Ask anyone, like Doug Skor, a Wurlitzer salesman. Owned by the guitar maker Gibson, Wurlitzer once made organs and pianos. Now the Wurlitzer trademark is mostly found on jukeboxes. “Pianos are for the most part just fine pieces of furniture,” Skor said.
Or ask Jackie Ross, the executive director of the Chamber of Commerce in Trumann, Ark. Until December 2008, Trumann was home to the last Baldwin plant in the United States. At one point, Ross explained, Baldwin’s plant employed about 260 people. Over the course of three years, the staff was reduced to a size of 13. Baldwins are now made mostly in China, though you can still order a custom piano from the tiny staff in Trumann.
For everyone in the business of making and selling pianos, the recession, combined with a general downward trend in sales and ever-increasing production and labor costs, created something of a perfect storm. In the eye of this storm is Steinway & Sons, the last major American piano manufacturer still standing.
Steinway & Sons’ American factory endures at the northernmost edge of Astoria, Queens, where it has remained since the late 1800s. The company has a sister factory in Hamburg, Germany, which opened decades after Steinway’s founding, in 1853 in New York.
Considered by many to be among the best pianos in the world – if not the best – Steinways are endorsed by the majority of professional classical pianists. A new Steinway grand can cost anywhere between $40,000 and upwards of $120,000. At the Astoria factory, skilled craftsmen have been building these pianos in much the same way since the company first began.
But in 2009, Steinway’s Astoria factory saw a sharp decrease in production.
“Sales in the U.S. were down by half from ’08 through ’09,” said Chris Arena, who was manager of the factory’s restoration department until March 2009, when he was laid off. Arena worked with the company for 22 years and is one of many employees laid off since the economic crisis hit in mid-2008.
Anthony Gilroy, director of marketing and communications at Steinway & Sons New York, clarified that in the second quarter of 2009, U.S. grand piano shipments, specifically, were down by a little less than half.
Steinway’s Astoria factory has felt the recession’s blow. Rohan Somnarain, the beleaguered president of United Piano Workers Local 102 — the union that represents Steinway workers — recounted a litany of woes. Union members’ wages, between $16.90 and $28 an hour, are frozen until 2012.
Since August 2008, Steinway & Sons’ staff has been reduced by 30 percent, Gilroy said. Somnarain added that 142 union members were laid off between November 2008 and November 2009. There are currently 259 workers on the Astoria factory floor.
Somnarain said his union’s bargaining power with the company has been seriously eroded by the recession. In the late 1990s, when times were better, the factory had some 500 workers.
Some workers’ biggest fear is that the factory could close and move to another location, or consolidate with the Hamburg factory.
“It’s not like a hospital — if this hospital closes, you can go to the next on the next street,” Somnarain said. “If Steinway falls, we have to go to Yamaha, Kawai in Japan, China.”
Fueling fears of a move is the high price tag on the land Steinway’s Astoria factory occupies. The 450,000-square-foot space has a current market value of nearly $54 million, according to a New York City Department of Finance estimate.
However, Ron Losby, the president of Steinway & Sons Americas, firmly stated his commitment to keeping Steinway & Sons in Astoria.
“If we would move this to Georgia or some other place in this country, it would definitely be the death knell for the company, because we wouldn’t have the access to the labor we need,” Losby said. As a cautionary tale, he mentioned Baldwin, which moved its factory from Cincinnati to various locations before settling in Trumann, Ark. “That had a serious impact on the fortunes of that company, and now it’s just a shell of what it used to be,” Losby said.
“Moving from America (or even from New York) might mean cost reduction, but it would also mean reduction in the quality of the Steinway piano, which is simply unacceptable for our company or the musicians who play our instruments,” Gilroy added in an e-mail.
“All of us have taken a hit, probably 30 or 40 percent,” Bill Brandom, senior technical manager of Yamaha’s American keyboard division, said of the piano industry’s sales last year. “All of us are just trying to survive right now.”
In 2007, Yamaha closed its last American piano plant, located in Thomaston, Ga. Brandom said a major factor in Yamaha’s decision was the high cost of American labor. Yamaha now produces its uprights in China, a line of grands in Indonesia and the majority of its grands in Japan.
The majority of Yamahas are tuned by a machine, for example, whereas Steinways are tuned dozens of times by ear. From beginning to end, a single Steinway piano takes about a year to make.
As Asian manufacturers like Yamaha and Samick Musical Instruments Co., a Korean-based company, purchase more and more piano brands, it has become increasingly difficult to keep track of where these brands are made. Most of Samick’s roster of brands, including Wm. Knabe & Co., Pramberger, Kohler & Campbell and Sohmer, were formerly American and European companies that Samick bought out and now manufactures in Asia.
“They call it stencil pianos, and they’re still manufactured under those old names, but they’re pretty much Asian pianos,” explained Mark Dillon, the foreman of Steinway Astoria’s tone regulating department.
In the last decade, some of the world’s preeminent piano brands have also been sold in whole or in part. Samick became a part-owner of the renowned German piano company Bechstein in 2002, while Yamaha bought the equally esteemed Bösendorfer in 2007. Bechsteins and Bösendorfers are still produced in their home countries, Germany and Austria, respectively.
The announcement has led to speculation from people close to the industry that Samick may have purchased the shares to secure a manufacturing deal with Steinway Musical Instruments for the production of its Boston and Essex piano lines, currently made through other agreements in China, Korea and Japan.
Samick also has the option of buying another 1.7 million shares of Steinway Musical Instruments before March 31. If this purchase were to take place, Samick would own nearly 30 percent of the company. Kyle Kirkland, Steinway’s chief executive, and Dana Messina, Steinway’s chief financial officer, would still own a controlling share of the company.
Despite the recession’s turmoil, there are signs that things are turning around. Traffic to Steinway’s showrooms has increased recently, Losby said. He also noted the market in Asia is increasing, though this market is by and large served by the Hamburg factory. And Steinway Musical Instruments’ fourth quarter earnings in 2009 were 26 percent higher than a year earlier.
“It might have reached its lowest point at this time,” said Alex Kostakis, co-owner of A.C. Pianocraft, a piano restoration company, of the piano industry at large. Kostakis, whose father worked at Steinway & Sons and founded A.C. Pianocraft in 1966, noted that Steinway could survive not only this economic downturn but also future storms.
“I honestly don’t see Steinway folding in any shape or form,” Kostakis said.