Martin Luthier

Like the rest of us, CF Martin & Co., makers of industry standard Martin Guitars, is having to adjust their expectations in order to remain competitive. Guitar Maker Revives No-Frills Act From the Thirties

Although Martin's guitars have been favored by music legends including Elvis Presley, Gene Autry and Eric Clapton -- who once said if he could be reincarnated as anything, it would be as a Martin guitar -- the company began struggling when consumer spending swooned last fall. Guitars aren't necessities, and anything other than food, shelter or clothing has felt the downdraft as job losses
mounted, home prices fell, and investment values dropped. Since autumn, Martin's sales have dropped 20%.

Meanwhile, Martin's inventories of its high-end guitars ballooned. The company eliminated overtime and didn't replace workers who retired or quit, cutting its staff by about 50.

But given the special woodworking skills involved in guitar making, Martin wanted to avoid layoffs. The company figured it is better to find a way to keep workers occupied than face the challenge of having to train new ones after the economy recovers. The solution: Copy what many big retailers do by offering a lower-priced alternative. The dilemma was how to do that without sacrificing
quality or muddying its image.

It's an approach that many believe saved the company during the Depression, when Mr. Martin's great-grandfather introduced an all-mahogany unadorned guitar, void of inlay and frills, which sold for $20 to $30, a small fraction of the price of its other trim-laden models.

Stan Werbin, owner of Elderly Instruments in Lansing, Mich., ordered about 20 of the new guitars and has sold a half-dozen in the past two months for $800 to $900. "It was really smart of Martin to come out with these in the current economy. They seem to be filling the niche quite well," he says.

Mr. Werbin says the new guitars are in a sweet spot in terms of pricing: under $1,000. "This is the price range that is not hurting as much."

This is hardly a unique strategy. Ford survived the Depression with low-cost vehicles like the Deuce Coupe (of Beach Boys fame), for example. The danger to Martin is that they make such low-cost guitars that they develop a reputation as a low-cost company. That might interfere with sales of their $2,000-$3,000 models, not to mention their $100,000 Brazilian Rosewood guitars.

Still, I think it's useful to hear such stories, rather than the drama queen complaining of the UAW and the public employee unions. Martin is not just trying to protect its business. It's also trying to keep its employees at work. I have no idea if Martin's is a union shop (I doubt it). Rather than an adversarial labor-management relationship, Martin's is marked my mutual respect and a, perhaps, unstated agreement as to how to treat employees. Martin's owners may have the brand and the Martin "magic," but Martin's employees (who really are craftsmen) are the ones cranking out 52,000 each year.

This is what an economy run by adults, rather than grasping special pleaders, would look like.