The Hollowing Out of American Manufacturing
Kalamazoo, Michigan Writ Large
I grew up in Kalamazoo, Michigan, two houses down from the Sweitzers. Mr. Sweitzer worked at the local Gibson Guitar factory, and he would arrive home from work each day at around 3:50 p.m. and his dinner was to be on the table by 4 p.m. Near as I could tell, it always was. I was always envious of the extra post-dinner play time this early eating allowed.
Then one day the Sweitzers started eating at 5 pm and I soon learned why: Gibson had left its Kalamazoo birthplace in America’s industrial heartland and moved to Memphis, Tennessee (presumably to avoid unionization and to reduce wages). A part of my town went with it.
I just learned that Gibson Guitar will soon be returning to an industrial heartland, but in China’s Liaoning Province this time. Gibson just purchased China’s third-biggest piano maker, state-owned Dongbei Piano Group. Our international lawyers have lately been seeing more American and European companies getting their start at doing business in China by buying existing China companies/facilities.
The company will be renamed Baldwin-Dongbei Piano & Musical Instruments Company, incorporating the Baldwin piano name already owned by Gibson. Gibson already produces around 150,000 guitars a year from a factory in Qingdao and it has a marketing office in Shanghai. Gibson also makes its cheaper Epiphone guitar line at a factory in southern Guangdong Province.
Gibson Guitar’s Future and the Future of Global Manufacturing
I have no doubt that this move to China will further reduce Gibson’s wages and I also have no doubt that this location will not be permanent either.
I wonder what time the Dongbei workers will get home from work, and I wonder when Gibson will move its Dongbei factory to Vietnam or Thailand.