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I am wondering if there are any of my PW colleagues that own S&S Stock in their portfolio? You may respond privately if you wish, Thanks!

It's a hard stock to analyze. I bought a hand full of shares. I think they've made some good changes in corporate structure lately, though that remains to be seen. So far, I've made a bit of paper money. Not enough to actually buy a Steinway, mind you. My equity share probably consists of a pile of spruce shavings on the shop floor.

I just wonder if Samick will take over.

I own a little. It keeps me on their notification list so I hear of significant events in their operation.

Plowboy...some think a Samick takeover may have already happened.

I also own the LVB stock. I bought 200 shares just for fun, rather than any serious thought of investment for return. Other than the 'pride of ownership,' the corporate reports and mailings are very interesting.

It seems that Gary and I both like to mess around in a little pile of spruce shavings.

With the recent changes, they certainly have the biggest stake. And now they can buy more shares with approval of the board, of which they have the most votes.

So the question is will it be a good thing? Samick is a piano company, so that's good. Will a Samick made Boston be more affordable than a Kawai made Boston?

Some of the great mysteries of our time...

There are other even greater mysteries, like why did Samick buy so much land in Gallatin, TN?

I am considering buying some just for the fun of it, I have other stocks as well as mutual funds and would certainly not put all my eggs in one basket and I am not expecting to "make a killing". Like Steve, it would be interesting to get their reports. Also, whether we like it or not, they are a big player in the musical instrument business in the US and I have no problem supporting an American owned musical business. If you can't beat them, join them ??

Well,

You can get their reports online for free if you like. I do it all the time.

And I wouldn't exactly call them "American owned" any longer, would you?

The Gallatin TN building is a logistical base for Samick. I find it extremely unlikely that Steinway would want to build a factory in TN due to the workmans comp expense.
They would instantly kiss 47% of their gross revenue goodbye by paying one of the highest comp rates in the US. There is also a 12K dollar surety bond per man to pay pre-hire as well. For this reason most TN plants and factories only use or hire temps, for which there is a 5k tax break.

So unless they plan on building a better robot to assemble and do the fine piano building work I really dont see them making a wise choice to build an actual plant in TN,.

47% of their GROSS REVENUE???

Sorry - your statement is absurd. You might want to check your facts.

And New York's Workers' Comp rate is fully 40% higher than in TN

Facts are beautiful things:

Workers Comp rates by State

This also seems unrealistic to me. Why would major car companies have plants here if it was so expensive to manufacture goods?

From the following article:
http://news.investors.com/030212-603104-tennessee-auto-industry-thrives-without-unions.aspx?p=full

Tennessee's law has held down labor costs. VW pays $27 an hour for new employees in wages and benefits, about half of the $52 an hour labor cost in Detroit.

I know this is just comparing to Detroit, but seems like it is not going to take 47% of their gross revenue.

Jonathan

We are the Mexico of Europe.

Then with all your wisdom you can explain away this bill I have on my desk, actually stapled to the wall from last year when we wanted to put on two employees. Surety bond bill from the TN dept of revenue for the hires which totals 18,246.00 So that bill is a figment of my imagination all the way up until we hired temps and got an 8200.00 tax credit for doing so. TN ranks like 38th on a list for the highest business tax rates anywhere, which is why our shop is no longer in TN.

In-fact since that land aqquistion in Gallatin there is now a land aqquisition tax. Which is made worse really by the fact that they already have a building there. Another tax that doubled last year is the corporate tax rate which is why a lot of music studios have moved out of the area this year.

Factories that employ more than 200 people may get exemptions BUT You want to talk about Nissan in Smyrna TN ? almost the entire workforce is staffed by randstad temp agency. 4000 workers out of the supposed 4800 are temps. The leaf was supposed to bring in more jobs well where are they?.

I will however tell some of my business owner friends that pay upwards of 55% of their gross for workmans comp/PPA tax and surety bond tax that its just absurd because someone in California says so gimme a break, yawn !

Facts are a beautiful thing:

http://taxfoundation.org/article/2013-state-business-tax-climate-index

LVB is more than Steinway the piano company. Keep that in mind when evaluating the Stock.

But, IMHO, their piano business is a rotten investment.

According to Steinway Dealers (like this one http://www.steinwaypianogallery.net/how-to-buy/piano-myths ) it takes 3,000 hours to make a Steinway. Since a Steinway dealer said this, it must be true.

Let's suppose Steinway pays its people $10/hour and it costs an additional $10 overhead per employee (cost of employer contribution for payroll tax, health insurance, heating building, etc). This, of course, is a rock-bottom estimate. It would mean that their NY staff couldn't afford to live in NY making $20,000/year.

Anyway, this means it would cost $60,000 in labor and overhead just to make one Steinway. We'll estimate $10,000 for raw materials, which would bring the manufacturing cost to $70,000.

A Steinway "B" retails for about $90K. This means that Steinway's profit on every "B" can only be about $10,000. The rest of the margin goes to the dealer. And they lose money on S, M, and Os. Because, after all, it takes "3000 hours to make a Steinway."

The dealers claim that all their workers go through a "rigorous apprentice journeyman system" so it's likely the wage cost is higher, which would bring their profit margins down even more.

I guess they must have huge profit margins on their stencil brands to make up for it.

Hmm I'm sure I recognise the name Samick from the acoustic guitar world!

Take off a zero and it will be much closer to reality.

ddf

2 X 12,000 = 18,246. The new math.

Thrill Science, why do you hate America?

You should read their annual report, then you won't have to speculate about facts.
http://phx.corporate-ir.net/phoenix.zhtml?c=76306&p=irol-sec

LVB is indeed more than the piano company. Not selling the band division was a very good decision. They could have saved a few million dollars by just asking me about that, though, rather than hiring "business consultants".

LOL My god this thread would be sheer perfection for No-Doz products. Gotta love it when people that do not live in a particular regional area suddenly become experts because they saw something like the Nissan job fair put on 2000 people on the news. Job fair = take a name and number after waiting in line for 3 hours. Top dollar out there is 8.25 and you are gone in 90-120 days WOW !. They had two of those job fairs in 3 months so the staff should reflect that? yes? NOT. VW and the other German plant in AL are temp run as well.


So couple very low hourly wages with the super high sales tax rates 9.25% in Nashville. 9.75 % in poorer counties and you have your formula as to why no one is buying anything or has the capacity to buy.

Now if you people think that under 9.00 is real money and is the way of the future then by all means lower your hourly rates and see how long you can live comfortably.

There is also strong resentment locally too so just because a new factory moves into the area with super low pay doesn't mean they will get quality workers