Steinway & Sons takes one more step closer to the River Jordan?

Question

Today Nov. 5, 2009 Steinway announced the private placement of 1.7 million shares of it's ordinary common stock and signed an agreement with Samick Musical Instruments. Samick also has the option to purchase an additional 1.7 million shares by March 31, 2010.

I feel we are seeing the final death rales of the once greatest piano in the world. I have been a Steinway person all my life and was shocked in 1972 when CBS purchased the company and immediately had Kawai begin building uprights with the name Steinway on them. I have been in the business a long time and in my opinion Asia has yet to manufacture a great piano. It seems all of the great names in pianos are being absorbed by Asia. Bosendorfer by Yamaha, C.Bechstein was tied in with Samick. Seiler by Samick. One more nail in the acoustical coffin.

I would like to hear other opinions.

Answer 1

We are long past the useful life of a viable American (or European) piano manufacturer. The economies of scale that the Asian market, and their incredibly low wages have sealed the fate of US and European pianos. Yes, we can (and do) build superior instruments simply because they are more hand-made. Even Mason & Hamlin, American owned and built is built by a team of labor bussed in from Boston's Chinatown. Simply because American workers demand a higher wage and don't extend the same care into the building of instruments. I believe their current actions (Wessell, Nickel & Gross) are cast in the far east. Again economies of scale, and actually being able to start a plant without ten-billion dollars of environmental impact studies. http://www.wessellnickelandgross.com/



Yamaha owns Bosendorfer, but the instruments are built in Vienna by the same people who built them before. As far as I know, Yamaha has no intention of changing the way things are done there. If anything they are gaining technology insights for their own branded instruments. I think the same will happen with Steinway. They will continue to be built in the US (though maybe not New York) for the foreseeable future.



Ibach, Nordiska and a couple of other European brands have been bought by Asian firms who basically packed up the European shops, packed 'em in containers, and moved the whole works to Asia.



Names like Geo. Steck, Wm. Knabe, Hallet, Davis & Co., Weber, Chickering. have all gone to be stencils in Asian piano firms. There may or may not be some distinction between the stencil and the house-brand instruments.



FWIW Steinway is (or was) the parent company of Conn-Selmer, makers of brass and woodwind instruments. To note, that Vincent Bach (Bach Brass) division has been on strike ever since Steinway acquired Selmer and C. G. Conn manufacturers.



... Now ask why digitals and Steinway Essex (Young Chang) lines are more popular?

Answer 2

This deserves a little more careful consideration, Jack.



What's involved here are common stock shares. The full 100% of the class A preferential stock remains where it always was -- and this is not directly about "Steinway & Sons, pianos" in the first place, but about the holding company "Steinway Musical Instruments" which counts a host of prestigious and other brands in its portfolio -- and that preferential stock represents 80% of the total voting rights, so this transaction, even within that context, is what it is billed to be: a minority holding in the parent company, not a direct, board level influence on Steinway & Sons specifically, itself.



I regret the 1972 debacle just as much as you probably do, but without 'a lack of transparency' in this transaction obscuring things from our view -- and having made a point of reading half a dozen analysts' reports, prompted by your post, which all see this as a comparatively marginal event in the greater scheme of things for Steinway Corp, at least one barrier distant from the piano company, or rather its flagships that hold our affections -- I think the sackcloth, never mind the ashes, is perhaps rather premature.



Besides, even the most greedy and ruthless have a habit of not killing the goose that lays the golden eggs, either financially and/or prestige/reputation-wise, and where the model D is concerned, they know precisely which side their bread is buttered on, and that the profession will simply walk if anything remotely resembling opportunistic, profit-led 'tinkering' might even be considered for their flagship.



That generally concentrates their minds wonderfully -- and long may it continue to do so... :-)



My reading of the runes, fwiw... :-)



Warm regards,

Answer 3

Ahhhhhhhh that is not good news! I thought surely Steinway would stay STEINWAY forever....



I agree, Samick/Yamaha/Young Chang/etc. have yet to produce a quality piano. And their pricing is ridiculous. I can't believe the amount of money people w/o any musical talent are willing to pay for a shiny cabinet in their multi-million-dollar living rooms.



When I bought my first (and hopefully, *only*) piano, I looked over the used uprights at the store's warehouse. I didn't want anything manufactured in Japan! I ended up buying a 1930's Howard by Baldwin. It has excellent tone quality and good key action, so UNLIKE the Kimball in our house growing up. It also has ivory keys, but it's almost 70 yrs old. If I were to get another piano, I'd have to get a Gulbransen or Story & Clark -- an old one, of course.



It's too bad people are so profit-driven these days they can't concentrate on the quality that allowed their companies to thrive in the first place!

Answer 4

This is one of the many reasons I did not even bother looking into Steinways when purchasing a new piano... All the pianos from the 70's onwards are hardly better than Kawai or Yamaha. Although recently I played a wonderful 1953 concert grand and it was AMAZING!



I'll admit, I do have a Bosendorfer... but that is still made in Vienna. It is just owned by Yamaha....



It does not bother me.... I will always think of old Steinways as WONDERFUL and the new ones as decent pianos. I guess its just not profitable to continue as they have been.