Editorial - Hamer’s Final Demise

Hamer Guitars, the first and foremost builder of USA-made 12-string basses for over 30 years, finally went out of business in December of 2012. I titled this piece “Final Demise” because the company had been heading in that direction for a long time. It was never a question of “if”, it was only a question of “when”.

The beginning of the end came way back in October of 1988 when Hamer sold out to Kaman Music. Being absorbed by a large music conglomerate can and did for a while provide advantages to a tiny company like Hamer: Access to cash to grow inventories, add new machinery and hire more people, economies in purchasing and bigger advertising budgets. The downside is that, despite assurances from the buyer that you will be left alone to do things your way, once you sign on the dotted line you have lost your decision making authority and autonomy. Your fate rests entirely on the whims and decisions of people who may have little to no clue about how best to utilize your company’s strengths or what direction you should be heading. Your future gets sacrificed for what is best for the conglomerate and the smaller you are relative to the conglomerate’s other divisions, the less control you have over that future.

Despite the fact that Hamer guitars had always been made in the USA, Kaman decided to start selling imported guitars under the Hamer brand name. Only one 12-string bass was produced overseas, the CH-12, which was a direct copy of Hamer’s best-selling B12L model. The reasoning behind this move was that since lower priced guitars sell better than higher priced ones, sending the manufacturing offshore would cut production costs allowing for more competitive retail prices which would result in increased sales volume and profits. The Hamer name would add legitimacy to the imports as buyers associated the Hamer brand with quality guitars.

In marketing circles this technique for expanding your product line is called Line Extension. Don’t bother trying to learn about it at your local university, they don’t teach it. Business schools are too busy teaching fundamental marketing basics from the 1940’s and theoretical internet guerrilla marketing schemes instead of tools that can actually be used in today’s real world. Besides, business is enamored with the idea of synergism, which is in effect getting something for nothing, and Line Extension plays right into this delusion.

This is how it works in the corporate boardroom: The marketing ‘experts’ tell management, “We can leverage the Hamer name to create instant demand and acceptance for our new imported products. Musicians already know that the Hamer name stands for quality so when they see ‘Hamer’ on the imports they will know that they are getting an established, quality product. We will not have to spend many years and significant amounts of advertising dollars to introduce and promote a new brand name, our current advertising budget will cover both the domestic and imported products. In essence we can add a whole new product line for minimal additional cost. Plus the imports will introduce new customers to our brand and serve as a stepping stone for their future purchases of the more expensive USA-made guitars.”

Translation: Two plus two equals five. Management eats it up.

Here is the Line Extension Trap: The new products are almost always immediately good sellers because retail dealers want to check out what is new. Additionally as in the case of 12-string basses, dealers who had never stocked a 12 before ordered them for the first time since their cost was so much lower than if they had bought USA-made basses. The first production run quickly sells out so the sales managers and marketing gurus who sold the idea to management all slap each other on the back in congratulations, tell each other how right they all were for promoting this strategy and then move on to their next projects. But then the second production run is finished – and most of the guitars sit in the warehouse unsold.

The Hamer name used to stand for high quality, American-made, high priced guitars. Now thanks to Line Extension the Hamer name meant high quality / low quality, American-made / imported, high priced / low priced guitars. This was confusing to potential buyers because in the mind of the customer, no single brand name can support two such contrary positions. Who wants to buy a cheap imitation of a quality product? Just about nobody. And who wants to buy a USA-made version when the import is almost as good and is a quarter of the cost? Just about nobody.

The CH-12 didn’t sell nearly as well as projected. Production was shifted from Korea to China and then Indonesia in order to cut costs even further. Quality suffered and so did sales. At the same time, sales of the B12L almost completely died because the price gap between the imports and the USA models kept widening. Kaman didn’t just shoot Hamer in the foot, they shot both feet completely off! It was a wound from which Hamer never recovered. Forget synergism, it’s a myth. Two plus two never equals five. And the long term results of Line Extension always destroy everything that was gained in the short term, plus more.

While the Kaman marketing shotgun blast was directed at Hamer, Hamer’s loyal customer base also took its share of the shrapnel. The value of many used American-made instruments plummeted literally overnight, costing current owners many hundreds of dollars in lost resale value. Once the imported CH-12 model 12-string bass with its street price of $799 appeared, used B12L’s that had been selling for $2,000 were now selling on eBay for half that much, sometimes less. The price deflation wasn’t only seen with the B12L model, prices for used B12A and B12S models started falling too even though these basses hadn’t been copied overseas. The reason for this was simple: It’s hard to justify spending twice as much for an instrument that’s primary difference is body design when a B12L could be bought so cheaply. Demand for the B12A and B12S basses dropped and consequently so did their resale values.

Once Kaman Music was acquired by Fender Musical Instruments (FMI), Hamer’s fate was sealed. It didn’t matter how good the guitars were or even if the company was making a healthy profit. (It wasn’t.) All that mattered was whether or not Hamer was big enough to add substantial numbers to FMI’s sales and bottom line. It wasn’t, not even close, so into the discard bin Hamer went. There are hopefuls who suggest that someday the Hamer brand name may resurface. It will never happen. FMI has a department whose sole reason for existence is to buy up competing guitar makers and put them permanently out of business. Once the door is slammed on the competition it stays closed. While a new company is now using the Hamer brand name to sell imported guitars, Hamer as it once was is gone for good.

Time will tell if Hamer 12-string basses end up being collector’s items or if they will be regarded as just another failed brand. Most are not particularly hard to find, in fact the black B12L’s and CH-12’s are, after the Dean Rhapsody 12, the two most common 12-string basses, all brands included. Die-hard fans will tell you that USA-made Hamers are eminently collectible. That’s human nature – the fewer the number of people who like something, the more adamantly they will defend it – but most musicians have never heard of Hamer. From personal experience maybe one out of every twenty musicians who have asked me what brand of bass I play has known anything about Hamer. Those who have recognized the brand have all known about it due to the 12-string bass.

I guess from a 12-string bass and numerological point of view it was fitting that Hamer left us in 12/2012. Maybe the Mayan prophecies weren’t referring to the end of the world at all, maybe they were referring to Hamer Guitars and their 12-string basses. Yeah, that’s it. Thanks Hamer, it was fun while it lasted!