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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.

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.

Steve

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,

Couldn't Hamburg supply Steinway grands to the USA market if the NY factory closed and Galatin was simply a distribution and rebuilding facility?

and to think, some called be crazy . . .

The only Steinway news I got was that come in and buy today because prices are increasing in 2013.

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.

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!

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

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.

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.

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

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.

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.

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.

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.

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

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.

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.