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The board wants him off because they don't like his leadership... because he is incompetent... he's a prima donna... among other things. I was hoping someone other than me would say it.

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The board wants him off because they don't like his leadership... because he is incompetent... he's a prima donna... among other things. I was hoping someone other than me would say it.

Well I don't know the guy personally.. But yes.. Mainly cos his business decisions sucked.... And now hes gonna have to pay for that and live with it...

 

I don't think anyone really needs to say it more.. Its kind of obvious reading between the lines of whats said online and what I have personally witnessed.. Hes screwed the pooch, now its time for someone new to take over..

 

Be aware that things could get worse because of this.. If its taken over by some faceless corporation they could just take it back to bare bones and end up making something that resembles a Les Paul just to make money.. OR it could get bought by someone who cares or just get better management and they may end up better off in the end.

 

That's the fun of life, anything can and will happen :)

 

Also.. With what I can see of whats going on, id be surprised if this forum is left alone when it all happens.. They could very well just scrap it as it is now and start a fresh.

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The board wants him off because they don't like his leadership... because he is incompetent... he's a prima donna... among other things. I was hoping someone other than me would say it.

 

Not picking nits or arguing zigzag, so don't take it that way.

 

It's not the board, it's the bond holders. They probably bought up close to face value because, you know, it's Gibson! Gibson is in danger of not making some big debt payments in some way. The bond holders see that as Gibson being unable to make the next coupon payment or meet maturity of those bonds. They want to trade the debt they own for ownership in the company, and that ownership needs to include new leadership, whether just the CEO or others as well.

 

If he is all those things that is too bad, and I hope he hasn't allowed his own arrogance to cloud everything up for them. Above all, it is just risky, debt laden business leadership.

 

Swapping debt for equity is not at all unusual in heavily leveraged business entities, and it isn't always a bad thing if it keeps the company going.

 

rct

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It's not the board, it's the bond holders. They probably bought up close to face value because, you know, it's Gibson! Gibson is in danger of not making some big debt payments in some way. The bond holders see that as Gibson being unable to make the next coupon payment or meet maturity of those bonds. They want to trade the debt they own for ownership in the company, and that ownership needs to include new leadership, whether just the CEO or others as well.

 

 

Ah. Thanks for the correction and enlightenment.

 

How exactly does trading debt for ownership work? What is the likelihood, in your estimation, that they would end up selling the company? In your estimation, do you think the bond holders/owners feel they can pay off debt and make Gibson (the entire entity) profitable?

 

My apologies for the rant, but all I know about Gibson and Henry J. is what I've read. I love Gibson guitars, but I just can't get past what he has said about his customer (and dealership) base, the conditions imposed on his dealerships, what I've read about his management of the company, the apparent questionable activities before and after the raids, the judgments that he has made in the diversification of his company, and the judgments he has made in his product line/design. I'm hoping the bond holders/owners can find an effective CEO without having to sell to an unsympathetic owner.

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Guest Farnsbarns

There is some questions over the madagascar ebony situation. Seems Gibson might have been warned from within that there was no truly white market for ebony in Madagascar, that it was all either black market, or somewhat grey, but they continued. That is, of course, if one chooses to believe the press.

 

The Indian rosewood thing was clearly not the same. US authorities chose to enterpret Indian laws in a way the Indian authorities didn't. American law said Gibson (and others) must abide by the exporting nations laws. India say Gibson did, but the US don't agree. Seems to me India should be the horses mouth here.

 

I don't actually think the confusing product line has damaged the business and 2015 aside, neither has their new tech. Just choices for consumers.

 

I really think the only real error Henry has made was the brand buy up. Easy to say with hind sight too.

 

There was a time when Henry was the hero in the piece. The guy who saved Gibson. How quickly that changes. In business, you're only as good as your last bad decision. All the good desisions and actions evaporate.

 

I really feel for Henry and if anything might put me off future purchases it would be that the bond holders had chased out this capable CEO, the man who saved Gibson in a time when it was really in trouble.

 

I don't know where they'll find a replacement but unless they come from within the industry it's likely we'll all see just how bad a Gibson can get.

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I really feel for Henry and if anything might put me off future purchases it would be that the bond holders had chased out this capable CEO, the man who saved Gibson in a time when it was really in trouble.

 

I don't know where they'll find a replacement but unless they come from within the industry it's likely we'll all see just how bad a Gibson can get.

 

True words I fear.

 

If we get the typical "Accountant" CEO to replace Henry then it will go from bad to worse.

 

At least henry recognises his mistakes even if he still cannot quite see that some people might love Gibson and yet not love electronic tuning machines and PCB boards in guitars.

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In my life, I've had a tendency to buy tangible items instead of going on trips, going out partying, or otherwise spending my money on activities or intangible things. It's served me well, because the rainy day WILL come. I always had those tangible items to sell off and bail myself out of financial trouble. Sometimes I was smart or lucky and actually made a profit on these things. That was just an extra scoop of ice cream.

 

What a wonderful thing it would be, if Henry sold off all the brands that aren't actually doing anything for Gibson.

 

Not second guessing Henry. But I know firsthand how to draw the wagons into a circle, and make that circle smaller if need be.

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Ah. Thanks for the correction and enlightenment.

How exactly does trading debt for ownership work?

 

Essentially, the bond(debt) holders would forgive, cancel the debt(principle upon maturity plus interest payments) they are owed by Gibson in exchange for ownership(stock in a public company) of a percentage of the company. What Gibson Fans in here and the acoustic forum fail to acknowledge is that this is not done in any form of hostility, nobody is tearing Gibson down, they are dealing with a company that is struggling and as the debt(bond) holders they do not see Gibson being able to repay them. It's just a fact of business, not somebody goin all grudge on Henry. If they are to be the new owners they will of course, like any other owners of a company, have a say in who runs it.

 

What is the likelihood, in your estimation, that they would end up selling the company?

 

Keeping in mind that we know absolutely nothing about their finances because they are not publicly traded, and keeping in mind that all of the financial information we see is extrapolated from a small amount of publicly available stuff, an estimation is all anyone can make. Their problem is that bondholders are organizing, that is not good. They are probably organizing, if that is true, ahead of what they see as an inevitable bankruptcy, which means that they see Gibson being unable to sell itself for anything remotely close to the debt they carry, so no investors are going to just buy a box full of debt that can't pay for itself just because it has the name Gibson on the headstock. Probably.

 

That's all a guess and nothing more.

 

In your estimation, do you think the bond holders/owners feel they can pay off debt and make Gibson (the entire entity) profitable?

 

I think, guessing, that if it is true the bondholders are organizing I think they simply want something for their investment. They bought 1000 dollars worth of debt for, let's guess, 900 bucks, maybe even closer to face value because it is Gibson, great guitars, blah blah blah. However much time later Gibson has(maybe, we don't know) passed on some interest payments, promising higher in the future, maybe shoved back a maturity date in exchange for even higher interest, things like that, complex, complicated mechanizations of large scale finance. Bond holders see the company as not only not making their interest payments, but possibly not making their principle payments. In other words, they bought 1000 dollars worth of debt for 900 and now may only get 700. Not good. The debt they are concerned about paying off is their own. After that they'll worry about the company.

 

If it is headed for bankruptcy they are organizing because they would like to be a large, medium, small part, who knows, of the next ownership team because the court will assign ownership as part of the bankruptcy proceedings, and the current owner will not be the current owner any longer, he will have lost his company to his unpaid debt.

 

My apologies for the rant, but all I know about Gibson and Henry J. is what I've read. I love Gibson guitars, but I just can't get past what he has said about his customer (and dealership) base, the conditions imposed on his dealerships, what I've read about his management of the company, the apparent questionable activities before and after the raids, the judgments that he has made in the diversification of his company, and the judgments he has made in his product line/design. I'm hoping the bond holders/owners can find an effective CEO without having to sell to an unsympathetic owner.

 

It seems, we can only guess, that they truly fell victim to the entire idea of Luxury Lifestyle Brand. Fashion and Jewelry can live in that realm, their retail face is about a third of their business, the rest being large scale sourcing of clothing and baubles for other names and houses. They can afford "loss leaders", stores in Disney Springs and Times Square that can't even make their rent but they stay open. Gibson can not do that, no matter how much the current management team likes being in Expensive Stuff Monthly magazine and crowing about their wealthy "clients", the fact is their retail business is greater than 60% of their income, and you can't leave that to chance.

 

When they(he, whomever) stood proudly next to that abomination SG with Swarovskis all over it, you knew it was the end of days for them. You can't stick yer thumb in the eye of your major consumer by scoffing at your bread and butter by pimping your retard-o "creation"s like that. You either make guitars for goofs like me to bash at or you make Luxury Lifestyle Brand items like drippy encrusted SGs. The two can't realistically live together, along with the constant "only 40 made world wide!!!" stuff. Yes, all of upper management and their friends got some nice guitars and had a great ride I'd bet, but you have to stop for gas at some point!

 

All of it just my opinion about business and their business, none of it personal, I was there for every minute of their travails since 1972 or so so I know what he did blah blah blah. It's just business.

 

rct

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In my life, I've had a tendency to buy tangible items instead of going on trips, going out partying, or otherwise spending my money on activities or intangible things. It's served me well, because the rainy day WILL come. I always had those tangible items to sell off and bail myself out of financial trouble. Sometimes I was smart or lucky and actually made a profit on these things. That was just an extra scoop of ice cream.

 

What a wonderful thing it would be, if Henry sold off all the brands that aren't actually doing anything for Gibson.

 

Not second guessing Henry. But I know firsthand how to draw the wagons into a circle, and make that circle smaller if need be.

Exactly. I've circled the wagons a few times and was glad for the tangible items (mostly Martins, but occasionally a Gibson😰) to get things back where they belonged. One of the greatest wastes of time, energy, and cash I've experienced was the cruise I got talked into a few years ago.

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Essentially, the bond(debt) holders would forgive, cancel the debt(principle upon maturity plus interest payments) they are owed by Gibson in exchange for ownership(stock in a public company) of a percentage of the company. What Gibson Fans in here and the acoustic forum fail to acknowledge is that this is not done in any form of hostility, nobody is tearing Gibson down, they are dealing with a company that is struggling and as the debt(bond) holders they do not see Gibson being able to repay them. It's just a fact of business, not somebody goin all grudge on Henry. If they are to be the new owners they will of course, like any other owners of a company, have a say in who runs it.

 

 

 

Keeping in mind that we know absolutely nothing about their finances because they are not publicly traded, and keeping in mind that all of the financial information we see is extrapolated from a small amount of publicly available stuff, an estimation is all anyone can make. Their problem is that bondholders are organizing, that is not good. They are probably organizing, if that is true, ahead of what they see as an inevitable bankruptcy, which means that they see Gibson being unable to sell itself for anything remotely close to the debt they carry, so no investors are going to just buy a box full of debt that can't pay for itself just because it has the name Gibson on the headstock. Probably.

 

That's all a guess and nothing more.

 

 

 

I think, guessing, that if it is true the bondholders are organizing I think they simply want something for their investment. They bought 1000 dollars worth of debt for, let's guess, 900 bucks, maybe even closer to face value because it is Gibson, great guitars, blah blah blah. However much time later Gibson has(maybe, we don't know) passed on some interest payments, promising higher in the future, maybe shoved back a maturity date in exchange for even higher interest, things like that, complex, complicated mechanizations of large scale finance. Bond holders see the company as not only not making their interest payments, but possibly not making their principle payments. In other words, they bought 1000 dollars worth of debt for 900 and now may only get 700. Not good. The debt they are concerned about paying off is their own. After that they'll worry about the company.

 

If it is headed for bankruptcy they are organizing because they would like to be a large, medium, small part, who knows, of the next ownership team because the court will assign ownership as part of the bankruptcy proceedings, and the current owner will not be the current owner any longer, he will have lost his company to his unpaid debt.

 

 

 

It seems, we can only guess, that they truly fell victim to the entire idea of Luxury Lifestyle Brand. Fashion and Jewelry can live in that realm, their retail face is about a third of their business, the rest being large scale sourcing of clothing and baubles for other names and houses. They can afford "loss leaders", stores in Disney Springs and Times Square that can't even make their rent but they stay open. Gibson can not do that, no matter how much the current management team likes being in Expensive Stuff Monthly magazine and crowing about their wealthy "clients", the fact is their retail business is greater than 60% of their income, and you can't leave that to chance.

 

When they(he, whomever) stood proudly next to that abomination SG with Swarovskis all over it, you knew it was the end of days for them. You can't stick yer thumb in the eye of your major consumer by scoffing at your bread and butter by pimping your retard-o "creation"s like that. You either make guitars for goofs like me to bash at or you make Luxury Lifestyle Brand items like drippy encrusted SGs. The two can't realistically live together, along with the constant "only 40 made world wide!!!" stuff. Yes, all of upper management and their friends got some nice guitars and had a great ride I'd bet, but you have to stop for gas at some point!

 

All of it just my opinion about business and their business, none of it personal, I was there for every minute of their travails since 1972 or so so I know what he did blah blah blah. It's just business.

 

rct

 

 

 

 

Good Post - thanks !

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Exactly! I've circled the wagons a few times and was glad for the tangible items (mostly Martins, but occasionally a Gibson😰) to get things back where they belonged. One of the greatest wastes of time, energy, and cash I've experienced was the cruise I got talked into a few years ago.

 

Yeah!!

I got back last week from my first (and last) cruise. Sort of like going to a resort hotel for a week, where your room is half the size, you can't play golf or tennis, the pool is the size of your kitchen at home and the 'entertainment' consists of Drunk Karaoke and performers from "America's Got Talent' who didn't make the Finals. Approximately $3K gone, when you consider boarding dogs, etc. Two afternoons at the beach of a Mexican 'resort' did not make it all worthwhile either.

I keep thinking "I could have bought an all walnut J45". So, instead of a really great guitar I could keep forever - I have some blurry pictures on my cellphone, a bottle of tequila and a refrigerator magnet.

I had more fun on the Government Sponsored cruises I took on smaller, gray painted ships a few decades ago.

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  • 2 weeks later...

Maybe an option for Gibson would be to drop or reduce there "other than Guitar" products,,accessories,straps,,picks,,amps,,or whatever and concentrate on just guitars till things pick up for them. It would be a sad day in the music industry for Gibson to close. IMO

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Robo tuners were a fail because no one took into consideration that to do alternate tunings properl, you really need different gauge of strings to compensate. This is why you have multiple guitars, and set then up accordingly. Not to mention that metal on metal was a bad frictions point and the tuners many times did not tune to pitch. Plus you had to rely on battery power, which also caused tuning issues.

 

Just a flawed idea that was pushed onto its customers, even when customers were against it. Still he blames the very customers he hopes to sell to. Suicide in business I would think.

 

I love Gibson guitars and feel they make wonderful instruments but...it's time for Henry to step aside and for someone else to run Gibson. Time to pass the torch.

 

As for Fender...they have their own issues and not to far behind Gibson.

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I think it's a misconception that younger people won't replace the older purists. Part of the attraction of Gibson for me is the purist thing. I like classic bursts and no robot tuners. I like PAF pickups. And I'm no Luddite, but if I wanted an Ibanez, I'd get an Ibanez.

 

And yes, Henry, Gibson players want cheaper guitars. I got the wonderful 2017 Tribute for the equivalent of 700 bucks on clearance sale, and I'm not the least bit jealous if your Les Paul cost three grand. I think he's mistaking purists for elitists.

 

And making Gibson into a lifestyle brand... Bad idea. You want hip, you go elsewhere. You want quality (after thorough inspection) and a sound that in my opinion is the ultimate guitar sound - you get a Gibson. I doubt the Frappucino Flying V will resolve the company's financial straits.

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I hope not. That would make Gibson look like a religion. [unsure]

Yeah I agree.. Ive been playing guitar on and off since I was 11 (now in my mid 40s).. It takes time I think for a player to find themselves and its a journey.. Most of us end up with the same conclusions to do with the original electric players and what they did and what influenced them there is a purity about it. It wasn't until I joined this fourm that I even cared about the technical side of guitars. Up until then I assumed that all guitars were made the same and were equal so all played and sounded the same.. How wrong I was :)

 

So for instance when I bought my first LP in about 93 I had no clues, there was no internet to tell me what the options were.. I just found one that I liked the look of and bought it.. When I went to buy my Tribute studio in 2011 I must have tried ten of them before I found one that spoke to me.. But at that point I knew what I was looking and listening for.

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Yeah I agree.. Ive been playing guitar on and off since I was 11 (now in my mid 40s).. It takes time I think for a player to find themselves and its a journey.. Most of us end up with the same conclusions to do with the original electric players and what they did and what influenced them there is a purity about it. It wasn't until I joined this fourm that I even cared about the technical side of guitars. Up until then I assumed that all guitars were made the same and were equal so all played and sounded the same.. How wrong I was :)

 

So for instance when I bought my first LP in about 93 I had no clues, there was no internet to tell me what the options were.. I just found one that I liked the look of and bought it.. When I went to buy my Tribute studio in 2011 I must have tried ten of them before I found one that spoke to me.. But at that point I knew what I was looking and listening for.

 

Well thats a vital point. In 40 years I only gigged one electric guitar. First a Strat (about 23 years) then Jackson (about 17 years). I was focused on music, not the tools. I knew almost nothing about guitars other than what I needed to know.

 

The only downside to learning about the tools (guitars) is you want to try them, compare them etc. and you end up buying more than you need. Its a pleasant downside admittedly! For your part, at least you have done something creative and fulfilling.

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For your part, at least you have done something creative and fulfilling.

Ha, and my previous career was working with computer games (which I spent most of my youth playing), and previous to that an assistant sound engineer (and in between a video and sound editor at the BBC)....

 

I have mostly been really lucky with my jobs.. [thumbup] Even though none of them have ever really led me anywhere in terms of financial success or stability its more important to me that I enjoy or at least have an interest in what I do :)

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Guest Farnsbarns

Ha, and my previous career was working with computer games (which I spent most of my youth playing), and previous to that an assistant sound engineer (and in between a video and sound editor at the BBC)....

 

I have mostly been really lucky with my jobs.. [thumbup] Even though none of them have ever really led me anywhere in terms of financial success or stability its more important to me that I enjoy or at least have an interest in what I do :)

 

Wise words, Rabs. I have only now, in my early forties, realised that stress and grief and doing something you don't like, for people you don't like, in an industry you don't like, just because it pays a bit (a lot, even) more than what you'd enjoy doing is ridiculous. I guess it's something I learned from my parents who always want their young adult children to chase success, and in my case that meant financial success.

 

I really can't do exactly what I like for a living becuase there is no money at all in any of it and exactly what I like changes constantly. I'm a dabbler. I get into things too easily. But working for a company who do something which fascinates me, amazes me every day and which I'm proud to be a part of is worth a significant cut in salary, especially when it's a really relaxed company who want happy, fulfilled employees just as much as they want performance.

 

There is a balance between that and ones codependents needs and supporting a life style but it's a balance I ignored for about 25 years and chased the highest salary I could without much thought for anything else.

 

I almost used to believe that people who banged on about enjoying their jobs and not chasing money were sappy, self excusing ne'r do wells who couldn't take the pressure if they tried. I was the fool.

 

Falling into the sales culture I actually convinced myself that I was motivated by money. That's what sales people say and live. I lied to myself for decades. I craved satisfaction, integration and creativity but didn't realise it until ill health knocked me another peg down and I really evaluated my life.

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Personally I think enjoying your job is way more important than money (if you can afford the luxury of choice). I went from being a furniture designer into teaching, which cut my income to half what I'd been earning and I didn't regret it one bit. You need to remember time is the most important currency, not money.

 

 

Ian

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Falling into the sales culture I actually convinced myself that I was motivated by money. That's what sales people say and live. I lied to myself for decades. I craved satisfaction, integration and creativity but didn't realise it until ill health knocked me another peg down and I really evaluated my life.

Yup.. thus the old cliché.. Youth is wasted on the young :)

 

Like with guitars, you think you know what you want until you get the life experience when you actually KNOW what you want but often by then its too late.. The paradox of life..

 

If I knew then what I know now I would have started making guitars straight after school (and possibly invested in Microsoft and Apple ;))... And practiced more scales and method in my playing much earlier on.

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