ML Production moving

[robertawillisjr]

Has the current ESL series been well recieved? Why is resale value of Summits are only about $1k higher than Prodigys? I even saw a Spire for about $1.5k more than a Prodigy.

I guess the new management has a lot to think about. Will they even want to keep ESL's in the line up?

 

[Hocky]

I haven't heard a lot of the older high panels to compare with, but I thought the Summit X that I demo'd was pretty damn good - certainly better than anything else that I demo'd under $20k. Of course, the CLX was amazing, but that is a given.

 

[MiTT]

I think there is a lot of speculation and even a note of panic being expressed in some of these posts. I tried to explain the rationale of why Martin Logan might eventually stop producing legacy components, but I certainly wasn't intending to sound any alarms.

The only statement that Justin (speaking for Martin Logan) said was...
Yes we will continue to provide replacement panels for some older models (just like we do now), but as time moves forward we simply can't support EVERY model, especially the older ones.

That doesn't sound very finite to me.

I'm suprised that anyone is talking about resale value on their speakers. Did any of us really get into Hi-Fi as an investment?

Yes, there will always be a market for the resale of used speakers (and amps, and cables etc.), but I really don't think that Martin Logan suffers from resale erosion any worse than any other component/brand overall. Do they make money from the sale of replacement panels? Likely yes. But is it at the same margin that they garner from the sale of other (new) products? I'd be stunned if it were even close. Again, drawing on my own experience from a somewhat similar production environment I'd guess that it's somewhere around 5-6% if that (and we make 48-53% on new product sales depending on mix). It's all about economies of scale and production planning.

Let's say that I make 15,000 of my Class R fixtures per month. I've got my suppliers to deliver the material as I need it knowing that I'm going to bring it in the building, build the fixtures, ship them and invoice them before the end of the month. My supplier knows what materials I need, so he buys raw material based on that product, plus all the others that he knows I'm going to buy. He factors in his lead time to me, shipping time etc and in the end I know exactly what I'm going to get, when I'm going to get it and how much I'm paying for it.

I get a call from Customer Joe Blow asking if I can send him 12 feet of the Rave fixture I discontinued in 2006. I need to see if the perforator still has the tool to make the blank. He does, but we used a heavier gauge back then, so he'll need to order different material than what we currently use, and since we haven't used that material in several years it's a 6 week leadtime from the mill with a minimum buy of 2000 lbs. I need 3 four foot sections with a combined weight of 20 pounds. OK, I'll take the 2000 lbs and hope to use it someplace else; my supplier will hold the material for me as part of my stocking plan, but if I haven't consumed it in 3 months he's just going to send it to me regardless (essentially it's now my inventory). Now I've got material, but I need to get it formed and painted. The form die hasn't been used since 2006 either, so somebody needs to go find that. They do, but now they need to know when I want to take my standard production down to fit it in. Well, I can't let any current orders go past due, so I guess I'll pay them a premium to come in over the weekend and run it. I finally get all my parts, but my own production schedule is at capacity, so I'll also have to have somebody work overtime to build it. See how I didn't make any money on it?

The other option is to just go ahead and make all the components and keep them around, but again, inventory doesn't generate revenue until you ship it and invoice for it. In fact it actually ties up your cash flow so that you can't make more of the things that do make you more money.

What's a manufacturer to do?

 

[zaphod]

i would happily send my penels to ML to have them reuse the stators in a refurb. i've been toying with asking ML if i could do that as i had some ideas about painting them to make them look more like screens for higher WAF.

 

[amey01]

tim, you make some good points. But i think amey01 is right. Your points are more applicable to a lower end, mass producer than to a maker of an expensive high end niche product. My fear is that this change in policy is just a small part of martinlogan's overall move toward becoming a more mainstream mass supplier of lower end audio components (think bose, klipsch, polk, etc.) than an exclusive high end audio company.

If your points were really relevant to this business, i think arc, cj, mac, soundlab, quad, maggie, etc. Etc., would have all come out with these policies limiting support of older models already. The fact that they persist in supporting all or most of their older products would strongly suggest otherwise.

For those members of this forum that have purchased higher end products from martinlogan (meaning those costing from $2,000 to upwards of $20,000 a pair), ask yourselves these questions:

If, when you bought your first pair of logans, you were told that your speaker had a limited life span (from ten to twenty years) and that the company making it would not necessarily support it when it died, how many of you would have plunked down the change for your logans vs. Exploring other brands? not many - one or two of our "more money than sense" guys only. Not a chance i would have bought them.

if you looked on audiogon and used values for the speakers from that company were a tenth of the retail cost after just a few years, would that impact your decision to buy them new at full retail cost?i would have thought "what's wrong" or "what do they know that i don't", then i would have used about 1/20th of my iq to deduce no resale = no upgrade = no buy!

how many of you, after purchasing your logans, have since purchased numerous other models of logans? yes recommended them to friends? yeswould this policy have changed your mind on those choices? i'm happy to wear the odd bad buying decision myself, but when i recommend to friends and family i see it as my reputation that has been tarnished for recommending a dud. Stay away from me if this happens - not much makes me more angry.

finally, for those that bought your speakers on the used market, would you have purchased those speakers for that kind of money if you knew it would be unlikely that you would be able to get replacement panels for that model? who would?

my point here is that if used prices don't hold their value, people are going to be less likely to upgrade from an older to a newer model logan. Right now, i can sell my summits for half what i paid for them if i want to upgrade to clx. If they were currently worth a tenth of their retail value instead of half, i certainly wouldn't be as likely to consider upgrading to the newer, more expensive model. And if used prices fall off a cliff, people are going to be unwilling to pay the huge retail markups for the new products.

These are the types of considerations that a company catering to the high end must take into consideration. They are not considerations for a company that focuses on selling mid-fi products to best buy customers. It seems pretty clear to me that martinlogan is in the process of transforming themselves from the former into the latter.



Actually, i would say they are trying to compete at a much lower level. They are forsaking the high end market in an effort to compete in a very crowded and probably diminishing home theater market that has much lower margins. I will be very surprised if this is a successful strategy for them.



There are way too many successful companies at the high end for me to buy into this notion. You were at rmaf. You saw all the niche companies with great products that are surviving just fine in this economy, as well as many of the large, established ones. (tellingly, martinlogan was not among them). Will the economy weed some of them out? Sure. It always has. But well-known companies with established reputations seem to be doing just fine. I haven't heard any rumblings about arc or mac or cj or wilson or soundlab or magnepan, etc. Going out of business because they can't compete in this economy. I also don't see any of those brands at best buy.

It really isn't a question of whether they have to do this to survive. This is a calculated decision to meet strict gross sales and profit objectives set by a parent company that has no clue or care about the high end audio industry. The fact that their current ceo has absolutely no experience in the high end audio industry is a huge clue in that regard. Just about every successful high end audio company i can think of is run by someone who has been in the business for decades. The decisions being made at martinlogan these days seem to be in complete disregard for the nature of the high end audio business and their long term brand reputation in that industry. They seem to be focused on increasing sales and profits at the expense of everything else they have become known for over the last thirty years.

++100.....

 

[amey01]

I get a call from Customer Joe Blow asking if I can send him 12 feet of the Rave fixture I discontinued in 2006. I need to see if the perforator still has the tool to make the blank. He does, but we used a heavier gauge back then, so he'll need to order different material than what we currently use, and since we haven't used that material in several years it's a 6 week leadtime from the mill with a minimum buy of 2000 lbs. I need 3 four foot sections with a combined weight of 20 pounds. OK, I'll take the 2000 lbs and hope to use it someplace else; my supplier will hold the material for me as part of my stocking plan, but if I haven't consumed it in 3 months he's just going to send it to me regardless (essentially it's now my inventory). Now I've got material, but I need to get it formed and painted. The form die hasn't been used since 2006 either, so somebody needs to go find that. They do, but now they need to know when I want to take my standard production down to fit it in. Well, I can't let any current orders go past due, so I guess I'll pay them a premium to come in over the weekend and run it. I finally get all my parts, but my own production schedule is at capacity, so I'll also have to have somebody work overtime to build it. See how I didn't make any money on it?

I certainly see your point - even for high-end speakers. What differs though, is that the panels are consumable. It should come as no surprise to ML that people are going to need replacement panels.

They may discontinue the speaker, but the panel, the consumable, is not discontinued.

Managing this is all part of the high-end business. A prudent company would design their product range around this. I see evidence of this from ML as well, since the Sequel, Sequel II, SL3, Ascent (and Odyssey?) all use the same panel.

The other option is to just go ahead and make all the components and keep them around, but again, inventory doesn't generate revenue until you ship it and invoice for it. In fact it actually ties up your cash flow so that you can't make more of the things that do make you more money.

Manage the supply as they will - it's all part of running a high-end audio business. And one reason why we pay so much for our 'Logans. I guess that's why some people here are placing great importance on someone who understands high-end audio heading the company rather than a chimney sweeper!

 

[Hocky]

On a relevant note, Ferrari will remanufacture any part for any car that they built in their entire history if you call them and write the check. Even for 1/1 cars.

 

[tonepub]

On a relevant note, Ferrari will remanufacture any part for any car that they built in their entire history if you call them and write the check. Even for 1/1 cars.

Well, Duh.

It's a little bit different getting a $40k windshield for a 3million dollar bespoke Ferrari than it is getting a pair of replacement panels for a pair of Aerius speakers that cost $2000 new.

I think it's crazy to expect a speaker mfr to still make drivers 20+ years later if there's no demand. Knowing ML, I'm sure they will continue to make panels for the most popular speakers. It's all about demand.

And how many people actually keep a pair of speakers for 25 years? Probably a pretty small percentage.

 

[cyclone]

I think there is a lot of speculation and even a note of panic being expressed in some of these posts. I tried to explain the rationale of why Martin Logan might eventually stop producing legacy components, but I certainly wasn't intending to sound any alarms.

The only statement that Justin (speaking for Martin Logan) said was...
Yes we will continue to provide replacement panels for some older models (just like we do now), but as time moves forward we simply can't support EVERY model, especially the older ones.


That doesn't sound very finite to me.

I'm sure ML is monitoring this forum they haven't said anything to calm the fears of them possibly discontinuing the panels.

 

[cyclone]

I think it's crazy to expect a speaker mfr to still make drivers 20+ years later if there's no demand. Knowing ML, I'm sure they will continue to make panels for the most popular speakers. It's all about demand.

And how many people actually keep a pair of speakers for 25 years? Probably a pretty small percentage.

I would think there is a pretty high percentage of the original Logans out there still.

 

[amey01]

I think it's crazy to expect a speaker mfr to still make drivers 20+ years later if there's no demand. Knowing ML, I'm sure they will continue to make panels for the most popular speakers. It's all about demand.

But there IS demand because it is a consumable!

And how many people actually keep a pair of speakers for 25 years? Probably a pretty small percentage.

Not many. But as Rich said, we all damn straight expect to SELL our speakers when we've finished, not throw them in the rubbish!

More pertinent question is, what percentage of ML's speakers are still in service after 25 years. I'd say close to 100%, save those that have actually been damaged by fire/flood or otherwise specifically written off.

 

[Jungle Jack]

I think there is a lot of speculation and even a note of panic being expressed in some of these posts. I tried to explain the rationale of why Martin Logan might eventually stop producing legacy components, but I certainly wasn't intending to sound any alarms.

The only statement that Justin (speaking for Martin Logan) said was...
Yes we will continue to provide replacement panels for some older models (just like we do now), but as time moves forward we simply can't support EVERY model, especially the older ones.

That doesn't sound very finite to me.

I'm suprised that anyone is talking about resale value on their speakers. Did any of us really get into Hi-Fi as an investment?

Yes, there will always be a market for the resale of used speakers (and amps, and cables etc.), but I really don't think that Martin Logan suffers from resale erosion any worse than any other component/brand overall. Do they make money from the sale of replacement panels? Likely yes. But is it at the same margin that they garner from the sale of other (new) products? I'd be stunned if it were even close. Again, drawing on my own experience from a somewhat similar production environment I'd guess that it's somewhere around 5-6% if that (and we make 48-53% on new product sales depending on mix). It's all about economies of scale and production planning.

Let's say that I make 15,000 of my Class R fixtures per month. I've got my suppliers to deliver the material as I need it knowing that I'm going to bring it in the building, build the fixtures, ship them and invoice them before the end of the month. My supplier knows what materials I need, so he buys raw material based on that product, plus all the others that he knows I'm going to buy. He factors in his lead time to me, shipping time etc and in the end I know exactly what I'm going to get, when I'm going to get it and how much I'm paying for it.

I get a call from Customer Joe Blow asking if I can send him 12 feet of the Rave fixture I discontinued in 2006. I need to see if the perforator still has the tool to make the blank. He does, but we used a heavier gauge back then, so he'll need to order different material than what we currently use, and since we haven't used that material in several years it's a 6 week leadtime from the mill with a minimum buy of 2000 lbs. I need 3 four foot sections with a combined weight of 20 pounds. OK, I'll take the 2000 lbs and hope to use it someplace else; my supplier will hold the material for me as part of my stocking plan, but if I haven't consumed it in 3 months he's just going to send it to me regardless (essentially it's now my inventory). Now I've got material, but I need to get it formed and painted. The form die hasn't been used since 2006 either, so somebody needs to go find that. They do, but now they need to know when I want to take my standard production down to fit it in. Well, I can't let any current orders go past due, so I guess I'll pay them a premium to come in over the weekend and run it. I finally get all my parts, but my own production schedule is at capacity, so I'll also have to have somebody work overtime to build it. See how I didn't make any money on it?

The other option is to just go ahead and make all the components and keep them around, but again, inventory doesn't generate revenue until you ship it and invoice for it. In fact it actually ties up your cash flow so that you can't make more of the things that do make you more money.

What's a manufacturer to do?

Hello,
While I certainly did not buy my first pair of Martin Logans in 1997 as an investment, it was reassuring to know that the Speakers held their value quite well. A Speaker's value on the Used Market really does say something. Let's face it, many of us go through phases in regards to Speaker types. That being said, I have continuously owned Martin Logans since my purchase of Aerius i's in 1997 eventually culminating in going with an all Martin Logan HT that I currently have.

My previous HT, was ironically now, Paradigm Studio 100 V.2's Front and Surround, Studio CC, and Servo 15. Due to Paradigm's excellent resale value, it made it much easier to afford the Vantage, Stage, Vista, and Depth HT that I currently have.

Having the knowledge that through the replacement of Panels, you practically have a new pair of Speakers really was an appealing aspect to Electrostats. While a blessing and a curse I suppose that the Panels will at some point need replacement, prior to Justin's Posts I never even worried about Panels ever not being a 785 Area Code Phone Call away.

Customer Service really has been the hallmark of Martin Logan. Jim Power is a legend. I cannot think of any other Speaker Company where an Employee in his Position is so well known. Or known period.

Given the changes afoot, how can long time Owners and fans not be concerned about the changes? Aside from a quick reference to the Ethos, the products that Martin Logan have announced lately are the Motion Series and a redesign of the Dynamo Subwoofer Series. In addition to moving production of the "Handcrafted Speakers" away from the Hands of American Workers and announcement that Product Support for Legacy Models will be limited. And an almost doubling of the price of Replacement Panels.
Cheers,
ML

 

[spectral]

Who is driving ML design at the moment?

I'd like to diverge a bit... Who is currently driving ML's designs? Hope it's not the chimney guy. Unlike a lot of manufacturers that I can name, there is no hot-shot, big engineering brain, with audiophile yearnings, guy behind ML or is there??? Who is he, and what are his/her qualifications?

 

[Hocky]

Well, Duh.

It's a little bit different getting a $40k windshield for a 3million dollar bespoke Ferrari than it is getting a pair of replacement panels for a pair of Aerius speakers that cost $2000 new.

It is not crazy at all. In either case, the factory has to break normal routine to reproduce those parts and they charge accordingly. I don't have a Ferrari and don't know what their replacement parts cost, but that is irrelevant. Oh, and Ferrari has never built a $3m car..... I don't think the current market value is matters since that isn't margin that Ferrari will ever see.

Let's do some quick math here. Let's pick Ferrari's middle line car right now, the F430. MSRP is $190,000. An average middle line car is $30,000. The Ferrari is 6x more expensive. Conversely, let's look at a middle end ML vs any old middle end speaker. The Visa is $4300 a pair. A middle end speaker pair that most non-audiophiles would consider nice would be something like $400 from a big box retailer. The ML is over 10x more expensive.... who is really paying the premium? Just because the scale is different doesn't mean the premium isn't there.

 

[zaphod]

I would like a clear answer to my question posed last week.

Will Martin Logan publish End Of Availability (EOA) timeframes for panels before discontinued?

This will allow us to purchase replacement parts while they are still available. Thank you.

 

[Gordon Gray]

Hi Lance,

One concept.

Page 29 / Post No. 425.

GG

PS: Tim, given your expertise, is this a viable option?

 

[Craig]

i would happily send my penels to ML to have them reuse the stators in a refurb. i've been toying with asking ML if i could do that as i had some ideas about painting them to make them look more like screens for higher WAF.

I've seen stators painted colors other black by the custom shop. Although, I believe the are powdercoated but that is also available in other colors including grey if you want a custom look.

 

[Craig]

I would like a clear answer to my question posed last week.

Will Martin Logan publish End Of Availability (EOA) timeframes for panels before discontinued?

This will allow us to purchase replacement parts while they are still available. Thank you.

I don't know that ML is discontinuing building replacement frames. So far this seems to be just rumor started through speculation on this forum unless I missed something concrete.

One week ago I asked ML Customer Service about replacement panel cost for the CLS and they gave no indication that they were going away but they did mentioned they currently have a short backlog of orders.

 

[jtwrace]

On a relevant note, Ferrari will remanufacture any part for any car that they built in their entire history if you call them and write the check. Even for 1/1 cars.

That is not true. As a former employee of Ferrari, there are many parts for the classic Ferrari's that are simply not available. What we did depending on the country, was to have one of the custom shops make it. The manufacturer had NOTHING to do with it though.

Cars are interesting as Federal law only mandates 10yrs of parts service from the time of exit of the USA. At then end of the day, many older cars still have parts available becasue A. the company is still in business...still wanting to service the older models and B. the money is in the parts / service NOT ON THE SALE OF THE CAR.

 

[zaphod]

Hi Lance,

One concept.

Page 29 / Post No. 425.

GG

PS: Tim, given your expertise, is this a viable option?

hmm, missed that one Gordon - i like the idea. right now i'm looking at buying two sets. that should do me for 30yrs or the electronics go kersnap