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Company Profile of Fender Musical Instruments Corporation

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Company Profile of Fender Musical Instruments Corporation
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Pratik Kukreja
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Company Profile of Fender Musical Instruments Corporation - May 5th, 2011

Fender Musical Instruments Corporation of Scottsdale, Arizona is a manufacturer of stringed instruments and amplifiers, such as solid-body electric guitars, including the Stratocaster and the Telecaster. The company, previously named the Fender Electric Instrument Manufacturing Company, was founded in Fullerton, California, by Clarence Leonidas "Leo" Fender in 1946.[1] Leo Fender also designed one of the first commercially successful solid-body electric basses, the Precision Bass (P-Bass), which has become known in rock, jazz, country, Motown, funk, and other types of music.
The company is a privately held corporation, with the controlling majority of its stock owned by a group of its own company officers and managers. Larry Thomas is Chief Executive Officer and James Broenen is Chief Financial Officer.
Fender's headquarters is in Scottsdale, Arizona with manufacturing facilities in Corona, California (USA) and Ensenada, Baja California (Mexico).

In 1996, Fender Musical Instruments Company was the leading maker of solidbody electric guitars with an estimated 50 percent of the U.S. market. The company, which marketed products under several brand names, including Fender, Guild, Sunn, Floyd Rose, Rodriguez and Squier, produced an estimated 1,000 guitars a day in more than 100 different colors and finishes.
Clarence Leo Fender, born in 1909 near Anaheim, California, never learned to play the guitar, but the company he started in 1943, which would become the Fender Musical Instruments Company, and the guitars and amplifiers he designed changed the course of popular music. Fender's reputation for producing quality amplifiers and electric guitars was already established in country music when rock and roll began to sweep the nation in the late 1950s and early 1960s. When early rock stars, including Buddy Holly, Jimi Hendrix, Eric Clapton and The Beatles, began playing Fender's brightly-colored guitars and basses, the company's success was ensured.

In 1964, Leo Fender, then 55, became ill and offered to sell Fender Electric Instruments to Randall, still his partner in Fender Sales, for $1.5 million. At the time, the company was producing 1,500 amplifiers, electric guitars, acoustic guitars, and other instruments per week, and was the largest exporter of musical instruments in the United States. Fender Electric Instruments employed 600 people, 500 of them in manufacturing.
Randall didn't have the resources to purchase the company himself but agreed to find another buyer. After talking with several companies, including the Baldwin Piano & Organ Co., Randall negotiated a deal with the Columbia Broadcasting System. On Jan. 5, 1965, CBS announced that a subsidiary, Columbia Records Distribution Corp., had purchased Fender Electric Instruments and Fender Sales for $13 million. The press release noted, "The Fender guitar is considered the outstanding instrument of its type by both professional musicians and amateurs." The new Columbia Records division was known initially as Fender CBS, but that was changed to CBS Musical Instruments in 1966, as it acquired other companies, including Steinway & Sons and flute maker Gemeinhardt Co.
CBS began making changes almost immediately. Fender Electric Instruments had expanded haphazardly over the past 20 years until it occupied 29 buildings scattered throughout Fullerton. To consolidate operations, CBS announced plans to build a 120,000-square-foot, $1.3 million facility, complete with a dust-free air-filtering system. The building was completed in 1966. CBS also began sending efficiency experts to Fullerton to analyze how the former Fender Electric Instruments Company operated. White, who had been responsible for production since 1954, commented in his book, "We had been invaded by a horde of 'know-it-all CBS experts' at both Fender Sales and the factory."
Demoted from vice-president to plant manager with the takeover, White quit less than two years later in a dispute over the quality of an amplifier that CBS planned to introduce. He wrote, "I asked all of my key personnel to come to the conference room. I told them that I had too much respect for Leo to have any part in building something that was not worthy of having his name associated with it."
Many other longtime Fender employees also believed that quality was declining, as CBS cut back on product lines and produced few new models. Randall, who had become vice-president and general manager under CBS, left the company in 1969 but apparently more because of corporate politics than a concern over quality. White quotes him as saying, "Everybody at CBS was climbing the corporate ladder, stepping on everyone else's fingers as they climbed up. There was a tremendous amount of infighting." However, despite the management upheaval and concerns over quality, sales at CBS Musical Instruments almost tripled from $20 million in 1971 to nearly $60 million in 1981.
Meanwhile, Leo Fender had been retained by CBS as a consultant in research and development from 1965 until 1970, although according to White, CBS executives made fun of his ideas. In 1972, Fender's consulting business, CLF Research, began manufacturing stringed instruments for Tri-Sonics, Inc., a company formed by White and Tom Walker, a former district manager at Fender Sales. Tri-Sonics changed its name briefly to Musitek, short for Music Technology, before finally settling on Music Man, Inc., in 1974. Fender was named vice-president in 1974 and became president in 1975. The company was sold in 1984.
In 1980, Leo Fender and George Fullerton, another longtime Fender Musical Instruments employee who quit CBS, formed G&L Inc. to market instruments made by CLF. G&L originally stood for George and Leo, but when Fullerton sold out in 1986, receptionists began answering the telephone, "Guitars by Leo." The company was sold after Fender's death in 1991.

Fender offered the first mass-produced solid-body Spanish-style electric guitar, the Telecaster (originally named the 'Broadcaster'; 'Esquire' is a single pickup version)[2] the first mass-produced electric bass, the Precision Bass (P-Bass); and the popular Stratocaster (Strat) guitar. While Fender was not the first to manufacture electric guitars, as other companies and luthiers had produced electric guitars since the late 1920s, none was as commercially successful as Fender's. Furthermore, while nearly all other electric guitars then were either hollow-body guitars or more specialized instruments such as Rickenbacker's solid-body Hawaiian guitars, Fender had created versatile solid-body electric guitars. These guitars were and still are popular for musicians in a variety of genres. Many bands still use Fender guitars today. Some notable Fender players were Jimi Hendrix, Ritchie Blackmore, Yngwie Malmsteen, Waylon Jennings, Kurt Cobain, George Harrison, John Frusciante, Keith Richards, Bruce Springsteen, Hank Marvin, Eric Clapton, Mark Knopfler, David Gilmour, Charles Brown, and others.
The company also makes and / or distributes acoustic guitars, electric basses, mandolins, banjos, and electric violins, as well as guitar amplifiers, bass amplifiers, and PA (public address) equipment. Other Fender brands include Squier (entry level/budget), Guild (acoustic and electric guitars and amplifiers), SWR (bass amplification), Passport Tacoma, Jackson, Charvel, Gretsch guitars and collaborated with Eddie Van Halen to make the EVH guitars and amplifiers.
On February 11, 1994 the Fender manufacturing plant based in Ensenada, Mexico burned down. Fender President Bill Shultz decided to temporarily move production from the Mexico plant to the U.S. plant. These Fender guitars are fairly rare and can be identified by the unique serial number.
On October 28, 2007, Fender announced its intention to buy Kaman Music Corporation (owners of Hamer Guitars, Ovation Guitars, Genz Benz amplifiers, Gibraltar Hardware, along with many others, and exclusive distributor for Sabian cymbals and Takamine Guitars).
Other Fender instruments include the Mustang, Jazzmaster, Jaguar, Starcaster, Duo-Sonic, Telecaster, Stratocaster, Toronado and Bronco guitars; basses such as the Jazz Bass, the 'Telecaster Bass' reissue of the original 1950s Precision Bass; a line of lap steels; three models of electric violin, and the Fender Rhodes electric piano.

The company began as Fender's Radio Service in late 1938 in Fullerton, California, USA. As a qualified electronics technician, Leo Fender had been asked to repair not only radios, but phonograph players, home audio amplifiers, public address systems and musical instrument amplifiers. (At the time, most of these were just variations on a few simple vacuum-tube circuits.) All designs were based on research developed and released to the public domain by Western Electric in the '30s, and used vacuum tubes for amplification. The business also sidelined in carrying records for sale and the rental of self-designed-and-built PA systems. Leo became intrigued by design flaws in current musical instrument amplifiers, and he began custom-building a few amplifiers based on his own designs or modifications to designs.
By the early 1940s, he had partnered with another local electronics enthusiast named Clayton Orr "Doc" Kauffman, and together they formed a company named K & F Manufacturing Corp. to design, manufacture and sell electric instruments and amplifiers. Production began in 1945 with Hawaiian lap steel guitars (incorporating a patented pickup) and amplifiers, which were sold as sets. By the end of the year, Fender had become convinced that manufacturing was more profitable than repair, and he decided to concentrate on that business. Kauffman remained unconvinced, however, and they had amicably parted ways by early 1946. At that point Leo renamed the company the Fender Electric Instrument Company. The service shop remained open until 1951, although Leo Fender did not personally supervise it after 1947.
The first big series of amplifiers were built in 1948. These were known as tweed amps, because they were covered in the same kind of cloth used for luggage at the time. These amps varied in output from 3 watts to 75 watts. This period was one of innovation and changes; While Leo made a Tweed Princeton in 1948 for his Professional 8 string Lap Steel guitar [very short lived, as later he would focus on 6 string Student models] later the Princeton would become a push-pull class AB tube amp, in 1948 it was a single ended Class A amplifier similar to the Fender Champ, with the output transformer mounted to the speaker frame and bereft of any negative feedback. Also, in 1964, the Tweed Champ amp would be reissued in black tolex in small numbers along with the newer model with the slant front panel and controls; the stacked plywood boxes Leo used often went uninventoried. In late 1963, he found a couple hundred Tweed Champ chassis boxes in these bins. He had had them chromed and printed in 1958; being frugal, he built them in black tolex with a chrome and black Champ nameplate, as he had money tied up in them already.
Fender moved to Tolex coverings for the brownface amps in 1960, with the exception of the Champ which kept its tweed until 1964. Fender also began using Oxford, Utah and CTS speakers interchangeably with the Jensens; generally the speaker that could be supplied most economically would be used. Jensens and Oxfords remained the most common during this period. By 1963 Fender amplifiers had a black Tolex covering, silver grille cloth, and black forward-facing control panel. The tremolo was changed to a simpler circuit based on an optical coupler and requiring only one tube. The amps still spanned the spectrum from 4 watts to 85, but the difference in volume was larger, due to the improved, clean tone of the 85w Twin.
Fender owed its early success not only to its founder and talented associates such as musician/product engineer Freddie Tavares but also to the efforts of sales chief, senior partner and marketing genius Don Randall. According to The Stratocaster Chronicles (a book by Tom Wheeler; Hal Leonard Pub., Milwaukee, WI; 2004, p. 108), Mr. Randall assembled what Mr. Fender's original partner Doc Kauffman called “a sales distributorship like nobody had ever seen in the world.” Randall worked closely with the immensely talented photographer/designer Bob Perine. Their catalogs and ads — such as the inspired "You Won't Part With Yours Either" campaign, which portrayed people surfing, skiing, skydiving, and climbing into jet planes, all while holding Jazzmasters and Stratocasters — elevated once-staid guitar merchandising to an art form. In Fender guitar literature of the 1960s, attractive, guitar-toting teenagers were posed with surfboards and Perine's classic Thunderbird convertible at local beachside settings, firmly integrating Fender into the surfin’/hot rod/sports car culture of Southern California celebrated by the Beach Boys, beach movies, and surf music. (The Stratocaster Chronicles, by Tom Wheeler; Hal Leonard Pub., Milwaukee, WI; 2004, p. 108). This early success is dramatically illustrated by the growth of Fender's manufacturing capacity through the 1950's and 1960's.

Private Company
Incorporated: 1959
Employees: 600
Sales: $160 million (1995)
SICs: 3931 Musical Instruments

7975 North Hayden Road
Scottsdale, Arizona 85258

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