Baldwin's Woes

[Robert Goodale]

The PTG convention in Reno proved to be a fertile ground for
gossip regarding Baldwin's woes.   Throughout the week
stories trickled along the withering grapevine about the ill
health of the company.  Several times I caught a hushed
earful of rehashed news and on rare occasion someone who had
know idea that there was a problem.  Personally I was
somewhat surprised to discover that the cashed strapped
legend managed to make an appearance, although it was
somewhat encouraging to see.

Of course I heard a great deal of speculation regarding
"what happens next" and of course the now infamous "I heard
that Samick is going to buy them" routine in addition to
other idle chat.  Nothing to stop the presses.  Then I
stumbled into a unique situation.  At the PTG banquet I
happened to sit at a table in the company of a gentleman who
had a little more credibility on the matter.  His name at
the moment escapes me although if I recall it I would not
repeat it in respect of privacy of the source.

This gentleman is the rather business savvy type and is an
acquaintance of Mr. Bob Jones, the new CEO of Baldwin Piano
and Organ.  In a nut shell the tale goes something like
this.  A short time ago when Mr. Jones assumed command he
took it upon himself to physically inspect every inch of the
Baldwin facilities.  Certainly a wise and appropriate task
to do as I'm sure you will agree.  As expected his
inspection yielded a number of items for potential
improvement, but the biggest shock was when the tour arrived
at one of the warehousing facilities.  Upon entering Mr.
Jones was said to have "gasped in disbelief".  Inside were
hundreds of brand new Baldwin digital pianos, crated in the
boxes and ready to ship.  Unfortunately the entire inventory
was at least five years or older, completely antiquated and
virtually worthless on the retail market.  They had been
sitting there rotting away for years until all market value
had deteriorated and with no explanation as to why.  Likely
they will now all have to be destroyed.  Littering the
market with a product for pennies on the dollar that can't
be given a warranty will likely damage the Baldwin name
further while eliminating potential buyers for future
profitable products.   In today's business world it would be
a risky move for a manufacturer to try and sell these
instruments at this late stage no matter how tempting.

Moving on to another warehousing facility was a further
unbelievable discovery.  Hundreds of pianos, grands and
uprights.  These are what is sometimes referred to in
business as class B surplus.  They are pianos that for
whatever reason were returned from dealers back to the
factory.  In some cases they were returned simply because
they were misordered.  In other cases they may only have a
couple of minor problems.  Few pianos that have major damage
ever make it this far.  As a result of poor record keeping
there was no way of telling what was in there.  A potential
gold mine of revenue sitting in a warehouse rotting away.
Every piano will have to be removed to be inspected and then
repaired as needed.  Of course at the present time even
these pianos are nearly worthless since Baldwin already has
a problem with excessive crated new inventory.

These are just a couple of examples of what mismanagement
can do to destroy a company.  Poor record keeping is largely
to blame for this unbelievable waste.  I just received my
July issue of  THE MUSIC TRADES  which contains a feature
article on Baldwin's bankruptcy after being unable to make
their May 25th payroll.  Once again Karen Hendricks is the
focus of the company's failure.  Although I have no doubt
that Hendricks was grossly irresponsible and deserves a
substantial amount of the blame, Baldwin's problems are
clearly rooted deeper than that.  This is a company that
been buried in waste and mismanagement.  Throughout most of
the 90s piano sales were soaring yet by the end of the
decade Baldwin had little to show for it.  Baldwin could
still potentially turn around with the right management and
an aggressive move toward leaning down and plugging the
hemorrhaging waste problems.  With new products, corrected
manufacturing defects, and an aggressive campaign to restore
the Baldwin name, the potential is there.  Unfortunately
what they need desperately more than anything else right now
is cash.  I didn't hear any stories regarding how that will
happen.

Rob Goodale, RPT
Las Vegas, NV