It’s been a while since I’ve written about anything audiophile related. Rest assured, I am still an audiophile and will always be one. The topic today is offshore manufacturing and audio companies. Many companies are jumping ship and are slowly moving production to China. This is the way things are now, and it’s a sign of the times. I’m not exactly thrilled about it.
Discussing this publicly and earnestly is necessary, but I really hate doing it because it sometimes attracts xenophobes and jingoists who clearly have ulterior agendas (i.e. racism). However, this is a real problem (for consumers). Case in point, the British speaker company Monitor Audio not that long ago released their Gold GX speaker series as a more affordable option for people who could not afford the top-tier Platinum speakers. I need to highlight that a more affordable option does not mean cheap. The Gold GX 300 speakers are $5,500. Much cheaper than their Platinum equivalent, but not exactly chump change. The big difference is that the GX 300 is manufactured in China. How much are you willing to spend for gear made in China? $5,500 is a lot of money anyway you slice it. The narrative always given is that everything offshore is up to par and production is just as good because they have properly trained staff overseeing everything. I certainly believe that, and that’s not my issue. My issue is that these companies are opening shop in China and the far east because of cheap labor, and that’s all there is to it. They aren’t doing this out of benevolence. So then how are the savings passed on to the consumer? One thing I know about hifi is that prices don’t come down. $5,500 is a lot of money for Chinese manufactured speakers.
Going offshore will hurt a brand’s image in the long run because many of these brands have histories and backgrounds tied to their country of origin. This stuff matters, and people make purchasing decisions based on it. Hypothetically, would you buy a Lamborghini or Ferrari made in China? If yes, how much would you pay for it? Would you expect to pay the same price as the Italian manufactured versions? If no, then why not? What would this do to the brand’s image? So much is inextricably linked to those cars and Italian manufacturing that it will never recover from offshore production if it were to happen. Country of origin matters with some products. Much like the time pieces from Swiss watchmakers. It isn’t a Swiss watch if it isn’t made in Switzerland, correct? But that goes without saying.
Which brings me to Italian speaker manufacturer Sonus Faber. It was started by Franco Serblin, who is no longer with the company (more on that later). Sonus Faber is a company that prided themselves in using “old world handcrafting” combined with modern technology to produce some of the finest speakers in the world. In fact, Sonus Faber means “handcrafted sound” in Latin. Their speakers took design cues and were even named after the great Cremonese luthiers like Guarneri, Stradivari and Amati. The process to make a small speaker like the Guarneri Memento is painstakingly laborious, but the end result spoke for itself.
via Sonus Faber – Guarneri memento integrates many lessons learned from the study of violin design. The lute shape, choices of wood and time-honored construction techniques creates an internal acoustic chamber of non-parallel sidewalls much like the body of a violin that is all but immune to unwanted standing waves that can cause a colored sound. The cabinet, for example, is formed with no fewer than 21 individual pieces of selected solid maple employed for constrained-mode damping to cancel undesirable resonance. Each speaker is hand-assembled using organic glue and heat pressing techniques identical to those used centuries ago in the manufacture of violins. The maple wood used is naturally dried for two years and then stabilized in kilns. The interior sidewalls are selectively damped using sheet copper and lead tuning elements to provide uniformity from unit to unit. Finally, each cabinet is finished using natural dyes throughout.
So now that you know the heritage of the brand, Sonus Faber recently announced a budget line of speakers called the Venere that will be manufactured in China. I’m sure the rationale with the top brass is that they want to go after the entry level segment of consumers. Fair enough, but I can’t imagine Franco Serblin caving in to a mass produced, bean counting applied method of sales. It goes against the very idea and premise of the brand. It was about quality, not quantity of product lines. In fact, I know he would not have done this because he’s moved on from Sonus Faber to create a new line of speakers with his own vision which mirrors Sonus Faber of the past. See Serblin’s new venture here.
I know some people are thinking that it’s only the budget line of Sonus Faber, so it’s no big deal. Watch Sonus Faber’s corporate video above and see what is said between the 2:55 to 3:08 minute mark. Perhaps, it may not be a big deal to some, but anytime I see a hifi company going offshore, I know they’ve turned a new leaf. Sonus Faber certainly has, just look at the message in their own corporate video. The recent offshore development certainly flies in the wind of the image and messaging they have cultivated and built for themselves over the years. They certainly won’t be touting that their new product will be made in China. In fact, no company that sends offshore production to China does. For now, it’s just the “budget” line of Sonus Faber, but this situation always makes me pause. I’ve seen this play before.
A perfect example is the B&W group. They started out moving Rotel and just the 600 series Bowers & Wilkins speakers to China. There was little protest, as that was the lower priced product, aka the “budget” line. Then they slowly started going further up the line to the mid-range CM series speakers and the grumbling began, but hey – it was still argued that it wasn’t top shelf product, so no big deal. Then they moved the entire Classe Audio manufacturing to China. Nothing from Classe is budget or entry level. Their SSP-800 prepro is $9,000. Their flagship Omega mono amps are $17,500. The thing is that shortly before they moved production to China, they had a price increase across the board. They had to know, as that type of move takes time and planning. Essentially, they raised prices and then moved production to China. They knew that there was no way they could move to China then raise prices.
Of course this has nothing to do with Sonus Faber, but I wonder if they too will turn once they see they can maximize profits. It always starts with the lower priced products. As of today, everything from B&W speakers is made in China, with the exception of the 800 series speakers. Their new PM1 speakers went straight to China for production. The entire Rotel and Classe brands are manufactured in China. If someone 5 years ago said that almost everything from the B&W group would be made in China, would anyone have believed it? That would have been inconceivable. All this happened in the last 3-4 years. One thing I know from companies that move offshore, is that they usually expand offshore production if the product does well, so there’s that.
I was a long time B&W speaker owner and I loved the brand (still do), but I’ll give some anecdotal evidence as to how offshore production has hurt them with their core base. I’ve owned speakers in their CM and 800 series. When I was selling my CM series speakers some time ago, a lot of the inquiries from potential buyers was about whether they were made in England. I owned what was in the last wave of speakers from the CM series that was made in England, before they started making them in China. It wasn’t a big deal to me at the time, but I recognized that it was to many people. I got a lot of offers just because of that. The amount of people who explicitly let it be known that they weren’t going to spend thousands of dollars on Chinese manufactured gear was loud and clear. Outside of the 800 diamond series, the core audience is a completely different one now for B&W, but like all things hifi; if they’re serious about it, they too will upgrade in time and believe me, it won’t be for Chinese made gear. Maybe that’s irrelevant to the bottom line, but what about longevity and loyalty? Does it matter? Few have loyalty for Chinese manufactured goods, and that’s the way the cookie crumbles. I have a hard time believing that John Bowers would have ever imagined that most of the products bearing his name would be made in China.
With respect to Classe Audio, the once very active Classe forum on Home Theater Guide is basically dead. Posting there has come to a crawl. I saw people sell off their Classe gear after they moved production to China. The move was the straw that broke the camel’s back after their price increases not long before. You don’t charge higher prices, then move production from Canada to China. Expecting people to pay a premium for Veblen goods made in China is foolhardy. Resale value has tanked as a result. On Audiogon, gently used Classe Audio products priced at 50% (some under) of retail price is having a hard time moving. 2 years ago, they easily sold at 70% of retail price.
The problem with many head honchos and top brass execs is that they want it all. They want to corner every market and everything is about the bottom line, with little regard for anything else. The artisan has been replaced with a bean counter. The reality is that you can’t have it all. There are products for every market segment, and that should be common sense to anyone with a brain. Some brands recognize this and have done well because they know they aren’t for everybody. One brand that exemplifies this is McIntosh. The heritage there is rich, and they aren’t trying to be a jack of all trades. They know their market and they stick to it. Many fathers have passed on their McIntosh equipment to their sons. A big chunk of McIntosh owners are owners because their parents passed them down a hand made amp or something along those lines. There is a source of pride there. Will there ever be a day when a father says the following “Son, this is an amplifier that was made on an assembly line in a factory in Taipei by someone making $10 a day. I want you to have it.” Not likely.
Ultimately, moves like this will only strengthen the Chinese economy, and it has done that tremendously in the last decade because this isn’t a problem just with hifi. It’s a problem with the manufacturing business period. In fact, manufacturing jobs are now moving to countries like Malaysia, Vietnam, and Thailand because the cost of labor in China isn’t as low as it used to be. They can’t exploit the Chinese labor force like they used to anymore. It’s the chicken coming home to roost in my opinion. The ball is now in the Chinese court. Meanwhile, the production jobs in many of these western countries are gone completely. Many of these companies did not see the long term ramifications of moving entire manufacturing responsibilities offshore. Like usual, they are penny wise and pound foolish. Not surprisingly, the companies that did not send production offshore are seeing a resurgence in sales, despite the sluggish economy. That speaks for itself, and somewhere in all this is a lesson, but greedy executives rarely take heed.