This was gleaned from an article published in April. I forgot where I found it, somewhere on the industry news.
Owned by Fender corporation, Ovation has closed its only US factory and is moving to cheaper production facilities in Asia.
Sadly, 46 employees will lose their jobs after the company decided to close the plant because of “current market conditions and insufficient volume levels” (to be read as “labor is cheaper overseas and that is where we will go”), the company said in a statement.
Ovations will continue to be manufactured outside the U.S., Fender spokesman Jason Farrell said Wednesday. He said Fender also builds Ovations in China, South Korea and Indonesia.
I have one of those Ovations built in Asia. They commonly sell for $300 or so. That guitar lives in my attic waiting to be round filed. It was unplayable after about 8 months of ownership. Pretty sad.
Labor costs are the driving force of this outsourcing. How to balance making a living with the cost of production is the issue. Consumers, i.e. musicians, want low cost products and for large companies there must be cheap labor to make low cost products, hence outsourcing of US jobs.
The US guitar industry is moving more and more each day to a consolidated monopoly of Fender and Gibson and Asian contract production where labor is cheaper. Outside of a few smaller companies like PRS, they own almost all of what is considered to be the US guitar manufacturing industry. Even PRS has been using Asian makers for years to boost their sales as their business is so big they have to have a high price to cover manufacturing costs. That’s just the way business is.
However, on the bright side there are small boutique builders out there like us with low overhead who can hand build you a fine guitar at an affordable price. Made in USA instruments at affordable prices are still possible for small companies.
I encourage guitars players to buy from the boutique and small builders like us when you can to support the industry in the US. By doing so you create jobs for your neighbor and you will typically get a better instrument!