300 Fender Employees Get Laid Off

Lesionaire disease especially

 

I'm not so sure about that. Cambridge Audio for one have been designing their stuff in the UK, but assembled in China for ages. There's other examples I'm sure, but build and performance for Cambridge gear is good. My own 752BD universal player is still going great guns eight years on.

IAG, who are a Chinese firm, but with several UK companies in their portfolio (including Audiolab, Quad, Mission as well as Luxman), and have speaker designer Peter Comeau as one of their senior management team.

 

I have to disagree about that. Yes, there are a few good Chinese made products, but they are limited in their categories. They don't really have much in the way of craftsmanship to offer in their present business model. It is simply that they are filling the role of the lowest cost on the planet. That generally does not bode well for Quality. I used to sell CA, but dumped that years ago. Also NAD, as neither had control of production and thus quality.
@AP1 is correct in that his comments and evaluation of the situation match my actual product experiences. The companies that contract with the Chinese to build their products end up losing their products. They become Chinese products. The mfrs swap out parts, not specified, and they fail prematurely. They sell shockingly similar product under other names, and hell they even literally steal your tooling and produce counterfeit product, dumping product on the market below cost, competing directly with those paying their bills. Ask Nike if you don't believe me.

-Bill

 

Because of the D in GDP in the case of this thread. Fender cut US, ie domestic jobs, not Asian jobs. The real issue which is confusing the market watcher is just how globalization effects domestic economies. In the US, the numbers you see commented on are usually the DOW and NASDAQ, etc. These are what large corporations are making, so growth in corporate profit, when profit is generated due to overseas labor savings, does not help the US worker at the supermarket. Much of the US is being bought by Chinese investors, both in terms of corporate control and in very real terms, real estate. They want US farm land. How that is even acceptable to to consider trading real US domestic produce for profits for the ultrawealthy is beyond me. But that is what we are doing. It's a trade imbalance. We are selling our own independence in exchange for cheap junk. When I say we, I mean you and me, not the fat cats that are collecting the interest on past due or soon to be past due loans to struggling US companies.

So when you see that the market is up, and all of the financial indicators look better for "growth", you need to consider who's growth that is. It isn't the growth of most American savings accounts. In summary, my points are that the talk you hear on the news isn't always what directly effects your bottom line. Sure gas prices and grocery prices are of concern to average Americans, but when the GDP is up and the average American wage is stagnant then it is only the fat cats who are getting fatter. They don't worry about grocery prices, many of the richest among them don't even drive. They are not concerned about gas prices. How much does it cost to fuel a yacht?
-Bill

 

Cambridge designs in the UK and the products are assembled in China. That also includes their higher end Edge range which typically comes in around £3,500 or thereabouts. They've been producing in China since 1994 and the quality is good in my experience (I've had a few Cambridge products over the years). And reliable. IAG can also claim John Westlake to their staff roster as well as Peter Comeau, both are often out in Shenzen. I've yet to hear of Cambridge "losing" their products because their Chinese production facility ripped them off for their goods. Just hasn't happened.

The facilities are by and large excellent. Robert Harley did a piece for the Absolute Sound back in 2008 that still rings true today.

A Look Inside the Chinese Audio Industry - The Absolute Sound

Andrew Everard's view in Gramophone in 2010 was rather more succinctly put: Does it really matter where it’s made? .

When AVI, sadly now retired, were looking at offshore production, they were very impressed with the production facilities for their actives. Can't recall if they went ahead, but they certainly considered it (and for two old guys in their 70s at the time, I'd be surprised if they didn't at least use them for some of their production runs). Certainly didn't stop Hegel from using Chinese production facilities.

If you're surprised that knock-offs are produced, I'm surprised by return. Counterfeit goods have been made for decades. Probably generations by now. This is nothing new.

Craftsmanship - fair point. I've never needed a design statement item however. I don't need that gear that is as much design aesthetic statement as it is a sound quality one. Quite happy with the 752BD in sound and looks. The market is big enough to accommodate both preferences. Equally, I don't think of Hegel as run of the mill hifi...

Again, if the QA is tight and well monitored then this should minimise the risk of issues later.

 

It would be one thing if demand was down because of business closures, or simply no desire to buy things.
However the shortage of workers is driving this inflation. One solution would be to let more people enter America for unemployment to decrease if our own citizens are deciding not to work, thus increasing production and lowering shortages that produce inflation. That would help supply chain issues also. A classic metaphor for a depression or recession is a flat tire...just no air (demand) available to get the wheels rolling.
We have air in our tires, just not enough people to pedal the bicycle to get us going on our way.

 

So, there are a few interesting things that have been revealed about Fender and this latest round of Fender layoffs in this thread.

first, there is the corporate debt problem for Fender. It could be that they failed to meet an obligation and have partly suspended operations in the USA to redirect resources to debt payments. Having to pay suppliers for unsold Asian products might create such a crunch, but the biggest cost savings available to Fender might be from partly shutting down USA production.

Second, those Asian suppliers aren’t just supplying finished guitars- they are supplying parts, like tuners, for numerous production facilities, including the USA. A supply issue in Asia can easily grind American production to a halt.

Thirdly, there is the question of American demand for USA made guitars. The wait times for both Gibson’s and Fender’s USA made products are stretching out further and further in to the future. I know retailers who are desperate for product, but none is forthcoming.

It would seem that laying off employees at a moment of near peak demand is a foolish endeavor, but another piece of the puzzle has emerged from this thread: up to 50% of Fender’s USA production must be re-worked to fix flaws. That figure may well be the same in Asia, but costs are lower there, so they might not hurt as much if Asian product is selling.

Evidently, the Asian products are not selling. That is likely putting a strain on the USA supply of parts- no parts, no guitars. Also, with high production costs, the USA production might be “loss leaders,” operating at either a loss or a considerably reduced profit margin even on a good day, compared to their Asian counterparts.

People are waiting until 2023 for USA made Jazzmasters, but they might have to wait a little longer of Fender is not making enough money from these sales AND the considerably more profitable Asian guitars are not selling.

 

Based on one opinion?

Fender releases new professional guitars as sales boom during pandemic

 

Well I'm 80, still have a Strat that I haul out from time to time and plug into my Soldano to try to recapture a few old memories. My original post was not intended to be critical of the younger generation, just saying that interests, time pressures and also technology are now different. As is popular music.

Now heading off to see if I can still play the guitar intro to Johnny B Goode.

 

Whilst I acknowledge Fender's catalogue is a bit confusing - it is not that hard to understand where their individual ranges are made.

If more people purchased from their ranges made in the US rather than Mexico or other countries then they would not be reducing staff in the US. We have a chance to impact on the company's decisions by our purchasing decisions. Clearly enough people want cheaper guitars rather than supporting US jobs.

I almost fall into this camp. I do own one Fender Bass though and it is a US production unit. I choose other brands of guitars because they fit my taste (or perception of value) more than Fender. I have:

2 x Music Man basses made in USA;
2 x Sadowsky basses (made in Japan, US company - the US made ones are quite a bit dearer and the Japanese are as good as Fender Custom Shop);
1 x Mike Lull Bass made in USA;
1 x Lakland Bass made in Indonesia and finished in USA, US company;
1 x Fender Bass made in USA
1 x Nash bass made in USA;
1 x Sandberg Bass made in Germany;
1 x Ibanez Bass made in Japan; and
1 x Dyson Bass made in Australia (my only domestic model - not many made here).

In every case it was clear where they are made when you choose which one to buy.

If people do not buy your product made in country XXXX, then you can not continue to provide employment in that country.

 

Rock on

 

I have zero musical talent, so I don't play.... but I do live vicariously through talented musicians when I fire up the air guitar. I was really lusting after the Fender / MoFi table but it lost it's appeal after reading this thread .

 

One more thing. The onslaught of cheap guitars available on Amazon, monoprice, etc does not help.

 

There were multiple articles about loss of interest in guitar playing. In my son case it is a large high school in relatively affluent suburb of major city. It should provide a reasonable sample to assess interest to guitar playing among high school age kids.

Actually when we speak about USA made guitars - I would expect more demand from abroad than locally here. "Made in USA" label still counts in other parts of the world.

 

As early as 1952, Fender employed at least 35 people, making Telecasters, P basses, amps, and Hawaiian guitars. There is a photo of the Fender factory workforce from Christmas 1952 included in Ian Port's book The Birth of Loud; only Leo is missing since he took the photo.

Anyway, they are now a massive corporation and employ thousands of people, not even counting the people who do contract building for them at Cor-Tek (Cort) in Indonesia or FujiGen in Japan.

 

That's what he said ...

 

Terrible news. Hope Fender can weather the hard times and stay solvent. I just got a Custom Shop Jimmy Page Telecaster and it’s incredible. Also have a 56 CS Relic Telecaster and a USA Jimmy Page signature Mirror Telecaster and no offshore Fenders or Squires scratch the itch like the good old California made axes.

 

looking forward to reading those articles.

 

That's because when we let countries like China etc into the WTO there were no "leveling the playing field" clauses, and instead of a rising tide lifting all boats now all the ships are sinking to the lowest common denominator

 

ARE there young guitarists? Or is it like Harley, customers dying off with few replacements? I've never seen statistics about the number of guitar players but feel like it is decreasing (while maybe still a lot).

 

Kruger? Wasn't he resurrected?

 

Maybe it's just a regional thing, but there's a thriving local music scene here in mid MI, with a lot of youngsters in the mix. I don't think it ever slowed down really. I'm not a fan of them, but Greta Van Fleet came from a town like 30 minutes south and are a poor man's Led Zeppelin (guitar focused) with members in their early 20s. The metal scene is definitely thriving also and I don't think that'll ever exist without guitar. One of my favorite guitar players right now is Tim Henson from Polyphia, who is 28. I already mentioned my nephews and all their friends play, and they range from 17-25. I guess maybe there's just nothin better to do around here besides play music, drink beer, and go disc golfing, lol.

 

I think there is more music released than ever. It’s easier to record and self release. Especially during Corona more kids enjoyed music either playing or buying.

 

Groups of guitars are on the way out.

 

A friend who is also a guitarist and I were dicussing

Thank you, Bill. I couldn't have said it better.