Gibson Facing Price-Fixing Lawsuits

[Chaser001]

http://www.tennessean.com/article/20100218/BUSINESS01/2180331/Gibson-Guitar-faces-price-fixing-lawsuits

[Deathshead]

"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?

[jmcgliss]

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.

[Dave W]

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.

[Psycho Bass Guy]

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.

[uwe]

 "The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."

 


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.



But the species as a group won't stop hunting them.




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,



 but also because they protect against the paw attacks of competitors.



 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.


"I'm really, really worried about all those poor zebras, but what can you do?"

Capitalism-sceptic, "market forces"-denying rant over!

Comrade Uwe

[EvilLordJuju]

"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?

[OldManC]

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! 

[uwe]

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. 

[eb2]

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:   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.  

[Dave W]

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.

[bassvirtuoso]

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?

[TBird1958]

 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

[uwe]

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.

[eb2]

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.