G&L out of business?

[groovepump]

I spent all weekend planning out a Build to Order CLF L-2000. Dang! I had been GASing hard for the fretless Pino Stingray and finally came to the conclusion that what I really wanted was a fretless CLF L-2000 in 3TSB...

I sold a fretless L-2000 years ago and it is the one regret I have about selling my basses over the years. I really miss that one.

 

[FretRiff]

Celebrity endorsements drive sales regardless of your feelings.

To the best of my knowledge it's extremely rare for any company making instruments or related gear to compensate endorsing musicians with anything other than merch (usually a free instrument, or maybe a custom or signature version) and some collateral PR. Nobody's making bank on it.

In the drum world the halo effect is definitely real, and I know fellow drummers who play Gretsch or Ludwig because of some fan-based or historical connection (they sounds good too, to be fair)... while brands like Pearl, Yamaha, Tama and DW/PDP (Roland) have objectively better hardware and/or better built or QC or even better-sounding drums at many competing price points.

As for compensation, there typically is payment to top-tier musicians to appear at drum clinics or promotional appearances or product launch videos. But you're right, most endorsers typically just get free drums and hardware, free sticks etc and deep discounts on gear (which they might quietly resell after a certain period of time.

For drum endorsers at least the downside is that you typically can't be seen in public using anything other than products you endorse. I know of several drummers with endorsement deals for various brands whose studio kits are Yamaha Recording Customs

 

[ahbass2500]

Celebrity endorsements drive sales regardless of your feelings.

Lakland is certainly a business case for this. Seems they built the business on endorsements.

 

[Hot Rats]

Damn, just when they came out with the Magnetic Field Design Jazz pickups. I was really hoping to put a set in my 2001 JB-2.

Also: Family | G&L Musical Instruments

 

[B Minor Threat]

Was this posted previously on this thread? If so, I apologize for repeating it. I saw this post on the Gear Page. I believe the original post was from Reddit.

Former G&L employee here…

Please pardon my anonymity, as I am still currently employed in this industry.

In my opinion, G&L has always been on the cusp of great things but has also been its own worst enemy. The McLarens have played a major role in the company’s overall prosperity—for better or worse. Phil McKnight has shared some great insights about G&L on his channel, and I think he’s pretty much spot on…

Here are a few topics I’ve seen discussed that I might be able to shed some light on:

Tribute Series – While I was employed at the Fullerton factory, the Tribute Series is what kept the doors open and the lights on. The profit margin on those instruments was far better than the U.S.-made models. They were the financial backbone of G&L during my time there. When a new container arrived near the end of the month, the final assembly department would often put U.S. production on hold to QC the imports and get them shipped out to dealers.

Tariffs – While the instruments are made in the USA, many components and materials are imported—tuning machines, bridges, and more all come from overseas. Tariffs undoubtedly affect these costs. All other manufacturers face this too, so G&L is very unlikely to be immune. If the Tribute line still plays a major role in their bottom line and those instruments are impacted, it would be devastating.

Payroll – During my time with the company, payroll was always on time as far as I can recall. However, I can confirm through contacts still at G&L that this has not always been the case in recent years. Some former high-level employees were owed tens of thousands of dollars when they left and waited many months to be paid out.

U.S. Production – While I was there, it was my understanding that once instruments were completed and inventoried, G&L received a “loan” or credit from a lender or financial institution for those guitars. This meant they didn’t need to invoice a dealer or customer before receiving an advance for that inventory. (This is actually more common in the industry than I realized.) There were months when the warehouse was literally full of hundreds (yes, hundreds) of unsold U.S.-made guitars, yet we were still pushed to continue producing more to make the end-of-month numbers look good.

I have no idea if this practice is still in place, but at the time, it was very concerning to see.

All in all, G&L has been plagued for decades by poor marketing, terrible upper management, and even worse financial decisions. I have known the McLarens for years, and trust me, they are not liked or respected in the industry. I can wholeheartedly say, the company would do best to continue without them..

I wish all the current employees the best and hopefully the brand will continue in any way that honors Leo Fender’s legacy.

 

[B Minor Threat]

For drum endorsers at least the downside is that you typically can't be seen in public using anything other than products you endorse. I know of several drummers with endorsement deals for various brands whose studio kits are Yamaha Recording Customs

This made me think of those cymbal demo videos on Memphis Drum Shop's YouTube page where people like Nicko McBrain have the drum kit wrapped in black so you can't see the brand name/logo! I always thought that looked ridiculous even though I knew why there were doing it.

 

[Nebadon2000]

All the people saying ‘G&L don’t have any well known endorsers!’

1) G&L don’t have the money to PAY those players to use their gear. They’re superior to any Fender in every way (except resale value) but guess which brand the well known players play?

Endorsements are largely BS.

2) If you need ‘Jaco’ or ‘Geddy’ or ‘Clapton’ to tell you an instrument is worth your time and money, then you don’t know how to assess an instrument.

 

[ardgedee]

As for compensation, there typically is payment to top-tier musicians to appear at drum clinics or promotional appearances or product launch videos. But you're right, most endorsers typically just get free drums and hardware, free sticks etc and deep discounts on gear (which they might quietly resell after a certain period of time.

For drum endorsers at least the downside is that you typically can't be seen in public using anything other than products you endorse. I know of several drummers with endorsement deals for various brands whose studio kits are Yamaha Recording Customs

Right, but the money is compensation for the time spent working -- granted that time was booked because the musician had the endorsement, but it's a benefit of having the endorsement rather than payment for the endorsement itself. I know this is splitting hairs, so I'm not gonna push on it.

As far as being seen with competing equipment, that can depend on the endorsement deal. Bass amp endorsements are often not exclusive, as far as I can tell, because many bassists can't afford to tour with their own backline. And session musicians ultimately have to play what they're paid to play, so if the musician you're backing on tour wants a Precision bass you don't want to have to choose between your endorsement and a paid gig. Exclusive endorsements presumably come with better benefits.

This made me think of those cymbal demo videos on Memphis Drum Shop's YouTube page where people like Nicko McBrain have the drum kit wrapped in black so you can't see the brand name/logo! I always thought that looked ridiculous even though I knew why there were doing it.

Back about 40 years ago when elite bicycle racers all rode steel frames, it was pretty common for the captains of teams sponsored by bike companies to have their bikes built by competing shops and then replace the branding with whoever their sponsor was. Blacking out or swapping logos is pretty common and if you're a trainspotting type it can be a fun thing to look out for.

 

[FretRiff]

I’m not even sure G&L can compete with just that.

No companies compete solely with endorsements. That's not the metric. The point is endorsements do drive sales.

In the 80s there was a sea change in hard rock drumming to Tama, led by the public use of their kits by Lars Ulrich, Neil Peart, Dave Lombardo and Steve Riley. It had a huge impact on sales at the time.

Lots of small companies today partner with musicians that mutually benefit both sides. It might be with smaller or up-and-coming artists with niche fandom, to compete more affordably with Fender's bigger roster of popular endorsers. JHS made a distortion/overdrive pedal by partnering with Brazilian guitarist Lari Basilio. Reverend partnered with 90s-era musicians like Mike Watt and Meshell Ndegeocello for signature models. Schecter recently made a deal with Charles Berthoud.

But you don't need to go as far as making a signature instrument just to make a simple endorsement deal.

 

[lug]

Sure, but it's not a focused effort Fender made against G&L (as opposed to its competitors in general), and anything a large competitor like Fender does has outsize effects on all smaller manufacturers to some extent. I was specifically referring to the claim that Fender targeted G&L specifically over other companies, of which I don't think we have evidence.

My only "evidence" is what the shop owner told me directly, I have none of his "documentation" on this.

 

[Pet Sounds]

Aside from the first two statements, which are just opinions, the post accurately describes the situation, as we now know it. Nothing from G&L, and even the news that employees were supposed to return Sep. 29 is only known because the Custom Shop manager leaked it to various hobbyist groups online.

BBE has slowly but surely run it into the ground. Anyone paying attention in detail started noticing this in the late '90s, when they started discontinuing and altering the old designs and Leo/George technology, such as the unattractive shape change on the L-2000, the switch to a generic "Tele" control plate, and the discontinuation of the incredibly useful neck angle adjuster. If not then, then certainly in the mid aughts, when they started building an import line, and then using the bridges originally made overseas for the import line, on their U.S instruments. It became very easy to see about 15 years ago, when the build quality noticeably dropped, and you started commonly seeing unacceptable build issues that never should have passed multiple stages of inspection. It was impossible not to see starting about 10 years ago, when they started using Ping tuners, changed truss rod designs, and started relying on "stiffening rods" (usually used in mass production to combat poor lumber and/or poor lumber cycling techniques – Warmoth has done the same, in their slide over the decades). They also introduced a factory pre-spec'd line (Fullerton Deluxe), that came with a gig bag, and they started using a cheaper quality version of a G&G hardshell case on the build to order instruments (cases that were eventually discontinued entirely, in favor of gig bags, a year or two ago).

All along the way, as their quality and parts got worse, their prices got higher, till it got to the point at which they were no longer worth the money. Over the course of almost 35 years, BBE took a product that was very high quality for a very fair price, and transformed it into a product that is mediocre at best, for more than it is worth. Kind of like what has happened to innumerable classic U.S. companies over past decades.

There's also the fact that customer service was absolutely top notch – the best in the business – under George, Leo, and Dale. BBE has never really come close, and it has only got worse as their tenure has gone on and on.

I am one of the biggest G&L collectors in the world. I love what the company USED to be, but I have been unhappy with their direction since the late '90s, and openly disparaging them for at least 19 years now. Here's praying they sell to a company that actually understands, respects, and does service to Leo's, George's, and Dale's legacies. BBE never has. Those two brothers don't know what they hell they're doing. They're just two lame-brained rich OC kids, who were handed the business in their 20s by their father...who had presided over Fender's downfall in the '70s.

Thanks for the insights. I had a couple of G&L guitars in the early 2000s and the quality was great. A little later, I owned an L-2000 and an SB-2. At the time, I didn't bond with them, but the quality was excellent. In more recent years, I tried them out again and wasn't nearly as impressed. I'm now G&L-less. Your post helps me make sense of what happened.

 

[FretRiff]

If you can't make payroll or pay the bills there is no other choice...............................................

Profitable companies can still crash due to cashflow problems: the timing of their incoming cash and outgoing payments don't match and they hit a point where they don't have sufficient funds to pay bills, suppliers, employees. It can happen for reasons including customers paying late, high overhead costs consuming cash... or because of poor financial forecasting and cash management.

One way to ameliorate that is by temporarily freezing the business and furloughing employees - which G&L has done here, and has done in the past. But that's fairly extreme. (And G&L has done it now at least twice.) Typically companies in this situation do things like offering discounts on payments due (or for early payments) if paid immediately, they negoatiate with vendors, and/or they get loans or lines of credit from a bank.

 

[FretRiff]

My only "evidence" is what the shop owner told me directly, I have none of his "documentation" on this.

To this day bar owners all over Seattle and Washington state tell adult bands directly - and wrongly - that they're not allowed to have drinks onstage. The law says otherwise, but the misinformation (maybe bar owners believe it, maybe they just think it makes for better behaved musicians) is still spread.

That's just a pointillist example. So I don't believe say-so form a third party, especially since restrictive contracts like that could easily have leaked on the internet years ago - but didn't, and could easily make Fender subject to antitrust scrutiny if they exist.

 

[Swerve]

Lest we forget, the Placentia!

 

[TDR1138]

Pretty sure the Placentia falls into the “lost money” category for them.

 

[ahbass2500]

Lest we forget, the Placentia!

They also shipped out the first Tribute JB basses with the wrong necks on them (you could not get intonation set properly due to incorrect length). I heard they were honoring warranty on them, but that kind of thing should never get past quality control.

Adding another: They used to ship the 4+1 five string basses with a G&G hard case that was too short and would mess up the D string tuner if you were not careful.

I am a G&L fan, but they have certainly made several avoidable mistakes.

 

[Swerve]

They also shipped out the first Tribute JB basses with the wrong necks on them (you could not get intonation set properly due to incorrect length). I heard they were honoring warranty on them, but that kind of thing should never get past quality control.

Yep, I actually bought one of those used! Luckily it was from GC and I was able to return it once I found out.

 

[MrB64]

I sent an email to my gear guy at Sweetwater to see if they have heard anything on all of this. Apart from that, I'm just waiting to see what happens.

 

[CrimsonGhost]

They also shipped out the first Tribute JB basses with the wrong necks on them (you could not get intonation set properly due to incorrect length). I heard they were honoring warranty on them, but that kind of thing should never get past quality control.

Adding another: They used to ship the 4+1 five string basses with a G&G hard case that was too short and would mess up the D string tuner if you were not careful.

I am a G&L fan, but they have certainly made several avoidable mistakes.

Seems like the import line was a bad idea with terrible quality and canabalizing USA line sales.

 

[aarono2690]

I'm sure you all have seen typical distribution curves. I'm not saying business is easy, but I keep thinking about how dog crap they were at running this business and how management must have fell on the far left end of the distribution curve in terms of business management.

I'm just continually dumbfounded as I learn more and more about this company. What is going on over there!?