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dhanners623

Gibson settles....

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I just heard something from someone somewhere that Esteban has purchased the wood in question.

Yeah, but his provision is to manufacture offshore, at slave wages.

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is gibson getting the wood back for guitar building or what ?

 

 

 

 

 

 

JC

No. The wood is forfeited, as I understand it.

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No one on this forum really wishes to deal with the political BS

In many cases, the BS is produced by forum members, so why go there?

An agreement was reached by Gibson and the government, and that's a good thing.

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Whatever? No one on this forum really wishes to deal with the political BS nature of the whole debaucle so my reply is "whatever".?. Someone or something will be the 'beneficiary' of the almost 300K of 'illegal' wood! They can have a big "woodie" over that too.....Jeesh!

Yeah, Pile-on Jannusguy et al......Like...."He be dissin' the regime!"

Oh there I go with my immature self again.....

I just can't contain it B)

See my Abe Lincoln quote of a few days ago.

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Gibson's response is here:

 

Link to "Gibson Comments on Department of Justice Settlement"

 

Red 333

So my guess was right -- Lacey Act enforcement has been reigned back to match the intentions of its authors, the import of Indian fretboard blanks is now officially okay, and Gibson gets the ones that were seized back. This is great news!

 

-- Bob R

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Gibson's response is here:

 

Link to "Gibson Comments on Department of Justice Settlement"

 

Red 333

 

 

That is a very interesting read, whether you think that either Gibson or the feds did anything wrong. The good thing that will come out of this is that companies will probably pay more attention to the sources and chain of custody of endangered woods, which is a good thing. This should not be a political issue: we all have a stake in it.

 

One of the imperatives under which we operate in my little corner of the world is "assume nothing". Another is "when in doubt, read the rules".

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The good thing that will come out of this is that companies will probably pay more attention to the sources and chain of custody of endangered woods, which is a good thing. This should not be a political issue: we all have a stake in it.

 

Largely I agree there, Nick (put that in your pipe and smoke it 40yearspicking :D ) the one caveat there is, adherence to the stipulation enforced won't stop illegal harvesting and selling, instead countries with a lesser reputation than those in the west will end up with these sources and as such guitars will inevitably end up here, to have one made from coveted woods here will cost many factors over the competition and not everyone is an ethics-first shopper.

 

What is likely is the current cost and future increased cost will be passed on to the customer, the import competition will be bale to import as they're 'finished pieces' and sell at massively undercut rates thus making it very hard for the operate at a level demonstrating any business growth.

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the one caveat there is, adherence to the stipulation enforced won't stop illegal harvesting and selling, instead countries with a lesser reputation than those in the west will end up with these sources and as such guitars will inevitably end up here, to have one made from coveted woods here will cost many factors over the competition and not everyone is an ethics-first shopper.

 

What is likely is the current cost and future increased cost will be passed on to the customer, the import competition will be bale to import as they're 'finished pieces' and sell at massively undercut rates thus making it very hard for the operate at a level demonstrating any business growth.

 

 

I can't disagree with that, but just because the other guy is doing it, that doesn't make it right for us to do it.

 

It makes Bob Taylor's approach of buying up production sources seem more rational, if your goal is really to effectively manage a scarce resource,

 

One thing I noted in the findings issued was that the invoice value of each fingerboard was about $10-$15. That is actually pretty consistent with the retail prices you see at the various luthier wood suppliers, where finished slotted fretboards in either rosewood or ebony go for about $20-$30.

 

The point here is that the cost of wood is only about 25-30% of the manufacturing cost. The rest is primarily labor, capital cost, and general overhead which do not vary with the cost of wood. The cost of the wood itself could increase a fair amount without catastrophic impact on prices.

 

Looking at prices, a new Gibson typically sells at about 25-30% off MSRP, which is a pretty meaningless number. I suspect most dealers work on a margin of about 20% on new guitar sales, which gives a reasonable idea of the actual cost of the guitar to the retailer. Assume the manufacturer is not selling them to the dealers at a loss.

 

No manufactuer likes to see his costs go up, as he must either absorb the increased cost and cut into his bottom line, or raise the price, which may also cut into his bottom line by reducing the demand for his product. It's a tricky balance.

 

If anything, it gives the domestic producer who is willing to live by the rules a strong incetive to see those rules effectively enforced on others, particularly on competing imported products. Then you get into the whole issue of tariffs, which is another can of worms.......

 

If you don't have some rules, however, the market gets flooded by cheap imports, and more US manufacturing goes away. But the US consumer gets to buy more stuff, cheaper, and US retailers may do better. Ain't so simple, is it?

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I can't disagree with that, but just because the other guy is doing it, that doesn't make it right for us to do it.

 

It makes Bob Taylor's approach of buying up production sources seem more rational, if your goal is really to effectively manage a scarce resource,

 

One thing I noted in the findings issued was that the invoice value of each fingerboard was about $10-$15. That is actually pretty consistent with the retail prices you see at the various luthier wood suppliers, where finished slotted fretboards in either rosewood or ebony go for about $20-$30.

 

The point here is that the cost of wood is only about 25-30% of the manufacturing cost. The rest is primarily labor, capital cost, and general overhead which do not vary with the cost of wood. The cost of the wood itself could increase a fair amount without catastrophic impact on prices.

 

Looking at prices, a new Gibson typically sells at about 25-30% off MSRP, which is a pretty meaningless number. I suspect most dealers work on a margin of about 20% on new guitar sales, which gives a reasonable idea of the actual cost of the guitar to the retailer. Assume the manufacturer is not selling them to the dealers at a loss.

 

No manufactuer likes to see his costs go up, as he must either absorb the increased cost and cut into his bottom line, or raise the price, which may also cut into his bottom line by reducing the demand for his product. It's a tricky balance.

 

If anything, it gives the domestic producer who is willing to live by the rules a strong incetive to see those rules effectively enforced on others, particularly on competing imported products. Then you get into the whole issue of tariffs, which is another can of worms.......

 

If you don't have some rules, however, the market gets flooded by cheap imports, and more US manufacturing goes away. But the US consumer gets to buy more stuff, cheaper, and US retailers may do better. Ain't so simple, is it?

 

Again, I can't disagree with what you've posted at all, Nick, the hard part is 'seeing others face the same regulation', inside a single-country single-law market no problem, when you factor in cross border trading agreements and fine-print on 'finished goods' you're choking your own market and propagating the competitors market. It also isn't helped by the delicate nature of trade agreements with some of the countries that could spring to mind when talking about this.

 

I doubt anyone sensible would dispute restrictions being enforced for the longer term good, but it's not a simple implementation, it's full of loop holes that appease certain questionable aspects in favour of these competing markets. It's a hard one to generalise over anyway, as any manufacturing sector will only have a small amount of companies that have the brand power that Gibson enjoys within the guitars market, so the decisions open to exec's are not always the same, all other things being equal.

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Again, I can't disagree with what you've posted at all, Nick, the hard part is 'seeing others face the same regulation', inside a single-country single-law market no problem, when you factor in cross border trading agreements and fine-print on 'finished goods' you're choking your own market and propagating the competitors market. It also isn't helped by the delicate nature of trade agreements with some of the countries that could spring to mind when talking about this.

 

I doubt anyone sensible would dispute restrictions being enforced for the longer term good, but it's not a simple implementation, it's full of loop holes that appease certain questionable aspects in favour of these competing markets. It's a hard one to generalise over anyway, as any manufacturing sector will only have a small amount of companies that have the brand power that Gibson enjoys within the guitars market, so the decisions open to exec's are not always the same, all other things being equal.

 

 

As we both say, it ain't a simple situation, and there ain't a simple solution. The globalization of economies makes for a pretty messy business world. Heck, we can't even agree on a common system of measurements, much less whether 'hog is better than rosewood!

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Less smog from a hog....

 

 

Well, I've got two rosewoods, three maples, four 'hogs, and a carbon fiber right now.

 

The carbon guitar has unique overtones, sort of a cross between maple and Airbus A-380.....

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So the government has $250K worth of Madagasscar ebony stored somewhere.

Who gets it? And will the next owner be any less tainted than Gibson?

 

I find it difficult to get my head in a place I could answer this. I've read in several places that agriculture in both Madagascar and in Brazil calls for clearing forested land, and they have no problem burning the wood. I also know for awhile they used hard wood to make shipping pallets in Brazil. So, even in Madagascar where more than half their forests have been cleared, if anyone there can figure out how to sell wood illegally and make a buck, they will. Guns like Berettas made in Italy have rosewood grips which are thick and contoured so probably use as much raw wood as fingerboards. As has been asked about the equivalent of our 1920s Lacey ( bird feather intended) act in China, I am sure the government of Italy believes what may be their #1 business (beretta supplies all pistols to US armed forces) does not need heavy handed regulations. Tourists in Haiwaii can buy full sized, beautiful outrigger paddles made of solid Koa hardwood. I believe it is up to Madagascar to prevent the cutting of the trees in their own country, now they've woken up. That would include preventing them from being exported of course. But if they make the laws so complicated (raw blanks bad, finished blanks good) or so poorly enforced their is still an incentive to cut down the trees, then that is their problem. Once the tree is felled, obviously, the damage is done. I think everyone under Madagascar's laws should get twenty years planting seedlings. I don't agree that is the responsibility of the importer (Gibson) to vet or perform " due diligence on the exporter. It is Madagascar's responsibility to do that and certify them . If Gibson buys from any other source, then they should fall under US laws. Which should be very tough. But fair and even handed. (I'm lost why Gibson cant buy wood, but Taylor can buy the forest.)

So, what happens to the seized wood? That to me is easy - sens it back to Madagascar and let them pay the shipping. Their government in effect says it owns the wood, so let them decide what to do with it once it is harvested due to their own inability to protect it while a living tree.

PM, thoughts, comments...can I get an "Amen"?

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I find it difficult to get my head in a place I could answer this. I've read in several places that agriculture in both Madagascar and in Brazil calls for clearing forested land, and they have no problem burning the wood. I also know for awhile they used hard wood to make shipping pallets in Brazil. So, even in Madagascar where more than half their forests have been cleared, if anyone there can figure out how to sell wood illegally and make a buck, they will. Guns like Berettas made in Italy have rosewood grips which are thick and contoured so probably use as much raw wood as fingerboards. As has been asked about the equivalent of our 1920s Lacey ( bird feather intended) act in China, I am sure the government of Italy believes what may be their #1 business (beretta supplies all pistols to US armed forces) does not need heavy handed regulations. Tourists in Haiwaii can buy full sized, beautiful outrigger paddles made of solid Koa hardwood. I believe it is up to Madagascar to prevent the cutting of the trees in their own country, now they've woken up. That would include preventing them from being exported of course. But if they make the laws so complicated (raw blanks bad, finished blanks good) or so poorly enforced their is still an incentive to cut down the trees, then that is their problem. Once the tree is felled, obviously, the damage is done. I think everyone under Madagascar's laws should get twenty years planting seedlings. I don't agree that is the responsibility of the importer (Gibson) to vet or perform " due diligence on the exporter. It is Madagascar's responsibility to do that and certify them . If Gibson buys from any other source, then they should fall under US laws. Which should be very tough. But fair and even handed. (I'm lost why Gibson cant buy wood, but Taylor can buy the forest.)

So, what happens to the seized wood? That to me is easy - sens it back to Madagascar and let them pay the shipping. Their government in effect says it owns the wood, so let them decide what to do with it once it is harvested due to their own inability to protect it while a living tree.

PM, thoughts, comments...can I get an "Amen"?

 

I can't quite agree with that :D :D :D

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It's easy to say oh well let Madagascar take care of its environment. But there has been political instability and a coup there. Enforcement is spotty and government corrupt. Meanwhile one of the most fascinating ecosystems on the planet is being destroyed. Don't turn your back and say I'm not my brother's keeper and let bandits, despoilers, and greedy enablers do the dirty while we look the other way. Don't destroy our cousin's habitat:

 

lemur8.jpg

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It's easy to say oh well let Madagascar take care of its environment. But there has been political instability and a coup there. Enforcement is spotty and government corrupt. Meanwhile one of the most fascinating ecosystems on the planet is being destroyed. Don't turn your back and say I'm not my brother's keeper and let bandits, despoilers, and greedy enablers do the dirty while we look the other way. Don't destroy our cousin's habitat:

 

 

All very true, Jerry... if we're expanding the argument, we might then have to address the facts that a rather large number of us are key contributors, I mean how many guitars do we really need? usual justifications for consumerism aside... legalities are only a side of the supply & demand chain. To make a real point wouldn't you have to make a bigger stand and stop import of that wood altogether? If enough people did it would curb the trade almost completely.

 

 

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All very true, Jerry... if we're expanding the argument, we might then have to address the facts that a rather large number of us are key contributors, I mean how many guitars do we really need? usual justifications for consumerism aside... legalities are only a side of the supply & demand chain. To make a real point wouldn't you have to make a bigger stand and stop import of that wood altogether? If enough people did it would curb the trade almost completely.

There are still legal and ecologically responsible supplies of Indian and african rosewood, mahogany, maple and other woods. The amount of wood used in guitars is miniscule compared to what goes to furniture and flooring. I have been personally boycotting madagascar products, in so far as I can identify them, for a few years. None of my instruments have wood from madagascar, to my knowledge.

 

Note: I am not saying beat yourself up if you own wood from Madagascar. I am suggesting don't buy any more.

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Hey Guys! 46 posts after dhanners623 threw us this 'bone'.....Please tell me what the 'final anaysis' is!!!!

As usual for an 'immature simpleton' PLEASE give me the "Readers Digest" 'condensed version' so as ....I can digest it and 'possibly' laugh at it ](*,)

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Hey Guys! 46 posts after dhanners623 threw us this 'bone'.....Please tell me what the 'final anaysis' is!!!!

As usual for an 'immature simpleton' PLEASE give me the "Readers Digest" 'condensed version' so as ....I can digest it and 'possibly' laugh at it ](*,)

 

 

Rod, I think you should just read the settlement agreement and draw your own conclusions. I don't think there are winners or losers here: just lessons to be learned about dotting your I's and crossing your T's when buying endangered wood in a market that can most kindly be described as a "grey market" with lots of fringe players. No grand conspiracies, and perhaps no conscious intent to circumvent the law. Maybe a somewhat sloppy "see no evil" attitude on Gibson's part, coupled with aggressive enforcement by the feds.

 

This is not necessarily a zero-sum game.

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