once had.
Sources
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