Gibson article

[Muzikman7]

This is intresting. http://www.ft.com/cms/s/2/cad42764-3924-11df-8970-00144feabdc0,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html

[uwe]

Sounds just like part of my daily work! Alienating lenders and the workforce is a candle burning from both ends, add your distribution channels and you have a possibly lethal threesome. Henry J has no doubt merits for Gibson, but 25 years in corporate power is a long time and you can't run an enterprise on the never-ending quest to be an established lifestyle brand like Nike as a family business. Perhaps it is indeed time for an owner change, the brand is certainly established enough (thanks to also Henry J, let's give credit where credit is due, Gibson was in its death throes in the mid-eighties) to be a nice asset in another context.

This ties in nicely with my experience of the Gibson booth at the Frankfurt fair last week. It was there and pretended to be almost as large as in years before, but upon closer inspection you saw that great parts of the alleged Gibson area were actually sub-leased to other exhibitors that had nothing whatsoever to do with the Gibson family of brands. A guitarshop owner referred to it as an "alibi booth" and commented that the all-clear for it had only reached European distribution two weeks before the fair.

Now downsizing your exhibition area in a downturn is not per se a bad thing and can be a sign of thrifty management. But what was much worse than the lesser space was how loveless an affair it was. Custom Shop, regular Gibsons, Epis and Kramers were hung against the wall without any concept. There was one single Gibson bass featured - the Grabber II - and that was relegated to the corner of an area otherwise populated by LP guitars with no explanation to it that it is now reputedly a series model. No TBird, no SG Bass, no BFG Bass, no nothing. Even the Epi basses were far from complete, a Goth TBird, a Pro one, an EB-0 and - the only news - a Zenith one which now seems to be available in black finish AND fretless after all (initially, only the natural fin was available fretless). It looked nice enough (those are not frets, it's a lined fretless) though a huge sustain block won't leave much of an acoustic tone remaining and the lack of a magnetic pup will not be to everyone's liking, I for one tend to grow tired of solely piezo sounds quickly (granted that there are differences in quality among the various systems).

[Blackbird]

While my wife will understand more of that with her financial background, can anyone here explain the price-fixing allegations?  I saw another link before, but I didn't get enough out of it to understand what the basis of those 20-30 claims were.

[uwe]

We don't know. The FTC not deciding to investigate certainly doesn't lend credibility to the individual claims and the US of A is a litigious country after all. Generally, an authority like the FTC has an instinct for where something is amiss. OTOH, America probably has more pressing cartel and anti-trust issues than the alleged price-fixing of Gibson guitars. And the FTC only that many investigators.

[Dave W]

The price-fixing allegations were BS. The lawsuits over price-fixing are BS. Setting a MAP is not price fixing, you can buy for less than that at a number of local and internet dealers. The idea that Henry J actually colluded with his bitter rivals to set prices is just beyond ludicrous.

The rest of the article is what interests me. I was expecting it to confirm what we read in the two articles I posted a few months ago -- the ones that mentioned Gibson's lowered bond ratings and the lack of audited 2008 financials. But it looks much worse than that. Still no financials, no explanations, replaced auditors, and now it looks like the lenders are finally up in arms about it. I won't be surprised if the company winds up in receivership.

OTOH they're still making an iconic brand that's still selling. Whatever happens to Henry J's regime, the brand will survive and I'm confident the manufacturing facilities will survive.

[Blackbird]

Thanks...I thought those seemed off (or inconclusive) but I'm not keen on the business world so I had to ask.  They sure seem to be misguided.

[Basvarken]

In a written statement, Gibson responded that Juszkiewicz "rescued this true American icon from the brink of bankruptcy when he acquired it in 1985; and under his strong leadership the technology, quality, sales and profits have steadily increased over the years. Gibson is doing well and has drastically increased its market share under his insightful leadership."

What's his name: Henry Kim Jong Il? 

[uwe]

There are inevitable similarities, true.

[Deathshead]

The price-fixing allegations were BS. The lawsuits over price-fixing are BS. Setting a MAP is not price fixing, you can buy for less than that at a number of local and internet dealers. The idea that Henry J actually colluded with his bitter rivals to set prices is just beyond ludicrous.

The rest of the article is what interests me. I was expecting it to confirm what we read in the two articles I posted a few months ago -- the ones that mentioned Gibson's lowered bond ratings and the lack of audited 2008 financials. But it looks much worse than that. Still no financials, no explanations, replaced auditors, and now it looks like the lenders are finally up in arms about it. I won't be surprised if the company winds up in receivership.

OTOH they're still making an iconic brand that's still selling. Whatever happens to Henry J's regime, the brand will survive and I'm confident the manufacturing facilities will survive.

Can we agree that they are guilty of GROSSLY overpricing their instruments to sell the word "Gibson" on the headstock?

[Dave W]

Can we agree that they are guilty of GROSSLY overpricing their instruments to sell the word "Gibson" on the headstock?

Some are grossly overpriced, others are bargains (like my Melody Maker guitar, or the faded series models).

But overpricing is not illegal, and it's a different issue from conspiring with other companies to fix prices.

[uwe]

Of course you're paying for the brand like you pay for any established brand. There is decades of work and nurturing behind it. But you also get a special product: At the top of your head, how many set-neck or all mahogany bass producers can you think of? The world is full of generic maple bolt-ons, but imitation of Gibson traits is comparatively rare among basses. (Did someone just cry out: "That's because they never sold any!!!" Would you please zip it!)

[Chaser001]

My computer won't let me access the article.  In trying to look for something similar, I did find something else of interest which I'm not sure has been posted.  It's a Deutsche Welle interview with Henry J.


http://www.dw-world.de/dw/article/0,,5390041,00.html