Something strange is happening

Just heard that two small but big name synth companies have gone out of business , in the USA MOOG have been taken over and most of their engineers and programmers have been sacked, in the UK , Bristol based synth manufacturer Modal Electronics are in receivership with millions of pounds in debt and no profits for years. WTF is happening ?

Its not strange for businesses to struggle.

Also consider that some businesses run up debt for various reasons including to fund expansion. And we’ve had a period where interest rates were very low for many years, creating a new sense of normal. But since then interest rates have risen a lot in recent years, creating great pressure on any company that was carrying a lot of debt.

You also have to consider the previous owners of both companies, the stage of their lives they were at, their willingness to continue to fund the companies or desire to move on, find a new owner etc.

Proper insider info and a view of the companies accounts are necessary to go beyond speculation in most cases. Its certainly not just a question of having sufficient sales, you have to make sure you are actually making a profit on each sale, and although it sounds silly not every company manages to do that, costs can be complicated.

As for exactly who got laid off at Moog, I’m not sure its fair to say that a majority of their engineers and programmers got sacked. We heard about plenty of people getting laid off from assembly lines, especially for their lower end products, but thats not the same as saying the engineers and programmers are gone.

Just had a good look on line regarding both companies, there seems to be no official press release from Moog or inMusic yet. However, according to ex-moog employees, many Moog employees in Asheville were fired . Adam Strange, a former instructor at Moog says: “Moog just fired most everybody, it was a good run. Game over”.** Production of Moog products will progressively be moved to cheaper labour areas of China.
If I remember correctly Moog employees unionised a few years age to demand a basic $17 (@£15:00 ) per hour wage so it was always a low wage employer .

As for model, it does seem that there is much more involved, clashes of personalities resulting in co-owner and chief exc leaving due to the transphobic attitude of the other co owner and some of the management team as well very poor financial / cost control not helped by making the business model funded by debt . Think the final nail in the coffin was trying to produce a new ‘mega’ synth using the wrong design team which cost +£100K , money they never had , in fact for months Modal had not paid staff so had lost many of its best designers etc
Late September , Companies House gave notice that Modal will be struck off the register and dissolved after 2 months, unless cause is shown to the contrary. Company accounts published earlier this year show liabilities exceeding assets.

Modal is now in administration, which means that it’s now controlled by an insolvency practitioner, who will be responsible for trying to resolve the company’s situation or liquidating it.