1987: A Landmark Year For Fender Guitars

Bob Leggitt | Friday 30 October 2020
TBX tone controls, Lace Sensors, bright yellow Strats, birth of Fender Korea, rebirth of Fender USA, death of Squier Japan, complete decimation of the Japanese Fender Contemporary range, and the budget wing's adoption of... Dare I even speak the word?... Plywood! The year was 1987, and it was a true landmark in Fender company history.

1987 Fender '62 Custom Telecaster Candy Apple Red
The gorgeous vintage reissue '62 Custom Telecaster was a darling of the pre-1987 Fender Japan range. It managed to survive a major cull and enter the post-1987 period. But many of its 1986 stablemates did not fare so well.

1986 had looked like a pretty good year for Fender. Their System 1 Contemporary Stratocaster had been a monster of a seller, and the standard Squier Strat had accompanied it in the UK Top 5 sellers chart. But Japan had been the only country mass producing Fender guitars in '86, and that was not a situation the management were content with. They knew it was a compromise. They knew they could punch harder...

Fuji Gen-Gakki in Japan had unquestionably outshopped fantastic instruments for Fender, but they were highly vulnerable to competition. In the UK, the Japanese Squier had been outsold by the Westone Spectrum, and the Fender System 1 had come runner up to the Marlin Sidewinder. The Marlin was the first budget guitar to really exploit what I call D&D (Deaf & Dumb) marketing. That is, make an unrealistically grandiose pitch, then either ignore, gaslight, or mentally exhaust anyone who tries to contradict it. It's the cornerstone of marketing today, but it was a novelty in the mid 1980s.

Fender Japan was also hugely vulnerable to the master “lawsuit” copyist Tokai. Another aggressively self-eulogising brand with a fast line in slick marketing but, unlike Marlin, professional quality to back it up.

However good Fender's Japanese guitars were, they just didn't have the weight of historical kudos carried by the American-made Fenders. But due to an indie buyout, relocation and dramatic reorganisation, Fender USA had been completely shut down through most of 1985. Technically, Fender's new Corona plant had been producing electric guitars in 1986, but with a staff total only just touching double figures, output had been extremely limited.

AVRI Guitars
For about the first year of (very limited) production, the only guitars coming out of Fender's Corona plant were Vintage Reissues - continuing the series built at Fullerton in the early to mid 1980s. Corona's very first individual guitar was a Fiesta Red '57 Strat.

Early Corona production was quoted at only five guitars per day - and aside from prototypes they were all vintage reissues. '52 Telecasters, '57 Strats or '62 Strats. And you couldn't go out and buy them. No one stocked them in '86, and UK dealers wouldn't even try to order them. Here's an edited quote from a reader's letter in a 1986 edition of Making Music (UK)...

In your issue two you say in the Smoke column that Hank Marvin was clutching a pink Strat from the new Fender American factory. Is that the one in Japan? [...] When I try to get one […] I am told that they only do them in red and they are all Jap copies.

Note, not only the complete sense of the American guitars' unavailability, but also the use of the word “copies”. This encapsulated Fender's problem in the early years of MIJ. Many buyers, and dealers, did not see Japanese Fenders as real Fenders. They categorised all MIJ Strats and Teles as replicas.

Fender's competitors had enjoyed taking advantage of the brand's weaknesses in '86. But they'd be laughing on the other side of their faces in 1987, as Dan Smith and Co. began to roll out one of the most universally impactive commercial attacks the electric guitar market had yet seen. In chess, it would have been checkmate.

Meanwhile, the heavy rock guitar market - since Hendrix, one of Fender's core battlegrounds - had increasingly been appropriated by Superstrat manufacturers. Whilst Fender had attempted to cover this territory within its Japanese Contemporary Stratocaster range, brands such as Jackson/Charvel and Kramer understood the heavy rock genre far better, and had decimated Fender's profile in the field. Had the aftermarket not been supplying high-output humbucking pickups to fit into a vintage Strat's single coil mount, one wonders whether Fender would even have retained Malmsteen as a brand advocate.

Where the Superstrat manufacturers had made bold statements with their instruments, Fender Japan's Contemporary Strats had hedged bets. Fender MIJ Contemporaries were excellent guitars per se, but for the 'eighties metal diehard they just weren't modern or daring enough. It would not have gone unnoticed by Arbiter (Fender's UK distributor) that their bestselling Contemporary MIJ Strat in '86 was the one with three trad-style single coils. This System 1 Strat did have enhancements to tuning stability and a “fast” neck, but it was barely distinguishable at first glance from a classic Stratocaster. Maybe, then, Fender should confine their Strat output to trad ground, forget the crossovers, and just supplement with a couple of full-on Superstrats to challenge Jackson and Co?...

Well, that's essentially what happened forward from 1987. The Japanese Contemporary 'crossover' models were wiped out in an epic cull, and Fender USA took over the trad Stratocaster modernisation programme, leading the innovation with the Strat Plus. Indeed, even the new American Standard Strat of 1987 was a subtle modernisation. It didn't have a locking trem, but it was definitely more comparable to the single-coil MIJ Contemporary than to a Vintage Reissue.

Late 1980s Fender USA Strats
The late 1980s Fender USA Strats had a fresh, modern look, but still adhered to classic Fender values. They came in a huge range of colours, including Pewter (Eric Clapton model), Gunmetal Blue (Standard Strat Deluxe), Torino Red (Standard Strat) and Graffiti Yellow (Strat Plus),

The TBX-fitted American Standard Stratocaster was the first product to augment the US Vintage Reissues. It actually hit the market whilst production out of Corona was still extremely limited in late 1986, but it led the range forward from 1987, and its early life coincided with aggressive upscaling in factory output.

The Stratocaster Plus arrived next - technically from mid 1987, but it took a while for stock to become readily available - again due to production volume limitations. The Strat Plus was really just an American Standard with Lace Sensor pickups as opposed to Alnico 5s, and advanced headstock hardware to improve tuning stability. The American Standard Telecaster didn't arrive until 1988. Before the end of the decade there were further USA additions such as the Standard Strat Deluxe, and the Strat Plus Deluxe.

Although the force of contemporary Fender design had shifted out of Japan and into the USA, there was not initially a vast difference in the price points on the UK market. The bestselling MIJ System 1 Contemporary Strat (now being withdrawn) had realistically retailed at somewhere around £350. But the new American Standard could be found for as little as £375 in late 1987 - due to the favourable dollar exchange rate of the time. And given that the US Strats came with a hard case worth more than the £25 difference, they were essentially cheaper than their MIJ predecessor. The American Standard Stratocasters, once they began to arrive in volume, were a true doubletake. Japanese prices, US manufacture, and technically, at that time, the best ever build quality from Fender USA. They sold like shovels in the Gold Rush.

Fender Japan could no longer compete with the contemporary USA models, and prices of the old Japanese stock instantly collapsed. And when I say collapsed, I really do mean collapsed. I took a little trip through the magazines of the period for evidence and found a true humdinger. Here's a £425 Fender MIJ System 1 Strat - the UK's leading Fender seller in 1986 - essentially begging for attention at just over a hundred quid, if you interpret the companion Session amp at its full retail price...

Fender Session deal

In one monochromatic image, that's why the MIJ Contemporaries had to go. It looks shocking today, but that was the impact the American Standard Strats had. Those MIJ System 1 Contemporaries were great guitars, but once the words “Made in USA” started to appear beneath £375 price tags, no one would look at them.

Fender Japan did, however, maintain an overwhelming presence in the vintage reissue market. The most popular models significantly undercut the USA reissues on price, for two main reasons.

One, they were cheaper to make. US vintage reissues had nitro finishes, whereas the MIJs had polyurethane - a major reduction in production time. US models included a vintage repro case. MIJs not even a gig bag. US models housed accurate vintage electrical components. MIJs (by '85) housed cheaper elecs, which were cheapened further as the MIJ range was subtly re-costed in '87. But none of these differences rendered the MIJs inferior as players' instruments. Indeed, many would assert that the MIJ reissues remained consistently more player-friendly than the AVRIs.

And two, bulk-buying and “cardboard boxing”. The London 'mail order' dealers bought popular MIJs in such bulk that they could engineer huge discounts. Some rival dealers referred to these volume-shippers as “cardboard box sellers”, since the guitars were deemed to be left in the distributor's boxes and sent straight out to customers without any inspection or setup. The rival dealers' goal was to demean the cheap deals and preserve a sense of value in higher prices.

But other dealers reduced prices to compete. So they began to sell more. Then they could get better discounts. That's how the MIJ price war began, and it kept some Japanese Strats and Tele reissues at sub-£300 prices, flowing through the system at pace. Whereas an MIJ '62 Strat might cost £295 on full discount, the USA version would probably retail at around £525. A big premium for something which, side by side on the rack, was virtually indistinguishable.

The Japanese reissues also offered more variety than the American range. Different years and styles of replica for Strats and Teles, plus the Jazzmaster, the Jaguar, the Esquire, the Thinline... So much choice.

However, some of these MIJ reissue models wouldn't bulk sell in the same way as the pre-CBS Strat and Tele replicas, and therefore could not be discounted to anything like the same degree. When this happened there was a compound negative effect on sales, due to the uncompetitive pricing.

The MIJ Jazzmaster and Jaguar reissues suffered from this issue, and in fact Fender's UK distributor - Arbiter - subsequently ceased importing them. A situation that persisted well into the early 1990s. In spring 1992, The Guitar Magazine even called upon readers to phone Arbiter and request their return. A measure which appeared to work.

But immediately post 1987, the most popular MIJ vintage reissues - namely the '62 Custom Telecaster and the '57 and '62 Strats - remained highly competitive in the new market and showed no danger of going the way of the Contemporary range.

1987 Fender MIJ Vintage Reissue '62 Stratocaster
In 1987, Fender Japan's pre-CBS era vintage Strat reissues kept their place in the listings, and remained very popular due to their low prices and superb playability.

The market had to wait until 1988 for Fender's new Superstrat challenger, but it arrived as predicted in the form of the Japanese-made HM Strat.

The Fender HM Strat - a scratchplateless 24-fretter with Kahler/Floyd Spider trem - was at first glance on-message, but it suffered from what brand marketers today would describe as an “authenticity failure”. A brand or product's authenticity is tested by the consumer question: “Do they really MEAN this, or are they just trying to cash in?”. And the answer, as regarded the HM Strat, was “just trying to cash in”. Fender probably wouldn't have looked any less reverent towards heavy metal if they'd put Nigel Tufnel's signature on the headstock.

I haven't yet covered the HM Strat on this blog, so for the record, its recommended price in the UK was either £365 (single tappable humbucker) or £451 (1 x HB + 2 x SC). It wasn't going to break the bank. But this was really Fender adopting the role of idea-less copyist, and introduced alongside eyecatching ground-breakers like Washburn's 36-fret EC-36, it was never going to win the head-turning war.

However, virtually everything else Fender touched was turning to gold, and compromises in quality at the budget end of the spectrum did not disrupt the party...

The entire base end of the Fender Japan output was lopped off and shipped away to Young Chang in Korea. This included the Squier standard Tele and Strat, and the Fender standard Strat and Tele. Notably, it was not just Japanese Fender Contemporary guitars that were zapped in the giant reorganisation. The Squier Contemporaries were withdrawn too. In '87 the Squier range was reduced to just two basic six-string models. One Strat; one Tele. Both Korean. Japanese Squier production completely shut down.

Interestingly, this left Fender without a humbucker-fitted representative in the sub £200 price range, where the 'bucker-totin' Marlin Sidewinder had been doing so much commercial damage. But it didn't matter. The Marlin received a bitter taste of its own medicine as Fender down-graded the Squier to play it at its own tactical game. Plywood body, cheap innards, Korean manufacture, and all marketed like it was the finest piece of craftsmanship a guitarist could buy. That was Marlin's world-beating strategy, but it collapsed when a bigger brand played the same card. The new, price-slashed Korean Squier took up the number one bestseller slot. And Marlin never recovered.

Ins and Outs
1987 shake-up... RETAINED (but subsequently de-listed by Arbiter): The MIJ vintage Jaguar Reissue (Candy Apple Red). OUT (temporarily): The MIJ Fender Telecaster Standard (Black) - production shifted to Korea. OUT (permanently): The Squier System 1 Strat (Olympic White) - deleted from the product range. IN: The MIK Squier Stratocaster (Lake Placid Blue).

For Fender, the move paid off, but it could have gone dramatically wrong. This was the first time in history that Fender had put its name to real cheapo body construction. And no one really knew back then what the impact would be on the overall brand. Two or three influential musicians saying “Fender now makes guitars out of plywood” could have sparked a meme that was very difficult to contain. Fortunately, that outburst (which eventually came from rival manufacturers rather than musicians) was delayed long enough for Fender to counterbalance with really spectacular high-end gear from the Custom Shop.

The mid 1980s showed that guitarists were a lot more susceptible to hype than had previously been believed. It had been imagined a few years earlier, when the likes of Tokai seriously dented Fender sales with their direct copies, that the concept of “brand” was losing its importance and that people would simply buy the best value.

But this overlooked the fact that Tokai were almost producing forgeries rather than mere copies. They'd copied the vintage Fender logo design, and had even made it fairly straightforward to remove the Tokai logo so that an actual Fender logo could be added in its place. A forgery doesn't compete with the original brand. It appropriates the original brand. Therefore, Tokai were arguably exploiting Fender's brand by proxy. So brand did matter after all.

Brand is much more about what you say, what you believe, and how you make your customers feel, than the actual superiority of your product. Make no mistake, Fender's extensive 1987 reorganisation drove value for money to new heights. But largely, it was their understanding of brand that won them the battles. They stopped trying to water down heavy rock guitars and went back to doing what they did best. Being Fender.

No one else could do that. They could copy, but they couldn't actually BE Fender. And if the mid 1980s taught the new, independent Fender company anything, it was that being Fender was a battle they couldn't lose. They understood that they could dump “divebomb” trems at the height of “divebomb” mania, and dump humbuckers at a time when humbuckers topped the sales charts. And that far from having a negative impact, this would in fact make Fender more Fendery, and better at being Fender.

It was bold. But it worked. And they all lived happily ever after. The end.