Yamaha to Close Three US Subsidiaries in Major Production Shake-Up

By David Davies London (February 27, 2007)--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 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.
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By David Davies

London (February 27, 2007)--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 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.

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.


Yamaha Commercial Audio Systems’ vice president and general manager, Larry Italia, noted “Our IS and Club Series speakers are manufactured at the Yamaha Music Manufacturing facility in Thomaston, GA. When that facility closes, we will transfer production of these two speaker lines to another facility here is the U.S. (we will not take the production off-shore). The speakers will be produced to the exact same specifications and will utilize the same components as the current models. We also have adequate inventories for the transition period so the change should not result in any impact for our customers.”

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 organization, 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 U.S. is likely to make up for the drop in PA speaker production.

"We have worked long and hard together here in the U.S. to manufacture the world's finest musical instruments,” said Yoshihiro Doi, president, Yamaha Corporation of America in a statement. “I am proud of our people and their achievements, and I deeply appreciate their commitment and loyalty to Yamaha. I am equally grateful for the support of the local communities in which these plants have thrived for a combined 60 years of commitment here in the United States. We must take this action in light of market realities and new, fierce international competition.”

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 $11 million.

For more information, check out:
www.global.yamaha.com
www.yamahacommercialaudio.com