Foreign Deal Puts Steinway on Defensive

AT the venerable Steinway & Sons piano company, officials are scrambling to the firm's defense after a Japanese piano manufacturer announced last month it will be making pianos designed by Steinway. Controversy over Steinway's new relationship with Kawai Musical Instrument Manufacturing Company comes amid furor over a Wall Street Journal article and syndicated Los Angeles Times reports that suggest slipping standards at the 183-year-old company, famous for its craftsmanship and high-priced pianos.

Steinway officials staunchly deny the charges and have embarked on a damage-control campaign regarding the Kawai connection, claiming "gross inaccuracies" in reporting. "There isn't a blade of grass that has changed or will change" in the hand-crafting of pianos at Steinway's New York and Hamburg factories, says president Bruce Stevens in a phone interview.

Steinway Musical Properties, the parent company that owns Steinway & Sons as well as flute and string instrument manufacturers, has formed a new division called the Waltham Piano Company, which next year will begin distributing a line of mid-priced pianos designed by Steinway engineers and mass produced in Japan by Kawai. Though the new piano line does not have a name yet, it will not be called Steinway or Kawai, officials say. The pianos will be sold exclusively by Steinway dealers.

"We recognized some time ago that our dealer network throughout the world had a real need for a good-quality, mid-priced piano line," says Mr. Stevens. The price of Steinway grand pianos ranges from $20,000 to $60,000. Waltham's grand pianos will be cheaper - most likely $14,000 to $18,000, estimates one dealer. Competing brands would include models made by Yamaha, Young Chang, Samick, Baldwin, and Kawai.

The high quality of the Waltham piano will set it apart from other brands, says Frank Mazurco, vice-president of sales and marketing for Steinway. "There'll be nothing else like it."

Stevens says the Kawai connection will not hurt Steinway's reputation, adding, "we're comfortable with what we've done." The new line is not an "extension" of Steinway & Sons, Stevens says. Hand-crafting a piano in the Steinway tradition, which takes nearly two years and incorporates more than 100 patents, could never be accomplished on an assembly line, he says. "You can't build a mid-price piano that way."

KAWAI, a piano company founded in 1927, produces about 100,000 pianos a year (compared to Steinway's 5,000 a year) and has factories geared for mass production. "Some elements of [the Waltham piano] will be mass produced," says Stevens. "It is altogether a different product and different market area." Mr. Mazurco says the pianos will have different scale designs from Steinway or Kawai pianos, and the keyboard action will not have plastic parts, like mass-produced brands. The pianos will, however, have t he high-gloss, polyester finish typical of Asian models.

"I would want this piano very much," says Paul Murphy Jr., a Steinway dealer in Boston, who also sells Young Chang, Sohmer, and Steinert brands. He plans to offer the line to his customers as soon as it is available. The economic recession in New England has hit potential Steinway buyers hard, he says. Murphy predicts the new mid-priced pianos will "sell out."

But at Sherman Clay Pianos in Los Angeles, Steinway owners phoned in voicing alarm over the initial news of Steinway's agreement with Kawai. Some customers even wondered whether they should buy a Steinway piano before the company "goes Japanese," says David Ida, store manager. Steinway "is considered an American treasure, one the last bastions of American supremacy." Mr. Ida says he assured customers the company "is not giving up the battle to strive for excellence."

"There's a lot of rumor and misconception about this," adds Murphy in Boston. He doesn't think the new line will affect the company's reputation in the long run. In talking with other dealers, "the worst I've heard is 'wait and see,' " he says.