Taylor Guitars

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Taylor Guitars

1980 Gillespie Way
El Cajon, California 92020-1096
U.S.A.
Telephone: (619) 258-1207
Toll Free: (800) 943-6782
Fax: (619) 258-3799
Web site: http://www.taylorguitars.com

Private Company
Incorporated: 1974 as Westland Music Company
Employees: 400
Sales: $43.6 million (2001 est.)
NAIC: 339992 Musical Instrument Manufacturing

Taylor Guitars is a leading maker of acoustic guitars for the mid-price and high-end market. The company produces over 40,000 instruments a year that range from the three-quarter size “Baby Taylor,” retailing for under $500, to more than 60 different full-size models that start at $1,200 and go up to $10,000 and beyond. Taylor also occasionally makes limited edition guitars like the Liberty Tree of 2002, constructed from wood salvaged from a 400-year old tulip poplar under which American colonists gathered to plot the revolution. The company’s guitars, prized for their tone and ease of play, are owned by many celebrated musicians, including Paul McCartney, Eric Clapton, Neil Young, and Bonnie Raitt. The privately-held firm is run by co-founders Bob Taylor and Kurt Listug.

Beginnings

The roots of Taylor Guitars go back to the summer of 1973, when two young men began working together at a music store called American Dream in Lemon Grove, California. Kurt Listug, 20, had been painting buildings at nearby San Diego State University when he convinced owner Sam Radding to hire him to work in his repair shop, though he had no prior experience. A week later he was joined by another new hire, 18-year-old Bob Taylor, who had impressed Radding with several homemade guitars he had brought into the store to show off. Both Listug and Taylor started out doing instrument repairs and then moved up to making guitars.

Just a year after the pair were hired, Radding decided to sell American Dream, and his staff split into two factions that both sought to buy the business. Taylor, Listug, and a third partner, Steve Schemmer, won out, and they took possession on October 15, 1974, renaming the store Westland Music Company. They continued in much the same vein as before, repairing instruments and making some guitars for sale at the shop. The young luthiers soon decided to put the name Taylor on the headstock of the company’s instruments, as Bob Taylor was their chief builder, changing the company’s name to Taylor Guitars.

In 1976, the company’s guitars were sold to outside dealers for the first time when Kurt Listug visited music stores in Los Angeles with a selection of the firm’s instruments. Among other features, the early Taylor guitars had bolt-on, low-profile necks, which allowed for easy repair, and were made in several different neck widths.

Though Taylor was taking steps toward growth, the market for acoustic guitars had virtually bottomed out by the mid-1970s, and the firm was often on the edge of financial insolubility. In 1977, a distributor was engaged to help sell the company’s guitars, but the low wholesale price received (between $150 and $380) made it difficult to turn a profit. After two years the distribution contract was terminated.

Struggling in the Early 1980s

At the dawn of the 1980s, the firm continued to trudge along, making about ten guitars a week but seldom earning more than enough to cover expenses. Taylor had hired additional employees to boost output but let them go so that the owners could write themselves paychecks rather than simply piling up more unsold guitars.

In 1981, Taylor took out a loan to purchase additional manufacturing equipment, which helped speed up the processing and tooling of raw materials. The following year, with a backlog of instruments piling up, Listug took to the road to market the firm’s guitars. On a route that took him to dealers as far away as Maine, he managed to sell all of the stock he had taken with him. Finally paying more attention to marketing, and with improved efficiency due to its new manufacturing equipment, Taylor Guitars began to turn a profit at last. In 1983, Listug and Taylor bought out third partner Steve Schemmer, who had been less involved with the firm.

In 1984, with the acoustic guitar market still soft, the company received an unanticipated promotional boost from pop musician Prince. The “Purple Rain” star needed a purple 12-string instrument made for recording and video use, and Taylor built him one of its 655 series models in that color. Though Prince specified that it could not feature Taylor’s logo, the news got around among guitar connoisseurs, which led to more orders for the company’s high-end Artists Series instruments. Custom Taylors were subsequently built for Bonnie Raitt and Billy Idol, among others. The company’s guitars were owned by a growing list of famous performers, including Neil Young, James Burton, and John Fogerty. By 1985, Taylor was grossing an estimated $400,000 annually and had 11 employees. Its instruments were now sold at 130 retail outlets around the United States.

The company was building its guitars mainly for the high end of the market, with most instruments priced between $800 and $2000, and specially built custom models costing as much as $4,500. With production beginning to increase rapidly, the firm announced plans to add a $600 mid-price line as well. In 1986, the company also introduced its first Signature Model, named for flatpicking guitarist Dan Crary.

Move to Larger Quarters in 1987

In 1987, Taylor’s growing success led it to move to a new 5,000-square-foot facility in Santee, California. The company’s staff now numbered 35 and was producing 50 guitars per week. The following year saw revenues top $1 million for the first time. In 1989, Taylor bought its first computer-assisted manufacturing equipment, which allowed for greater precision in milling wood and more consistent quality across the product line. The machines also reduced costs and increased output. At the same time, the firm began making cases for its guitars in-house. The arch-topped cases, priced at $200, were made of poplar that was covered with vinyl, and lined with velvet. They replaced the generic models Taylor had previously outsourced; they also fit the guitars better while providing more protection. In 1990, a second Signature model bearing the name of Leo Kottke was introduced, this time a 12-string instrument.

July 1992 saw Taylor move to larger quarters yet again, with a new 25,000-square-foot facility in El Cajon becoming a combined headquarters and manufacturing site. The company’s growth continued to be strong, and in 1993 it had an estimated $5 million in revenues. Eighty workers were employed by the firm, which was nearing production of 10,000 guitars per year. 350 U.S. dealers and 20 foreign distributors carried the Taylor line. The company’s legion of well-known owners now included Eric Clapton, Bruce Springsteen, and Paul McCartney.

By this time, interest in the acoustic guitar had rebounded dramatically, due in part to the “Unplugged” phenomenon launched by MTV, which had spawned a best-selling Clapton album of acoustic versions of his hits. Technology also played a role, with improved electronics enabling the amplification of acoustic guitars in live rock band settings while preserving much of their natural sound and significantly reducing the troublesome feedback and distortion that was previously unavoidable when a hollow-body guitar was amplified either by external microphones or pickups mounted on the instrument. Taylor continued to seek new manufacturing solutions and 1994 saw the purchase of a special fretboard sanding machine and an ultraviolet finishing system, which cut the time required to varnish a guitar from several weeks to a single day. Sales continued to soar, rising 52 percent during the year.

“Baby Taylor” Introduced in 1996

In 1996, the company brought out a scaled-down guitar, the Baby Taylor, which was priced at less than $500. The three-quarter sized instrument was aimed at guitarists who wanted portability, such as backpackers or frequent travelers, as well as beginning musicians. It sold over 1,000 units during the year. A new full-size guitar, the “Grand Auditorium” model, was also added to the company’s regular line, and it was pronounced by Bob Taylor “the best we’ve ever made.” Many customers and critics agreed. Taylor began offering branded clothing and accessories during 1996 as well. Sales for the year hit a record total of $20 million.

In January 1997, a custom Taylor guitar was presented to President Bill Clinton at the Arkansas Inaugural Ball in Washington. The so-called “Presidential Guitar” featured extensive mother-of-pearl inlays that depicted the Inaugural Seal and Inaugural Ceremonial Ribbon, as well as the names of Clinton and his home town of Hope. It was presented to him for Taylor by guitarist David Pack, who had been a featured performer at the event and had gotten the idea of making it for him.

In October 1997, the company built a special limited edition “Cujo” guitar in conjunction with author and semi-professional guitarist Stephen King, whose novel of the same name inspired the instrument. Wood for the guitar came from a black walnut tree that had been featured in the 1983 movie version of the book. A run of 250 of the instruments was produced, each of them with “dog tag” labels hand-signed by King. The guitars sold out in five days. By this time, Taylor had 190 employees and was shipping 100 guitars per day to more than 600 U.S. dealers and international distributors. The firm had an order backlog of one year.

Company Perspectives:

Established in 1974, Taylor Guitars evolved from a small venture between cofounders Bob Taylor and Kurt Listug to its current status as one of the world’s most successful and highly regarded acoustic guitar manufacturers. As a leader in the industry, Taylor continues to revolutionize the design and manufacture of high-end acoustic guitars with significant innovations that produce superior instruments.

In 1998 Taylor’s guitars were celebrated on an album called “Sounds of Wood and Steel,” which featured celebrity guitarists—including Clint Black, Amy Grant, Vince Gill, Michael Hedges, and Leo Kottke—all playing their favorite Taylor instruments. The CD sold well and was later followed by a second volume. The albums were great publicity, and the company itself produced a quarterly newsletter and sponsored guitar clinics at shops around the country which were conducted by respected musicians like Doyle Dykes, Chris Proctor, and Artie Traum. Tours of the company’s factory were offered as well.

During 1998, the company constructed a new 44,000-square-foot factory adjacent to its existing plant in El Cajon, which would house most manufacturing operations as well as the offices of its administrative, advertising, and financial departments. The older facility would be used for final assembly and finishing as well as hosting the firm’s research and development and sales offices.

“NT Neck” Debuts in 1999

In 1999, Taylor introduced another technical innovation, a new neck design that was made possible by the greater cutting precision of computerized manufacturing equipment. The joint where the guitar neck was attached to the body had always presented problems for musicians wanting to adjust it to a different tension setting for playability, since the frets on the part of the neck away from the guitar’s body and those that extended onto the body would go out of alignment, which adversely affected the fingering on each part of the fretboard. Taylor’s NT (” New Tech”) neck system united the previously separate elements so that string tension remained consistent on both. The NT design was a hit with guitarists and was later named “Product of the Year” by Music Trades magazine. Bob Taylor subsequently received a patent for the technology.

A survey of Taylor owners at this time found the majority to be married homeowners between the ages of 35 and 49 with household income of nearly $70,000. Ninety-seven percent were male, and most played the guitar daily for an hour or more. Many owned more than one instrument, including both acoustic and electric models. A typical Taylor guitar buyer was a “baby boomer” who had become interested in music during his formative years in the 1960s, then gotten away from playing until financial success allowed him the luxury of purchasing a high-end instrument.

In 2000, Taylor laid plans for another limited edition guitar, the Liberty Tree model. Much of its wood came from a 400-year-old tulip poplar, the last remaining “Liberty Tree” from the 13 original U.S. colonies. One tree in each colony had been given this name through its use as a gathering place where patriots plotted the American Revolution. Over the years all save the one in Maryland had been lost, but in September of 1999 Hurricane Floyd fatally damaged that tree as well. Some of the wood was cut up and distributed as mementos to the staff at St. John’s College in Annapolis, where the tree had stood, but most was trucked to landfills. Mark Mehnert, a local landscaper, spent $70,000 to acquire the wood after discovering its fate by accident. A Taylor dealer in Baltimore who heard the story contacted the company, which was able to acquire the remnants of the tree, paying $78,000 for it and shipping it cross-country in a refrigerated truck. In addition to using it in the guitars, 14 seedlings were generated for planting in each of the 13 founding colonies and at the United States Botanic Garden in Washington, D.C.

The year 2000 also saw Taylor adding to its Signature line with new models signed by Clint Black, Kenny Loggins, Doyle Dykes, Jewel, and several others, and launching its first mass-market advertising campaign with an ad in Rolling Stone magazine. Taylor guitars remained popular, with 40,000 now made per year by the firm’s 325 employees, up from annual production of 6,000 just seven years earlier. A new model introduced during the year was the “Big Baby,” a 15/16 size model that was priced to appeal to guitar students. By now Taylor was offering more than 60 different models of acoustic guitars ranging in price from $1,248 to $10,494, with the Baby Taylor just $348. They were sold by more than 800 dealers in the United States and Canada and by 13 foreign distributors internationally. The year 2000 also saw the company start a program called Taylor Guitars for Schools to donate Baby Taylors to San Diego area elementary schools. During the first year the company gave away 240 instruments.

In 2001, Taylor installed an “acoustic room” at its factory, a specially-designed space that was used to analyze the sound of its guitars in a live performance setting. The room was also used for concerts and special events. In April 2002, Taylor’s Liberty Tree guitars went on sale. The limited edition run of 400 instruments, priced at more than $6,000 each, sold out immediately.

After more than a quarter-century in business, Taylor Guitars had become one of the best-known makers of acoustic guitars in the world. Esteemed for their quality and technical innovation, the company’s instruments were played by many famous musicians, as well as thousands of others who prized their clear tone and ease of use.

Key Dates:

1974:: Bob Taylor and two partners buy a music store and begin making guitars.
1977:: The firm begins distributing through an outside firm, but profits are small.
1981:: New manufacturing equipment is purchased to increase production.
1983:: Bob Taylor and cofounder/CEO Kurt Listug buy out their third partner’s stake in the firm.
1987:: The growing firm moves to a new 5,000-square-foot factory.
1989:: Company buys its first computer-assisted manufacturing equipment.
1992:: The company moves to a larger site in El Cajon, California.
1996:: New three-quarter size “Baby Taylor” debuts.
1999:: “New-Tech” neck design is introduced and wins accolades for innovation.
2002:: A run of 400 Liberty Tree guitars, made from a historic tree, sells out on release.