Now what?

[Alan]

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Is this supposed to mean that 92% of all pianos currently sold in =
America
are coming from Korea??? I don't think so ...
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Alan R. Barnard
Salem, MO

-----Original Message-----
From: Kent Swafford [mailto:kswafford@earthlink.net]=20
Sent: Thursday, September 09, 2004 5:09 PM
To: Pianotech
Subject: Now what?


Watchdog quashes piano buyout

The Fair Trade Commission stopped a major domestic piano maker from =
buying
out its rival yesterday.
Samick Musical Instrument Co., a domestic piano manufacturing company, =
has
been in the process of taking over its rival and market leader, Young =
Chang
Piano Co., for the past six months. It was told to sell off the 48.6 =
percent
share it bought from Young Chang within a year.
The watchdog said if Samick takes over Young Chang, competition would
disappear, and the market would be monopolized.
The commission said that if Samick, which has 33 percent of the domestic
market, takes over Young Chang, which has a 59 percent market share, its
share would be 92 percent. The high percentage would eventually hurt
consumers with high prices, said an official from the commission. Young
Chang could survive without Samick, since its high potential market =
value
could attract many other domestic companies, he added.=20
Samick, however, plans to file a suit against the commission and take =
other
legal measures regarding the decision. The company views the =
commission's
order as typical bureaucratic red tape, which ignores the commercial =
reality
of the domestic piano industry. Taking over companies on the verge of
bankruptcy is a way to restructure industries, but the watchdog made an
unreasonable decision based purely on market share figures, said an =
industry
source.
Kim Jong-seop, president of Samick, said that the commission did not =
seem to
know the reality of current domestic business conditions.
"If another company takes over Young Chang, the possible growth would =
not be
as dramatic," he said.
A legal expert said that the domestic piano market is fully open and =
sales
are decreasing, making it impossible for prices to go up. "The Fair =
Trade
Commission seems to have overly exaggerated the negative effect of
monopolies and oligopolies."
The idea of an acquisition was actually suggested by Young Chang in =
March.
Young Chang graduated from a debt workout program in June 2002, but its =
debt
increased by 600 percent last year because it claims it had to make
excessive retirement payments while cutting its workforce. It has run in =
the
red for three years.=20
When its workers went on strike, management decided to sell the company, =
and
notified three domestic companies, including Samick, of its intention.=20
Currently, domestic piano makers are going through a deep slump.=20
Young Chang's sales for the first half are only 60 percent of its sales =
a
year ago. People are selling their pianos rather than buying new ones. =
Used
pianos take up around 70 percent of the domestic piano market currently,
worsening the condition for piano makers.=20
The commission's decision has discouraged the domestic piano industry, =
which
is already in difficulty, said an official of the industry.


http://tinyurl.com/4usk2


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