Buc McMaster Posted March 31, 2010 Share Posted March 31, 2010 Don't mean to be the bearer of bad tidings, but Gibson as we know it is not going to survive. Gibson In The Soup.......thank you, Henry. Link to comment Share on other sites More sharing options...
BigKahune Posted March 31, 2010 Share Posted March 31, 2010 Thanks Buc. That's a very thorough article you pointed us at. Looks like the fears many of us have had building up over the last few years were sadly well founded. I hope Henry comes to his senses before it's too late. <* edit *> Hey Buc, I posted your link in the SG and LP forums, credited to you of course. Link to comment Share on other sites More sharing options...
BigKahune Posted March 31, 2010 Share Posted March 31, 2010 A big thanks to Buc McMaster over on the Acoustic forum for this link. It doesn't look good guys - Henry is running Gibby into the ground. http://www.ft.com/cms/s/2/cad42764-3924-11df-8970-00144feabdc0,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html Link to comment Share on other sites More sharing options...
BigKahune Posted March 31, 2010 Share Posted March 31, 2010 A big thanks to Buc McMaster over on the Acoustic forum for this link. It doesn't look good guys - Henry is running Gibby into the ground. http://www.ft.com/cms/s/2/cad42764-3924-11df-8970-00144feabdc0,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html Link to comment Share on other sites More sharing options...
NeoConMan Posted March 31, 2010 Share Posted March 31, 2010 Funny how you can keep saying the same thing over and over and over while people listen less and less... They're aiming their entire product line at the beginners and kiddies with Mom & Dad paying the tab. And the money side now looks like a miniature fxcking Enron. Was Henry listed in Bernie Madoff's cell phone? Quotes I selected from the article; Juszkiewicz earned widespread praise for rescuing the brand in the mid eighties with a hands-on approach, only to draw equally widespread criticism in recent years for his autocratic management style. The owner dissolved Gibson’s board of directors in 2008 and spent free cash flow on dividends and subsidiaries, even as he failed to report earnings and flirted with covenant breaches, four sources familiar with Gibson’s financial travails told Debtwire. robot guitars, abandonment of small retailers and a revolving door of middle managers... no independent board of directors and no public shareholders... “In the guitar world, a lot of people are frustrated because they feel that Juszkiewicz has ruined the company because it’s all about his ego, not the guitars” "they are trying to stretch this game out as long as they can before the house of cards comes falling down..." “People who are Gibson dealers end up having to have a lot more [product] than what they want to have...” the manufacturer’s de-facto exclusive distribution arrangements with mega-stores like Guitar Center squeezed out independent shops by requiring them to invest an outsized portion of their capital Guitar Center and Sam Ash declined comment. Gibson dealt with a Federal Trade Commission investigation into price collusion, and a US Fish and Wildlife Service investigation into illegal rainforest timber importations that led to a raid on Gibson’s Nashville plant. The FTC declined to pursue charges as a result of its investigation, but the company is currently party to approximately 30 lawsuits that allege Gibson and other manufacturers and organizations conspired to fix prices of musical instruments. the company replaced auditor Grant Thornton with KPMG and three CFOs cycled in and out by mid-year Link to comment Share on other sites More sharing options...
EVOL! Posted March 31, 2010 Share Posted March 31, 2010 Ouch! Would hate to see who swoops in to buy Gibson after it goes belly up. Probably someone not in the instrument making business. god help us. Link to comment Share on other sites More sharing options...
NeoConMan Posted March 31, 2010 Share Posted March 31, 2010 Probably not an American company either. Care to guess what flag the Savior might be flying? Link to comment Share on other sites More sharing options...
ajsc Posted March 31, 2010 Share Posted March 31, 2010 Sad news! Link to comment Share on other sites More sharing options...
albertjohn Posted March 31, 2010 Share Posted March 31, 2010 I agree, it is a real shame that an autocratic boss can not see beyond his nose. I'm sure most of us have worked for such people and it's generally unpleasant, inefficient and demoralising. However, this is no basket case. If the profits are as estimated in this article then they've done well. Problem is, noone knows because Henry has failed to publish the numbers. If it was as bad as some people fear, the creditors would have taken some action by now. The breaches of covenant referred to are the failure to deilver accounts. I haven't read that it is a failure to service debt. There's a huge value to the IP in Gibson even after a couple of years of bad news from dealers and employees the goodwill is still there. It's a huge worldwide brand. So, who knows. Fender, Peavey, the chinese manufacturer who has just bought Volvo? It could be Henry is busy finding new bankers. All we can hope for is that whoever picks up the baton can make some improvements. People management and dealer relations should produce some easy wins? My 2 cents. Link to comment Share on other sites More sharing options...
jimmiJAMM Posted March 31, 2010 Share Posted March 31, 2010 Maybe AMF will buy 'em out like they did Harley-Davidson back in the 70's. Link to comment Share on other sites More sharing options...
lpdeluxe Posted March 31, 2010 Share Posted March 31, 2010 China. Henry is doing what a Harvard MBA is trained to do: maximize profits, build an empire, and swashbuckle his way into history. Unfortunately, that approach doesn't help Gibson. Craft-based companies are poor candidates for world-change platforms. The policy of insisting on ruinous inventory investment to stock Gibson forces the smaller dealers out, and that's not a good thing. A lot of us depend on the local store to pick up gigs, recruit band members, and check out new gear -- I'd as soon hang out at GC (for example) as I would Wal-Mart. Didn't Gibson already go through a period of clueless MBA ownership? Oh yeah -- it was called the Norlin era. Link to comment Share on other sites More sharing options...
jimmiJAMM Posted March 31, 2010 Share Posted March 31, 2010 Don't knock the Norlin era, it gave me my beloved Walnut '78 which will blow the doors of most anything out there. Guess our good ol' "Made in the USA" Gibsons would become even more valuable as a result. Link to comment Share on other sites More sharing options...
dhanners623 Posted March 31, 2010 Share Posted March 31, 2010 Jeez. It kind of sounds like it could be a business school class on "How to Screw Up a Famous Company." I've never run a business and I'm certainly no rocket scientist but even I can see that if you're going to have a company that size, you need a board of directors. It just makes sense. Guys with outsized egos should especially have a board. I mean, jeepers, even Lee Iococca could deal with a board when he was at Chrysler. And I've read through the article a couple of times, but I still don't really understand the business model in which you force small retailers to buy huge amounts of your product or none at all. Link to comment Share on other sites More sharing options...
NeoConMan Posted March 31, 2010 Share Posted March 31, 2010 Yeah, but you gotta admit that the moves Gibson made then were unprecedented in their idiocy. Some good products still managed to get out the door but... Henry has validated pretty much every criticism of the Norlin Years, and gone one better in most cases. I'd as soon hang out at GC (for example) as I would Wal-Mart. Funny you should mention that... I hang out at Guitar Center now and then - rarely purchase anything. Most of our household staples come from Wal-Mart, but I ain't hanging out there any longer than it takes to buy. Link to comment Share on other sites More sharing options...
tbonesullivan Posted March 31, 2010 Share Posted March 31, 2010 I guess it's time to bring out my "BRING BACK THE VOLUTE!" sign. More than anything, the real reason for getting rid of it is probably pretty simple: it requires a thicker neck blank, and therefore requires more wood to make necks with volutes. I mean, seriously. I want a MODERN Les paul, maybe like the axcess, but maybe something more. And um, drop the freakin robot guitars Henry, before it's too late. Link to comment Share on other sites More sharing options...
zombywoof Posted March 31, 2010 Share Posted March 31, 2010 Holy Shades of Arnie Berlin! Funny how Gibson did just fine its first 70 or so years when the place was run by guys who knew how to design and build guitars. Link to comment Share on other sites More sharing options...
Jinder Posted March 31, 2010 Share Posted March 31, 2010 This is shocking. It certainly doesn't paint a picture of a company in rude health. I agree with Zombywoof, a guitar manufacturer is best run by people who make, play and buy guitars. Link to comment Share on other sites More sharing options...
deepblue Posted March 31, 2010 Share Posted March 31, 2010 Gibson will survive in one form or another. Link to comment Share on other sites More sharing options...
mr newhaven Posted March 31, 2010 Share Posted March 31, 2010 This is shocking. It certainly doesn't paint a picture of a company in rude health. I agree with Zombywoof' date=' a guitar manufacturer is best run by people who make, play and buy guitars.[/quote'] agreed! unfortunately they need to come together...get enough scratch and purchase it outright from ownership and start a co-op of sorts to ensure proper repayment... didnt this happen with Harley Davidson in the 80's?? Link to comment Share on other sites More sharing options...
Jinder Posted March 31, 2010 Share Posted March 31, 2010 I would love to be part of a Gibson buyout. Unfortunately the investment capital I possess amounts to 43p, a pack of D'Addario EJ16s (with the G missing), two Scotch Eggs and a copy of last August's Guitar Buyer. Am I in? Link to comment Share on other sites More sharing options...
ksdaddy Posted March 31, 2010 Share Posted March 31, 2010 I'll take the scotch eggs. Mmmmm, I can feel my heart trying to explode just at the thought of it. Link to comment Share on other sites More sharing options...
NeoConMan Posted March 31, 2010 Share Posted March 31, 2010 Yeah, don't forget the Better Business Bureau rating in the toilet as well.... Link to comment Share on other sites More sharing options...
jimmiJAMM Posted March 31, 2010 Share Posted March 31, 2010 Henry's trippinnnnnnnnnnnnn' Link to comment Share on other sites More sharing options...
lpdeluxe Posted March 31, 2010 Share Posted March 31, 2010 Don't knock the Norlin era' date=' it gave me my beloved Walnut '78 which will blow the doors of most anything out there.[/quote'] I'm not knocking the guitars: until recently I owned a '70 LP Deluxe and it was a gem. After I got my Bigsby-equipped SG and 335 it became surplus to requirements. But reading the Norlin corporate history is like watching a slow-motion train wreck: they started with the robust, highly successful CMI and, in their Harvard MBA insistence that they were business geniuses, ran the whole thing into the ground until all that was left was a stock certificate printing company, which was then bought by Pitney-Bowes. Someone who was there said that you couldn't spend money as fast as Norlin could burn through it. It's hard to pick out just one sorry decision they made. Suffice it to say that the world is a better place without them. Here's how bad it was: the same year that CBS sold Fender, minus the plant and facilities, for $12.5M, the heirs to Norlin sold off Gibson, blood, guts, feathers and all, for a mere $5M. Credit Henry J Juszkiewicz for rejuvenating Gibson, but he ain't no white knight. But what the hell: I keep buying Gibsons because they remain the best electric guitars on the planet, and, to add a different twist to what you added, my heirs will make a killing selling primo Made in USA Gibsons in a Made in China market. And, as a matter of fact, I haven't been in a Wal-Mart this year, and don't expect to be. Somebody I know might see me in there. Link to comment Share on other sites More sharing options...
Thundergod Posted March 31, 2010 Share Posted March 31, 2010 Thanks for the link Bigkahune, and thanks for sumarizing it Neo (I didn't care to read the whole thing so it was very useful) It's a shame one guy would take down what used to be the best guitar brand in the world. Maybe we should be happy we got to buy ours before the logo on the headstock changes to peavey. You know what I think? I think they deserve to suffer Guild's fate: to be bought by fender. Link to comment Share on other sites More sharing options...
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