AXL Musical Instruments Co. Ltd. Corp.

AXL Musicical Instruments Co. Ltd. Corp. or, if you prefer, Shanghai Chaobo Musical Co. Ltd.

Eric Liu - Chairman
Allan Liu - Chairman/CEO
Eric's brother-in-law - Also an executive

Brands
AXL - Heavy metal electric guitars
Johnson - Bluegrass and country acoustic and steele guitars
Palatino - Pianos
Lucinda - Mandolins

They also make the Fender Squire series of entry-priced electric guitars and Goldstar bajos. I also saw violins, electric base guitars, electric
cellos, flutes, clarinets, alto saxophones, tenor saxophones, trombones, harmonicas, trumpets and a few things I couldn't identify, including
traditional Chinese string instruments.

Manufacturing Locations: 20
Markets: China, Europe, Argentina, The United States, Canada, EU
Employees: 6000

They own their own shipping company, but we saw some Hanjin container boxes, so distribution is kind of murky.

Tour

We started in the offices if Project 1, where we saw about 6 people sitting in small cubicles taking orders and tracking inventory on computers.
Yong explained to me that a few years ago, they paid a ton of money to some German company to write software to manage their inventory and distribution. The cubicles suck, as all cubicles suck, but I've seen worse in America.

From there we saw a fascility that produces plastic guitar cases. Think of those light, hard black plastic guitar cases. These all had "Fender" on them, but Yong pointed out that they commonly change the name. The raw material comes in bags of black plastic chunks about the size of a pea. The chunks are poured into a big machine. The first thing it does is melt the chunks in what looks like a brewery distillery. The liquified plastic if flattend out with rollers, then the sheet of plastic is chopped into uniform rectangles. The end of this process is a pile of black rectangles, about 5 feet by 3 feet. The rectangles are put on a big press, into which you can put a number of different moulds. The one we saw in the press was a Fender case, so the press shapes the plastic into a guitar case with the word Fender on it. From there, aluminum hinges and mouldin are affixed to the plastic and the liner is installed. After the hard guitar cases, we went to a fascility that makes soft musical cases. On entering the room, we saw a big pile of drum cases that were co-branded Body Glove, which I think is a sports outfitter, and Zydilgin, which I just misspelled horribly and which is a famous drum maker. Also in this room were a buch of soft guitar cases. Yong showed us that they had invented a way to make soft guitar bags durable by sewing bamboo in the liner to protecect guitar and moulded plastic on the sides. The room was full of machines cutting fabric. At the end of the production line were to rows of women sewing (men aren't careful enough and their fingers are too big). Each line had about 8 women in it, and when each worker was done with her task, she pushed it forward, where it fell into a bin to be picked up by the worker in front of her.

About a month ago, Sarah and I watched a terrifying documentary about young girls who worked in a Chinese blue jean factory 20 hours per day, so at this point, Sarah started to grill Yong about working hours and production quotas. The factory operates from 9 until 5. Each team is responsible for a certain amount of production, and people are free to take breaks or whatever they need to do. As if on cue, one of the women got up and got an iced tea. I have to admit, they all looked very young to me, but I couldn't really tell for sure. A couple of days later, Yong and I were buying bubble tea, and I was sure that the girl in the stall was 14. Yong asked, and she was 27.

From there, we went to a small room, about 30 x 30 feet, piled with material and with small booths on the window-end. In the booths, women where assembling harmonicas. In harmonicas, little metal bands vibrate at a specific frequency to make the sound. In each booth, there was a little machine that vibrated the band and tested the frequency, and the worker would adjust the way the band was attached until the pitch was right. Each harmonica has about 30 little bands in it. Yong showed us their new invention, the wireless harmonica.

We headed over to Project 2, where we saw the Fender Squire production process. This was amazing. It started with wood being chopped in to 2x2 boards. Then two guys glued the board together until they made a 2" x 2" square. Then the squares were fed into a computerized Korean drill press that passed over the squares a few times, creating the guitar body. A similar process was going on next to this for the guitar necks. After the bodies were made, they were piled on custom carts, each of which could hold about 20, to be carted through the painting process. In the next series of rooms, the bodies were sanded, painted, varnished, laquered and polished. In another room, the finished bodies were fitted with pickups and the finished necks, with fret boards attached, were fitted with those little tuning knobs. The necks are then stuck on the body, and the guitar goes down a line that gets them strung, at the end of which is two Chinese rocking dudes that do final tuning and quality control. Once the guitars pass the rock-dudes muster, they are wiped down and packaged on the spot.

After watching the guitars get made, we saw the warehouse to Project 2, which was incredible big and organized. Then we went to piano manufacturing facility. Each piano has 2444 unique parts. The paces is much less frenetic than in the guitar plant. Here，you see a person sitting at a stool in front of a piano harp, assembling it piece by piece. These were stand-up pianos. During the course of production, a piano is tuned 4 times, and most of what people seemed to be doing was making an adjustment, then wrenching a tuning wrench, then listening, then doing it again. There are machines that pound on the keys for 5 straight minutes, after which the keys are re-measured to make sure they are still in line.

The grand pianos are made one floor up.

The company provides food and lodging for the workers. As part of the tour, Fey took us to the dormatory, where we saw two room used by the female workers. The rooms are small, and Sarah was taken aback by the pop-star posters over the beds (whick we also saw in the harmonica booth). It made them seem naive, which I think they were. Each room houses up to 6 workers in is about 10X15 or smaller.

We ate lunch in the workers' cafeteria. The food was good。

It's important to note here that everyone in the factory seemed relaxed. It wasn't miserable. It was work, for sure, but not miserable work. Mr. Liu is a prominent figure in the Communist Party of Shanghai, and as Yong explains, he feels an obligation to treat his workers well in the Communist tradition. Whenever there is a call for workers, workers from nearby factories line up down the street. While the dormitories and lines of seamstresses were startling to us, and particularly Sarah, I have to say that if I were to dedicate myself to the cause of workers' rights in China, I wouldn't start here.

After the tour, Yong noticed that his Uncle Alan was there (he has a giant silver BMW), so we went upstairs to meet him. When I met him, things instantly fell in place. He's fluent in English, laid back, a little salty, wears western close and even wears hair gel. He's the opposite of Eric. Alan got his graduate degree in music in the US in the 80s. He's super-gregarious. Eric is kind, but stoic, more serious and with a ton of gravitas. Alan works the business end, Eric clears things with government and keeps the manufacturing running. I'm not sure what the brother-in-law does, but the Liu brothers complement each other perfectly. We talked for a long time with Alan about the business, our governments, his history, the Chinese GDP, per-capita GDP, floating monetary values. It was amazing. He name dropped a lot of people in the US music industry who's names I didn't recognize and told me some of the strategies they use to contain shipping costs (at one location, they keep contracts with FedEx and UPS so neither can gauge them). It was a fascinating conversation, and before I left, Alan gave me two Cuban cigars.