BY LEAH BETH WARD
The Cincinnati Enquirer
Baldwin Piano & Organ Co. has eliminated 50 salaried positions at four locations, including its Loveland headquarters, citing a sooner-than-expected loss of contracts to make pianos for other piano sellers.
''Due to the loss of contract manufacturing for two piano companies earlier in the year, we must get our overhead costs in line with revenues,'' Karen L. Hendricks, chief executive officer and president, said in a release Tuesday.
Ms. Hendricks said the biggest portion of the lost business stemmed from Jasper, Ind.-based Kimball International Inc.'s decision several months ago to stop selling pianos altogether. Baldwin supplied Kimball with cases that surround pianos as well as keys, soundboards and piano ''innards,'' such as the hammer assemblies and strings.
The cutbacks affect about 15 percent of Baldwin's salaried work force of 330 people. Individuals were notified Tuesday. Some of them were affected immediately while others will be phased out by the end of the year.
Besides the Loveland main office, other sites hit with cutbacks are manufacturing plants in Greenwood, Miss., Trumann, Ark., and Fayetteville, Ark.
Baldwin sales for the nine months ended Sept. 30 fell 8.2 percent to $79.8 million, from $87 million for the same period last year.
Ms. Hendricks said in a telephone interview Wednesday that the cutbacks were not unexpected but ''happened a little more quickly than we anticipated.''
Earlier this year, Ms. Hendricks said Baldwin would exit the relatively low-margin businesses of contract music and furniture manufacturing.
She said the decision wasn't a reaction to any pressure from Bolero Investment Group. The Newport Beach, Calif.-based limited partnership, which has accumulated a 6.5 percent stake in the company, has been clamoring for Ms. Hendricks to take aggressive steps to improve earnings and the performance of Baldwin shares or sell the company.
General Partner Kenneth W. Pavia Sr. Wednesday said the latest steps at the company ''are not enough.''
He said his ideas have been ignored and that he will take his proposal for a sale or merger directly to shareholders next year if the Baldwin board does not respond.
But Ms. Hendricks maintains that Mr. Pavia has failed to suggest anything that has not already been considered or implemented, such as expanding the Baldwin financing company or the company's electronics business.
Baldwin has been on a mission to use its electronic manufacturing capabilities, developed from its digital piano line, to build the business of supplying printed circuit boards to electronics companies. As an example of that effort's success, Ms. Hendricks cited Siemans AG's decision to name Baldwin a preferred supplier of circuit boards.
But Mr. Pavia said he has no plans to let up.
''I do intend to keep adding to our investment,'' he said. ''I'm not convinced it's a declining market (for pianos). I'm convinced the competition is eating into our market share.''
Published Nov. 14, 1996
