rAVe Exclusive: Mackie and EAW Chinese Factory Shuts Down – Unexpectedly

There have been rumors swirling for months now that EAW and Mackie were in trouble due to a factory closing in China that they did not plan; the factory supposedly just shut down one day without notice.  Well, we went straight to the CEO of Loud Technologies (the parent company of Mackie and EAW, among others) Rodney Olson, and asked him to tell us what happened – no rumors here, just facts:

rAVe:  What happened to the factory in China? 

Olson:  In late Q4 2008 we learned that one of our suppliers in China that produces certain Mackie and EAW products discontinued production due to difficulties that supplier was experiencing. The good news is we were already securing additional production sources for products manufactured by this supplier prior to the closure due to a backlog of orders that continued to grow through most of 2008.

rAVe:  Did it only affect Mackie and EAW?  And, were other industry players affected?

Olson:  No.  It is very important to note that production of the rest of the Mackie and EAW product lines, as well as all Alvarez, Ampeg, Blackheart, Crate and Martin Audio products were not impacted by this facility’s closure as they are produced at other manufacturing locations. We cannot comment on impacts the closure may have had on other companies as we have visibility only over our own business.

rAVe:  What is the effect on shipments today?

Olson:  We have made significant progress in restoring stable and ample supplies of the affected products. In fact, we have added three new contract manufacturers to our worldwide supply chain and have restored production for large portions of the affected product. Lines for EAW KF & SB touring loudspeakers, EAW JFL compact line arrays and Mackie MR and HRmk2 studio monitors have been up and running now for two full months and we are rapidly catching up with the very strong worldwide demand for these products that we were not able to meet with our prior supplier. We will continue to add lines for other products every few weeks until supplies are stabilized.

rAVe:  Was the shutdown economic related or something else?

Olson:  As stated in our 8K dated 12/17/08, the facility closed due to difficulties they were experiencing. We are not in a position to speculate over the cause.

rAVe:  Is there anything else you want ProAV integrators to know?

Olson:  While the closure will create short-term shortages of the affected products, the good news is we?re quickly fixing long-standing supply shortages and inconsistent deliveries that limited our growth, and our dealers? growth, for quite some time. LOUD will emerge from this period in a very strong position. We have a well-diversified portfolio of brands with leadership positions in both the MI and Pro markets, a streamlined and focused organizational structure and a more efficient and disciplined operating budget. And when you combine all of that with what will soon be a very stable and high-capacity supply chain, there?s no question we will succeed.

LOUD Technologies can be found on the web here.