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#2004964 - 12/27/12 02:44 PM Steinway News  
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This belongs in the Steinway Hall thread, but it got locked. Nevertheless, this might be of interest to the denizens of this forum.

Yesterday Steinway announced they were terminating the agreement with Directors Messina and Stoner to sell them Conn-Selmer. This seems like the board is actually looking out for the best interest of the stockholders. Perhaps particularly a stockholder named Kim?

Interestingly, they also modified the employment agreement with Ron Losby, the President of Steinway and Sons - Americas, so that if he were terminated, or quit, within 12 months of a "change in control" he'll get a golden parachute of two years salary and bonus.

A year or so ago in one of their SEC filings they mentioned a down turn is Boston sales and felt that Japan was becoming too expensive for manufacturing.

Combine this with nylawbiz's post about the situation of their NYC real estate and you have to wonder if there are changes in the air.


Gary
Essex EUP-111 at the mountains
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#2004995 - 12/27/12 03:44 PM Re: Steinway News [Re: Plowboy]  
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I think it is universally agreed that something is going on. However, those who know what is happening don't talk, and those who don't know, (and I am certainly in that group), are left to guess.

On today's announcement, keep in mind that Mr. Kim, who owns ~33% of Steinway, also owns Samick which is a major manufacturer of band instruments in addition to pianos.

Also keep in mind that the land that the NY factory sits on is rumored to be worth over 100 million dollars and that Samick has a lot of land surrounding their Galatin TN facility.

Steinways stock dropped about 5% after today's announcement.

I don't know if any of this is meaningful, just interesting...very interesting.


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#2005003 - 12/27/12 04:02 PM Re: Steinway News [Re: Steve Cohen]  
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Steve
Originally Posted by Steve Cohen

On today's announcement, keep in mind that Mr. Kim, who owns ~33% of Steinway, also owns Samick which is a major manufacturer of band instruments in addition.


This is true Steve. Also something to keep in mind - when an investor wants to painlessly gain a majority position in a company they can do this by having stock owned by holding companies, partnerships, etc.

In reality, Mr. Kim may "own" more than 33% of Steinway. To be clear, I have no direct knowledge to this effect, but it would make sense that this could be happening.

My 2 cents,


Rich Galassini
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#2005163 - 12/27/12 09:35 PM Re: Steinway News [Re: Plowboy]  
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Couldn't Hamburg supply Steinway grands to the USA market if the NY factory closed and Galatin was simply a distribution and rebuilding facility?

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#2005179 - 12/27/12 10:08 PM Re: Steinway News [Re: Plowboy]  
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and to think, some called be crazy . . .

#2005223 - 12/27/12 11:27 PM Re: Steinway News [Re: Plowboy]  
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The only Steinway news I got was that come in and buy today because prices are increasing in 2013.


Quid est veritas et mendacium, cum orbis terrarum.
#2005385 - 12/28/12 10:22 AM Re: Steinway News [Re: Bob]  
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Originally Posted by Bob
Couldn't Hamburg supply Steinway grands to the USA market if the NY factory closed and Galatin was simply a distribution and rebuilding facility?


I don't believe that the Hamburg plant has that much manufacturing capacity.

Keep in mind that Steinway is sell their production reasonably well on a global basis.


Piano Industry Consultant- http://www.linkedin.com/pub/steve-cohen/6/b92/b80

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#2005389 - 12/28/12 10:34 AM Re: Steinway News [Re: Plowboy]  
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Steinway prices increase every year, at least as far as I know. I wonder whether their discounts do as well? I suppose that any percentage discount goes up, simply because it is a percentage.

In any event, there are a lot of wonderful pianos out there, and only some of them are Steinways!

#2005416 - 12/28/12 11:25 AM Re: Steinway News [Re: Steve Cohen]  
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Originally Posted by Steve Cohen

I don't believe that the Hamburg plant has that much manufacturing capacity.

Keep in mind that Steinway is sell their production reasonably well on a global basis.


Their fastest rising market is China. If Samick took control, would that have a negative effect on their brand in China, do you think?


Gary
Essex EUP-111 at the mountains
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#2005525 - 12/28/12 01:40 PM Re: Steinway News [Re: Plowboy]  
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At current demand, the Hamburg factory could handle grand production needs, even more if the Hamburg uprights were moved to another factory in Germany....

It's not an easy thing to instantly staff, but I can imagine it. I believe there are a few out of work craftsmen in Germany, which is a great asset. I'm sure the belief is there will be growth, but I'd be amazed if even the strongest projections called for numbers like the good old days.


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#2005670 - 12/28/12 05:47 PM Re: Steinway News [Re: Plowboy]  
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And, I'm certain Hamburg would have no problems installing a New York hammer if called to do so.......of course, I'm simply guessing about a different option to production in the USA.

#2005685 - 12/28/12 06:09 PM Re: Steinway News [Re: Bob]  
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Originally Posted by Bob
Driving slow?....Stay right. Driving fast?....Stay left. Can't drive?....Stay home! .......


HELP!!! I certainly hope you're not doing this in Australia or Britain (last point is relevant in most parts of the world though) ...


Alan from Queensland, Australia (and Clara - my Grotrian Concert & Allen Organ (CF-15)).
#2005688 - 12/28/12 06:13 PM Re: Steinway News [Re: PianoWorksATL]  
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Originally Posted by PianoWorksATL
At current demand, the Hamburg factory could handle grand production needs, even more if the Hamburg uprights were moved to another factory in Germany....

It's not an easy thing to instantly staff, but I can imagine it. I believe there are a few out of work craftsmen in Germany, which is a great asset. I'm sure the belief is there will be growth, but I'd be amazed if even the strongest projections called for numbers like the good old days.


I think that manufacturing solely in Hamburg would drive up prices in the U.S. (and elsewhere)to an unsustainable level.

A new factory, (in Galatin?) would solve several problems nSteinway faces. I see no reason that the quality of Steinway pianos could not be maintained in a new factory. Sure, competitors would howl, but Steinway's brand cache and marketing accumen are such that it might not suffer significantly from such a move.


Piano Industry Consultant- http://www.linkedin.com/pub/steve-cohen/6/b92/b80

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#2006218 - 12/29/12 09:01 PM Re: Steinway News [Re: Plowboy]  
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Well.....it's not fair to Steinway to guess. I'm sure that whatever they do will be a long term win for the company.

#2006263 - 12/29/12 10:48 PM Re: Steinway News [Re: Steve Cohen]  
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Originally Posted by Steve Cohen
...A new factory, (in Galatin?) would solve several problems nSteinway faces. I see no reason that the quality of Steinway pianos could not be maintained in a new factory. Sure, competitors would howl, but Steinway's brand cache and marketing accumen are such that it might not suffer significantly from such a move.
As I had mentioned in an earlier thread, Bösendorfer and Bechstein did it (moved the production to a cheaper location, maintaining only a "representative" exclusive store in the metropolitan centers they are associated with). Why should Steinway not do the same if it is good for the bottom line and the share price...? Unfortunately, short term profits and shareholder's satisfaction (ROIs) are what drives most of the free enterprise.

#2006268 - 12/29/12 11:07 PM Re: Steinway News [Re: Supply]  
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Originally Posted by Supply
Originally Posted by Steve Cohen
...A new factory, (in Galatin?) would solve several problems nSteinway faces. I see no reason that the quality of Steinway pianos could not be maintained in a new factory. Sure, competitors would howl, but Steinway's brand cache and marketing accumen are such that it might not suffer significantly from such a move.
As I had mentioned in an earlier thread, Bösendorfer and Bechstein did it (moved the production to a cheaper location, maintaining only a "representative" exclusive store in the metropolitan centers they are associated with). Why should Steinway not do the same if it is good for the bottom line and the share price...? Unfortunately, short term profits and shareholder's satisfaction (ROIs) are what drives most of the free enterprise.


Including your enterprise also??

Sorry - but this your statement is so negative. If most of free enterprise is driven by selfish short-term interests then shall we assume that your business is the same? And mine? And Piano World for that matter?

Competition is what protects consumers from predatory business practices - not regulation nor virtually anything else.

Information and the free flow thereof is liberating to consumers - and that is Steinway's greatest challenge in my opinion - not the location of their manufacturing facility. As consumers become more aware of choices, they become better armed to make good decisions.

In that sense this forum serves a great purpose.

End of rant.

Now back to your regularly-scheduled Steinway speculating.

Last edited by Furtwangler; 12/29/12 11:13 PM.
#2006272 - 12/29/12 11:57 PM Re: Steinway News [Re: Plowboy]  
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Unfortunately, I've never owned a Steinway piano and I really don't ever anticipate having the available funds to really shop for a large Steinway grand. If I did, at this time, there is no Steinway dealer in NM. The authorized Steinway dealer closed more than a year ago, so if pianists in this state want a new Steinway from an authorized dealer, they have to have it shipped in. I'm not sure why it matters to me, but I find it very sad and troubling. Whatever the management and staff at Steinway do to promote their brand and keep their legacy and history alive, I'll cheer them on.


J & J
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#2006274 - 12/30/12 12:03 AM Re: Steinway News [Re: Plowboy]  
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Steinway is affected by change as is everybody else in the industry right now.
Chances are in few years nobody will even recognize the map.

We have picked our winner, hoping everybody else has picked theirs.

Norbert



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#2006315 - 12/30/12 02:31 AM Re: Steinway News [Re: Plowboy]  
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As a business Steinway has to do what Steinway has to do to survive. The forseable future doesn't look too good for any type of prosperity, especially for an industry that is based more on desire than need.

But as someone who has to deal with training new employees, I can tell you that it's very difficult to find good help. Steinway has a huge number of employees, specialists, and craftsman in their NY facility, many of whom have been there for the better part of their whole lives. It would be very difficult for them to pick up and move to TN. Their place has been there for a long time and they're sort of stuck in their ways, if you know what I mean. A lot of their equipment is ancient, but still perfect for their needs, and so are their people. Undoubtedly they'd loose many of their best people in such a move. A Steinway is a Steinway not because of the name plate but because of the people building them.

#2006339 - 12/30/12 04:18 AM Re: Steinway News [Re: Chloe J. Scott]  
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Consider some of what we hear (for example, in adjacent threads to this one) about 'variable' quality in Steinways - folks, there's no such thing as variable quality - in a manufacturing sense, if a process is variable it's not under control. I know of a company in a different industry that had so many quality problems at a particular plant that they finally decided to close it. There were too many old timers who couldn't change, too much outmoded equipment, etc. Steinway may have decided to fix its quality problems by simply closing the plant, and is trying to do so while retaining its mystique.

#2006578 - 12/30/12 03:20 PM Re: Steinway News [Re: Plowboy]  
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I heard on KBAQ this morning, that Steinway would not be making any changes, but did consider selling the building and took some offers from other potential buyers. But, decided that the offers would not improve Steinway's position.
Also,Steinway looks for a good 2013.
I look forward to a better 2013 also as my team lost a bowl game last night, but it was still fun.
Happy new year to all at PW.


#2006584 - 12/30/12 03:33 PM Re: Steinway News [Re: Mark VC]  
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Originally Posted by Mark VC
Consider some of what we hear (for example, in adjacent threads to this one) about 'variable' quality in Steinways - folks, there's no such thing as variable quality - in a manufacturing sense, if a process is variable it's not under control. I know of a company in a different industry that had so many quality problems at a particular plant that they finally decided to close it. There were too many old timers who couldn't change, too much outmoded equipment, etc. Steinway may have decided to fix its quality problems by simply closing the plant, and is trying to do so while retaining its mystique.
But from several threads at PW and the from the Piano Buyer it seems that there has been great improvement in the consistency and quality of Steinways in recent years.

#2007267 - 12/31/12 11:57 PM Re: Steinway News [Re: Plowboy]  
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Steinway has indeed improved their product over the last several years. New tooling is everywhere in the factory. I don't think any brand can build without some variation, at least while pianos are still made of wood.

#2007523 - 01/01/13 04:36 PM Re: Steinway News [Re: LJC]  
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Originally Posted by LJC
Steinway has indeed improved their product over the last several years. New tooling is everywhere in the factory. I don't think any brand can build without some variation, at least while pianos are still made of wood.


Yes, a lot of computer aided manufacturing where appropriate. But also more portable. Easier to relocate machinery that skilled staff.

#2007547 - 01/01/13 05:05 PM Re: Steinway News [Re: Plowboy]  
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By way of a response to Furtwangler: if a business is owned and run by a specific person or group of people, they can make whatever decisions they want about running it, because their only obligation is to themselves. Thus, they can make decisions based on principle and pursue goals in addition to (or even instead of) generating profits.

Once a company is publicly traded, however, that changes, because those in charge of running it now owe an obligation to shareholders, who are the real owners of the company. There are of course companies that are publicly traded that adhere to principles, but stock prices are kept high (and go higher) when the company generates profits, not when the company takes a principled stance that actually costs it money. It is my understanding that Steinway is publicly-traded; thus, its priorities may well not be the same as those in an ownership that is willing to put principle ahead of profits.

My two cents.

#2007558 - 01/01/13 05:23 PM Re: Steinway News [Re: Plowboy]  
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Gee thanks.

I did not know that (to borrow a phrase from the late Johnny Carson).

So let me get this straight - there are actually some publicly owned companies that adhere to principles? Gosh. What a country.


My three cents.

#2007586 - 01/01/13 06:36 PM Re: Steinway News [Re: frog97]  
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Originally Posted by frog97
I heard on KBAQ this morning, that Steinway would not be making any changes, but did consider selling the building and took some offers from other potential buyers. But, decided that the offers would not improve Steinway's position.
Also,Steinway looks for a good 2013.
I look forward to a better 2013 also as my team lost a bowl game last night, but it was still fun.
Happy new year to all at PW.



Now I'm confused. I thought that the Steinway Hall deal was finalized, with the exception of a balance to be paid to Steinway when they vacated the building.

I thought the issue that was deemed not in the best interests of stockholders revolved around selling the Selmer/Conn decision to two executives.


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#2007715 - 01/01/13 11:49 PM Re: Steinway News [Re: Plowboy]  
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If Steinway wants to build a new factory in Gallatin then they better start saving money now for the new TN employee workers comp trust or just consider hiring temps. They will never have a sustainable qualified workforce in Gallatin. Not many people will work 10 years for a 30 cent raise to 8.30 an hour. 48 % of their revenue will go straight to the comp trust for the first 2 years.

They would be better off in a more business friendly state like Delaware or South Carolina, Maybe Georgia.


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#2007832 - 01/02/13 08:42 AM Re: Steinway News [Re: Plowboy]  
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Would a Steinway made in Tennessee still qualify as a New York Steinway?

#2007834 - 01/02/13 08:52 AM Re: Steinway News [Re: Rank Piano Amateur]  
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Originally Posted by Rank Piano Amateur
Would a Steinway made in Tennessee still qualify as a New York Steinway?


That's an interesting observation. Steinway has tied its branding in with its location so leaving NY could be a terrible move in terms of continuity of a beloved line of products. It's quite possible they might have left NY long ago if it weren't for the "Steinway New York" factor. On the other hand, NY has been good to them and they might not have lasted this long without the heritage in NY. I don't know - just thinking out loud...

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