When Is a Company No Longer the Same Company?

[mep]

Some audio customers are very brand loyal and once they find a brand they love, they tend to stick with that company through the years. As we all know, companies change hands, sometimes on favorable terms and sometimes not. What happened at Krell is the latest example I can think of when the principal of an audio company loses control of his company and is shown the door.

Some audio companies have one chief engineer who designs all of their products and sometimes that is the person who started the company. David Manley and VTL come to mind as an example. I’m pretty sure that David Manley designed all of VTLs products up until the time that father and son parted ways. Meanwhile back at the ranch, David Manley had already started his Manley line of audio gear before he split with his son Luke. After that David gets divorced and leaves the country and now his ex-wife Eva is running Manley. Is VTL still VTL without David? Is Manley still Manley without David? Are both companies standing on the shoulders of the products that David originally designed or are they building new products that David would never endorse if truth be told? And I ask that not presuming to know the answer.

And now let’s use Mark Levinson as another case point. Mark Levinson lost control of his namesake company because he deserved to lose control of his company. I think Mark Levinson has run every company he ever owned into the ground, but that isn’t the point. So Mark Levinson loses control of his namesake company, but people still believe the heart and soul of the products are still alive in the first reincarnation of the company. There no doubt was a group of talented engineers who designed their products and those products received many rave reviews. Mark Levinson gets sold again to Harman, the *original* factory is shut down and production moved to Indiana I think. Did any of the engineers who were responsible for the Mark Levinson products that received rave reviews stay with the new owners or were they all shown the door? Now that we are two owners removed from the original company, what is Mark Levinson now?

And I could say the same things about Krell. I don’t know if Dan designed all of the Krell products or if he had a team of engineers. One thing for sure was that Dan had a vision of what his company was and what it represented in the marketplace. Now that Dan is no longer with Krell, is Krell still Krell or is it just a name that represented value to the new owners?

I could flip over to speakers and come up with many examples as well. Martin Logan and JBL to name just a few. Same deal here. My question is when does a company really cease to be the company that caused you to buy its products originally? Does it even matter? William Z. Johnson has passed away and ARC was sold even before his death. I don’t see that anyone is proclaiming ARC’s new products to be inferior to what came before.

 

[Johnny Vinyl]

Deep thoughts there Mark! Not sure if I've ever given any of that much thought when considering a product, unless the quality took a nose-dive after the transition. Are there any examples whereby a change in ownership has upped the quality?

 

[puroagave]

Mark, ive met everyone on your list over multiple CESs. for sure Krell and Levinson have left their purest 2-ch roots. i owned ther older products which is to say im not a candiate as a future customer for their current offerings. I met David and luke Manley at their first US CES in '87, i miss his prolific sense of building something for everyone in a multitude of flavors. Ive owned everything from the tiny triodes, to PP 300bs and 300 watt monos and probably a few i've forgotten. both VTL and Manley have strayed far from this philosphy. with bill johnson deseased and ARC now owned by an Italian holding company by faces id never recognize, to me ARC is now just another company that makes tube gear, i couldnt tell you if they still have a house sound or not.

 

[Bruce B]

Are there any examples whereby a change in ownership has upped the quality?

Yeah.... Genesis. I know Arnie did a fine job, but Gary has taken it to an even higher level!

 

[audioarcher]

Yeah.... Genesis. I know Arnie did a fine job, but Gary has taken it to an even higher level!

I agree. Gary has done a great job.

It helps when the person taking over an audio company is passionate about audio. When a large corporation takes over who knows what will happen.

 

[Bill Hart]

MEP, i think it is one variable, but it is impossible to generalize. What of designers that hung in there, and the companies didn't improve the gear as time went on, perhaps because they lacked the capital that usually comes with those buy-outs and mergers?
Among the examples you cite, Levinson hasn't been at ML for decades, right? And the company did produce some highly regarded gear over the following years (although I don't know the Levinson stuff well). Ditto, re Manley and VTL. ARC went through a 'white' period when WZJ was still at the helm, when the amplification was not as musical. It has since regained its sonic footing and has good street credibility. (In fact, there was a period when its stuff was considered very expensive; by today's standards of SOTA, some ARC gear is almost a bargain).
In Ferrariland, some folks think real Ferraris died after Enzo sold the company to Fiat, although they made some great cars after that, and others think that the company was no longer the same after Enzo died, but they continued to make great cars after that.
One of the dilemmas is that some of the outre stuff comes from small companies that have uneven distribution and may not have the greatest support. Not that a big influx of cash guarantees commercial success, but the corporate changes are an almost necessary part of growing a company, and in the process, the company changes, its culture becomes different and its goals may change as well. (I'm trying to think of examples of 'high end' companies that became more commercial and less credible in the process).
Interesting question, though. Having said all that, I realize that most of my components come from smaller, single person driven operations (Lamm, Allnic, Kuzma).

 

[Bruce B]

Just like when Ford bought Jaguar. They certainly went downhill after that!

 

[A.wayne]

Yeah.... Genesis. I know Arnie did a fine job, but Gary has taken it to an even higher level!

Agree ....!

I liked what Gary has done to the line , the entry level speakers are vastly improved , frankly under Nudell there was the GEN1 a very serious speaker and then nothing....

IMO Gary has done a fantastic job ...

Regards ,

 

[Bill Hart]

Just like when Ford bought Jaguar. They certainly went downhill after that!

Jaguar was hardly a model of reliability before Ford, much as I love the E type and the old XK-120-150.

 

[audioarcher]

Jaguar was hardly a model of reliability before Ford, much as I love the E type and the old XK-120-150.

That's for sure! Their looks have gone down hill though. If they don't have their look then what do they have?

 

[treitz3]

An overpriced Ford.

Tom

 

[Mosin]

All this begs yet other questions. What happens to a company when the original guy stays the owner?

Let's say a guy has a vision that produces a stellar product that gets raves from everyone. Isn't he like that rock star out there who feels the pressure to produce another hit? What if he can't do it? Is he a one hit wonder, or does he tweak the same idea over and over again, but with a different face? Which is his best product, the first one, the third, the tenth? Where does real innovation stop and market hype begin? How does he address dealer demands when his heart isn't really into what they are demanding? What if he burns out? Does he continue to go though the motions and become just another market whore, or does he sell out his business? When you consider that we are involved in a hobby where many enthusiasts are driven by an emotional need to improve their equipment frequently, these are valid questions.

I have met quite a few manufacturers, and most are small ones like me, but almost all of them have run the questions I mentioned through their minds at one time or another. Still, most are true enthusiasts who will never run out of ideas in their lifetimes. There are quite a few exceptions, however. I know some who just go through the motions, and I know some who see it as just another business. Some were extremely talented before they became disillusioned, or right before things were repossessed. It is a hard business that is fickle in nature, so it is in the best interest sometimes to sell the place, and sometimes a fresh face can rejuvenate that enthusiasm before the name becomes a footnote in history. So, at the end of the day you have a bunch of companies, and only a few people, if any, really know the mindset of the owner, whether he started the place or bought it last week. At least, that's my take on it.

 

[audioguy]

Theta was an active high end audio player until the company was sold. They, then, could not seem to get out of their own way in upgrading their SSP to incorporate the newer technologies and still have not released their SSP with room correction.

This is not to suggest they don't have good products !

 

[mep]

Good points Win. Mike Elliott lost Counterpoint because the bank called in their loan which forced them into bankruptcy. Mike started a new *company* Aria and those products never really took off. Mike sold lots of people on the idea that he was going to design and build a new super preamp and had customers pay money up front in order to finance the design while waiting years for the preamp to become reality. The end product was really based on the Counterpoint SA-5.1 preamp IMO. It really wasn't a ground-up new design.

Many companies fail because they are under-capitalized to begin with. Others fail because their products either don't compete in their price categories or they are just bad designs. I do think the great designers of audio gear are visionaries for their companies and the products they create. When the head visionary leaves, do the products march on to a new beat and lose the identity of the original designer/owner or does the *new* company have really talented engineers that carry the torch forward that was passed (or taken)?

I believe Bob Carver was another talented designer that lost the rights to his name. Without Bob Carver designing Carver products, what did you really buy? Regardless of your feelings for the merits of Carver designs, there is no doubt the man is a brilliant engineer who I don't think would be easily replaced with regards to his innovation skills. On the other hand you have SOTA turntables that are now owned by new people in Illinois. The original designer of SOTA tables is still involved with them from what I understand and that would give me some comfort if I was in the market for a SOTA table. I guess my point is that I believe at some point when a company changes hands (and in some cases several times) and the head engineer responsible for designing the company's products is out of the picture completely, all you are buying is the name as a customer because the original *soul* is gone.

 

[jazdoc]

Win and mep make a great point -- in high end audio you are usually purchasing the person as well as the product. It's worth taking time to get to know the person (or at least their reputation) behind the product before purchasing.

 

[audioarcher]

If you don't want to loose the rights to use your own name then don't name the company after yourself. Running a successful company is tough. All good things come to an end eventually.

 

[audioarcher]

An overpriced Ford.

Tom

Sounds about right.

 

[treitz3]

Well, Bob didn't exactly lose the rights. He sold the rights....and got paid dearly for it. It was then that it was run into the ground, with IMO the Lightstar products being the only designs that were completed and subsequently put into production that actually sounded good.

Tom

 

[A.wayne]

Jaguars were great cars when compared to their 1960's contemporary's ....

carver's ..?

 

[audioarcher]

Well, Bob didn't exactly lose the rights. He sold the rights....and got paid dearly for it. It was then that it was run into the ground, with IMO the Lightstar products being the only designs that were completed and subsequently put into production that actually sounded good.

Tom

Well there is that. I think Bob has done well for himself over the years. Whatever works.