Swatch Group said Hayek died unexpectedly of heart failure Monday at his office in Biel, Switzerland.
Hayek maintained that they could survive by making less expensive products and charging a premium for top-of-the-range timepieces labeled "Made in Switzerland," the traditional home of precision timekeeping.
Guided by Hayek, the watch-making companies merged to form SMH, in which Hayek bought a 51% share in 1984. Hayek reasoned that a cheap watch could tell the time just as well as an expensive one and SMH started to produce a plastic wristwatch — the Swatch — which revolutionized the industry. SMH was renamed the Swatch Group in 1998.
He introduced the use of plastic cases, quartz movements and mass-production to hold down prices of cheaper watches.
Although the Swatch brand became a global fashion success, Hayek also made money from the company's more up-market brands, including Breguet, Calvin Klein, Longines and Omega.
The self-styled Mr. Swatch became a national figure, respected as one of the economic leaders of Switzerland, despite his very un-Swiss flamboyance. In 1998 he came up with the idea for the ultra-compact Smart car, now made by a subsidiary of DaimlerChrysler AG, saying a city car needed room for only "two big adults and a crate of beer."
One of the richest people in Switzerland, according to Swiss magazine Bilanz, Hayek was born in Beirut, Lebanon, on Feb. 19, 1928. The family moved to Switzerland when he was 7 and Hayek went on to study chemistry, math and physics at France's Lyon University.
In 1963 he founded Hayek Engineering in Zurich, Switzerland, which has advised a wide variety of international companies, including Nestle, Siemens and U.S. Steel.
Hayek's big break came in 1982 with the report on watch-making. He was passionate about timepieces, telling the British weekly the Sunday Times that watches were "emotional products."
"A watch is something people carry on their bare skin, sometimes 24 hours a day," Hayek, who was known to wear up to four watches on each arm, said in a 2000 interview. "We have to convince every individual that this particular watch fits his or her personal style and lifestyle."
Hayek began to wind down his career when his son, Nick, took over as Swatch chief executive in 2003. The elder Hayek stayed on as president and remained active in the running of the company.
Besides his son, Hayek's survivors include his wife, Marianne, and his daughter, Nayla.