Another sad day for JBL

[Wagner]

................that LOUD SUCKING SOUND when you next pull the lever............AND who's friends with this pig...........just sayin':

The writing was on the wall with the move to mexico

[Wagner]

Sorry, sincerely, for the way in which you have been treated Mr. Timbers, your talents have brought much joy to my and my family's life

Sincere regrets and good luck to you,
Thomas Wagner

[mech986]

Much of this is because Paliwal is not America centric but more global in his thinking. I'm not against that, but he stated in the article that 4313B linked that his ambition was to completely change the way Harman worked and behaved globally, which thinly meant that current and legacy US and American knowledge, expertise, and manufacturing was much less important than globalizing all 3 of those factors - moving them to other countries where the market and growth was going to be, as well as cheaper labor and larger workforce pool.

The sad part of all this is that Harman prided himself originally on American based companies which had some legacy in American manufacturing and engineering. But this CEO believed it was and is important for him to shatter and literally remove all of that, moving to less than 30% America involvement. Some other quotes from that article:

"We had a clear five year plan. We had to take $400 dollar permanent cost out for a small company of our size; we were less than $3 billion.



This year, we are a $6 billion dollar company. Our profit has tripled. Goal was $400 million. We took out $500 million dollars permanent cost, which means it will never creep back in the company. I had to shut the first plant in Los Angeles. Now you may say "did you really have a factory in the middle of Los Angeles?" Yes I did, a large factory.
That was the constituency of the founder's wife. She was a Congresswoman so that was the most difficult thing for any CEO. I said I'm going to shut that factory first just to send a message that I'm here in all seriousness."

"I discovered a great company with the most iconic brands in audio and a very good reputation in the auto industry. We were working exclusively with German cars and Lexus. Sidney Harmon was a founder who had been running the company for 40 plus years. He was 88 year old, very active and he had tried three CEOs in the last two years before I came in. So the number one thing I discovered was here's a man who needs to be shown very clearly what's not working but with courage. I needed to invest in these brands and take these brands where they've never been to. We had no growth story so we needed to go to the growth markets like China, India. We needed to innovate. We needed to design the cost without sacrificing quality. I have always said you cannot be a sustainable profit leader if you don't have the sustainable cost advantage."


"I have a very clear bias for people who have lived in different countries. They have a whole new mindset: Cultural diversity, different needs, new consumer insights. If you have a bunch of white males from America, how do you expect them to know Japanese cultural differences? What really ticks with Chinese or Indians or even Europeans.
So I have a German, a Korean, an Indian, a Brazilian, and a woman CFO on my team. This is a global leadership team. So, my board was a very colloquial 73 plus Americans. I ended up bringing a Scotsman, a Hungarian, a Chinese, and a German on board. Why? Because I wanted to have unique competencies in the board in the retail, the emerging market knowledge, and the people side of skill."

"I was very lucky to have the opportunity to work for people like Jurgen Dormann who came from the pharmaceutical industry. He was the CEO of Hoechst and then Sanofi Pharmaceuticals and he was the Chairman, CEO and President of ABB for the last 5-7 years of my time. He had one word: pipeline.
He said invest in your pipeline; pipeline of people, pipeline of product innovation. If you don't have these two you have no future. That's exactly what I did. I had to hire talent from outside. I told myself, that won't happen again in this company. I'll start to develop talent in this company."

Yep, cut the cost of talent and expertise and innovation you already have, and then depend on new, young, and in some cases, relatively inexperienced engineers. But that's a conglomerate bean counter mentality. I don't doubt Paliwal will continue to push Harman into the areas of growth he knows will be there. But JBL as a cutting edge loudspeaker company based on American Engineering has come to an end.

The only way we will ever see this again, if ever, is to have new driven private companies run by single-minded individuals who want to see their vision succeed. But that is likely a dream these days.

Sad, sad, sad.

[jpw]

After a brief pause from the shock of the news, I would also add that I do not feel these events devalue what designs JBL has done in the past or is doing now. In fact it may make the current models more valuable going forward.

It's hard to be positive right now about what remaining engineering capability JBL will have going forward. But I think it is important to remember that we do not have a complete picture on what JBL is planning or may have in the pipeline for talent. My best hope is that, like a major league baseball team selling off their aging stars (sorry Greg and Jerry), they have good prospects in their farm system somewhere for down the road. If you aren't buying this right now, I can't blame you.......

[DavidF]

I have mixed feelings on what I perceive to be happening at Harman. Companies have to grow or they die. Some of the old brands formed around one individual’s tenents may well linger on after they pass on or retire. With new stewardship those firms can hold to the same core values but those companies are most often privately held and subject to a different return-on-capital expectations by the owners (Klipsch, Harbeth).

Harman can certainly show muscle in the capital markets in which few audio companies can compete. Pioneer, Panasonic and similar have all pretty much moved to the audio-as-an-appliance approach and away from the consumer HiFi end of themarket (I know….the Technics brand is peeking out of its rabbit hole again). It became all about brand merchandising and out-sourcing and less about nurturing long-term customer relationships.

So as an owner of Harman (and I might be in some IRA fund or other!) I could be satisfied that the company is out there building marketing channels and providing inexpensive goods that people consume world-wide…for a profit. On the other hand, as a mature consumer grounded in the sense of value in a product- and in confidence of quality of the brand- I rue the way Harman is exorcising JBL’s legacy of quality, care and sound engineering that was critical in building a long-term customer relationships.

When Greg was so rudely asked to leave I wasn’t sure if was an isolated case of bad judgment or part of some overall top-down change in the division. I think the consultants like to call it a “new paradigm”. The company has to become a living organism, able to quickly adapt and adjust, not relying upon older industrial-era conventions. Yeah, well, can’t say for sure but evidence of continued change must have been in the air. Jerry and the others must have of sensed something was changing that would affect them. Not necessarily that their positions were at risk, but more like what their role in the firm may become and how satisfying would it be to remain with JBL? Whatever, it wasn't their choice and that sucks.

One thing seems obvious, those days of testing drivers on the roof of Northridge in the cool of the morning must seem like ancient history to the remaining few that were around in the day.

[SEAWOLF97]

are there any shoes left to drop

[SEAWOLF97]

Right - this kind of garbage is why I sold off all my legacy JBLs -
.

maybe for you , but I will listen to them tomorrow and bet they sound same as today.

maybe classic JBL was akin to Camelot ... a great period in time that has now disappeared. That may make the classics even MORE valuable to me.

didn't you switch to other brands before the Harming legacy suicide ?

[BMWCCA]

I have mixed feelings on what I perceive to be happening at Harman. Companies have to grow or they die. Some of the old brands formed around one individual’s tenents may well linger on after they pass on or retire. With new stewardship those firms can hold to the same core values but those companies are most often privately held and subject to a different return-on-capital expectations by the owners.

I can't see any rationale for the apparent policy of dumping those who brought you to the dance. Even if you look at it in the most charitable way for Harman, and agree that they have to "grow or die", what would the actual cost have been to have kept Greg and Jerry in their positions? I would hope those two gentlemen would have been compensated nicely for their brains, their experience, and their contribution to JBL, but even if they approached seven-figure salaries, what percentage of Harman's budget would it have cost just to keep them on?

I don't believe these decisions were based on the bean-counters but they are symbolic of a shift in corporate mission that is so contrary to what made JBL the great pioneer they had been, to a shell of a company with an iconic name that is just an embarrassment to those currently in-charge to the extent that they didn't want any reminder of former greatness around to remind them of what they'd accomplished in gutting a venerable old firm. Once all sense of creativity and invention is gone, they can justify simply counting those beans with no corporate conscience to remind them of their former mission. I wonder what dollar-value they actually put on the JBL name? Or how soon they figure they will have succeeded in devaluing the name to the extent that they'll simply sell it to someone interested in re-establishing the old JBL, with renewed purpose?

[mech986]

are there any shoes left to drop

Oh, sure. The entire professional parts department for example. I know a few folks there, one who has been there at least 15-20 years and who plays music and knows the drivers and parts for all the vintage speakers too.

If JBL ever decided to abandon the professional market, or outsource all to offshore, they'd be the first to go.

Reminds me of HH Scott when they were sold off to Emerson. IIRC, a number of semis with all of the literature, records, parts, history, tooling, equipment of HH Scott was moved in the late 60's or early 70's to consolidate with Emerson, and the vast majority of it was essentially put into dumpsters. I had heard there were some private individuals who wanted to save it, buy it, or at least find a way to make it usable for Scott fans and previous owners, but Emerson decided there would be too much liability, plus probably confusion of who exactly was Emerson's new owners.

[mech986]

Personally, I'm surprised that JBL consumer still exists in NY. You'd expect them to get booted down to a no income tax state.

[gtimbers]

I can assure you that neither of us even approach a 7 figure salary, or even $200k for that matter. What is interesting, and sad, is that both of us are still top of the heap in the engineering department. So the idea of getting rid of the old dogs for younger more up to date engineers is just not correct. None of the guys left have any skills we don't have and we have talents beyond what any of them do not even factoring in experience. It looks to me like pure dollars and cents plus a desire by the guy in charge to purge all JBL people. Jerry and I probably account for 80% of the IP within engineering. Things just don't add up if keeping the department open for the long haul is really in the plans.

[LowPhreak]

"... invest in your pipeline...", and the rest of the drivel Paliwal is peddling there. No doubt you've heard it all before. What the hell does that vague, soaring, MBA/sales pitch crap even mean? I'm sure if you asked any 5 of these clowns in the hallway at CT or Northridge you'd get 5 (or 7 or 10) tangential replies, none of which would make any more sense than the others.

Well they did get to sing multi-cultural Kumbaya and that's always a plus, right?

You wonder if they all get the same but slightly rehashed, refried spiel from the U. of Chicago School of Economics, in reality just another Dale Carnegie rah-rah speech with a few modernized terms tossed in to sound edgy. Similar to the Christmas fruitcake that gets passed around every year that no one ever wants or eats, they just keep giving the same (but ever more stale) fruitcake again the next year.

To quote a Joe Jackson lyric: "We don't have rocks in our heads!"

Is this all you get for paying a $13 million annual CEO package?

[Alobar]

I really despise what has happened to my beloved speaker manufacturer, but somehow in the wake of its demise I love my old JBL's all the more. At this point I'm going to try to hang onto them for the rest of my life.

[mech986]

I can assure you that neither of us even approach a 7 figure salary, or even $200k for that matter. What is interesting, and sad, is that both of us are still top of the heap in the engineering department. So the idea of getting rid of the old dogs for younger more up to date engineers is just not correct. None of the guys left have any skills we don't have and we have talents beyond what any of them do not even factoring in experience. It looks to me like pure dollars and cents plus a desire by the guy in charge to purge all JBL people. Jerry and I probably account for 80% of the IP within engineering. Things just don't add up if keeping the department open for the long haul is really in the plans.

Is Toole involved in any or all of this, or is he gone or outside (consultant) the company? As an older guy, would he also be vulnerable to being outsourced?

I don't doubt this is mostly a cost cutting move, probably because they don't want to build anything remotely expensive, or accurate, high tech, cutting edge anymore, figuring JBL can basically live off its reputation and sound like BOSE to the uninitiated. It certainly seems they are pushing hard on the automotive connectedness front if their press and corporate initiatives are to be believed.

I suspect that JBL will be "good enough" and that's all.

What do you think will happen to JBL professional and product development there? That area does not suffer fools or poor performance / reliability for very long, word gets around fast.

the only saving grace in all of this is likely, in the not too distant future, the management guys who terminated you all will themselves be let go once the purge is completed. And they will probably be let go via email or text, along with an escort by the last remaining security person.

[4313B]

The writing was on the wall with the move to mexico

The article outlines what his master plan is. He tells why he moved the plant to Mexico and why he is making large changes to manufacturing and engineering.

the management guys who terminated you all will themselves be let go once the purge is completed

It would be nice to know who they were.