The Fender Tapes
Gary Cooper asks embarrassing questions. Dan Smith (Fender's Guitar Chief) has the answers — or has he?
A PROVOCATIVE INTERVIEW ABOUT FENDER'S FUTURE: DAN SMITH (MARKETING DIRECTOR, GUITARS) TALKS TO GARY COOPER.
One of the most irritating aspects of being a musician in Great Britain is the information gap which has traditionally existed between ourselves and the makers of many of our instruments. Based in the U.S.A. (and despite having their own U.K. divisions in some cases) instrument makers like Gibson, Fender, Gretsch, Ludwig, Rickenbacker and others have often been the subjects of wild rumours, believed by many players over here — not because we are necessarily credulous, but because the truth was often impossible to get at. So, when we heard someone tell us that all Brand X guitars were now being made in Korea — well, how were we supposed to know the real facts? And when the neck dimensions changed on model Z — was it really because someone had lost the original drawings? You presumably know the sort of rumours I'm talking about!
To a lot of us then (players and dealers alike) the launch this year of the Fender Squier series of guitars and basses, Japanese made instruments with Fender labels on the head-stock must have seemed like the end of a golden dream of American-made electrics with a history stretching right back through rock and roll to its very birth. What were Fender playing at? Was this the beginning of the end of genuine U.S. manufactured Strats, Teles and what have you? Had the Japanese finally beaten them into the ground?
The answers could only come from the top. However much the U.K. division of C.B.S. tried to explain what was happening (and their communications with the press have improved out of all recognition during the past eighteen months or so) it was the word of a Fullerton Director we needed to make us feel that we really knew what was happening.
I was lucky, recently, to meet Dan Smith, Director of guitar marketing from Fender U.S.A. and the man responsible for many of the new changes and future plans of this illustrious maker. During the course of our conversation a lot about Fender's thinking emerged which should give readers a better understanding of what they have been up to and where they're going.
To start with, though, a bit about Dan himself. As a journalist of some years' experience I've met a lot of the American bosses of instrument makers. I won't be rude and say that they're an identikit model — but there is a type... Dan doesn't seem to be one of these professional businessmen — at least, not the kind that handles the sales/marketing for an instrument maker one year and the same for General Motors or I.T.T. the next.
Dan's background is solidly in music (something he shares with all of the new Fender team brought in to shake the place up around a year ago).
He started playing guitar in 1957, began repairing his own instruments in the late 1950's, built his first guitar in the early 60's and has a player/repairman's intimate knowledge from the outside. Later he worked with Yamaha and now he's back home with Fender. But, unlike these more typical Disneyland dealers one is used to, Dan's experience of looking at Fender from the outside means that he can't dismiss the company's problems in the usual way. It makes him refreshingly honest about Fender's past shortcomings.
"...WHY MANUFACTURE IN JAPAN... TO BE QUITE FRANK, WE WERE BEING KILLED BY THE COPY MODELS"
But first, I asked him, why introduce the Squiers? Surely it was selling this great name down the river — a long-term act of commercial hara kiri?
"The reason why we decided to set-up a manufacturing base in Japan was because, to be quite frank, we were being killed by the copy models. To send a model to the Japanese market means that it's going to suffer from the duty put on it by the Japanese Government. It means that it is very restrictive in terms of being able to sell your product at anything like the price you sell it at in your own country. I'm sure that's a problem which British manufacturers experience too.
"In the Japanese market that meant a guitar which we sold for $900 in the States would cost around $1,200.
"Also, and I have to admit this, the quality had gone down. Fender had a situation over the years where the quantity of instruments that was needed between the late sixties and seventies was such that I think that everyone in the States was manufacturing more and more and more and just lost touch with their quality levels.
"Basically, these companies had started up in the 50's and were using manufacturing processes from that era. It's very expensive to shut a plant down and change all your manufacturing techniques over to more modern processes. On top of that they were besieged with back orders asking for product — what could they do?
"...THE JAPANESE STILL DON'T HAVE THEIR PICKUPS RIGHT FROM A TONAL POINT OF VIEW."
"No manufacturing base was really set-up to handle what happened from about 1965 to 1978, which is when I'd say the boom was.
"But, in Japan, the companies over there started making copy models, poor copy models at first, with new equipment. That was maybe ten or fifteen years ago but as they became more and more proficient they started using even more modern equipment so they were manufacturing far more efficiently than we were.
"A Fender Strat in the Japanese market was selling, eventually, for around $1,200, whereas a Tokai or a Fernandez or Brand X was selling for anywhere from $25 to $600, and at at a quality level which was slightly less than ours, as good as ours or even better than ours, depending on what you were prepared to pay."
As Dan went on to tell me, much of Japanese companies' profitability lies in having a strong home market, enabling them to export at low prices. The knock-on effect being, for American guitar makers generally, much what it has been for car makers in Europe — a situation where increasing amounts of under priced highly well made Japanese product began to seriously undermine native goods.
In the guitar market this really affected territories outside of the U.S.A. (Europe notably) which meant that whilst Fender could compete at home in the States, their prices and quality had begun to cause a serious sales decline over here. Japan too was lost to them.
"...PEOPLE WHO CAN'T AFFORD TO BUY THE FULLERTON-MADE PRODUCT WOULDN'T HAVE BOUGHT A FENDER."
"We were being destroyed in the Japanese market. Over the last five or ten years over 50% of what Fender produced at Fullerton went for export — and the Japanese market probably purchased about 50% of that export. It just got to the point where we could not sell in Japan any longer.
"We went from selling thousands of instruments in the Japanese market to this year where we might have sold only seven or eight hundred over there.
"The only choice that we had, then, was to open-up a joint venture over there with a company who could produce a guitar with the quality which Fender wanted to be associated with. We chose what we consider to be the finest maker over there, Fuji KenGakki, who made Ibanez and Greco. Now about 50% of what they produce is for Fender Japan, so we at least feel that in the Japanese market we are sorting the copy market out."
One interesting aspect is that Dan firmly believes that the Japanese still don't have their pickups right from a tonal point of view and cites his own experience with Yamaha as an example of the amount of trouble a Japanese guitar maker will go to in an attempt to get the 'American' sound — without 100% success, he claims. The Squiers, however, use Japanese assembly skills on largely American-made hardware, (including pickups) giving them a more authentic sound. This raises the question why the Japanese, who seem to get so much else right, should - have such problems over something as fundamentally simple as a pickup?
"When I worked for Yamaha (and that was for six years) we broke our asses trying to get that sound but they never quite sounded right. I can only guess that the answer is in the magnets.
"...YOU'RE GOING TO BE SEEING SOME OF THE MOST EXCITING THINGS THAT HAVE EVER HAPPENED IN THE MUSIC BUSINESS."
"The Japanese were responsible for developing the Alnico magnet in the 30's. I think, off the top of my head and with no scientific evidence to back this up, that Japanese magnets are too good to sound right. If you compare a Japanese magnet it's too pure, no little indents or whatever. But if you look at an American magnet on a Fender or a Gibson or a speaker or whatever you'll see that the American ones look like they're of a lesser quality but that may be why they sound better. It may not be a better sound but its the sound we all know. American guitars were the first guitars and they had the sound that people wanted to get. The Japanese had to aim for that but were using their own magnets to do it."
So that just about wraps-up the mysterious move of the Japanese Fenders. But what of the future? Currently the Fenders being made in the States (the Strats and Teles plus the top basses notably) are retailing at tremendously higher prices than the Squiers. Did Fender expect to be able to sell these against their own far lower priced Japanese-made instruments?
"As a player, or a pro player who's been playing for some while, my perception is that you'd buy the American Strat against the Japanese one. There's a certain ambience there, a sound there, that doesn't exist elsewhere. I don't think we're going to lose much in the way of overall sales because people who can't afford to buy the Fullerton-made product wouldn't have bought a Fender at all, they'd have bought something else so we can score that way."
But for Fender to have any sort of future, the company has to be more than an established American name making its products in Japan. If they fail to take that opportunity then they are immediately relegated to the ranks of once proud names like Washburn and Harmony — American names put on Japanese guitars with no-one among the average players in the street remembering their origins. It might take time, but it could even happen to Fender one day. What plans did they have to prevent this?
"Over at Fullerton there have been a lot of changes. We've begun to mechanise the plant, there have been a lot of personnel changes too, we've changed the whole philosophy of the company during this past year or so. But it's a long hard process. Don't forget, you're talking about a company that's had machines on its floor that date back to the early 1950s.
"IN THE PAST WE'VE HAD PROBLEMS BECAUSE WE DIDN'T LISTEN TO WHAT PEOPLE WANTED."
"We've begun to turn the whole thing around — it's time for the sleeping giant to really get down to getting its act together and believe me, as we say in the States, you ain't seen nothing yet. Over the next couple of years you're going to be seeing some of the most exciting things that have ever happened in the music business. What made Fender great in the beginning was innovation, and we've got to begin to innovate again.
"Look, we're living off products which were developed in the 1940s and 50s and we've been lucky because players have still loved those products in later years. But we're going to be taking the Fender company into the 1980s — we want to be the trend-setters again.
"Our plans from Fender are that eventually we will have a product range which can be manufactured in the U.S.A. to meet all price levels at every quality level. We plan on upgrading our current line, having a mid-price line — it will all be capable of being made in Fullerton.
"We knew up front that when we introduced the Squier here some people would perceive that Fender were going down the tubes — but it just isn't true. Why should we give our market away to the Japanese when it was really our market?
"If you look at the products coming out of the plant now the quality level's improved, we've had upgrades on machines, pickups, all round. We feel that nobody should be able to make a better Stratocaster than Fender. You shouldn't have to go to someone like Schecter to get special pickups or hardware or whatever!
"AT ONE POINT WE HAD AROUND 90% OF THE BASS MARKET BUT EVERYBODY WENT AHEAD AND WE STAYED THE SAME."
"Right now we're developing a whole new series of Fender guitars, working with a lot of top pro players in the States. We'll have a lot of things happening over the next two or three years. In the past Fender may have introduced a new product every six years or so but now we'll hope to have six new products every six months until we have a complete product line again."
In fact much of Dan's promise has begun to take effect. Recently we've seen a new line of Bullets (replacing the older Tele-style bodied models with a more Strat-like range), we've had the new acoustics, and others are about to arrive. But why did they change the Bullet so soon after its introduction?
"Basically, we felt that the people who had designed the original Bullet before we came had missed the boat on some things. To start with the Strat is a more popular shape. Strats outsell Teles about forty to one, did you know that? We also felt that we could do more with it by basing it on the Strat and making it all round a better guitar."
Changing the subject from Strats and Teles, what were the inventors of the bass guitar going to be doing with it next? After all, hadn't they lost their lead in that market years ago?
"I think Fender really let the bass market slip away. At one point we had around 90% of the bass market but everybody went ahead and we stayed the same. But, as with the guitars, we're working on a new series of basses which we feel are going to be the most playable innovative basses that anybody's got. They'll be out next year along with a lot of other new models which we're working on."
Understandably, Dan was reluctant to go into too much detail (haven't they been copied enough in the past?) but from several 'off the record' comments made to me I would be inclined to watch the newly revived Fullerton giant very closely. Some examples of new products he could reveal were 'on tape' however, as I gather their arrival is imminent. One example is a bass that, as far as I know, has yet to be seen over here.
"We have a short-scale Bullet bass with a 30" scale. It's the same price as the full scale model (after all we only save about 10 dollars on wood, it's the same on machines, frets, pickups etc!) and all the pro players who've seen it and played it say it's the most professional, best sounding low-priced bass they've ever played. It's an original and it's in the same price range as the low-cost copy models."
Dan's philosophy (which one assumes is that of the company generally) is summed up simply.
"In the past we had problems because we didn't listen to what the people wanted. What we have at Fender now is a team of people who do listen to what people want — and it's going to continue that way."
Maybe scepticism about large companies is natural. Maybe it's even justified in 99% of cases — a reasonable attitude to take to any large concern when dealing with it on any level you care to name. But, somehow, I got the feeling that Dan was telling the truth and I'm certain that his enthusiasm was genuine.
I also talked with Paul Revera (Dan's opposite number on the amp side) and found the same willingness to admit that there have been problems in the past but he too had an almost religious fervour about the future of Fender.
Whatever does transpire over the next few years, there are going to be big changes and my hunch is that they'll be changes very much for the better. Watch this space for a few years and see if I'm right. Either way, the determination is there!
Feature by Gary Cooper
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