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Hi Marty,



You are fooling yourself. That copy was written by a PR team.

Funny how that stated goal never works out. It reminds me of what happened when the Luis Vuitton holding company (I forget their name) bought Moet et Chandon, and a couple of Italian vineyards, and then set up a satellite in Napa under the "Moet et Chandon Estate" label. The quality was noticeably worse off within two vintages, and continues to drop. But they sure still want to get top prices for their wines, even if they aren't nearly as good anymore!

I really hope the new corporate management is reading this thread.

Because as a pianist, the proof of the pudding is in the eating. The American Steinway output has been uneven at best since they took the company back. If the pianos drop in quality in the subsequent production years after the sale goes through, I'm never going to buy a new one again. I'll tell everyone I know or work with not to buy a new Steinway. If they decide to change ANYTHING, IN ANY WAY with the plant in Hamburg or its output, I'll tell everyone I know or work with to buy a vintage Hamburg Steinway, but never a new one. Most likely, I'll be telling anybody who asks that the new Steinway they want to own is actually a Chinese piano. Most likely, it will be the truth, and the new piano will be a pale shadow of what Steinway once was.

As far as I'm concerned, this marks the end of Steinway as a maker of great pianos. I guess I'll go out into the yard, rub ash in my hair, and hire mourners to wail.

This is conceivably worse than when CBS took over. I'm quite shocked the rest of you don't see it regardless of what you read in the papers.

Marty, I hope your stock does well for you. That's about all that will happen to it.

I have to agree with Laguna-Greg.. .I think things are going downhill. In any case, no pun intended, I'm a vintage Steinway person, and not predisposed to installing NEW soundboards in them.. I played a bunch of those on Piano Row, and they did NOT sound like Steinways, period. The best piano of the lot in a particular store was an 1895 or so Bechstein with its orig. soundboard.. stood out among all.

I have video of my playing the Bechstein, and it proved my point.

I would not worry about buying a new Steinway - after all, the factory has been though 4 day weeks, and occasional week long furloughs in response to the recession, and production has continued.

I would not assume this is a negative event for Steinway. I would let time tell. I think there is room for more quality improvements, and more production efficiency at the NY factory. I think some assembly methods that are done because "it's always been done that way" might be done a bit better, a bit faster, and with greater precision.

A Steinway piano arrives at the store only 95% complete. It would be better for cash strapped stores and the end consumer if stores didn't have to complete prep that was missed at the factory.

I love working on Steinways, because each piano has it's own characteristics, just as each of your children have different personalities. I hope that part of the Steinway piano never changes.

This is true, Bob. When someone is trying to feed their family and they are working two weeks on and two weeks off, it is difficult. But between that and the layoffs they have had over the past few years, I don't know that there is much more water to be had at that well. At least not without drastically changing the process.



True enough. But this represents a cost for the factory that they would rather not have. It kind of goes the opposite direction from your first statement.



Although I am happy that you enjoy this aspect of the NY production, that inconsistency from piano to piano can be very frustrating to musicians. It is something that isn't a part of the Hamburg product - or very many other great pianos.

More consistency from the NY production would greatly help the product. I understand they are doing better on that front right now than at any other time in recent history. I applaud those efforts!

I hadn't realized that hyperventilation could be quite so contagious.

I used to do that;
"The year I sold the Steinway" sort of statements, without clarifying that it was a few hundred shares of LVB.

If the doom and gloomers are right there will be pre and post buy out NY Steinways, with some perceived value difference.

At some point Steinway may become just another emblem stuck on the same old same old - much as "Cadillac" is essentially a Chevrolet with slightly different trim.
Essex, Boston, Steinway,,, with optional colors, veneers, etc.

Mere OPINION, but PRODUCT consistency is usually an indicator of PROCESS maturity aka quality.
5% incomplete out the door doesn't hack it in any other manufacturing business - like it or not this IS a manufacturing business.

All this doom and gloom conjecture is WAY premature. As has been pointed out many times, the piano industry is rather unique. This case is no exception.

Also, there are many factors in play that most posters here are completely unaware of.

[My 10,0000th post!]

This is not Indrik Laul or Udo Steingraeber buying a venerable piano manufacturer because they love making quality pianos. This is a leveraged buyout firm with no particular familiarity with pianos or what it takes to build a fine instrument. They are not going to care about Steinway's history, except to the extent it feeds into the brand image. Kohlberg & Co. has an obligation only to its shareholders and investors, who are charged very high rates (2% annually on amounts invested, and usually 20% of all profits earned) because Kohlberg promises them very high returns even after these fees. Unfortunately, in the past six years the private equity and hedge fund businesses have not been able to produce the returns investors are used to, so they are under pressure to step up their own performance.

Kohlberg & Co. are one of the better performers in the business. They don't like to use excessive amounts of debt and they don't always look for quick answers such as moving all manufacturing to Asia. Still, their goal is to "clean up" the company by finding manufacturing efficiencies, and selling off non-strategic assets, however these are defined. And they definitely use debt, or Macquarie wouldn't be in the picture, so there is going to be pressure to clean up the company in five years or less and dispose of it at a profit, either by a resale to private investors or by an IPO on the market.

I would take their word for it that they see the Steinway brand as a link to the luxury market. That market has been one of the few that have performed consistently well since 2008 in most parts of the globe. Exactly how Steinway is going to create growth in the luxury sector for Kohlberg & Co. is the real challenge in this buyout, but obviously China is the place they will start. And that doesn't necessarily mean in pianos alone. The Chinese upper class may develop a taste for other instruments, and for band lessons for their children, as an example. It's easy to see in this buyout that the new Steinway will be marketed heavily in China, and perhaps some manufacturing moved there or elsewhere in Asia.

Whether management in the new Steinway cares whether the pianos compare to top names like Bosendorfer, Steingraeber, or Fazioli remains to be seen. Keeping up the highest quality standards in piano making just for the sake of being a top manufacturer is not likely to be a basic goal of the company. But keeping up some sort of reputation as a quality manufacturer of pianos is going to be important to maintaining the brand, which is all important in a buyout like this. If they can cut corners yet keep up the brand image for the next five years, then that is an acceptable approach. Remember, as nice as the people in Kohlberg are, their goal, and their obligation to their owners, is to get out of these buyout situations quickly. I've worked with enough of these buyout deals to know that the sooner you exit your position as owner, the higher your overall return will be. That is ultimately how they are judged - on the returns they generate their owners and investors.

Greg - How am I fooling myself? All I did was relay the opinion as expressed by a specific radio broadcast. I didn't say I agreed with it or that I even shared the opinion.

However, I doubt that the writers at "Market Place" are a PR team.

I would add the Burgett brothers to Numerian's list of Indrik Laul and Udo Steingraeber. I do not see a similar aura around the Kohlberg transaction to that which surrounded the three purchasers listed. I agree that we should all wait and see (and hope), but it is perhaps worth noting that we have no choice in the matter.

Could there be much larger investors lurking around the corner waiting to make their move - when time is right?

Norbert

I am with laguna_greg and Numerian on this.

In the past, I have visited the Estonia factory and personally met with Indrek Laul. Even though it was just a short visit, I could clearly understand why the brand was so successful after even briefly talking with Mr. Laul and seeing how the technicians were working with such a deep love for the instruments they were producing.

Yes, the piano business is different from other businesses. Steinway's success lies in their fine craftsmanship and tradition. If they move ANY, but ANY part of their production to China or elsewhere they are bound to lose.

I hope they keep the experienced craftsmen and the traditional way of producing each piano by hand. Nobody is after mass produced identical Steinways, even if they are far better than today's Steinways. The MAGIC lies in every one Steinway piano being different from each other and unique.

That is the main marketing value of the Steinway piano. Nobody would pay that much money for a machine made (even it is of a minor scale) piano. The buyer's main motive in spending such amount of money is the feeling that he/she is investing in a unique instrument and also an instrument that will hold its value better than mass produced pianos.

My concern is that Steinway staff members would be worried / distracted and some re-structuring may be taking place...Is it a good or bad timing to get a factory order new NY Steinway?

GGO,

I understand your concern and there is no way to be absolutely certain of the shop morale. One thing that does seem to be certain, is for the foreseeable future, nothing is going to change. The types of restructuring changes being speculated about take years to accomplish, rather than months.

The Steinway artisans and craftsman are very proud of the job they do. That type of dedication does not disappear overnight. It's not like they can be replaced by temp workers and the Steinway crew is well aware of that fact.

If it were me, I would trust the reputation of the company and have no reservations about placing an order for one of their pianos.

You mentioned that you have placed an order. Is that because the model you preferred was not available at the showroom, or because you chose custom cabinetry or some other specific design change? A standard issue would already have been built. A custom order may, perhaps, be built with even more care.

So, it remains mere conjecture, and there is no absolute answer to your question. Within 43 days, if there is a general strike at the factories in NY and Hamburg, there would certainly be reason for concern. But, I think that is highly unlikely. Unless there is a major collapse, I trust that the builders will continue to do the job that they do so well.

My memory may deceive me, but I do not recall ever reading a post that talks about someone having played a poorly prepped Hamburg Steinway. I have, however, read many, many posts concerning that complaint regarding the New York instruments. What does it say about a company that thinks it's OK to send out an instrument that someone is expected to pay 50, 60, 70 or $110K for in LESS than 110% "optimum" playing condition? Mind you, they are also not willing to discount a dime off that outrageous price, because, after all......"it's a Steinway"!! From my perspective, the best thing these new owners could do for that company is fire everyone in the New York office/factory and replace them with personnel from Hamburg.

Hi CC,

Joe88 has posted a few times about about having to perform on badly prepped Hamburgs.

Don't worry, that'll probably be one of their first moves. They'll slash wages and rob the pension while giving themselves nice fat bonuses and salary increases.

We're all pretty sure about what's going to happen, aren't we?