Reports of the death of American manufacturing have been greatly exaggerated. And, although both Hillary Clinton and Donald Trump might be painting too rosy a picture of a renaissance in American manufacturing should they be elected, it remains a fact that companies continue to find ways to make products here at home…and to do so profitably. Given The Music & Sound Retailer’s deep and abiding belief in U.S.A.-made products, we trumpet that message every October in this, our annual “Born In The U.S.A.” story. Here, we spotlight prominent, successful MI companies that are making American manufacturing work.
Because this is a recurring feature, we try to attack the topic from a different angle each year. For 2016, we asked our contributors whether it’s gotten easier or harder to remain a U.S.-centered manufacturer, and we inquired as to whether music products dealers are enticed to carry lines simply because the products are “Made In The U.S.A.” Although the respondents didn’t always stick completely to the questions, their comments—to a person—reflect the ingenuity and commitment of some of the leading lights our industry has to offer.
Can America “make” again? The best answer, perhaps, is, “We never stopped.”
Compared to one, three or five years ago, is it now easier or harder for you to keep your manufacturing in the United States, rather than outsourcing your manufacturing?
It is getting harder. The dramatic increases in minimum wages in New York and California over the next four years will force us to move almost all our pay scales up nearly 50 percent in four years. That is definitely going to have a big impact on our ability to compete globally. We will begin implementing significant wage adjustments October 1 of this year that will force us to raise our prices considerably for 2017. That is not something we are taking lightly. Fortunately, our strategy of heavily investing in manufacturing infrastructure has continually yielded us efficiencies that have enabled us to maintain 95 percent of our manufacturing in America. We are hoping that we will be able to continue.
It will be interesting to see how the election goes and how the new president will lead the agenda of minimum-wage increases on the federal level. If they do not raise them to the $15-per-hour target that New York and California have set, we may have to look at moving some operations to states with more business-friendly programs. We hope it does not come to that, as it will be a huge expense and distraction from our other strategic plans.
—Jim D’Addario, CEO, D’Addario & Co., Inc.
The temptation is always there to make something at a discounted rate, so that your product gets into more hands. But, to me, it’s more of a challenge to outsource overseas without physically being there. If my Uncle Milton instilled anything in me, it is that quality is the most important aspect of manufacturing. Quality control becomes a problem when your manufacturing plant is thousands of miles away.
—Meredith Hamlin, CEO/President, Kyser Musical Products, Inc.
Zildjian began manufacturing cymbals in the United States in 1929 and, today, we are proud to be the only cymbal company to continue that tradition. However, manufacturing in the U.S.A. continues to become more difficult due to factors such as rising energy costs, health-insurance rates and environmental issues. Despite those, the Zildjian family remains committed to keeping our cymbal factory in Norwell MA for many years to come.
—Paul Struble, Executive Vice President, Operations, Avedis Zildjian Company
Due to competition in the audio, case, rack and accessory markets, it has become increasingly hard to keep manufacturing in the U.S.A. Most of our competitors manufacture much more than 50 percent of their products offshore. In order to stay price competitive, we have to import like items or develop new products that are not conducive to offshoring. Our U.S.-designed and -manufactured products continue to do well in custom applications, as do our new products that have not yet been imported by our competitors.
—Frank Grund, President, Grundorf Corp.
It’s much easier for us to manufacture in the U.S. today than three years ago for a couple of reasons. First, our team has done a great job of improving our efficiency in our plants over the past three to five years. Secondly, over the last three years, we have had thousands of band directors, music educators, artists, dealers and distributors from around the world visit, tour our facilities and see American artisans handcrafting these incredible instruments. Lastly, manufacturing in the U.S. differentiates us in sound and quality from a lot of the instruments being shipped from the Pacific Rim.
—John M. Stoner, Jr., President/CEO, Conn-Selmer, Inc.
Yes, manufacturing here is easier for us, but that is only one third of why we are “Made In The U.S.A.” We continue to forgo the 40-percent savings for three reasons. One, yes, it is easier. Second is quality. We tried producing in China, and they never came close to the quality of U.S.A. manufacturing. Third would be jobs. Our production provides a wage for more than 20 American citizens. Nothing is more rewarding than seeing that.
—Dave Chiappetta, CEO, ToneGear
Dean Markley is a heritage brand that, today, is 100-percent “Made In The U.S.A.” We remain committed to manufacturing in the United States to ensure the highest quality products for the musicians who choose Dean Markley. Thanks in part to tireless planning and strategic partnerships, we have not found the manufacturing process for our U.S.A.-made products to be more difficult now than in prior years. Keeping our production in the U.S.A. will always be a priority.
—Lori McCallian, CEO, Dean Markley USA
Audix made a commitment early on, in 1991, to build a manufacturing facility in Wilsonville OR, and we have been expanding ever since. We are driven to be as integrated as possible. Maintaining full control over production ensures that the quality of the products we ship to our dealers, distributors and installers will be consistent across the marketplace.
Would it be “easier” to outsource rather than produce product ourselves? Essentially, we would have to say “yes.” However, there is a definite cost to outsourcing, especially if you are going to do it right. It takes extra levels of management, and it places additional demands on inventory control, purchasing, logistics, planning and quality control. And, if you are developing products, one has to ask how much intellectual property you are willing to share with an outside vendor.
What we are seeing in the marketplace is this: Companies outsourcing products from overseas on an OEM basis, who are basically private labeling products, have created a huge category of “me, too” products with diminishing value and lower margins for dealers. The remainder of companies have invested the time and resources necessary to successfully produce proprietary products overseas, or they have invested into technology, equipment and manpower to make it in the U.S.A. Both are equally valid approaches. For Audix, we have chosen the latter, and we believe it’s the more difficult route.
—Chris Doss, Vice President of Sales and Marketing, Audix Corp.
Vic Firth, Founder of the Vic Firth Company, was born and raised in Maine. Keeping the factory in Maine was a priority for him to give back to the workers. Being in Maine also allowed Vic to visit the plant weekly to speak with the employees and ask what the company could do better to make them more productive and efficient. He took those comments and suggestions to the management meetings, which resulted in constant improvements and innovation to the manufacturing processes. He was always involved with the workflow and process improvements, and he knew each employee personally, which was important to him. Today, all that is still the highest priority for the current management team. At the Vic Firth Company, we strongly believe our workforce is still the best at consistently making the highest quality products. Being in Maine has also made the logistics for the American hickory that we utilize much more stable.
—Mark Dyke, Director of Sales, Vic Firth Company
Manufacturing DoorJamz Guitar Hangers in the United States was the most convenient way for me to start the manufacturing process. I wanted to work with someone local. So, I had a lot of conversations with different manufacturers in the area. Ultimately, choosing to manufacture in the U.S. actually became inspiring.
There’s a lot of “tweaking” that goes into the initial design process when manufacturing your own product, and you really need to create a process that’s cost effective for everyone. Building relationships with local manufacturers has created flexibly for my business, and it’s established trust that I am providing a high-quality product to my customers. I talk to the guys who actually transform DoorJamz Guitar Hangers from huge sheets of steel into works of art. I’ve watched them bend the steel and quarter the edges by hand. They are some really great, hard-working Americans.
Although manufacturing overseas might be more cost effective in the long run, I am inspired and take pride in the fact that I am supporting jobs in an environment with fair laws and fair wages.
—Stephanie Anderson, President, DoorJamz Guitar Hangers
It’s the same now as it has been—not more or less difficult. The reason being, we’ve never even considered manufacturing offshore. That’s not in our playbook. We view ourselves as part of a tradition of U.S.A.-made musical instruments and accessories. It’s a tradition that started with Rickenbacker, Fender and Gibson, and it continues today with companies like us, crafting all our parts and components ourselves. And when we do have parts made by a third party, they’re usually local houses with which we have a longstanding relationship and where we can oversee the quality.
—Jason Lollar (Head of Research and Design) and Stephanie Lollar (Head of Finance and Human Resources), Lollar Pickups
Compared to one, three or five years ago, it is harder to keep our manufacturing of Manhasset music stands and accessories in the United States. There are several factors that make it more difficult than it used to be to be a U.S. manufacturer. Those include employee benefits, with health-insurance costs increasing every year; the cost of raw materials used in our production; and local, state and federal government requirements as it relates to manufacturing. Manhasset has worked very hard to keep the negative impact of each of those areas under control the last few years, focusing on areas where costs savings could be achieved to offset increases in other parts of the company’s expense structure. The company has invested in new equipment and processes that have increased productivity, helping to keep unit costs as low as possible.
—Dan Roberts, President and General Manager, Manhasset Specialty Company
It can be a challenge to manufacture not only in the U.S. but, in particular, in southern California. Higher labor costs, regulations and high corporate tax rates can have a big impact on production costs. SKB also has factories in Mexico and China, but the fastest-growing segment of our business is our U.S.-manufactured products. Most of our products that were copied by competitors (vacuum-formed guitar cases, B&O cases, etc.) are products with high labor content. We moved those types of cases to China in order to compete in the market. However, the product molds and construction methods are the same that we used to manufacture in the U.S. and Mexico facilities in the past.
In the U.S., SKB manufactures high-tech products with lower labor content. The flipside is that there is a large capital investment in machines, molds and robotics. By investing in that infrastructure, we can keep other related costs in check, while also providing very competitive, high-quality products. We see no need to outsource the products made here in the U.S. in order to maintain our competitiveness. If an item is too expensive to produce in the U.S., we consider moving production to one of our other factories.
In addition, outside the music industry, the U.S. military and other government agencies require U.S.-manufactured goods.
—Jerry Andreas, Senior Vice President, SKB Corp.
Compared to one, three or five years ago, are music products dealers more or less inclined to stock your products in their stores because those products are made in the United States? Discuss.
I would say that nationalistic feelings are running high everywhere, in the U.S.A. and in other countries. That is clearly evidenced by the Brexit vote and the political rhetoric being bandied about by some candidates. Although I believe there is a renewed interest in quality products that are “Made In The U.S.A.,” each product is evaluated by consumers and dealers on its price, features and quality. No one is going to pay a lot more for something just because it was made here. They will also not tolerate an inferior product just because it was made in America. All things being equal, people would grab the American-made product. But is it a requirement? Probably not.
Internationally, there are many countries whose citizens value American craftsmanship and, therefore, they’re almost giddy when we tell them that our products are all locally sourced and handcrafted in the United States. And, domestically, it’s hard to find anyone who isn’t impressed that we are making our capos in Texas. Over the past four years, we have made great strides to improve our product, whether it was looking for new sources for our aluminum or new vendors that would give us the best customer service. Additionally, offering a lifetime guarantee on our Quick-Change capo has challenged us to “up the ante” and to continue to look for ways to improve the entire manufacturing process.
I believe that “Made In The U.S.A.” continues to be a strong selling point for Zildjian cymbals and drum sticks for the consumer, but I don’t believe that’s a factor in the store’s buying decision. I think the dealer is more concerned about Zildjian’s market-leading brand position, brand image and heritage, as well as the margins they make selling Zildjian products. The consumer, on the other hand, often will express a preference for a “Made In The U.S.A.” item, which might, in turn, influence the dealer’s buying decision to some extent, reinforcing the other major factors in the dealer’s buying/stocking decision.
—Andy Schlosser, Vice President of Sales, Avedis Zildjian Company
I believe most independent dealers and integrators would like to stay loyal to “Made In The U.S.A.” Larger dealers tend to gravitate to imported products because the profit margins can be higher for them. However, dealers will stock what the consumer wants, and most consumers, if given a choice between “Made In The U.S.A.” and imported, will generally choose whatever is cheaper.
I think dealers appreciate that we are “Made In The U.S.A.,” but I don’t think I have encountered a dealer that stocks us because we are “Made In The U.S.A.”
Dealers around the world seem more willing to carry and support our brands because it differentiates them from dealers that carry other Asia-Pacific-manufactured brands. Also, from a U.S. perspective, we can get out-of-stock products to a dealer much faster than someone shipping from the Pacific Rim. Our brands have a great American heritage that players of all ages recognize and appreciate. Our commitment to staying true to the founders of those world-famous brands—Vincent Bach, CG Conn, Bill Ludwig, Frank Holton, etc.—is appreciated around the world.
Dean Markley products have garnered a great reputation and trust among dealers and consumers. In recent years, we have found our retail partners are more inclined to carry our products for their high quality and loyal customer base. However, the fact that they are “Made In The U.S.A.” does give us even more credibility with our dealers and customers.
In the retail world, I would have to say dealers are not inclined to stock Audix products simply because they are “Made In The U.S.A.” With very few exceptions, the value of a product in the marketplace is generally created at the marketing level. If two products are sitting on the shelf, offering the same performance at the same price, I believe consumers might choose the U.S.A.-made one. However, there are strict rules and regulations that govern the labeling of a product as “Made In The U.S.A.” In the marketplace, I don’t know if it really matters where it’s made. It is a personal choice of each consumer. At Audix, we have made the personal choice to produce products in the U.S.A. because it aligns with our values.
Many dealers and consumers continue to support products that are “Made In The U.S.A.” Vic added the American flag to his first quality sticks because he was very proud to make all the Vic Firth Company sticks in the U.S. The combination of “Made In The U.S.A.,” high quality and immediate availability continues to be a strong sales influencer for dealers and consumers alike.
I believe music products dealers become more interested in stocking products in their stores when they learn they are “Made In The U.S.A.” They’re intrigued by the process and how I manufacture here, just outside of San Francisco CA. I think that conversation opens up some doors. But, at the end of the day, the dealers need to make money. So, the actual product itself and its profit potential will be the deciding factors. I have a unique product that’s relatively easy to sell, so dealers tend to want to stock it.
I believe that, with the exploding popularity of innovative shows like “Shark Tank,” people have become increasingly aware of the controversy of manufacturing overseas. That has inspired a stronger interest in supporting companies that have made an effort to keep manufacturing here in the U.S. There is something about music and freedom that is essentially intertwined, and that carries over into the heart of most musicians.
Although it has its challenges, I believe people tend to want to support products that are “Made In The U.S.A.”
Our network of dealers continues to grow every year, so I would have to say they’re more inclined. I know there’s a political move underfoot to bring back American manufacturing, and that might influence purchasing decisions at the wholesale level. I think that’s great. But it just never applied to us, as “Made In The U.S.A.” is all that we know.
Compared to one, three or five years ago, music products dealers are more inclined to stock Manhasset products because they are “Made In The U.S.A.” They’re also more inclined to give increased exposure to Manhasset’s products as compared to competitive imported products, because they’re made in America. Buyers do respond positively to the fact that Manhasset stands and accessories are “Made In The U.S.A.” But, they are also responding to the great value that our products represent, with their excellent quality and competitive pricing, as well as the lifetime warranty we offer on our music stands.
We can react much quicker to the market by producing locally. When there is a hot product in the market, we can easily develop a custom interior in one of our U.S.-manufactured products and beat the competition that has to develop products overseas. Dealers like to have just-in-time inventory or quick access to our U.S. stock. Waiting for containers to arrive from overseas is not an option.
Dealers like selling brands that customers have confidence buying. With the proliferation of house brands that customers have never heard of, it has helped create a demand for the real thing. No customer ever searches online for a house brand. A known brand always wins.