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1. Glossing up the balance sheet in advance of a sale of the entity.

2. Shedding all low-margin/unprofitable parts of the entity in order to prepare for a last-ditch effort to avoid bankruptcy.

These are the only reasons to shutter underperforming brands? You're gonna get sold, OR you're going bankrupt?

Is that in your curricula?

Absent a specific context, no, those aren't the only reasons. Given the continuing trend of private equity acquisitions, the similarities of FMIC's situation to firms in like competitive environments, and individual firm characteristics (heavily dependent upon a single retailer); yes, these would serve as leading indicators of a potential sale or a firming up of the store to appease creditors. In such cases, underperforming brands are easily lopped off. It's not entirely dissimilar from GM's decisions to shutter over half its brands since teetering on the brink of bankruptcy.

Reading day is tomorrow....Exam is on Friday. Good luck. ;-)

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I have been very privileged to work with great people, some you know very well and others are kind of in the background, for twenty four years. They supported me, trained me , stood by me and I'm fore

After I got back home a little after 9:00 am on that black Tuesday my first two phone calls I received were from Jol and Frank. Jol had a lot of suggestions and encouragement and Frank ( even though I

Sucks.

Work with Greg, or Terry, or Jay, or go on your own... Whatever you do, do something you love, and do it better. You all deserve that.

I feel like shit today - I can't imagine how you feel. But I look forward to seeing what you do next!

Sincerest best wishes.

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It's not entirely dissimilar from GM's decisions to shutter over half its brands since teetering on the brink of bankruptcy.

I thought about that, Ford dropped Mercury, GM dropped Olds, and Chrysler dropped Plymouth - but those things happened well before two of the three went under.

GM dropped Pontiac and Saturn (Pontiac, at the Feds' behest, not by own volition) and retained Chevy, Buick, Cadillac, and GMC...so let's see, they dropped two and kept four. "Over half"?

I think Occam's razor applies here. Hamer was a tiny tiny operation and even if margins were huge the cashflow was microscopic. Same for Guild, probably sans margin. Ovation, as mentioned somewhere else in all this, probably has seen the sun set on the viability of USA operations - others figured out how to amplify acoustics in the 30 years since they owned the live performance.

Fender's not a niche company, neither is Gibson (nor really PRS), they gotta move volume, for better or worse. I think this was probably a long time coming, regardless of the competitive environment (although the GC situation probably puts a real fine point on it).

Contrary to what seems to be the majority opinion, I think Fender did the best they could with Hamer and gave it an honest effort. All the stuff we hated - "no" to any off-mainstream custom order, dropping crown inlay...on whose watch did that happen? Oh, Jol's, right.

And who opened the shop back up to "sky's the limit"?

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I'm sorry Mike. I realize we've never met but I do know what its like to lose a job you've poured your heart in. You and the others out there made guitars that I'm scared to take out of their cases because I have that much respect for them. I thank you for your efforts and I feel extremely lucky to have them. I sincerely hope that wherever you end up you will stay a part of this board. This truly is a special place with special people and when we say today hurts you know its for real.

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It should not all be about the numbers (profit). Yes, you must remain solvent (as a business). Yes, you must make a living as an individual. But, you don't have to "screw all" in the name of money. Many knowingly don't maximize their earnings potential, either as individuals or small business owners, because there are non-financial tangibles in the work they find important. Many businesses seek the steady and sustained model, value the product or service they sell, and value their workforce. It isn't all greed.

Yes, FMIC was maybe never one of those companies - even back to Leo Fender - maybe they were always there to maximize profit. But, it doesn't have to be that way.

The steady, sustained model is dependent on the numbers, too. Sometimes you gotta adapt to changing market forces in order to simply survive. Forget about profit. Hamer had nine toes in the grave before FMIC even stepped in. Why? Jol and Paul's adherence to the "it should not be all about the numbers" philosophy.

Hef had the same approach to business. That resulted in the Chicago office closing. I won't speak for the New Hartford guys who got laid off today, but as for me, you're damn right I wish Hef had focused more on the bottom line. I'd still be a Playboy employee. It was a rather pleasant working environment.

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Condolences to the entire New Hartford crew. This reeks of the type of business decision that will lead to one of two outcomes for FMIC:

1. Glossing up the balance sheet in advance of a sale of the entity.

2. Shedding all low-margin/unprofitable parts of the entity in order to prepare for a last-ditch effort to avoid bankruptcy.

Hamer was always, at its core, a low-production, high-build-quality shop (New Hartford took it fully into McInturff-style custom shop status) that dared do both Gibson better than Nashville ever could and original designs that have carved enduring niches. This, my friends, is NOT FMIC's forte and makes me even more curious why they purchased the stable of brands from Kaman if they weren't prepared to run them based on their small-shop culture. They might have failed on their own, but then, they would have done so doing it their way.

Speaking of Terry McInturff, I wonder if he has enough business to entertain a move of any of you guys down here to central NC?

FMIC filed for an IPO in March 2012, but they haven't gone forward with it. That means for over two years they've known they need an infusion of cash. In the meantime they've moved some things around, gave up on Hamer USA Jan. 2013, and closed down the New Hartford operation yesterday, meaning the end of Ovation USA and probably Guild. This may all be in the interest of improving the balance sheet to go through with an IPO.

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It's not entirely dissimilar from GM's decisions to shutter over half its brands since teetering on the brink of bankruptcy.

I thought about that, Ford dropped Mercury, GM dropped Olds, and Chrysler dropped Plymouth - but those things happened well before two of the three went under.

GM dropped Pontiac and Saturn (Pontiac, at the Feds' behest, not by own volition) and retained Chevy, Buick, Cadillac, and GMC...so let's see, they dropped two and kept four. "Over half"?

I think Occam's razor applies here. Hamer was a tiny tiny operation and even if margins were huge the cashflow was microscopic. Same for Guild, probably sans margin. Ovation, as mentioned somewhere else in all this, probably has seen the sun set on the viability of USA operations - others figured out how to amplify acoustics in the 30 years since they owned the live performance.

Fender's not a niche company, neither is Gibson (nor really PRS), they gotta move volume, for better or worse. I think this was probably a long time coming, regardless of the competitive environment (although the GC situation probably puts a real fine point on it).

Contrary to what seems to be the majority opinion, I think Fender did the best they could with Hamer and gave it an honest effort. All the stuff we hated - "no" to any off-mainstream custom order, dropping crown inlay...on whose watch did that happen? Oh, Jol's, right.

And who opened the shop back up to "sky's the limit"?

Agree that these brands' margins had likely been an issue for years. In relatively large portfolios like we see at FMIC, a small number of boutique brands can be good for the purposes of image...if the consumer can easily connect the boutique brands to the mothership. I'm not sure that connection was ever made in the average consumer's mind in regards to Hamer/Guild/OvationUSA and big brother Fender. The Gretsch brand is so old and legendary that it seems to have a much better of surviving on its own merits, plus the Electromatic import line appears to be a strong seller.

GM? I actually include the death of Olds and Hummer in that list, since these were shuttered while GM was suffering sales declines and was largely unprofitable. Perhaps we see it through different lenses, but Pontiac, Saturn, Olds, Hummer--that's half of the domestic GM nameplates in my view.

I agree with your position on FMIC's post-Jol attempt to open up the catalog. I often wondered whether FMIC's big move on Hamer would be to relegate the brand to import shredder status (vis-a-vis Gibson and Kramer) or to move production to Corona as the corporations' higher-volume response to Gibson's classic designs. That's what I would have expected from them, but they allowed it continue as a custom shop building low double-digits each year. I am inclined to believe that a business model similar to the operation at Arlington Heights would have been a better fit for the Hamer brand within FMIC.

I would like to believe that decisions such as the one from today are preparations to set up the firm for another potential IPO, but my years of observation indicate that they are more deeply concerned about improving its debt/asset ratio and profitability...right now. the timing seems a bit odd and abrupt for it to have been the result of a pensive, cerebral process of analysis. Hope I'm wrong.

A successful IPO would help the firm generate some cash and create some breathing room in advance of the impending implosion of Guitar Center et al. I don't look forward to reading about the GC shoe dropping.

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It's not entirely dissimilar from GM's decisions to shutter over half its brands since teetering on the brink of bankruptcy.

I thought about that, Ford dropped Mercury, GM dropped Olds, and Chrysler dropped Plymouth - but those things happened well before two of the three went under.

GM dropped Pontiac and Saturn (Pontiac, at the Feds' behest, not by own volition) and retained Chevy, Buick, Cadillac, and GMC...so let's see, they dropped two and kept four. "Over half"?

I think Occam's razor applies here. Hamer was a tiny tiny operation and even if margins were huge the cashflow was microscopic. Same for Guild, probably sans margin.

I spent over 10 years at a company in Colorado where I ended up getting laid off (courtesy of mandatory headcutting across the board by the VERY large multi-national corporation which owned us). For years we were concerned they would just shutter the whole place as we NEVER appeared in their annual report and were such a small drop in the bucket(we're talking 0.01% or less of annual revenue) that no-one but us would have even noticed if we disappeared. They are still in business 4 years later, but it's damn near a ghost town and has been repurposed (they are now mostly a development shop working on the owning company's technology). Waitasecond, that sounds familar!!!

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It's not entirely dissimilar from GM's decisions to shutter over half its brands since teetering on the brink of bankruptcy.

I thought about that, Ford dropped Mercury, GM dropped Olds, and Chrysler dropped Plymouth - but those things happened well before two of the three went under.

GM dropped Pontiac and Saturn (Pontiac, at the Feds' behest, not by own volition) and retained Chevy, Buick, Cadillac, and GMC...so let's see, they dropped two and kept four. "Over half"?

I think Occam's razor applies here. Hamer was a tiny tiny operation and even if margins were huge the cashflow was microscopic. Same for Guild, probably sans margin. Ovation, as mentioned somewhere else in all this, probably has seen the sun set on the viability of USA operations - others figured out how to amplify acoustics in the 30 years since they owned the live performance.

Fender's not a niche company, neither is Gibson (nor really PRS), they gotta move volume, for better or worse. I think this was probably a long time coming, regardless of the competitive environment (although the GC situation probably puts a real fine point on it).

Contrary to what seems to be the majority opinion, I think Fender did the best they could with Hamer and gave it an honest effort. All the stuff we hated - "no" to any off-mainstream custom order, dropping crown inlay...on whose watch did that happen? Oh, Jol's, right.

And who opened the shop back up to "sky's the limit"?

GM? I actually include the death of Olds and Hummer in that list, since these were shuttered while GM was suffering sales declines and was largely unprofitable. Perhaps we see it through different lenses, but Pontiac, Saturn, Olds, Hummer--that's half of the domestic GM nameplates in my view.

And Saab...while they didn't shutter it, they would have if Spyker hadn't bought it.

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GM? I actually include the death of Olds and Hummer in that list, since these were shuttered while GM was suffering sales declines and was largely unprofitable.

Olds was dropped six years before bankruptcy. I hardly see how it can be claimed to have been 'shed as a result of bankruptcy'. Same with Chrysler and Plymouth? How about Ford and Mercury?

Ford sold Aston, Volvo, and Jaguar, GM sold Lotus, Chrysler sold Lamborghini. All due to bankruptcy, I reckon?

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GM? I actually include the death of Olds and Hummer in that list, since these were shuttered while GM was suffering sales declines and was largely unprofitable.

Olds was dropped six years before bankruptcy. I hardly see how it can be claimed to have been 'shed as a result of bankruptcy'. Same with Chrysler and Plymouth? How about Ford and Mercury?

Ford sold Aston, Volvo, and Jaguar, GM sold Lotus, Chrysler sold Lamborghini. All due to bankruptcy, I reckon?

that is business...to make money.

they already tried making guilds in corona and that did not work.

try it again?

nah

guild will be gone too

If that's so, then Fender is risking their own name brand acoustics in the same move.

It costs a certain amount of money (probably pretty huge by our perspectives) just to keep the New Hartford facility open. The combined revenue of USA Guild, Fender, and Ovation acoustics need to generate enough revenue to justify keeping the facility open. Obviously the combined sales of those brand names can't do that. And let's not forget that the loss of USA Ovation is as iconic as any of the brands mentioned here. Ovation had the same market impact in the '60s/'70s that Taylor has had in the last two decades.

You guys are the best..................022_zps9077317d.jpg001_zps067a27b7.jpgPicture018_zpsa7085643.jpg

that is fine guitar^^^..ovation was my favorite acoustic...lose them too..wow

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My main supplier of machine made rugs, in the USA, just QUIT. No notifications, no culling of underperforming segments. No letters , No nothing. See ya-------- Best wishes that the talented crew finds an appropriate , supportive , work place.

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It's called Karma... You guys did many great things for a good many people and that will eventually come back to each of you.

I'm still sick over the loss of Hamer as a brand, it makes me dislike FMIC all the more, when you actually begin to think about the folks it affects, especially having picked up stakes from ILL.

One door closes, rest assured another will open.

Best to all of you guys !

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I don't understand why it's still there. The color is awesome, the build is awesome, it's a ONE OF A KIND custom issue, but not like a Miller guitar or something gaudy. And it's only $2500. That would be like 15,000 if it was from the G-brand.

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i've been eyeballin' that GOO Monaco III for months, seems like a helluva guitar for the $. I live and grew up close to Nashville, so the GOO theme has some relevance to me I guess. if $ wasn't the issue at the moment, I would seriously consider this one my next guitar purchase...

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Wow....

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