Chinese guitars, etc.

[whitefang]

The thing about it in the auto industry anyway, is that they all offer employee discounts. You'd see mostly GM cars filling the parking lots in the GM plants I worked in. Same with FORD and CHRYSLER. I'm not sure about the Japanese auto companies, or any of the guitar makers. But replacing autoworkers with robots do put somewhat of a dent in the sales market. Laid-off auto workers in need of a working vehicle will likely either struggle to get a decent priced used car, meaning the corporation gets NO profit from it, or seek out a good deal from a competitor.

 

But, in the auto industry, EVERYbody who works for any of the "big three' drives to work, and the employee discount incentive assured both company loyalty and a guaranteed level of sales. But, I don't know HOW many of say, GIBSON workers also play guitar, so I don't know if THEY offer any employee discounts on their product. All I DO know is that robots DON'T purchase cars, so there ya go....

Whitefang

[Winston Psmith]

But, I don't know HOW many of say, GIBSON workers also play guitar, so I don't know if THEY offer any employee discounts on their product. All I DO know is that robots DON'T purchase cars, so there ya go....

Whitefang

 

Can't speak for Gibson, but PRS Guitars is nearby, and I've known some folks who had family members working for the company. I was told that everyone who works at the PRS plant and offices in Maryland gets a substantial discount on PRS products; also, after you've been there a number of years, you get a PRS Guitar, essentially built to order. Not bad . . .

[Scott Fraser]

Can't speak for Gibson, but PRS Guitars is nearby, and I've known some folks who had family members working for the company. I was told that everyone who works at the PRS plant and offices in Maryland gets a substantial discount on PRS products; also, after you've been there a number of years, you get a PRS Guitar, essentially built to order. Not bad . . .

 

I knew I liked those guys. What a company! I've wanted them to build me a guitar, based on elements from about 6 different models they make. But I need to win the Lotto first.

[Larryz]

At the winery I worked at we used to get a 1/3 discount on any of our products. I drank a lot of Brandy back in those days LOL!

[whitefang]

 

Can't speak for Gibson, but PRS Guitars is nearby, and I've known some folks who had family members working for the company. I was told that everyone who works at the PRS plant and offices in Maryland gets a substantial discount on PRS products; also, after you've been there a number of years, you get a PRS Guitar, essentially built to order. Not bad . . .

 

Yeah. When I worked at the Cadillac plant, many of US thought too, that instead of a watch or a clock when you retire from there, they should let you have a CADILLAC! I mean, if they can spare a few for CRASH TESTING, then why NOT?

Whitefang

[ajm558]

Sorry for the delayed response. @Scott, the mods I have done were to do exactly as you suggest, get the guitar to do what I want it to do. The two most heavily modded guitars represent some sentimental value to me, and I never really intend to get rid of them.

 

The first is a made in Vietnam LTD EC-256. My first guitar. A gift for Father's day from my wife and kids as I destroyed my knee and was facing micro fracture surgery. I tore out all the pots and switches to upgrade to cts and orange drop. I then took out the shrill pickups and installed a pair of MIK Kent Armstrong paf's. I later upgraded the bridge to a tonepros and put in a tusq xl nut. It looks stock until closer inspection. It will never be a Gibson LP, but the guitar is so well made I doubt I would ever need to upgrade now.

 

The second heavily modded guitar is a made in Indonesia Squier VM Jaguar HH with that crappy Danelectro like bridge. Got it from a local pawn shop by trading my tennis racquets in. Those racquets had more value than the guitar and had been mostly gifts from my wife. So the axe represents about 3 Christmas's worth of love. So I redid everything but the nut and tuners. Cts pots, switch craft switch and output jack, vintage/shielded/pushback wiring and Duncan Phat Cat pickups. Oh, then routed out a traditional Jag vibrato tailpiece with a Gibson abr bridge. Pics to follow.

 

I have modded and sold other guitars as I figure out how everything works, but the best platforms to mod without losing too much value is with MIA guitars. Along the way I determined what I like and what I don't like with my guitars. But the US import tax would have prevented me from experimenting so much. I will never recoup what I put into the Jag or the Ltd. But I don't intend to either.

[ajm558]

+1 on Michigan. What would happen to Reverend if the tax went through? Puresalem? Both American companies manufacturing in the same Korean plant.

[whitefang]

Now I'm a bit confused.

 

Is this tariff on goods made in China and exported by Chinese companies? And CAN they place a tariff on goods made IN china by AMERICAN companies?

Whitefang

[JuJu Kwan]

Yes.

 

The tariff is currently 5% on products from the US to China , and 2.9% on products from China to the US.

[ajm558]

Yes, the current tariffs are 5% and 2.9%, but Trump is proposing 45% from China and 35% from Mexico. This would adversely affect Fender and Epiphone costs.

https://www.google.com/url?sa=t&source=web&rct=j&url=/amp/s/www.washingtonpost.com/amphtml/politics/whitehouse/for-americans-trumps-tariffs-on-imports-could-be-costly/2016/12/01/467d70cc-b7eb-11e6-939c-91749443c5e5_story.html&ved=0ahUKEwis6sejsezQAhWIRiYKHUi6DG8QFggaMAA&usg=AFQjCNEIeuRvC5wskEnjbt4wg9K7dUsyOQ&sig2=0l8obNStUnkCn3xyGDFveQ

 

 

[Scott Fraser]

Yes, the current tariffs are 5% and 2.5%, but Trump is proposing 45% from China and 35% from Mexico. This would adversely affect Fender and Epiphone costs.

https://www.google.com/url?sa=t&source=web&rct=j&url=/amp/s/www.washingtonpost.com/amphtml/politics/whitehouse/for-americans-trumps-tariffs-on-imports-could-be-costly/2016/12/01/467d70cc-b7eb-11e6-939c-91749443c5e5_story.html&ved=0ahUKEwis6sejsezQAhWIRiYKHUi6DG8QFggaMAA&usg=AFQjCNEIeuRvC5wskEnjbt4wg9K7dUsyOQ&sig2=0l8obNStUnkCn3xyGDFveQ

 

It will never happen.

[ajm558]

From an educated view, I agree, it will never happen. However...I have not predicted any correctly in the past year as it relates to politics or economics.

[Dannyalcatraz]

"The educated view" of economics hasn't been in vogue with the GOP since Ronald Reagan met Arthur Laffer.

[Scott Fraser]

I'm sure the Chinese & Mexican governments know that this talk of tariffs is just chest thumping, saber rattling intended to rile up a pissed off, economically depressed constituency within the US. Those voters wouldn't stand for having all the cheap goods they buy at Walmart suddenly priced out of their reach.

[Larryz]

Yes.

 

The tariff is currently 5% on products from the US to China , and 2.9% on products from China to the US.

 

It looks like we should be increasing the tariff 2.1% on Chinese products coming to the US. I doubt this would hurt the US consumers pocketbook all that much and it would level the playing field...

[Dannyalcatraz]

...unless & until China upped the ante.

[Scott Fraser]

Raising tariffs mostly results in tit-for-tat retaliation, until cooler heads prevail, or an election intervenes.

[JuJu Kwan]

Larry, that would seem like a good idea, but that isn't the Presidents goal. He wants to raise the price of imported goods thinking it will bring manufacturing jobs back to the USA. That is not likely to happen, and manufacturing is already leaving China for cheaper labor in places like Vietnam.

 

 

 

 

[Dannyalcatraz]

More to the point, if he DID somehow manage to convince Congress the tariffs would do that, and got the full amount he asked for, one of the first casualties of the trade war would be American jobs.

 

Bush opened a door a crack, and Obama blew it off the hinges: between those two, public and private orders for Boeings have skyrocketed. Punch China with a big tariff, those orders will be cancelled and given to Airbus. Ta-ta to a bunch of jobs.

 

Right now, I can think of dozens of small American companies that- like guitar companies- have sizeable portions or even ALL of their manufacture of important product lines done in China and other Asian nations. Tariffs might sink them.

 

Carrier's deal with Trump made them essentially less competitive with European and Asian HVAC makers who can still have labor costs a fraction of what they're going to be paying.*

 

Protectionist tariffs in a globalized economy are a disaster. They ignore the laws of economics. There's a reason nobody buys Brazilian cars outside of Brazil.

 

 

 

* and since they're still going to be offshoring jobs, shouldn't they still get hit with the penalties Trump says he wants to impose?

[Larryz]

Larry, that would seem like a good idea, but that isn't the Presidents goal. He wants to raise the price of imported goods thinking it will bring manufacturing jobs back to the USA. That is not likely to happen, and manufacturing is already leaving China for cheaper labor in places like Vietnam.

 

 

 

 

I don't think that is the stated goal. The idea is to keep jobs from leaving the US, not having to bring them back by raising prices on imported goods. I do not like tariffs of any kind...

 

 

 

 

[whitefang]

Yes.

 

The tariff is currently 5% on products from the US to China , and 2.9% on products from China to the US.

 

I'm not sure you understood my query. My question was, for instance, does the proposed tariff affect say, goods manufactured in China FOR an AMERICAN company( say, Gibson) or just goods manufactured in China for a CHINESE company?

 

If it's the first, it will affect more than just GUITAR prices.

Whitefang

[JuJu Kwan]

Sorry Whitefang,I wasn't very clear, actually I'm not sure if the new tariffs would apply to all products or just on those by USA corporations. The current tariffs app!y to all. There is no policy yet, that I know of, for the proposed tariffs.

 

The only policy on the tariffs is tweets.

 

[whitefang]

Either way, I don't see how it will create any "fair wage" jobs HERE. In order to keep a consistent profit margin, American companies will either raise the prices of those Chinese made products, or if they close shop THERE, they'll want to pay any AMERICAN workers hired to make the same products HERE the SAME WAGES that the CHINESE workers now get.

 

I don't see the employment situation so dire as to think many Americans will JUMP at that chance.

Whitefang

[Scott Fraser]

Here's an interesting article on the true cost of manufacturing guitars in several different countries, what it really costs:

 

https://reverb.com/news/guitaronomics-how-much-does-it-actually-cost-to-build-a-guitar?utm_campaign=ab3cbcb658-rnauto_welcome2&utm_medium=email&utm_source=newsletter&utm_term=0_5889ed6702-ab3cbcb658-62883813

[Winston Psmith]

Here's an interesting article on the true cost of manufacturing guitars in several different countries, what it really costs:

 

https://reverb.com/news/guitaronomics-how-much-does-it-actually-cost-to-build-a-guitar?utm_campaign=ab3cbcb658-rnauto_welcome2&utm_medium=email&utm_source=newsletter&utm_term=0_5889ed6702-ab3cbcb658-62883813

 

The person quoted in the article may be right about the relative manufacturing costs within each country-of-origin, but no one that I worked with in Music Retail was making 100% markup on any new product. I saw many of the invoices as they came in, so I knew what many items cost, and employees got to purchase gear for ourselves at Cost+10%. With that formula, if we'd been marking everything up 100%, a $700 Guitar should have cost the store $350, which would have made the employee discount price $385: no. Same thing applied across the board, from string sets, to effects pedals, and so on. Overall, we probably got about 15-20% off of the retail price, on most items, which should give you an idea what the margins really were . . . and BTW, that's not including overhead, like rent, advertising, staff, loss-leader sales, etc., etc. etc..

[ajm558]

Well, the price of Mexican made Strats is about to explode. I am assuming China is next.

new york times

 

 

[Scott Fraser]

Does the office of the president get to determine import tax rates? I don't think he has the last word on the matter. Not to mention the devastating effect a trade war would have on the main beneficiaries of the NAFTA pact, which are US companies selling to Mexico.

Oh, by the way, if MIM Strats prices go up by 20%, so does the price of most of the fruit & vegetables we eat from winter through spring.

[ajm558]

Yup. Agreed on most fronts, Scott. But this plan was apparently shared with Republican Congress members earlier in the day and met with favorable responses in order to pay for the wall.

 

Look, I don't think this is a good idea, and I hope that cooler heads prevail. But developments today are related to this thread JuJu started months ago. And if this is allowed to become reality, how long will it be before the current administration does this to China?

[JuJu Kwan]

The forgotten party is Canada. Canada is the United States second largest trading partner, trailing only China.

[Scott Fraser]

Yup. Agreed on most fronts, Scott. But this plan was apparently shared with Republican Congress members earlier in the day and met with favorable responses in order to pay for the wall.

Look, I don't think this is a good idea, and I hope that cooler heads prevail. But developments today are related to this thread JuJu started months ago. And if this is allowed to become reality, how long will it be before the current administration does this to China?

 

While a trade war with Mexico would be disastrous, a trade war with China would be catastrophic. We can only hope after all the voter-pleasing chest thumping dissipates, that there is actually an adult in the room when the real decisions get made.