The Last Bass Outpost
Gear Discussion Forums => Gibson Basses => Topic started by: Chaser001 on February 18, 2010, 02:37:48 PM
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http://www.tennessean.com/article/20100218/BUSINESS01/2180331/Gibson-Guitar-faces-price-fixing-lawsuits
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"More job losses could be on the horizon in the music manufacturing industry because of a storm of lawsuits and weaker guitar sales,"
How about stop trying to saturate the market with 900 versions of the same les paul and trying to charge $2-$30k for it?
"George Gruhn, owner of Nashville store Gruhn Guitars Inc., said he views the lawsuits as "total complete hogwash" because he and other dealers often sell below Guitar Center's prices." <---think thats true? :-\
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Huh? I've used local dealers for 30 years that beat GC prices and MAP prices as standard practice, without "I have to ask my manager" shenanigans. The internet has made it easier to find even more places to find a deal. Isn't it incumbent on the buyer to shop around? Shopping around is short-circuited if GC orders a special model or color only available in their stores, but that's not price fixing.
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Just because somebody files a class action lawsuit doesn't mean it has any merit.
If the claim is that several companies got together to fix prices, that's just absurd. The marketplace would take care of that in short order. Without seeing the details of the suits, there's no way to tell, and I don't trust that reporter to know what he's talking about.
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I don't trust that reporter to know what he's talking about.
FYI, we are both employed by the same company, Gannett. You are wise.
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"The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."
:mrgreen: :mrgreen: :mrgreen: :mrgreen: :mrgreen: :mrgreen: :mrgreen: :mrgreen: :mrgreen:
I disagree completely. I'd be shocked if Gibson was not involved in any price-fixing for its products. It's just a matter of whether you can dig down deep enough to prove it. The way Gibson has reshaped its distribution in recent years certainly makes price control easier rather than harder.
With all due respect, Dave, saying that "the market place will take care of it", is a bit like saying that all lions will become vegetarian sooner or later because as more and more Zebras are eaten by them they will need to turn to grass as nutrition to survive. No. Individual lions starve to death if there are no zebras.
(http://www.fatheroflions.org/Photos_AnimalsWILD/Lion_StarvingInNairobiPark_200.jpg)
But the species as a group won't stop hunting them.
(http://www.google.com/url?source=imgres&ct=tbn&q=http://www.pollackphoto.com/tanzania/serengeti/lionkill/large/F0311-20.jpg&usg=AFQjCNH7M_aLC-Gzmx-v4p88V8abKJSRjg)
Price fixing is an inherent capitalist urge among dominant market players and it follows the law of evolution that within one species the members may fight and battle for food, territory and reproduction opportunities, but not eradicate themselves while doing so. That is why male lions have manes, not only because they turn the lionesses on,
(http://images.google.com/url?source=imgres&ct=tbn&q=http://www.african-safari-journals.com/image-files/lionmating.jpg&usg=AFQjCNFFt0zplIIum16F4oz1DwRzx5Prfw)
but also because they protect against the paw attacks of competitors.
(http://images.google.com/url?source=imgres&ct=tbn&q=http://www.pondoro.co.za/jan/Rangers-Report-Strip-4.jpg&usg=AFQjCNE2Al9I_XffxVssRwtfP_IpDOW39Q)
It is utterly sensible that chief market players do not want to waste resources by fighting battles they cannot win against each other. Price wars hurt every producer eventually and that the consumers get to pick up the bill disturbs companies about as much as the death of a zebra disturbs the zebra remains devouring lion.
(http://images.google.com/url?source=imgres&ct=tbn&q=http://farm3.static.flickr.com/2714/4301824939_59179904eb.jpg&usg=AFQjCNFklbMpu5hYRipHpbsnU-yS1OezFQ)
"I'm really, really worried about all those poor zebras, but what can you do?"
Capitalism-sceptic, "market forces"-denying rant over!
Comrade Uwe
(http://images.google.com/url?source=imgres&ct=tbn&q=http://revousa.org/wp-content/uploads/2009/07/marx.jpg&usg=AFQjCNEkBotjycyZRYZQXxQPTMcU6o_1Fg)
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"People will lose jobs. Companies will be hurt. No one will benefit except lawyers," Majeski said.
I'm a bit lost on the lion analogy... are the Lawyers the lions and Gibson the zebras?
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I'm a bit lost on the lion analogy... are the Lawyers the lions and Gibson the zebras?
Pretty much the lawyers are lions and and everybody else is the zebra! :mrgreen:
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Why is it that we people of the second-oldest profession have such a bad image? It really is like heroin addicts blaming the pushers for their consumption. All we do is fill a need.
Or focus people's attention on the fact that there is a need. :mrgreen:
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I, of course, reject all Marxist-oriented views of market forces along with impressionist images of the old toad's face and phrenology. Uwe's insert: :mrgreen: :mrgreen: :mrgreen: Lions would eat grass if they were of a species that could physically do that, as some omnivores can. But in regards to Gibson, they will try to compete until they croak. Market over-saturation will catch up with everyone. Except Rickenbacker which has avoided un-sustainable market grabs.
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I disagree completely. I'd be shocked if Gibson was not involved in any price-fixing for its products. It's just a matter of whether you can dig down deep enough to prove it. The way Gibson has reshaped its distribution in recent years certainly makes price control easier rather than harder.
With all due respect, Dave, saying that "the market place will take care of it", is a bit like saying that all lions will become vegetarian sooner or later because as more and more Zebras are eaten by them they will need to turn to grass as nutrition to survive. No. Individual lions starve to death if there are no zebras.
You misunderstand. I'm saying that there are so many companies in the market that any conspiracy between Gibson, Fender and a few others would fail. The idea that companies at the top end of the price range could pull off something like this is just absurd. Look what happened when Fender did raise its prices much more than usual last year -- they lost so much to the competition that they had to back off, reduce a lot of prices and hold special sales.
Now Gibson did try to fix retail prices, no doubt about that. They forced local dealer prices offline, nothing appears online unless it's a Gibson-approved price at one of the Gibson-sanctioned online dealers. That may or may not be legal, but it's not a conspiracy between Gibson and other companies.
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I have to say that as of late, I haven't been impressed with Gibson's practices (then again who has, orange peel anyone?). A few years ago they started forcing all dealers to carry a certain high percentage of Gibson stuff on their walls. Well because of that, at least in Nebraska and Iowa, you can only find Gibson in Guitar Centers now. I mean, come on, why in the world would I want to buy a Gibson hanging in one of those stores?
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Same is true here in Seattle Dave. If I want a new Gibson bass I use one of their online dealers, which last time I did worked pretty well. That was for my Nikki Sixx Mk.II, Gibson's price was $2400.00 and I ended up paying 1800.00 which was also the price of a standard finish 'Bird st the time tho they've dropped to about $1500.00 now
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You misunderstand. I'm saying that there are so many companies in the market that any conspiracy between Gibson, Fender and a few others would fail. The idea that companies at the top end of the price range could pull off something like this is just absurd. Look what happened when Fender did raise its prices much more than usual last year -- they lost so much to the competition that they had to back off, reduce a lot of prices and hold special sales.
Now Gibson did try to fix retail prices, no doubt about that. They forced local dealer prices offline, nothing appears online unless it's a Gibson-approved price at one of the Gibson-sanctioned online dealers. That may or may not be legal, but it's not a conspiracy between Gibson and other companies.
Gibson and Fender together is one hell of a chunk of the classic brand electric stringed instrument market. It's like BMW and Mercedes getting together and saying, oh, there is still plenty of competition in the upper class and luxury car sedan market, don't worry about us.
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I think their whole operation is teetering on the edge of problems. The price-fixing would be problematic, but I suspect that GC has been more involved in that then Gibson's wholesale operation. But you add that to the recent squishing of small-volume franchises in the last couple of years in favor of big buyers, and that wood importing stuff, and it don't smell right. GC itself is running on fumes. The market really is correcting, new used and vintage.
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Lions would eat grass if they were of a species that could physically do that
But you're missing the point; animals don't decide to do things to benefit their species as a whole, or another species, as Uwe correctly states. This is "group selection theory," and it was soundly disproved as a credible biological theory in the 1960's. Eating grass when zebras become scarce doesn't benefit individual lions because it reduces their caloric intake, status, and health of their offspring. Lions would much sooner compete for the very last zebra until total extinction.
Which ties into Uwe's point: if you believe the goal of capitalism is wealth accumulation, then the trajectory isn't going to focus on preserving a market or fairness. This could be supported with evidence of monopolistic tendencies seen in major industries over time: railroads, telecommunications, oil, etc. This information was proposed by no less a communist stalwart than the father of capitalism, Adam Smith (http://en.wikipedia.org/wiki/The_Wealth_of_Nations)!
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I'll take Milton Friedman over Karl Marx anyday. Now if Lions could fly..
But, besides all the critique of commerce as it stands, hobbled and unnatural, the other problem Gibson has is that some people seem to be coming out of the woodwork (maybe due to bad finishing) and lobbing lawsuits and criminal charges/investigations at them. A well-oiled corrupt business squashes this ahead of time. But Henry J doesn't get any heads up on these things till they happen. So has he got enemies? Or is someone orchestrating this, via legal/govt connections to bring wave upon wave of bad press? The damage could be done even if no crime exists.
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It does seem that Gibson is being targeted to me. First the illegal wood investigation and then this. It seems like too much of a coincidence. You may not see it here, but it isn't hard to find an outright visceral hatred of Gibson in general by a lot of people on the Internet who seem to take pleasure in Gibson's misfortunes. Gibson may have used illegal wood and it may have been guilty of price-fixing, but I have a feeling there are other companies just as guilty or more guilty of the same things. Whatever the behind-the-scenes reasons are, Gibson seems to have become a whipping boy.
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Or is someone orchestrating this, via legal/govt connections to bring wave upon wave of bad press? The damage could be done even if no crime exists.
Can we remember the Tucker?
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It's possible that Gibson is being targeted in the wood investigation. But the price fixing allegations are civil suits, not government action. And they involve other companies, not just Gibson. It's the plaintiffs' bar trying to extort settlements from big companies, nothing more, nothing less.
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...It really is like heroin addicts blaming the pushers for their consumption. All we do is fill a need...
Whatcha sayin' here? ;D
I like the lion/zebra analogy, which makes sense to me. The only thing on that I'd add is that cats will eat grass to help digestion or to help soothe upset stomachs. This isn't a food substitute as much as it is a healthy garnish. Of course they wouldn't survive if they had to rely on it for major food source.
That the price-fixing investigation could be vindictive and frivolous is definitely possible. For 10 years I worked in the medical device industry and quite often we had to contend with lawsuits, some legit, some frivolous. Sometimes a company which was infringing on one of our trademarks, copyrights or patents would preemptively sue us if they got wind we were going to sue them for that infringement. That would immediately place the burden on us and often this led to a settlement rather than a courtcase. In other words, sometimes lawsuits are simply strategy and have no merits on their own.
As far as Gibson instruments go, my favorite guitar shop stopped carrying them a few years ago because of poor quality. Brand new guitars and basses would show up from Gibson with the finish so soft you could peel it off with your fingernail. The luthier there told me that he told many customers to send the thing back to the company because it was under warranty and they shouldn't have to have it fixed by a luthier. Both the GC here and Sam A. carry Gibsons but hardly any are basses. I'm not sure what Gibson's strategy is for sales but it seems to be faltering to me.
I wonder if Gibson alone is being investigated for price fixing. Usually when I hear about price fixing two or more companies are involved.
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Couple of things:
1. I hate neither Gibson nor Henry J, I think the latter did fine with resurrecting Gibson from the sorry state it was in the mid-eighties. If Gibson is in a financial crisis now, I'm sure its not from Gibson USA, Custom Shop or Epiphone sales, but you never know how much their aggressive diversification strategy re other brands might have cost them and it seems to me that they got reckless overleveraging their equity (they were not the only ones, money was cheap and easy until 2007).
That said, Henry, will you please finally send the Ripper II over to Germany which I ordered many moons ago with you in another selfless effort to enlarge your personal wealth? You don't even know me, yet you could probably buy a medium-size car from all the profits you have made off me. :-\
2. Karl Marx' analysis of capitalism ranks among the best and is nothing short of acerbic. Never mind how his recommendation for that other economic system did not work. Capitalism, for all its unparalleled efficiency in generating goods and services, will always have a self-destructive streak and it is up to man to rein that streak in and turn the big bad wolf into a useful shepherd dog.
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That the price-fixing investigation could be vindictive and frivolous is definitely possible. For 10 years I worked in the medical device industry and quite often we had to contend with lawsuits, some legit, some frivolous...
I wonder if Gibson alone is being investigated for price fixing. Usually when I hear about price fixing two or more companies are involved.
There's no price fixing investigation, i.e. there's no government agency investigating them for fixing prices. There are only class action civil suits alleging price fixing among guitar companies including Gibson.
The only reason the article focuses on Gibson is that it's a Nashville paper.
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I once fed a carrot to a zebra... they bray like donkeys...
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When I was a kid I flipped off a llama on the other side of the chain link fence at the zoo. It hocked a loogie at me. :P
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I once fed a carrot to a zebra... they bray like donkeys...
Perhaps the wrong orefice then? :-X
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I once fed a carrot to a zebra... they bray like donkeys...
\
What a wonderful local collquialism Kenny!
I can bray like a donkey ;D
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But there all similarities in treatment must stop, please!
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DAMN IT...!!! Fraulein V and Herr Bassmeister... do you realise how difficult it is to clean tea out of a laptop keyboard...?!?!? :P
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do you realise how difficult it is to clean tea out of a laptop keyboard...?!?!? :P
Actually, yes, I do. We've all had that problem around here sometimes...
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Tea the liquid made from a tea bag, or tea made from loose tea leaves?
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Being the American you are, I had half-expected you to include "instant tea" in your question, Sir James. :-*
Don't you guys just generally toss it in cold salt water while dressed as ethnic minorities in an effort of tax evasion?
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http://www.businessweek.com/ap/financialnews/D9E25G5G0.htm
I don't know what it all means... any economists in the house?
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DAMN IT...!!! Fraulein V and Herr Bassmeister... do you realise how difficult it is to clean tea out of a laptop keyboard...?!?!? :P
little blow it out through the nose deal? :popcorn:
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hocked a loogie
Consider this line stolen. ;D New terminology to use, Awesome! :mrgreen:
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http://www.businessweek.com/ap/financialnews/D9E25G5G0.htm
I don't know what it all means... any economists in the house?
This is bad, but not unexpected, since Moodys downgraded Gibson last fall and said a further downgrade was possible. See this (http://bassoutpost.com/index.php?topic=3103.msg46254#msg46254) from a few months ago.
"The ratings are considered non-investment grade." translation = their credit rating has reached junk status.
They still haven't released their audited 2008 financial statements. The longer that's delayed, the more I'm inclined to think the outlook really is dim.
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As a non-Marxist economics fan, I would say the corporation is close to teats up. Relying on lines of credit to stay afloat is a game that does not play out so well over the last year and a half. But they could declare bankruptcy, restructure, sell off Baldwin, etc. It shall be interesting.
Instant tea? I never heard of such a thing. I suppose instant Iced Tea made with hot water. But how much of a hurry does one need to be in that a cup of tea is not quick enough? Tea demands no hurry. I am having a cup now. Very relaxing.
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This is bad, but not unexpected, since Moodys downgraded Gibson last fall and said a further downgrade was possible. See this (http://bassoutpost.com/index.php?topic=3103.msg46254#msg46254) from a few months ago.
"The ratings are considered non-investment grade." translation = their credit rating has reached junk status.
They still haven't released their audited 2008 financial statements. The longer that's delayed, the more I'm inclined to think the outlook really is dim.
Ouch, the clock is ticking louder. I'm sure their core guitar business can be carved out and find a new home anywhere, but it will be the end of Henry J's reign whose lifedream it was to turn Gibson into a life style company à la Harley Davidson or Nike. It would be interesting to see Gibson under a new roof. Would they concentrate on making it as the upmarket brand, the Mega Custom Shop, or would they retain the "there is a Gibson for everyone" approach and - I dare to fantasize - even do outlandish things again like advertising for their basses in the media?!!!
It is interesting how all the musician mags keep quiet about Gibson's financial dire straits - you would assume it would be something of interest to the community, it sure interests me. Seems like at least the PR department is still working in Nashville. In a report on Winter NAMM in German Gitarre & Bass the authors wrote: "Well, Winter NAMM took place without the anticipated breakdowns of certain name brands." and I took that as alluding to Gibson. Gibson is certainly concerned with other things momentarily than selling their products. A question I had to service of Gibson Europe some weeks ago has remained unanswered - that has never happened before, they were always quick to respond. There was also none of th usual NAMM reporting on their site as if they were ashamed of the fact of having subleased a booth space from Monster Cable.
Uwe
PS: Chris "Buzzard" P. should give his German friend Peter Wilfer of Warwick a call and talk him into buying that Nashville hopeless bunch. Gibsön needs deutsche Führung. And in a first step, the Thunderbird will be equipped with new Junkers Jumo pups and renamed Sturmvogel!
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Instant tea? I never heard of such a thing. I suppose instant Iced Tea made with hot water. But how much of a hurry does one need to be in that a cup of tea is not quick enough? Tea demands no hurry. I am having a cup now. Very relaxing.
Many of us 'Murricans are only interested in drinks which require less than 60 seconds of preparation.
I'll go as long as 10 minutes to fix dinner!
Good thing I'm married and my wife was a foods/nutrition major who enjoys working with actual bits of food, or I'd be living out of cans of chili.
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"Good thing I'm married and my wife was a foods/nutrition major who enjoys working with actual bits of food, or I'd be living out of cans of chili."
That's why I love being a bachelor! If I want to eat a can of chile right out of the can without warming it up - I do. It's also nice to have no regard whatsoever for the gas producing consequeces that inevitably occur later as I parade around the house in my civvies due to having no clean laundry............ ;)
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See now, my nice relaxing civilized cup of tea is clashing with images of eating beans out of cans and laying down bunts later. How did this happen?
I think both lifestyles can only be blamed on Gibson. Damn them! Damn them all to hellllllllllll!