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Kaman sold to Fender


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How many members are we at the HFC? Can't we all chip in and buy the damn company B) I'd rather place my money there than on a custom order right now.

So we can have an annual shareholder meeting in New Hartford ! :D

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Were there similar concens when Kaman bought Hamer?

I don't believe so, since Hamer was looking to be acquired and in control of their destiny so to speak. From what I've heard almost across the board from people who were at Hamer at the time, things continued as usual, except they got lots of new tools and machines that made things easier and better.

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750 guitars per year output x $3000 each (I'm guessing) = $2.25million gross revenue. FMIC paid 117million in this deal? Hamer has to be no more than a very nice, but very small piece of the puzzle. We'll have to wait and see what shakes out.

For Fender, getting Hamer is kind of like when the Red Sox got Series MVP Mike Lowell as a throw-in on the deal for 20 game winner Josh Beckett. B)

I personally believe this is much closer to the truth. Hamer HAS been profitable for a couple of years. The change occured with the retail price increases, The increase in customization and the discontinuation of almost all the lower priced guitars. I don't know the accounting of the deal but it wouldn't surprise me to learn that FMIC bought KMC below it's real value, making Hamer almost free. Hamer's largest overhead is it's employees in part due to it's sharing space with the much bigger and more profitable Ovation line.

As long as Hamer doesn't lose money there is little benefit in changing it. Hamer is recognized for it's quality product. It also offers something that Fender does not do well, double humbucker guitars. The value of Hamer to FMIC in this deal is little, They wanted the distribution and the drums (Gretsch), along with the other stuff.

Mostly speculation on my part, but this scenario makes sense and is just as viable as the others.

ArnieZ

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Congratulations, Jol, I would say - as you sail off into the sunset', but knowing how much you like cars, let's make that - RIDE OFF INTO THE SUNSET!

Thank you for everything you've added to my life. It has all been happy, quality, memories!

I, for one, wish you nothing but the best in whatever lay ahead.

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FMIC has long had an acoustic guitar line that never seemed to get a whole lot of traction. They bought Guild, eventually scotched Guild's longstanding line of archtops and electrics, and expanded their line of flattops. Check out Guild Guitars' range of flattops. It's massive. Then they bought Tacoma, which bought them unconventional construction and more electric-like feel and action, and the budget Olympia line with it. The US Tacoma line is also state-of-the art for US factory-built instruments, fully outfitted with NC machines. They moved the Guild operation to Tacoma.

Now picking up Kaman, they add Ovation, Adamas, Takamine, Applause, and Jasmine.

That's 9 flattop brand names (oh, wait; there's also Squier acoustics). The only flattops left with a large US presence are Gibson (+Epiphone), Martin, and Seagull.

Now, if you want a flattop made of solid wood, solid top/laminated sides/back, boltneck, plastic back, acoustic electric, carbon fiber top, round hole, epaulets or offset soundhole, entry-level or high end, FMIC has it covered. Tacoma, Ovation, and Applause also offer mandolins and acoustic bass guitars.

And I agree--Fender has never gotten a good foothold in the setneck, dual humbucker (or P90) market the same way Gibson has never successfully cracked the boltneck single-coil market. Fender acquires instant presence and credibility with Hamer. If they want to make Hamer work, watch for more high profile endorsements.

This is also a strong counter to Gibson's goal to be a soup-to-nuts musical instrument supplier. Gibson has Slingerland, Fender now has Gretsch drums, Sabian cymbals, Vic Firth sticks, and both Toca and Latin Percussion hand drums.

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FMIC has long had an acoustic guitar line that never seemed to get a whole lot of traction. They bought Guild, eventually scotched Guild's longstanding line of archtops and electrics, and expanded their line of flattops. Check out Guild Guitars' range of flattops. It's massive. Then they bought Tacoma, which bought them unconventional construction and more electric-like feel and action, and the budget Olympia line with it. The US Tacoma line is also state-of-the art for US factory-built instruments, fully outfitted with NC machines. They moved the Guild operation to Tacoma.

Now picking up Kaman, they add Ovation, Adamas, Takamine, Applause, and Jasmine.

That's 9 flattop brand names (oh, wait; there's also Squier acoustics). The only flattops left with a large US presence are Gibson (+Epiphone), Martin, and Seagull.

Now, if you want a flattop made of solid wood, solid top/laminated sides/back, boltneck, plastic back, acoustic electric, carbon fiber top, round hole, epaulets or offset soundhole, entry-level or high end, FMIC has it covered. Tacoma, Ovation, and Applause also offer mandolins and acoustic bass guitars.

Someone's gonna cut your balls off for not mentioning Breedlove in this screed.

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750 guitars per year output x $3000 each (I'm guessing) = $2.25million gross revenue. FMIC paid 117million in this deal? Hamer has to be no more than a very nice, but very small piece of the puzzle. We'll have to wait and see what shakes out.

For Fender, getting Hamer is kind of like when the Red Sox got Series MVP Mike Lowell as a throw-in on the deal for 20 game winner Josh Beckett. B)

I personally believe this is much closer to the truth. Hamer HAS been profitable for a couple of years. The change occured with the retail price increases, The increase in customization and the discontinuation of almost all the lower priced guitars. I don't know the accounting of the deal but it wouldn't surprise me to learn that FMIC bought KMC below it's real value, making Hamer almost free. Hamer's largest overhead is it's employees in part due to it's sharing space with the much bigger and more profitable Ovation line.

As long as Hamer doesn't lose money there is little benefit in changing it. Hamer is recognized for it's quality product. It also offers something that Fender does not do well, double humbucker guitars. The value of Hamer to FMIC in this deal is little, They wanted the distribution and the drums (Gretsch), along with the other stuff.

Mostly speculation on my part, but this scenario makes sense and is just as viable as the others.

ArnieZ

+1

The only things I'd add is that the import line is likely to be profitable. So that adds additional zero's to your valuation of Hamer, but in the end it's about the distribution.

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Since our 'guru' plays an olympic white one at home and repeatedly says stuff like "Sooner or later every good guitar player ends up with a strat," I wonder if there will be a new s class without the copyright debate.

On another point: Does the licensing agreement with Gibson transfer for the V, Standard, etc?

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That's 9 flattop brand names (oh, wait; there's also Squier acoustics). The only flattops left with a large US presence are Gibson (+Epiphone), Martin, and Seagull.

Someone's gonna cut your balls off for not mentioning Breedlove in this screed.

That's why I included the qualifier, "...with a large US presence..." I think Breedlove is great, but they're a premium brand and their profile is not as high as the other brands I mentioned.

You do make a point, though. Where visibility is concerned, I should have also mentioned Taylor.

It's also interesting that for all of Fender's previous forays into archtops, they have completely abandoned that market, especially re-defining Guild in the process. At one time Fender had a James D'Acquisto line of premium archtops. When they bought Guild, their line included many archtops including the Manhattan jazz box and the Starfire thinlines. Then Guild (under Fender) even started building the lower level Benedetto models. Even Tacoma had a paisley-soundhole archtop model when Fender acquired it. Now each and every one of them is gone.

Why is that relevant? Look at Hamer USA's product line. Not acoustic archtops per se, but definitely semihollow thinlines with hand-carved archtops (Newport, Monaco, Improv, Duotone, Artist).

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....... screed.

I gotta hand it to ya Muse ..... you're a funny dude!

Ya also gotta admit .... I make it easy for him.

Main Entry: screed

Pronunciation: \'skrēd\

Function: noun

Etymology: Middle English screde fragment, alteration of Old English scrēade — more at shred

Date: circa 1789

1 a: a lengthy discourse b: an informal piece of writing (as a personal letter) c: a ranting piece of writing

Hats off for a particularly tasty word choice that matches on all 3 variants of the definition!

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Guest Mike Lee

JohnnyB - what about Taylor? They've got a large presence. They were also able to figure out how to increase production dramatically while maintaining quality - even improving it. They used some pretty advanced manufacturing processes, and have applied CNC machines correctly - to improve consistency, not just reduce cost. Fender needs Ovation if they want to think about competing with Taylor.

About the "licensing" from Gibson.

Per Jol, there was a "gentlmen's agreement" with Gibson allowing Hamer to use the V and Explorer shapes. Gibson did not see Hamer's sales volume as a threat. There is no way Hamer could afford a lawsuit if Gibson decided to sue for trademark (or perhaps trade dress) infringement.

However, now that Fender owns Hamer I think Gibson might change their mind. In that case, Fender should challenge the validity of the trademark, if there even is one. By allowing Hamer to make Standards for so long, Gibson may have a tough time showing that they have the rights to the design. Fender is able to pay for the legal fees if there is a fight in court.

Another thought:

Maybe, just MAYBE, Fender will start making shredder Hamers in the Charvel/Jackson facility. That would make a lot of sense if there is enough market.

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About the "licensing" from Gibson.

Per Jol, there was a "gentlmen's agreement" with Gibson allowing Hamer to use the V and Explorer shapes. Gibson did not see Hamer's sales volume as a threat. There is no way Hamer could afford a lawsuit if Gibson decided to sue for trademark (or perhaps trade dress) infringement.

However, now that Fender owns Hamer I think Gibson might change their mind. In that case, Fender should challenge the validity of the trademark, if there even is one. By allowing Hamer to make Standards for so long, Gibson may have a tough time showing that they have the rights to the design. Fender is able to pay for the legal fees if there is a fight in court.

Another thought:

Maybe, just MAYBE, Fender will start making shredder Hamers in the Charvel/Jackson facility. That would make a lot of sense if there is enough market.

Well, I'm not a lawyer, so take all of this w/a grain of salt, but...

Hamer's been making the Vs and Standards for quite some time now. When you hear about companies going after people for trademark infringement, especially when it's something like a Disney going after a day care center for having characters painted on its walls, one of the points that gets overlooked is that there's a provision in the trademark law that if you are seen as allowing people to use it somewhat freely, you can lose your trademark protection. So, assuming "gentleman's agreement" means "unwritten", there may be grounds to say that Gibson allowing the use of the shapes abandons the trademark.

Second, there's the question of whether or not the case would go Gibson's way. Remember the Paul Reed Smith case? There's a question of deception - is Hamer/Fender trying to make people think they're getting a Gibson? In the PRS case, that was one of the points that hung Gibson - Gibson themselves admitted that only an "idiot" would buy a PRS Singlecut and think it was a Les Paul.

Oh, and guess who has the patent papers for the Explorer and the Flying V? It ain't Henry... Not sure who actually has ownership of the patents, but the papers are in Maryland.

Alan

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Oh, and guess who has the patent papers for the Explorer and the Flying V? It ain't Henry... Not sure who actually has ownership of the patents, but the papers are in Maryland.

Ted McCarty?

Perhaps they found their way to Maryland when Ted got involved with PRS?

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Nice thread. I love fiction, especially thrillers!

I actually think that Jol and Fender are loving this. He's said publicly very nice things about Fender, Strats and Leo in particular ask people who attended a guru clinic like I did. He's been on a campaign to raise Hamer's quality AND prices, even to the point of saying that the Improv should be double the price when it came out. He's said publicly that he still loves the shredders like the Californian, but it wasn't the focus of the high end marketing direction for Hamer. He's also been in favor of an import line that provides good value and pumps up the bottom line, including Californians. If we see $20,000 limited edition Hamers it will be because Jol thinks they are worth it in comparison to what other guys charge.

The guys at Fender are gonna love him.

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Oh, and guess who has the patent papers for the Explorer and the Flying V? It ain't Henry... Not sure who actually has ownership of the patents, but the papers are in Maryland.

Ted McCarty?

Perhaps they found their way to Maryland when Ted got involved with PRS?

Per Paul at the Experience PRS event Ted gave the papers to Paul before he died. Paul is the first one to say they are just papers, Gibson clearly owns the patents.
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ExpPRSPRSwLPBridgepatent.jpg
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Per Paul at the Experience PRS event Ted gave the papers to Paul before he died. Paul is the first one to say they are just papers, Gibson clearly owns the patents.

Yep. Evidently McCarty is the inventor of record for the Les Paul, Explorer, Flying V, Moderne, and several others, but Gibson is the assignee.

Moderne patent

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