AudioCircle
Audio/Video Gear and Systems => The Musician's Circle => Topic started by: OzarkTom on 2 May 2018, 12:20 am
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http://money.cnn.com/2018/05/01/news/companies/gibson-guitars-bankruptcy/index.html
Sorry to hear this. Vintage Gibson guitars will probably be even more expensive.
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I’m not surprise ,guitars is not as popular like before ,kids have no guitar god to look up to .
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With any luck they can shed the Gibson Lifestyle companies and just go back to making guitars like they should have done in the first place.
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With any luck they can shed the Gibson Lifestyle companies and just go back to making guitars like they should have done in the first place.
This.
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Does it really matter? There's more than enough guitar makers out there these days.
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Well, it certainly matters if you happen to work for Gibson.....
Sad to see an iconic American brand struggling.
Young people don't seem to listen much to guitar oriented music anymore. Everything is soulless, electronically generated crap that sounds like a washing machine with an unbalanced load. I know my parents thought the same thing about my music, but a lot of it (certainly not all) has stood the test of time. There are fewer people taking up the guitar (or pianio, or etc etc etc) because it requires effort to learn- if it was easy, everybody would be doing it. Everything the young people listen to today comes out of GarbageBand or its ilk.
Hope Gibson survives.
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They’ll get bought up by some hedge group or conglomerate and the quality will drop like a rock with cheaper prices just like so many other brands. The brand name is too valuable, someone will snatch them up. This has nothing to do with sales. It’s just another victim of creative financing that runs its course. Look at guitar center.
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Well, it certainly matters if you happen to work for Gibson.....
Sad to see an iconic American brand struggling.
Young people don't seem to listen much to guitar oriented music anymore. Everything is soulless, electronically generated crap that sounds like a washing machine with an unbalanced load. I know my parents thought the same thing about my music, but a lot of it (certainly not all) has stood the test of time. There are fewer people taking up the guitar (or pianio, or etc etc etc) because it requires effort to learn- if it was easy, everybody would be doing it. Everything the young people listen to today comes out of GarbageBand or its ilk.
Hope Gibson survives.
+1. His products were expensive low sales, they refused to enter the low priced market.
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Well, it certainly matters if you happen to work for Gibson.....
Sad to see an iconic American brand struggling.
Young people don't seem to listen much to guitar oriented music anymore. Everything is soulless, electronically generated crap that sounds like a washing machine with an unbalanced load. I know my parents thought the same thing about my music, but a lot of it (certainly not all) has stood the test of time. There are fewer people taking up the guitar (or pianio, or etc etc etc) because it requires effort to learn- if it was easy, everybody would be doing it. Everything the young people listen to today comes out of GarbageBand or its ilk.
Hope Gibson survives.
So not true. Pull up youtube and look up the many boys and girls across the globe shredding their axes. Walk into a guitar center and there are always people checking out guitars. You make it sound like everyone played in the ‘old days’. Guitars are ever popular but always been a small market. And Gibsons are expensive. So you’re not really talking about these darned kids. You’re talking about midlife crisis men who suddenly no longer have the urge to plink down 1000 plus. Got nothing to do with the younger generation.
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So not true. Pull up youtube and look up the many boys and girls across the globe shredding their axes. Walk into a guitar center and there are always people checking out guitars. You make it sound like everyone played in the ‘old days’. Guitars are ever popular but always been a small market. And Gibsons are expensive. So you’re not really talking about these darned kids. You’re talking about midlife crisis men who suddenly no longer have the urge to plink down 1000 plus. Got nothing to do with the younger generation.
https://www.washingtonpost.com/graphics/2017/lifestyle/the-slow-secret-death-of-the-electric-guitar/?utm_term=.cbd5e5c1747f
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Maybe their troubles with the government in 2011 had something to do with this.
https://www.npr.org/sections/therecord/2011/08/31/140090116/why-gibson-guitar-was-raided-by-the-justice-department
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I thought guitars were more popular these days... btw.
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Maybe their troubles with the government in 2011 had something to do with this.
https://www.npr.org/sections/therecord/2011/08/31/140090116/why-gibson-guitar-was-raided-by-the-justice-department
I thought Gibson plants their woods, as they advertised in the 90's in Guitar Player.
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https://www.nationalreview.com/corner/gibson-ceo-slams-big-liberal-obama-robert-costa/
Henry Juszkiewicz, the chief executive officer of Gibson Guitar Corp., tells National Review Online that President Obama, a “big liberal,” has done “untold damage to business” and should not be applauded for his jobs speech. ”He’s a government fan,” he says. “He has a problem with successful businesses. He thinks they’re the problem, that they shouldn’t be quite as successful.”
“He is using the levers of government to not only redistribute, but to penalize,” he adds. “I see a difference between what he said and what he’s doing.”
Gibson has been under federal investigation in recent months, reportedly for its importation practices. Juskiewicz blames the Obama administration for causing his company, an iconic American brand, to lose money and lawyer up.
“We’re under attack,” Juskiewicz says. “It’s pretty interesting to see that one of the points in Obama’s speech was to cut back regulation and promote jobs, when, in fact, he’s done just the opposite with us. We have been under investigation and harassment for over two years and that continues on — seized goods, shut down our plant.”
No American laws were broken. It was political.
One of Gibson’s leading competitors is C.F. Martin & Company. The C.E.O., Chris Martin IV, is a long-time Democratic supporter, with $35,400 in contributions to Democratic candidates and the DNC over the past couple of election cycles. According to C.F. Martin’s catalog, several of their guitars contain “East Indian Rosewood.” In case you were wondering, that is the exact same wood in at least ten of Gibson’s guitars.
If two companies use the same materials from the same place, how is one bad and the other isn't?
After: spending nearly two and half million dollars in legal fees: and: paying a $300,000 fine, the government has settled with Gibson and has finally returned the confiscated tonewood.
They had to waste $2.5 million in legal fees, a $250K fine, and a forced $50K to pay off some environmental group in order to get their wood back a couple of years later.
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https://www.nationalreview.com/corner/gibson-ceo-slams-big-liberal-obama-robert-costa/
No American laws were broken. It was political.
Bwahahaha. Literally blaming Obama for Guitar company failure. That's hilarious.
Now back to reality:
Gibson Brands Inc. filed for bankruptcy with a turnaround plan that will give some of the company's lenders equity ownership
The change in control will give noteholders equity in a new company, replacing current stockholders such as Chief Executive Henry Juszkiewicz. According to court filings, current noteholders include Silver Point Capital, Melody Capital Partners LP, and funds affiliated with KKR Credit Advisors. The restructuring will also allow the instrument business to "unburden" itself of a consumer-electronics unit that Gibson blamed for its financial woes.
Its Gibson Innovations business, acquired in June 2014 from Koninklijke Philips NV, was the source of its financial woes, according to a court statement from Brian J. Fox, a managing director at Alvarez & Marsal who will serve as the company's chief restructuring officer. Acquired through a leveraged transaction, the business faced significant sales declines due in part to a loss of credit insurance overseas.
Sounds to me like Gibson had some other murkier issues related to its current 'restructuring' and acquisition by noteholders. Just like Guitar Center, etc. So like I said, Gibson isn't going anywhere. Money and debt are just changing hands, product will be compromised, consumers probably screwed. They're just doing what a lot of others are doing.
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I don't trust the government to do the right thing. Just look at how the I.R.S. was used as a political tool.
If one company get's punished while another doesn't for doing the exact same thing, it raises a big red flag. Either they both broke the law or neither broke the law. I don't have anything vested either way. I expect continuity. I say let them use the wood.
Shutting you down, confiscating your supplies-n-inventory, having you spend unnecessary funds to get them back years later will have an effect on your business. That's two years of current, future, and lost sales as well as hurting your reputation.
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https://www.washingtonpost.com/graphics/2017/lifestyle/the-slow-secret-death-of-the-electric-guitar/?utm_term=.cbd5e5c1747f
Like I said middle aged dudes who don't have the $$$$ to plunk down on expensive gear. Guitar sales are lower than a decade ago and a decade ago I'm sure they were lower than the decade before. ALL of retail is undergoing a massive sea change with big sales and revenue drops, be it Gibson or Sears or Toys R US. The PRS guy seems to get it:
“This is a very complicated mix of economy versus market, demand versus what products are they putting out, versus are their products as good as they used to be, versus what’s going on with the Internet, versus how are the big-box stores dealing with what’s going on,” Smith says. “But I’ll tell you this: You put a magic guitar in a case and ship it to a dealer, it will sell.”
Then there’s Henry Juszkiewicz, the biggest and most controversial of the music instrument moguls. When he and a partner bought Gibson in 1986, for just $5 million, the onetime giant was dying
Almost went down in '86. What was their excuse then? Run-DMC torpedoed their sales?
There’s also the line of self-tuning “robot” guitars that Gibson spent more than a decade and millions of dollars developing. In 2015, Juszkiewicz made the feature standard on most new guitars. Sales dropped so dramatically, as players and collectors questioned the added cost and value, that Gibson told dealers to slash prices.
Self wha? Doesn't sound like a consumer problem, sounds like a management problem.
Journey’s Neal Schon says he battled with Juszkiewicz when he served as a consultant to Gibson.
“I was trying to help Henry and shoo him away from areas that he was spending a whole lot of money in,” Schon says. “All this electronical, robot crap. I told him, point blank, ‘What you’re doing, Roland and other companies are light-years in front of you, you’ve got this whole building you’ve designated to be working on this synth guitar. I’ve played it. And it just doesn’t work.’ And he refused to believe that.”
Points for 'electronical'.
Juszkiewicz says that one day, the self-tuning guitars will be recognized as a great innovation, comparing them with the advent of the television remote control. He also believes in the Philips purchase. Eventually, he says, the acquisition will be recognized as the right decision.(6/2017)
M'kay. I think that says enough.
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I don't trust the government to do the right thing. Just look at how the I.R.S. was used as a political tool.
As evidenced above, politics has nothing to do with Gibson's problems. Unless you're saying the government should invest in in ROBOT GUITARS. Dangerous technology. Think of the consequences, man!
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As evidenced above, politics has nothing to do with Gibson's problems. Unless you're saying the government should invest in in ROBOT GUITARS. Dangerous technology. Think of the consequences, man!
It definitely was a piece of it. I wish it wasn't so it can solely be a management problem.
Government shouldn't be investing in things.
I don't know what a robot guitar is, but, since everything is going technology (self-checkouts, etc), I wouldn't be surprised.
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It definitely was a piece of it. I wish it wasn't so it can solely be a management problem.
Robot. Guitars.
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They never did get their ebony back and have been using Richlite (basically, counter top material) as a substitute ever since aside from very limited editions.
My understanding is that they did not pass on a shady ebony deal like everyone else did and they got caught.
They also started quietly replacing point to point wiring with PCB boards, tried to do away with conventional tuners and forced everyone to buy guitars with battery operated tuners, poor quality control, oddly shaped necks, had a line up of hundreds of variations on the models, forced out the Mom and Pop stores, gig bags substituted for hard cases, all sorts of stuff.
Toss in the "we're not really a guitar company anymore" mindset and that's what led up to the current situation.
And the pricing: it would fluctuate depending upon how desirable they wanted the model to appear. Sales are down on a model? Raise the price.
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Gibson page on Wikipedia: https://en.wikipedia.org/wiki/Gibson
Although it is well known for its guitars, Gibson's largest business is in fact electronics.[citation needed] Gibson offers consumer audio equipment devices through its subsidiaries Gibson Innovations (Philips brand), Onkyo Corporation (Onkyo and Pioneer brands), TEAC Corporation (Teac and Esoteric brands), Cerwin Vega and Stanton,[6] as well as professional audio equipment from KRK Systems and TEAC Corporation/TASCAM.
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None of the posts so far have addressed the real reason Gibson is going into bankruptcy: poor management decisions that have nothing to do with their legacy musical instrument business. Quoting from yesterday's Wall Street Journal:
" The musical instrument maker, founded in 1894, said the bankruptcy filing was prompted by looming debt maturities and the unsuccessful 2014 acquisition of Phillips consumer electronics business, in papers filed in U.S. Bankruptcy Court in Wilmington, De." "The company blamed much of its recent financial struggles on its Hong Kong based Gibson Innovations Ltd. division, a 2014 acquisition that sells Phillips branded consumer electronics such as headphones and speakers. "That acquisition has not been successful," said Brian J. Fox, Gibson's restructuring chief."
Gibson's debt ratings were downgraded, then they lost their credit insurance which resulted in the loss of significant amounts of business. So now they've defaulted on certain debt covenants in Asia. Now the Asian debt mess is threatening their USA business even though the US musical instrument business has a positive cash flow. Business at Gibson guitars is actually UP 11% over a year ago, so all the naysayers about the death of the electric guitar may be announcing the funeral prematurely.
They will restructure their debt obligations and Gibson guitars will continue. They've already lined up $135,000,000 in new bondholder financing.
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None of the posts so far have addressed the real reason Gibson is going into bankruptcy: poor management decisions that have nothing to do with their legacy musical instrument business. Quoting from yesterday's Wall Street Journal:
Uh, that's exactly what my posts were about above.
Doesn't sound like a consumer problem, sounds like a management problem
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Uh, that's exactly what my posts were about above.
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Sorry mate, you are correct. Your comments didn't make way into my pre-caffeine compromised brain early this morning. I should wake up more before responding to threads. :lol:
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As a parent with an 11 year old in school right now, I've seen that we've been cutting funding (and class time) for the arts for decades now. Well all you shortsighted stupid fiscal conservatives, this is what you get - less people get a solid exposure to the arts as kids, so you see a lack of interest later in life. It's disgraceful how little we spend on education in this country. And the "solutions" we provide are just more stupidity. Instead of properly funding the schools/programs/teachers, we just eliminate things that are "not core" and focus all our effort on the "core subjects" which we also suck at because it's also underfunded. The simple and obvious answer is to properly fund our schools. But no, the idiot fiscal conservatives don't want to pay a single $ extra in taxes. So here we are. Hope those people that are whining about a decline in musical interest realize that you are very likely not just part of the problem, but actually causative.
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My understanding is that they did not pass on a shady ebony deal like everyone else did and they got caught.
But, if a similar company did the same thing, and they don't get equal treatment, then there is a bias. It's selective enforcement on something that isn't really necessary in the first place.
I will not deny a company making stupid decisions. That happens. But, to believe that making "guitar hero" guitars for real would bankrupt icon of a brand doesn't fly with me.
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As a parent with an 11 year old in school right now, I've seen that we've been cutting funding (and class time) for the arts for decades now. Well all you shortsighted stupid fiscal conservatives, this is what you get - less people get a solid exposure to the arts as kids, so you see a lack of interest later in life. It's disgraceful how little we spend on education in this country. And the "solutions" we provide are just more stupidity. Instead of properly funding the schools/programs/teachers, we just eliminate things that are "not core" and focus all our effort on the "core subjects" which we also suck at because it's also underfunded. The simple and obvious answer is to properly fund our schools. But no, the idiot fiscal conservatives don't want to pay a single $ extra in taxes. So here we are. Hope those people that are whining about a decline in musical interest realize that you are very likely not just part of the problem, but actually causative.
Funding ain't the problem. Public schools suck and if were allowed to take our money elsewhere, we could start to correct that problem. Main problems (in general) we have though starts at home.
I can tell you are Liberal. There goes the insults right from the start. Liberals run the education system and those inner cities. Maybe it's time for a change.
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Funding ain't the problem. Public schools suck and if were allowed to take our money elsewhere, we could start to correct that problem. Main problem we have though starts at home.
I can tell you are Liberal. There goes the insults right from the start. Liberals run the education system. Maybe it's time for a change.
Yes, you are soooooooo right, people that want to spend money on education are the problem. That's why the red states have the best education systems! Oh wait, they don't. In fact, the blue states, with the better funded education systems have better outcomes. Shocking that the states that spend more on education get better educated kids! What kind of crazy logic is that??!!??
But here's where I agree with you. If you look at an individual kid (or even an individual school district), then yes, it is true that if you take all the high performing kids out of the public schools and put them into a private "high performing" school, then that minority of kids get a better education. But it also royally screws over EVERYONE ELSE. But I suspect you are a conservative, and therefore don't give a flying flip about anyone else but yourself.
You are probably also the type of person that whines about the "decline" of our modern society. And you don't see that your ideas directly contribute to this decline.
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:popcorn:
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Actually this has veered to much into politics and for that I apologize.
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Yes, liberals are the problem. That's why the red states have the best education systems! Oh wait, they don't. In fact, the blue states, with the better funded education systems have better outcomes. Shocking that the states that spend more on education get better educated kids! What kind of crazy logic is that??!!??
But here's where I agree with you. If you look at an individual kid (or even an individual school district), then yes, it is true that if you take all the high performing kids out of the public schools and put them into a private "high performing" school, then that minority of kids get a better education. But it also royally screws over EVERYONE ELSE. But I suspect you are a conservative, and therefore don't give a flying flip about anyone else but yourself.
You are probably also the type of person that whines about the "decline" of our modern society. And you don't see that your ideas directly contribute to this decline.
I'm becoming more Libertarian, but I am not there yet. I wouldn't necessarily deny anybody a cake, but a $130K "fine is a decline of modern society (it's political punishment). A moral decline is how that person is raised/indoctrinated to believe that political or social bullying is acceptable (punishment doesn't fit the crime) to force their way on people. People don't boycott for principle anymore (it's to destroy instead of having them change their ways). I vote with my wallet regardless if somebody else does it or not.
When it comes to education guess what: people like me are not going to be a doctor or drive a Lambo. I have my place being an average slub who went to a community college and drives a new Ford. Not everyone is going to be successful. There are going to be ditch diggers in life. Plus, it has been proven that you don't even need an education to be successful in life (those people on "Dirty Jobs" are not poor).
But, we are getting away from the subject. A business WAS hurt by government actions, and the evidence seems clear that it shouldn't have been or wasn't equally performed (Liberals want equality, right?)..
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Actually this has veered to much into politics and for that I apologize.
We have to stop.
Back to our regularly scheduled postings complaining about audio.
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We have to stop.
Back to our regularly scheduled postings complaining about audio.
Darn kids these days, they don't even know what good music is! I tellya!!! ;)
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Gibson page on Wikipedia: https://en.wikipedia.org/wiki/Gibson
Whoa, they own Onyo, TEAC, and *Pioneer*? They really did stray from the path. Then this bankruptcy is probably a good thing. Kick out 'Robot Guitars are the Future' CEO and refocus the Gibson brand on premium instruments.
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We have to stop.
Back to our regularly scheduled postings complaining about audio.
Seems to me looking for the culprit that brought down Gibson is likely to be colored by one's personal politics. What is surely NOT appropriate here or anywhere else on this forum is assigning selfishness, nastiness, or other ugly traits to folks whose main crime is disagreeing with you. I managed to live through 70+ years arguing politics with many of my friends without calling them names for exercising their right to their own opinions. Just saying...
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I've owned Gibson electrics since around 1974 and have four of them at the moment.
They make some wonderful instruments and I hope they can right the sinking ship and keep production here in the US.
Time will tell.
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Gibson cant pay the hi paychecks labour in US,
go to China is a fresh air exit.
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They do make Chibsons, they're called Epiphones.
It's the foray into electronics that did them in, not the guitars.
Lots of stupid decisions with the guitars didn't help matters any, though.
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One time I tested a Epiphone Paul McCartney hohner viola bass after adjust the tones it had a great piano sound.
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They make some wonderful instruments and I hope they can right the sinking ship and keep production here in the US.
I hope so too, and that they can do it without hurting quality. I'm actually looking to buy my first Gibson Les Paul (or maybe one of the cheaper but still decent epiphone Les Paul) in the near future - I just can't decide which one. :-)
The one things that Gibson and some of the other brands make it hard for a first time buyer is that there are sooo many different variations and special editions of each guitar with different pickups, hardware, neck shapes and width, weight, some with 50s style an others inspired by the 1960s models, etc. ... not to mention color and finish. Absolutely fantastic if you are a pro to allow you get the exact sound and feel you are looking for, but takes a while to sort out for people like me who doesn't know yet what I want/like - especially since the price tag also differs a lot. Take for example the iconic Les paul model - On Gibson's product page when filtered for Les Paul it shows more than 200 different guitar options plus many of these comes in different wood colors and finish. Many of these are expensive custom builds out of reach for most people, but still. :D
Need to hurry to get back to guitarcenter to try out some more before they get in financial trouble too.
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Thanks for linking all the articles. Pretty interesting to see that Taylor Swift of all artists are nowadays inspiring a lot of girls to pick up the guitar. Whatever it takes to get more people into music I'm all for it. Didn't think i would say this, but I am now a fan - at least when she is playing the guitar.