Rickresource Rickenbacker Forum

Thanks for setting the record straight, John.

johnhall wrote: Yes, we did raise prices partly to try and bring demand and supply into some kind of equilibrium. The overseas currencies had risen so high against the dollar that foreign distributors were placing orders for hundreds of instruments at a time trying to lock in their orders for years to come. This just strangled production and making it difficult to get goods in the U.S. But the other part of it is been some rather large cost increases, especially for metals, finishes, insurance, and energy.

Interesting, I never thought of the investment from overseas buyers of trying to lock in orders while the dollar is low vs the Euro etc. And it makes sense, it is almost like investing money in actuality as by the time the instrument are delivered they would be worth considerably more than the initial investment most likely. Even if you priced the instruments in foreign currency, it could come back to bite you in the rear by the time shipping came with international exchange rates.

Indeed, manufacturing costs in the US has skyrocketed across the board. For anyone that works in fabrication working with alloys you would know that brass, copper and bronze in particular went up anywhere from 200-300% over the past 2-3 years. Stainless, aluminum, cold and hot rolled steel, as well as cast iron has gone up considerably as well. I do not work in wood or chemical finishes as Ric does, but I am sure the costs have gone up as well with the increase in oil prices alone.

Simple views from the outside typically are "Why not just make another factory?" But in all likelihood, the complexity of doing that may over complicate the efficiency you are looking to address in the first place. The decision to expand your company involves investments in property, employees, industrial supplies, offices, machinery, warehousing, producing duplicate fixtures and dealing with possible transportation issues from one to the other in some cases. Not to mention manufacturing space in the So Cal area is probably not easy to come by.

A lot of companies that decide to expand in such a manner do it because if they do not they are likely to lose their market share to a company that can produce sufficient quantities. In the case of Rickenbacker, they are in a unique position where this is not the case.

Anyway, that is my 2 cents. Thanks for chiming in John.

johnhall wrote:Sorry, but we just had to shut down the San Jose factory in order to limit the market and drive demand up.

Man! He beat me to it.

Gotta be quick, Kenny.

Darkhollow wrote: ...Simple views from the outside typically are "Why not just make another factory?" But in all likelihood, the complexity of doing that may over complicate the efficiency you are looking to address in the first place. The decision to expand your company involves investments in property, employees, industrial supplies, offices, machinery, warehousing, producing duplicate fixtures and dealing with possible transportation issues from one to the other in some cases. Not to mention manufacturing space in the So Cal area is probably not easy to come by. ...

Adding another shift would be much cheaper but the time it would take to bring new employees up to speed would certainly slow down the existing workers during the training period. Adding the cost of employee benefits could also add to the products price.

johnhall wrote:Sorry, but we just had to shut down the San Jose factory in order to limit the market and drive demand up.

I am happy that I was able to tour that factory before it closed down.
Very few people knew about it.
Guitars made on the laps of young virgin maidens.
T'was a sight to behold.

jwilli wrote: Guitars made on the laps of young virgin maidens.

And strings rolled on their, erm, thighs...<<sigh>>

What?????/ No cee-gars???

Not allowed in a wood shop, Howard...it's a safety thing...

I wonder if they had a position in the Quality Assurance department for 'knobtwister'...

beatlefreak wrote:Welcome to the forum. For a guitar that is still largely hand made in America, the current prices for new Rickenbackers is good value for the money.

+1

ozover50 wrote:What?????/ No cee-gars???

Ahhhhh, you remember that picture I sent you!

Indeedy I doody, JA!!!

The whole idea of a second shift is anathema to RIC, and it is only partially due to bringing new workers up to speed, which is, after all, only a matter of time.

A major issue is the Hall family's connection to the business. Quite simply put, they are the business.

A second shift would have to run without the Halls on premises. I can't see this as being a positive situation, all things considered.

A second shift has been discussed through the years and we even did so for some time in the old factory. However, it's not an attractive proposition for a number of reasons, even beyond the recruiting and training of the people necessary to operate a shift. The security of the building simply isn't adequate, insurance costs rise, new air quality rules come into play with expanded hours, and energy costs rise dramatically. (There is some offset to the cost of electricity as it's cheaper at night, but you're still using much more of it in total for lighting and climate control.)

The facility poses no pressing limitations for increased employment; I'd guess we could double the number of employees, maybe even to 150 people before things would get unbearable. Parking might be pretty nasty though!

Thank you.