GENEVA, June 29, 2010 (AFP) - Shares in watchmaking group Swatch dropped on Tuesday after the sudden death of chairman Nicolas Hayek, widely regarded as the founding father of the fashionable Swatch plastic watch and saviour of the Swiss watch industry.

Hayek, 82, died of heart failure on Monday while at work at the company he transformed into the world's biggest watchmaking group, englobing classic brands such as Breguet, Blancpain, Longines, Omega and Tissot as well as the affordable and colourful Swatch.

The businessman of Lebanese origin was hailed as the saviour of the Swiss watchmaking industry after it plunged into decline against modern Japanese competition in the 1970s and 1980s and plants were shutting down.

Swatch Group's share price fell 3.6 percent by midday to 56.9 Swiss francs, even though Hayek senior had long handed over operational control of the company to his son.

His aura was such that he was even hailed by rivals on Tuesday.

"Nicolas Hayek's death is an immense loss for Switzerland and for the watch industry," said Johann Rupert, chairman and chief executive of the Richemont luxury goods group.

"He was the driving force behind Swiss watchmaking; its leader and its saviour. Our industry has lost one of its champions, respected by everyone who dealt with him; a man of honour, gravitas and great personal charm," Rupert added in a statement.

In the 1980s, the Beirut-born business consultant merged two struggling Swiss watch and component makers, using his marketing flair to revive a quartz watch idea on their books and challenge Japanese competition head on.

The bullish, blunt and charismatic Hayek was one of his company's top ambassadors, characteristically turning up at public events wearing watches on both wrists, and keeping them well in view of the cameras.

Swatch group sold 5.4 billion Swiss francs' (4.0 billion euros, 4.9 billion dollars) worth of watches and components last year, while net profit dipped to 763 million Swiss francs, with stronger growth reported so far this year.

Hayek senior had passed on the company to his son, current chief executive Nick Hayek, in 2003, adopting more of a back seat role but never quite letting go of his "beloved" creation.

"Nicolas G. Hayek's greatest merit was his enormous contribution to the saving of the Swiss watch industry and the foundation and the commercial development of the Swatch Group," the company said, praising his "extraordinary vision."

The Swiss press paid tribute to that vision, which left its mark on a conservative society and otherwise dowdy business environment, and turned him into a first stop for advice when local industry was running into trouble.

"Switzerland has lost its Napoleon, a compass during a tormented period, the immigrant who revived the genius of the country's founding fathers," the daily 24 Heures said on Tuesday.

Le Temps dubbed him a "messiah and entrepreneur" while the Neue Zuercher Zeitung highlighted a favourite quotation of his: "True entrepreneurs are artists who have kept the creativity and curiosity of a six year-old."

In the 1990s, Hayek started developing the "Swatchmobil" car, first looking to Volkswagen then Daimler to develop the diminutive two-seater that became known as the Smart.

He sold out to the German carmaking giant as when his cherished concept of a mass produced electric-powered runabout was watered down.

Hayek did not let go of his vision for an affordable "green" vehicle and set up a firm in 2007 to harness and develop hydrogen fuel cell technology.

"In Switzerland, like elsewhere in the world, we are going far too slowly," he complained.

Despite his business mind, Hayek was a frequent critic of the financial world.

He admitted in 2008 that he had considered delisting Swatch a year after its turnover hit a billion francs, because of his disgust with speculators.by Peter Capella