Yamaha to close three US subsidiaries in major production shake-up27 February 2007
EXCLUSIVE: Yamaha Corporation of America’s early February decision to close three subsidiary operations in the US – Yamaha Musical Products (YMP), Yamaha Music Manufacturing (YMM) and Yamaha Exporting Inc (YEI) – represents a hugely significant development in the long and eventful history of a manufacturing giant. “Carefully considered profit analysis” and an examination of retail trends in the US are said have contributed to the decision, which will result in a significant ramping up of production levels in Asia and the Far East, reports David Davies.
The decision to shut up shop at YMM – which, like YMP, was established back in the 1970s – is particularly significant for pro-audio. The division’s Georgia base has long combined the manufacturing of pianos and loudspeakers (including the Club Series) to considerable success, but in recent years has also been responsible for producing Yamaha Commercial Audio Division’s Installation Series – Yamaha Corporation of America’s first such series to be singled out for a global campaign in the mature contracting market.
Under plans revealed earlier in the month, this operational structure will now change radically, with YMM and YEI scheduled to suspend production at the end of March, and YMP following suit a month later. YMM and YMP are both likely to be liquidated in 2008 following the sale of land and buildings.
According to the company, the resulting production shortfalls will be made up by other parts of the Yamaha organisation, primarily in Asia and the Far East. In the case of YMM, piano production will be increased at Yamaha companies in China and Taiwan, while a subsidiary in Indonesia (P.T. Yamaha Music Manufacturing Asia) and the continuation of subcontracting production in the US is likely to make up for the drop in PA speaker production.
Yamaha Commercial Audio’s marketing manager, Karl Christmas – who notes that “from the UK/EU perspective, it’s business as usual” – tells PSN-e: “Having met many of the [YMM] Georgia-based colleagues, I’m naturally upset for them. However, from my limited knowledge of the situation, I believe that the main reason for the closure of these plants was based on carefully considered profit analysis, whilst looking purely at retail trends within the US. Whilst the Georgia plant was latterly responsible for some of Yamaha’s global speaker manufacturing, it was originally set up 28 years ago to assemble home organs and then produce acoustic pianos solely for the US market. Times change and it was obviously deemed that it would make more economic sense in the long run to maximise the use of our other established piano factories to supply existing demand.
“Thankfully, the manufacture of the relatively new Installation Speaker Series will continue in the US, which will help Yamaha Commercial Audio build on the successes we are having with this range and help us develop our plans for the future.”
While those working for YEI will be transferred to parent company Yamaha Corporation of America, the employees of the other two subsidiaries are scheduled to be laid off. The cost of winding up these businesses is also considerable in financial terms, with the total combined expense expected to reach US$11m.