REFUSING TO FRET; GUITAR MAKER BUCKS INDUSTRY DOWNTURN.

Byline: Rosland Briggs Knight Ridder Newspapers

A tour through the production area in Nazareth, Pa., shows the detail involved in manufacturing a C.F. Martin & Co. guitar.

The wood is aged for a full year to reduce moisture. Tiny strips of mother of pearl are placed in the narrow crevices around the guitar's face. Wood is treated with 15 coats of lacquer, sealer and other materials for just the right finish, one as thin as a human hair. The guitar's trim is hand-scraped to remove excess lacquer. The finished guitar is tuned, set aside for 14 days to settle, and then tuned again.

The tour also shows that, between the employee work stations and the piles of drying wood, there is not a lot of unused floor space.

``We have orders for 10,000 guitars, and we have no place to build them,'' said Dick Boak, director of artist relations at the 165-year-old company.

But by February, the company's 80,000-square-foot production space will grow to 140,000 square feet, so workers who make strings for Martin guitars can come back from the warehouse. And wood that has been housed in an outside storage facility will have its own humidity-controlled room in the expanded plant.

The expansion is expected to increase employment by about 50, Boak said.

It is welcome news for Martin's 500 employees and is taking place even though the guitar industry's total sales have been flat since 1994. Sales of acoustic guitars, Martin's specialty, fell 3.5 percent last year from 1996, according to the International Music Products Association. Acoustic guitars produce sound without an amplifier, unlike electric guitars.

The company is bucking the industry trend thanks to a strategy introduced this year to boost sales volume: less-ornate guitars at lower prices.

The company's line of DXM guitars was announced in July. They cost $600, compared with the low-end price of $2,000 for the traditional, glossy models.

``I got worried that people would say they're the guitar for rich doctors, and I never saw our company as being that,'' said Christian F. Martin IV, chairman and chief executive officer, who represents the sixth generation in the family business. ``We, as a company, decided to come out with more-affordable guitars.''

He said he believed the DXM would catch on because of the company's reputation and experience, even if the price is the same as that of competitors' models. ``We get extra points because we are who we are,'' he said.

The DXM guitars account for 5 percent of production and 1 percent to 2 percent of revenues, Martin said. They do not feature the rare woods, elaborate decorations and high-gloss finishes of Martin's traditional line. And they don't take three months to produce. So they require less work and their materials cost less, Martin said.

``It's interesting for a market leader like Martin, especially someone based in tradition, to come out with a nonwood product,'' said Teja Gerken, gear editor at Acoustic Guitar magazine.

Martin Guitar has grown significantly since the early 1980s. In 1983, the company produced 3,000 guitars that generated revenue of $13 million. Its total for November was 3,000 guitars, Martin said, and its revenue last year was $47.5 million.

``The acoustic guitar has come back in popularity,'' Martin said. ``It's not that I'm a genius. I just happen to run a family business that was in the right place at the right time and was very focused on what they did.''

CAPTION(S):

2 Photos

PHOTO (1--Color) Christian F. Martin IV is working to increase guitar sales at his family's firm by offering less-ornate models at lower prices.

Scott S. Hamrick/Philadelphia Inquirer 

(2--Color) Curt Purdy, an artist at the C.F. Martin Guitar Co. in Nazareth, Pa., carves a wood block that will become a guitar's neck.