September 20, 1974

Having received instructions from his CBS boss Robert G. Campbell to increase production, reduce inventories as a means of reducing investment, to accelerate the passage of lumber from the yards, shortening the drying time below the required one-year minimum, and to lay off some of the personnel, Henry Z, Steinway fires back a memorandum: “I find these instructions illogical, I further believe, that if carried out, these instructions will destroy Steinway”. In the memorandum, Henry Z. Steinway also points out that at 13% of total assets, Steinway & Sons inventory is much lower than that of General Electric (23%) or General Motors (25%), and that Steinway & Sons needs three months of supplies on hand in order to have the factory operating at full speed, which means that reducing the inventory contradicts the demand for increasing the production; finally, Steinway & Sons inventory will not be devalued over time due to changes in product or consumer preference, because a piano is a long-term product.