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Cort Guitars , Korean Guitars .

mingw posted a very interesting video on jamtank .

Okay , no need to watch . Basically , the video is about how CORT guitars mistreated their employees .

also see :
http://cortaction.wordpress.com/

Anyway , here is what i think . How it all started .

In the beginning , Ibanez , Schecter , LTD and other famous guitar brands gave projects to Cort (Korea) Plant to manufacture guitars for them (OEM) .

OEM (original equipment manufacturer) refers to companies that make products for others to repackage and sell.

Soon , Korean made Ibanez , Schecters , LTDs hit the market …all of it were priced between 400USD-800USD , depending on the specs and the company of course .The standard of living and the cost of living in South Korea increases every year . That includes materials , wages and salary etc. As it increases , Korean guitars became more and more costly to produce , as compared with Indonesian guitars or China made guitars ( lower standard of living , lower cost ).

How do you counter this problem ?

To counter the problem , you need to perform and excel. Show the world that the prices of your guitars are entry level prices, but the quality matches up with the top brands in the world . After gaining respect from the world , you can increase the prices of your guitars, along with the increasing costs of the guitars.

Japan for instance , initially , in the 70’s they were OEM for American Companies , they made entry level guitars . But overtime , the Japanese learned and showed the world that THEIR GUITARS HAVE QUALITY , and the price is cheaper too . The Americans actually felt threatened by them , that is why you hear alot of “lawsuit Japanese guitars”. At that time ,  people were actually buying Japanese Guitars over the American Guitars . Don’t believe me ? Ask an old uncle who has been playing for 40 years .

Today , Japanese Guitars has a place of its own . I am talking about World class reputation , high quality prestigious guitars. A Japanese Strat in the 70s , started with the price of 350-400 USD . Today , a common Japanese guitar cost around 1000 USD - 2000 USD. For example , the Ibanez JEM . Some brands such as Greco Zemaitis , Caparison and ESP can even go up to 4000-5000USD .

Korean made guitars failed to do that .

What Korean guitar showed was that their quality was SLIGHTLY better than China and Indonesia .Thats it .Nothing extraordinary , nothing fantastic . They didn’t move up with the rising cost and the inflation .

Maybe they DID have the quality after all , but their marketing failed them .

Or worse ,  maybe guitar players around the world are heavily influenced by Gibson , Fender , Ibanez , American made , Japanese made marketing .

Back to the story

As their cost increase, Ibanez , Schecter , LTD started doing their research . They realized that they CANNOT increase the price of their Korean made guitar to 1500 USD because people won’t pay for it . People do not value Korean made guitars that high.  Guitar companies HAVE to maintain the price of 400-800USD to sell .

An example, Ibanez SA2020FM Prestige . It was one of the few Ibanez prestige guitars that was MADE IN KOREA , and guess what , it failed . People don’t buy . That guitar was a market tester . It went back to Ibanez’s JAPANESE factory . Today , this guitar is made in JAPAN .  I remember this clearly , because at that time (i think it was 2004) , i went to Bentley and saw it. i was the kid who was making noise on why the hell are Ibanez prestige made in Korea.

Ok , back to Guitar Companies and Korean Factories .The problem is they cannot increase price , the rising cost, and lesser profit . The only solution was to find a cheaper alternative . The move initially was to lower the quality of a Korean Made Guitar , but it didn’t help . China and Indonesia Factories WERE THE ANSWERS .What happened next ? Korean Guitar Factory has no more projects. Everything has been taken over by the Chinese and the Indonesians . Epiphone started the trend by shifting their Korean Plant to China .

When a company (or subsidiary company ) is out of project , they will do ANYTHING for survival ; and that includes treating workers badly , cutting pay , forcing overtime etc ..Logic isn’t it ? Cutting unnecessary cost and be more efficient . An example would be , replacing 2 female workers with a capable male worker .

Then the whole thing screw up . Workers start getting pissed off and they are not happy . So who is at fault ? The owner ? Yes but not entirely. He only speak to his managers, not the workers . The workers who didn’t make good guitars ? No , i think the Koreans did a great job .Maybe it is the whole industry itself . A sinking boat .

China is learning . They realized they WILL be in trouble like the Koreans . (upcoming factories in INDIA , Vietnam ) That is why today , you will see HIGH END GUITARS that are made in China . For Example , Schecter Synyster Gates Custom , Dean from Hell , Washburn , Fernandes , Brian Moore , going for USD1000-1500.

Lesson ? Simple . The prices of guitars are INCREASING every year . No , not the low end ones , but American and Japanese made guitars . Last time , in the 90’s, you can get an American made Fender Standard Stratocaster for 799 USD . Today , 2010 . Its 1149 USD .Hell , in 2004, i bought my Mexican Made Fender at 349 USD . Today it is at 499 USD already .

No . I am not condemning China made guitars . In fact , some of the nicest acoustic guitars that i’ve played are from China . Heck , my Fernandes Ravelle is China made !! China is slowly building its reputation in the industry .

Soon , when China made guitars start to gain respect from the world , China will start pricing their guitars at 1500-2000 USD (which is happening),  Japanese Guitars and American Guitars are forced to increase double or triple the price . Doesn’t make sense if an American made guitar is the same price with a China made guitar , right ?

Hope this post helps you to see a bigger picture.