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Actually A427, I'm being dismissive of you.

A427? Really?

What next? Are you going to challenge him to a fight on the playground after school?

Not for the next thirty days.

There are several members who have been repeatedly warned about ruining practically every thread they participate in by engaging in unending tit-for-tat insults. Public warning that the tolerance level for this has gone way down. Persist at your own risk.

No, not at all. Those were my experiences and observations based on many years of living/working in that city. I'm not sure why my existence/experience always seem to come across as threatening--but it always seems to have been that way.

If I have personal experience that I think might add value to the discussion, I share; if I don't, I don't.

Hi A443, my comment wasn't directed at you but at Marty's comment to you.

Well, having 'significant number of improvements' in no way is a contradiction or disagreement to what I said.


To help you understand what I meant, let's look at another tech company: Apple has made significant improvements to their products since Tim Cooke left, but they are still worse off for having lost Steve Jobs.

Sorry to see the thread not be about the C1 and C1X, but since it is what it is, I would like your take on the sale, particularly if you happened to be living in Vienna at the time.

From what I could glean from the business media in the US, Baway had no choice but to dispose of Bosendorfer, and probably should not have bid for it a decade before. Bawag was in trouble on its own and Bosendorfer had lost 2 million euros in one year. That's a startling number for a company with so few units produced. There were two bidders. Brodmann bid 11 milion euros and Yamaha 15. Yamaha guaranteed that production would stay in Austria. Brodmann didn't. Bawag chose Yamaha when Brodmann did not up its bid.

Now if any of that is incorrect, please correct me.

I have two questions for you. The first is your own opinion. Which available option do you think was the best course?

a) Bawag keeping the company

b) Bawag selling to Brodmann, a shell company for pianos made OEM in Xichang, China by Parsons Music

c) Bawag selling to Yamaha

d) something I didn't mention

The second question is about the general opinion in Austria of the two bids. Did the Austrians by and large favor Brodmann because of its claim to be a Austrian piano maker as opposed to the big Japanese coroporation?

Thanks

I'm not dismissing your coments about the cultural loss. I'd just to focus on the alternatives that were realistically available to Bawag at the time..

What makes you think that Steinway's leadership is less motivated or cares less about their pianos?

I have interacted with their executives and find them both caring about Steinway's quality as well as being very motivated.... possibly more so than John and Henry were in the later years.

Well, for one thing, I don't think you'll disagree that Steinway was worse off during the CBS era

The Steinways were very aggressive improving their pianos, and marketing them.

Edit: Please don't interpret this to mean that Steinway is bad at marketing, or bad at improving their pianos; rather that before they were quite beyond anyone else in these areas

Good info and puts things into perspective. A lot of times consumers only think from their point of view, and don't look at the economic impact to all parties concerned (e.g. the owners). Not sure what caused them to lose $2M that year, but apparently Yamaha thought moving the factory out of the high rent city would help. I like that option more than B.

Actually William, you're nearly spot-on, but there was another bidder: Sauter.

and......??????


Never caught a whiff of that. Please develop.

In terms of what was in the media: non-disclouseur agreements prohibit all parties, including BAWAG, from disclosing any parts of the sales process. How any of that information was made public, or where the information came from, is a mystery.

It is public knowledge, however, that there was at least one other bidding group (i.e., not another piano manufacturer), backed by the support of the workers. That group was apparently not politically correct for BAWAG: it seems like the Bosendörfer sale may have gotten caught up in a red vs. black political back-and-forth; those were some scandalous times--that is what was in the news (i.e., not so much about Bosendörfer). Since BAWAG is a red party bank, and they were under attack by the black party (i.e., for embezzling and mismanagement of strike fund monies), BAWAG dealt with Bösendrofer in a way that was least harmful for them politically...as far as I can tell.

Oy Vey! Red and Black. Black and Red. I was in the 19th for two years livings on Nusswaldgasses. I couldn't even understand my neighbors, much less the politics.

If a bank in the US is disposing of an asset and both the bank and the asset are in a distressed situation, it would be almost certain that the high bid would win the day as long as its debt level was not a concern and/or its credit shaky.

Are you suggesting that Bawag took less than it could have gotten from a group supported by Bosie workers because Yamaha was the politically expedient choice?

A mitigating factor:

I was told that Bosendorfer had been declared a "national treasure" and that any buyer was legally bound to keep Bosey in Austria.

If true, that might have affected bidders.

As far as I can tell this is an unfounded rumor. In fact there was a formal statement in parliament of an Austrian minister saying that - while it was to be desired that production stays in Austria - the government would not interfere with a private sale. This official statement can be found here:
http://www.parlament.gv.at/PAKT/VHG/XXIII/AB/AB_01724/

No, that is not true.

There was some movement to set the Graf Starhemberggasse factory/building under "Denkmalschutz" protection, but that was not welcomed by the Hutterstrasser family: doing so would have significantly devalued the land, the building could then not be altered for other uses (i.e., this was a serious concern, as the building was constructed of a series of add-ons over a c.300 year period), and would have completely prevented the current high-rise project that is going in there now.

The sale of Bösendorfer, and the other twenty-some politically motivated purchases by BAWAG, had little/nothing to do with a financial distress situation.

The BAWAG board received a far more favourable offer to purchase the company, with the support of the workers, c.3 months before politics forced their hand to start unloading the companies--the offer to purchase the company came after the Bösendorfer red-party-management refused to negotiate large on-going orders of pianos that would have ensured profitability (i.e., it was reported that Bösendorfer was haemorrhaging many millions of euros/year). The response from BAWAG essentially was: the company is not for sale, everything is fine, we are not going to change directions.

Hey, that's the same as your designation in the US, no?

The way it was reported in the US business press was that Yamaha on its own had agreed to keep piano prodcction in Austria.

Designating an enterprise that is leaking two million euros in one year a national treasure seems a little strange, and that 2m figure reported in the business press came from correspondents in Europe. It was also widely reported in the European press before the sale was consummated.



This is hard for me to understand, especially since Bawag's own financial mess was bad enough that it wound up being controlled by a hedge fund that dealt in distressed assets. But.... the reason I asked you to post your impressions of the sale was to try to understand things from an Austrian perspective. So, while the political aspect you're reporting is confusing (at least to me), it's also fascinating and I appreciate you taking the time to develop it here.

OK, this might get too complicated/uninteresting, but I’ll give it a shot anyway.

BAWAG was Austria’s forth largest bank, which was 100% owned by the unions (ÖGB). The ÖGB is a VERY powerful group in Austria that, essentially, IS the Red party [SPÖ--Social Democratic Party of Austria; FYI, the previous name of this party was "Social Democratic Workers' Party of Austria”]. The connect is no secret, everyone in Austria knows this.

The BAWAG board consisted of ÖGB and SPÖ leaders. Even though BAWAG was a company, with fiduciary responsibilities to its shareholders, the board and CEOs, nevertheless, took many actions that were purely politically in nature; there were twenty-some companies that were purchased by BAWAG over the years for reasons other than business investments. However, none of those business were really “the problem” in terms of the bank’s own self-created financial distress--all of these companies's losses were manageable, including Bösendorfer's.

The Black party (ÖVP) intervened when it learned that the BAWAG leadership was convering-up €1,000,000,000 in losses by using the ÖGB strike-fund monies as a guarantee (i.e., to hide the fact that highly speculative offshore transactions in the Caribbean/Lichtenstein went bad, as did a c.€400,000,000 loan to Refco--all in the same year). Naturally, the investigations found that were many other "financial issues” going back much further to other CEOs.

Just to be clear: strike-fund monies may not be used for speculative investment purposes, nor can they be used to guarantee loans. This is why it was a red vs. black political issue. What they were doing was illegal. Because of the BAWAG scandals, and the massive amounts of negative media, the ÖGB and SPÖ had no choice but to quickly sell off BAWAG to manage the negative image for the upcoming 2006 elections.

Bösendorfer was, essentially, a non-issue in the political turmoil that was transpiring. There were so many more important issues that people were dealing with at the time. The finical stability of YAMAHA represented a situation that seemed to have had less potential for something to go wrong and produce even more political ammunition in the upcoming elections of 2006.

Bösendorfer had other options in terms of new ownership that were supported by the unions at the company level (i.e, the workers), but not necessarily at the ÖGB/SPÖ/political level.