What would YOU do to save Gibson?

[Marley's Ghost]

Uh oh, Gibson is going out of business (they are not) Quick let's buy some guitars.

I'd love to see if there has been a spike in sales. You can't buy this kind of publicity.

 

[BOOG]

I would think most would find it sad that any American company that lasted over 100 years would go under. It’s just a sad thing.

My point, exactly. Plain and simple, it is sad.

 

[DEMS854]

While I feel for the employees, there are few options for such a mismanaged company that don't involve a lot of personnel disruptions. I say let the company die. As for me, I'd drastically sell off parts of the company, simplify and make it smaller focused on sustainable markets that I know something about. I'm sure that someone in the bluegrass area would be interested in buying the remnants and resurrect a company that would actually do the name proud.

I agree, am surprised no one else said it first, and you said it better than I could have. If Gibson can't maintain its former glory, let it at least remain a part of American culture and history as a small company, there is no shame in that. It would seem that there are enough Gibson guitars out there circulating on the used market to keep folks happy and able to obtain one if they want it bad enough that they could raise their prices and their quality and just cater to the discerning person who really wants the Gibson brand. It's a sad state, but ciest la vie?

 

[togril]

Make a Gibson sound better than an Epiphone.

 

[Gizmot]

I would guesstimate 99.9% of Gibson customers have no idea who Henry is. However, if one additional person bought a Gibson if Henry was gone, your statement is true.

- John

In Nashville alone, most people know who Henry is and know former and current employees of Gibson that he's treated badly. Read the posts - Henry's a jerk and a bad businessman who needs to be pushed out for the sake of the customers and employees.

 

[-Asdfgh-]

This is interesting... It's easy to picture Gibson getting bought out by some giant Asian conglomerate, and then building most of their stuff overseas, with only high end or custom shop models being made in the US. But that would really confuse things with Epiphone. I wonder how that could be handled to make it work.

The name has a certain cachet, and you'd have to structure the price bands. If you had Epiphone in a band of $250 to $750, Gibson Tribute at $750 to $2000, and Gibson Heritage above $2000 it would probably work. Below $250 the market seems pretty crowded with Gibson lookalikes, so I'm not sure there is much money to be had there.

 

[TonyP-]

I don't disagree with you but, like it or not, nostalgia is a big part of the industry.
Note: I am not a professional musician so, our perspectives are different. However, I respect your opinion and perspective and I believe it is very relevant and your points are valid.
I for one would hate to see either of the "big two" go down the tubes. There's a lot of history in Fender and Gibson and their early days of easily accessible distribution has contributed to more musicians and more music over the past half century or better. So, yes, it does infiltrate my mind and hundreds of thousands of others whether admitted or not.
Again, our perspectives are rightfully different and I think yours is the one that the manufacturer needs to strongly consider for their own future.
But, what do I know...?

No doubt BOOG, I totally agree with You regarding nostalgia is a big part of the industry.
On the guitar side of the house at NAMM this year the reliced Friedman guitars were some of the hottest guitars at the show.
You know what they look like...Hot rodded strats and teles (more or less) that are a bit worn.

Yes, I'm sure hundreds of thousands of players feel the same way you do and would like to see the brands preserved.
Our industry has been in flux since Napster came out (what is that 18 years ago now). As a side effect I basically rethought what are my ideas are to make money in this industry, accepted the change and lost just about any Nostalgia thoughts...Unless I'm getting a Italian sandwich in my old home town when I'm there lol...

@BOOG good chatting. Cheers

 

[mellowgerman]

six words: flamed maple transparent turquoise explorer basses

 

[AngusHasMoxie]

MyGibson:
step 1: you pay them $1895 (the established price for an 'elite' instrument)
step 2: you specify everything about the guitar, ala Warmoth. Neck/body woods, hardware, neck/body shape, pickups, electronics, and paint
step 3: you get assigned a single 'builder', who follows the build from start to finish, does the final checkup and QA on the guitar. Is available to answer any questions about your guitar.
step 4: the customer receives a 'signature' model guitar, to their exact specifications. If they have any questions, they've got the person who built the guitar for the length of the warranty.

This is the sort of thing companies like Adidas and Nike are already implementing on a massive scale, Gibson has the infrastructure and resources to do something like this and I don't understand why they don't. People will pay extra to have Gibson on the headstock of their custom guitar.

 

[Biggbass]

keep on building guitars and ignore the false internet stories about bankruptcy.

 

[Paulabass]

Uh oh, Gibson is going out of business (they are not) Quick let's buy some guitars.

I'd love to see if there has been a spike in sales. You can't buy this kind of publicity.

I have read LOTS of articles in the legit financial press- Wall St. Journal, the Economist, etc. They do not say Gibson is going out of business, but that they are badly in debt, and lenders do not have the faith in the current ownership to quickly get them the cash they need. Read between the lines- Without very creative financing they WILL go out of business, but they are not actively going out of business at this point. Certainly a chicken/egg thing, but speculators on both sides are right...and wrong...

 

[-Asdfgh-]

Buyout by an Asian firm is probably a good bet in terms of debt, as some could be repaid in the short term, and recovered over the long term, but would come with cost reductions. It would be risky to build new plant in the USA, as there would be a risk of the strategy not working, so using existing plant in Asia makes more sense, like Fender in 1982.

However, if a company in the USA could repatriate profits to the USA at a low tax rate to investvin Gibson, it might work. That probably means Apple buying Gibson and making it a lifestyle producer.

 

[Spidey2112]

It's a slow day at work... I just spent the last half hour looking for a stock history
of a privately owned company...

... Aaaarrrggghhh!

 

[micguy]

Gibson needs... an obsessed guitar nerd at the helm. Go online and watch videos of Paul Reed Smith talking about guitars. Watch how he talks about the people that work with him (he admires the things they do). Watch him play his guitars. He lives, eats, breathes, and sleeps guitars, and he knows how to treat people. EVERYTHING else flows from that - good employees, employee satisfaction, innovation among the people at the company, and that....is why you get great guitars from PRS.

Gibson is in trouble because they think they don't have to do anything but manage the business they have better. Wrong - they need to obsess about what they make - live, eat, breathe, and sleep the stuff. They're in trouble because Paul and his folks have EARNED enough of their business that Gibson can't profit from what they have left. The only thing they have going for them at this point is that Paul is not 30 years old any more - if Gibson gets the right whippersnapper running the place, they have a chance at becoming great again. If the business types continue to run the place, they're toast.

Fender also needs to watch out - all it takes is one other obsessed guy that takes aim at what they do, and they could be history. Yes, it'll take a while, but if the right guy comes along, the way Fender does things will take them down the very same road.

 

[-Asdfgh-]

I have read LOTS of articles in the legit financial press- Wall St. Journal, the Economist, etc. They do not say Gibson is going out of business, but that they are badly in debt, and lenders do not have the faith in the current ownership to quickly get them the cash they need. Read between the lines- Without very creative financing they WILL go out of business, but they are not actively going out of business at this point. Certainly a chicken/egg thing, but speculators on both sides are right...and wrong...

In that sort of situation chapter 11 is a real possibility.

 

[40Hz]

They are using the media to posture so the bankers are under more pressure to come up with favorable terms for debt restructure. The company is making money, the debt is the problem.

Bingo!

Bankruptcy seldom benefits lenders unless there’s significant readily liquefiable assets (real estate, patents, modern manufacturing machinery, investments, etc.) to break up and sell off. And I don’t think Gibson has that enough of that kind of asset base to make selling it off piecemeal an attractive option. Especially with Gibson’s $1 billion annual revenue stream. That’d be like killing the goose that laid golden eggs for its down.

There’s a saying in business that goes: When you can’t afford to pay your lenders back the $10 thousand you owe it’s your problem. When you can’t afford to pay back $10 million it’s also the lender’s problem.

So the rule if thumb is: If you borrow, best borrow big.

If you’re going to go into debt, make sure it’s for enough money that the lender’s financial statements will take a hit and require a footnote if you default. Because the worse thing that will happen in that scenario is you’ll end up with a couple of their people sitting on your board of directors.

Gibson has significant cash flow - assuming their sales are “sell through” numbers and not just consignment sales for retailer’s inventory. But the situation is definitely salvagable (short term) as long as the people they owe can come to an agreement on restructuring an unworkable debt load. Sometimes making 80¢ is better than making $1 if you can get it more easily.

That would require the lenders to look a bit beyond their current and next quarterly P&Ls. And that’s something most American companies have become loathe to do. So even though it makes sense to restructure Gibson's debt there’s no telling if the financial people would have the grit to do so and see it through. But it’s still doable. And it makes good business sense to do it.

But that’s no guarantee it’ll happen. Lenders are under the gun to produce fast & easy money and show immediate profits just like every other US business these days. And bad debt write-offs for corporate tax purposes softens the blow somewhat. So it’s still hard to predict what will happen there.

Right now it’s a waiting game while the vultures circle and the bean counters sharpen their pencils and shoo them off before going on to the next round of negotiations.

Time will tell how it finally ends.

 

[Marc DLarosa]

Besides...
Bankruptcy, only means that Your NEXT Gibson, may say Hundai, on it. Don't fret!!!
Ha!!! I kill Me!!!

 

[BassBrass]

Berkshire Hathaway Inc. acquires Gibson, Warren Buffett says, "I think there's still value left in the Gibson name."

 

[dbsfgyd1]

What would you do if you had the wheel? Hypothetically, if you had the power to do anything to the company that you wanted to, what would you do to right the ship, save the day, and bring Gibson back to their former glory?

I think I would start with a “Gentlemen, This is a Basketball” speech before all employees. There is a difference between manufacturing and craftsmanship.

Over the years, they tried to “dumb downed” their product line to a Fender level.
Back in the 60’s, there was no doubt that Gibson made a far superior guitar. Today, it’s very much debatable. If they expect to get back to where they were, the pre-eminent Guitar manufacture in the world, this is where it starts.

 

[Nev375]

1. Revert to only popular classic Gibson designs that are time tested through the ages.
2. Fix the historically proven design flaws. (i.e. reinforcing rods that bend and extend into the headstock to prevent breakage)
3. Fix the neckdive issues (even if it means adding lead weights to the body. Since your flagship Les Paul is an anchor, you might as well stick to the theme and trademark your brand as being for big strong tough guys.)
4. Recall all robo-tuner instruments and destroy or retrofit them with normal tuners and sell them as Epiphones. (Edit the employee handbook as "any mention of them is grounds for immediate termination." Representatives will publicly deny them as ever having existed. #fakenews, #conspiracytheory, etc...)
5. Increase quality standards to justify the high prices.