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Junior Varsity
Peavey shut down
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<blockquote data-quote="John Roberts" data-source="post: 132400" data-attributes="member: 126"><p>Re: Peavey shut down</p><p></p><p></p><p></p><p>Yes and no.... I hope this isn't top secret but Peavey looked into owning their own factory in China pretty seriously back 20 years ago but finally abandoned it. (I mostly agree with that decision both short term and long term, it would have been a huge diversion of focus and resources not to mention fun and games working with the Chinese government). Peavey is an international company selling product in more than one hundred countries. I actually visited contract manufacturing factories in China back before I quit almost 15 years ago. Back when the US was the dominant significant market for products, building gear here and shipping it around the world made sense, but starting a couple decades ago or more, trade relations (tariffs and duties) with China were relaxed (for many not all countries) so shipping products from the US became uncompetitive. I recall visiting a music store in Berlin back decades ago and seeing the "picky" German customers embrace Chinese made products because of the lower price at point of sale. </p><p></p><p>So the first wave was building product for the rest of the world to stay competitive against the other major brand early adopters. Peavey was reluctant to embrace Chinese manufacturing but not to the point of being self-destructive. As more domestic brands embraced Chinese manufacturing the logic of keeping domestic market manufacturing here (for value products) stopped making economic sense. The final question was whether to suffer the cost of tooling up the same products twice to build them in two different factories. The economics of that question should be obvious even to musicians. <img src="https://cdn.jsdelivr.net/joypixels/assets/8.0/png/unicode/64/1f642.png" class="smilie smilie--emoji" loading="lazy" width="64" height="64" alt=":-)" title="Smile :-)" data-smilie="1"data-shortname=":-)" /> </p><p></p><p>Peavey is just responding to market forces. The customer remains in charge and is always right (even when cheap). I suspect Peavey will still build some of their more expensive, and low volume products here, but expensive is not exactly the sweet spot for Peavey. I suspect manufacturing can move again to wherever it makes sense if and when China becomes too expensive (not for a while, but it could happen if I live long enough). </p><p></p><p>JR</p></blockquote><p></p>
[QUOTE="John Roberts, post: 132400, member: 126"] Re: Peavey shut down Yes and no.... I hope this isn't top secret but Peavey looked into owning their own factory in China pretty seriously back 20 years ago but finally abandoned it. (I mostly agree with that decision both short term and long term, it would have been a huge diversion of focus and resources not to mention fun and games working with the Chinese government). Peavey is an international company selling product in more than one hundred countries. I actually visited contract manufacturing factories in China back before I quit almost 15 years ago. Back when the US was the dominant significant market for products, building gear here and shipping it around the world made sense, but starting a couple decades ago or more, trade relations (tariffs and duties) with China were relaxed (for many not all countries) so shipping products from the US became uncompetitive. I recall visiting a music store in Berlin back decades ago and seeing the "picky" German customers embrace Chinese made products because of the lower price at point of sale. So the first wave was building product for the rest of the world to stay competitive against the other major brand early adopters. Peavey was reluctant to embrace Chinese manufacturing but not to the point of being self-destructive. As more domestic brands embraced Chinese manufacturing the logic of keeping domestic market manufacturing here (for value products) stopped making economic sense. The final question was whether to suffer the cost of tooling up the same products twice to build them in two different factories. The economics of that question should be obvious even to musicians. :-) Peavey is just responding to market forces. The customer remains in charge and is always right (even when cheap). I suspect Peavey will still build some of their more expensive, and low volume products here, but expensive is not exactly the sweet spot for Peavey. I suspect manufacturing can move again to wherever it makes sense if and when China becomes too expensive (not for a while, but it could happen if I live long enough). JR [/QUOTE]
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