Other Guitars

Ouch! — Gibson sued…

2

Gosh with such great ideas like this how could they possibly be going under?

At a certain point it will be a mercy killing...

3

The comments under that article can't be very encouraging.

4

I am beginning to think that a Chapter 11 proceeding in bankruptcy court would be the best thing to ever happen to Gibson. It would give the company the ability to kill off much of its debt, or to restructure it on terms that it could meet. On the other side, the creditors could demand that there be a change in the company's management. Kind of a win-win for everyone but the unsecured creditors who might well get squeezed out of existence. Yet, it would allow this historic company and brand to soldier on.

5

I likely wont ever own one but it would be sad to see them go under.

6

Instead of the "Boogie Van" Les Pauls, they really should have done a Mystery Machine themed line with graphics from the Scooby Doo van. Those could get $6,000 easy, right? Maybe even $7000!

7

Why doesn't the boogie van Les Paul come with an on-board auto-wah and a case lined with shag pile carpet and the smell of weed?

Missed opurtunity for Gibson.

8

The whole thing is sad and maybe could have been avoided... they should do reorganized, downsize and get back to building great guitars and forget all this modern-world robo tuner stuff

9

I am beginning to think that a Chapter 11 proceeding in bankruptcy court would be the best thing to ever happen to Gibson. It would give the company the ability to kill off much of its debt, or to restructure it on terms that it could meet. On the other side, the creditors could demand that there be a change in the company's management. Kind of a win-win for everyone but the unsecured creditors who might well get squeezed out of existence. Yet, it would allow this historic company and brand to soldier on.

– Ric12string

That's how I've felt from the get-go. Bankruptcy won't be the end of Gibson guitars. It will just be the end of Gibson "lifestyle" brands and Henry J. Sounds okay to me.

10

As for the original subject, good luck collecting $50,000,000 from Gibson.

11

The vultures are circling.

12

I smell more Tokai and Fernandez LP’s hitting the shelves soon.

13

Where do they come up with a number like 50 Million Dollars? Did Gibson possibly equip that many guitars with the Tuners.

Those P.O.S. tuners cant be that expensive.

14

That's how I've felt from the get-go. Bankruptcy won't be the end of Gibson guitars. It will just be the end of Gibson "lifestyle" brands and Henry J. Sounds okay to me.

– Afire

You (and Bob) hit the nail on the head! Gibson clearly needs new leadership and return to the business of making top quality guitars.

Henry J's reign -- even though he saved the company financially back in the day -- has been a path of very bad choices and decisions.

15

All in all it's just another brick in the wall.

Or, another nail in the coffin.

Of course, Gibson could counter sue claiming the robot tuners hurt their business. Still, collecting $50M won't be easy, as Afire said. Can't squeeze blood from a stone.

Considering his past performance, Henry J could be a government appointee soon.

16

Anything that throws Henry J out the door and into the cesspool works for me.

Henry J's screwing everything up he touched [since saving the company] is the perfect example of the old adage, "the cream always rises to the top, but so does the scum."

17

Perhaps Henry should have read "The Peter Principle". Seems it may actually apply to him.

18

Why doesn't the boogie van Les Paul come with an on-board auto-wah and a case lined with shag pile carpet and the smell of weed?

Missed opurtunity for Gibson.

– Ger (aka Ratrod)

Because THAT would be sheer marketing genius... an area where Gibson is obviously found lacking.

19

So if they file now, does that somehow move them up on the list of creditors once the bankruptcy proceedings commence? Lawyers in the house?

20

I can't imagine any scenario in which Gibson is lost as a brand.

I also can't imagine any scenario in which Henry J survives as an autocratic czar: I can imagine a deal in which he retains some ownership stake (though that's now a liability) - IF he can accept that deal - but no longer pushes all the buttons and pulls all the strings. I can also imagine scenarios in which he's gone-gone-gone.

I think I have it in me to be as good an arm-chair expert and anonymous demonizer as the best of them, and Henry-bashing can sure feel good. But at least from my perspective, based on what I've been able to learn, he's not the garden variety greedy capitalist. I think he is a particular kind of visionary/borderline megalomaniacal "leader" - who is not motivated solely (or maybe even primarily) by money. And, has been noted, he did "save" Gibson early in his regime, and did at least substantially the right things for 10-15 years. But either that wasn't enough for his ambition, his goals changed, or his sense of mission just expanded.

Making Gibson a "lifestyle" brand occasionally gave us stuff to poke fun at, but remember that he was just taking pages from the Harley-Davidson playbook - one that Fender and Gretsch have certainly followed as well. Being a lifestyle brand and also making good products offering fair value for the price (even if some of the prices are high) - and that people want to buy - are not mutually incompatible. I don't fault him for that.

His forays into higher tech for guitarists are easily caricatured, and certainly (especially in retrospect) were misguided. But consider that Gibson in its most hallowed golden ages - from the 20s & 30s with the development of first the archtop jazz guitar, and then the wider commercialization of the electric guitar - was innovating and pointing the way forward. The set-neck solidbody electric was a new thing. The thinlines and humbucker were new. Seth Lover and Ted McCarty were innovators. We now revere many of their products as icons of a golden age embedded in paralyzing amber - but we ought also to recognize that, in its best years, innovation (wedded to tradition) was the most successful Gibson product.

In that light, Gibson can be viewed as a victim of its own past success. I think it's "obvious" to most us now (or we're all succumbing to a certain groupthink consensus) that Gibson could survive and even thrive by generally abandoning all attempts at innovation and modernization of the product - by simply building examples from its wide, deep, and unique heritage, perhaps at 2 or 3 price points.

But I also have some sympathy with the general thrust of Henry's failed innovations (the digital ethernet guitar, robo-tuners, etc). He's wondering where the guitar goes when the baby boomers have all died off and left their heirs and assigns with bloated collections of instruments recalling a musical mid-century heyday receding quickly into the past. He's wondering how it might be adapted to keep up with the times. He was thinking like a carriage maker in 1910, who had to ask himself if he was in the horse accessory business - or the transportation business. It's not always an easy question to answer - and maybe, especially from our perspective as guitarists of a certain age - not even one he needed to be asking.

But at some point, just making guitars, trying to evolve the breed, and elaborating ever sillier versions of lifestyle products to achieve market saturation were no longer enough (or the missteps were draining the coffers).

But missteps in those areas were only wounding. I think the likely fatal wrong turning was leveraging Gibson into a holding company for consumer/prosumer electronics products. That's clearly out of the company's "wheelhouse of expertise," and - in a small way - a reminder of how well that worked for CBS, Norlin, and Baldwin back when they diversified themselves outward and upward to Peter-principled incompetence. It also represents a complete loss of focus: when guitars - or at least musical instruments - are not Gibson's main business, it's no longer really Gibson.

And here's where I think HJ's personal megalomania comes in. He was either absolutely convinced he was right, too proud to back down, or so sucked up into the fundament of his own vision that he no longer made rational decisions - or at least decisions which benefited the Gibson part of the family of the brands. It looks to me that, to him, none of this is about the money anymore. (I can't think your normally competitive and ego-driven capitalist overlord would have taken some of the financing deals he's accepted to keep the brand afloat; I think most would have been loath to send good money after bad, and would have bailed long ago, as long as they got a parachute of at least semi-precious metal.)

Nother words, at this point he's something of a wild-eyed prophet, raving at foes and would-be followers alike, moving depleted or non-existent armies around on a map of his own imagination.

The point of that long armchair psycho-business speculation? That HJ's recent financial decisions don't reek of financial prudence, and I'm not sure he would accept a role at Gibson where he wasn't driving the bus. Would he step down graciously and get out of the way, or would he rather see it all crash and burn? Even as a radically demoted part of a newly constituted management team, does he have anything useful left to offer in the rehabilitation of the company?

I can only guess, but the obvious and popular speculation says "hell no" to every question. So it's easy to imagine, yes, a bankruptcy in which HJ loses it all and shuffles away in disgrace, leaving "Gibson" freed of its debt, broken up into constituent parts with Tascam and the rest left to attract what ownership and investment they can - and someone left to lead the guitar business itself forward chastened and with a sharper sense of mission. From a business standpoint, messy as it is for the shortchanged creditors, that would all make an attractive proposition for new owners.

I guess I can also (barely) imagine a white knight sweeping in and saving the company from bankruptcy by negotiating settlements with major creditors against the promise of a surer prospect of future Gibson health, paying HJ off with an "adviser emeritus" title and a face-saving settlement, then - yes - selling off all the extraneous brands and proceeding chastened and with a sharper sense of mission.

The guy who built General Motors over 100 years ago - one Wm Crapo Durant - was also a visionary and a crazy man. He started with Buick, added Cadillac and Oldsmobile, then went on a crazy diversification buying spree. The company went bankrupt and he was booted as part of the resurrection settlement. He then got involved with the Chevrolet brothers, built their reputation as race-drivers into an upstart brand - whose low-cost cars eventually made enough money that he could BUY GM BACK.

Like, Chevrolet bought General Motors.

Chevy then supported and floated GM for the next 50 years till all the innovation died in the 70s. Given 30 years for the company that was too big to fail...to fail...and GM went bankrupt aGAIN.

But Cadillac, Buick - and Chevrolet - survived. Chevy is not the market juggernaut it once was - but its volume still far outstrips Cadillac and Buick. It still supports the prestige brands.

The partial analogy here is, of course, to Epiphone, which rightfully thrives on guitars that are awfully well made for the money, provide excellent value, and have mostly ignored the goofy lifestyle ideas which have marred recent Gibson history.

My thinking is that if new owners and/or management keep Epiphone as financial (if not titular) head of a much smaller brand family, that financial strength can support Gibson through a rebuilding process. (And they should turn those managers loose with the Gibson brand itself. Seems they understand it better.)

If Epiphone is split off as a wholly separate company (and can it be, really, when it relies on so much Gibson intellectual property?), then Gibson has a harder road back. I think it then looks more like Rickenbacker in volume and market penetration - a legendary brand, making fine product in limited quantity.

In any case, I still can't imagine a scenario where the brand name dies. I can picture a bankruptcy in which the brand name itself goes to a highest bidder who then will have to prove their intentions: build a limited number of guitars in the US worthy of the Gibson name, take the skillful (and fortunate) Fred Gretsch route of finding an offshore builder to work to the classic recipes at more moderate prices (and/or higher profit) - or simply slap the name on generics and ride it down.

The latter seems unlikely to me, as marketing Gibsons with nothing to differentiate them from the cheapest copies seems short-sighted: it offends most potential current Gibson buyers, and within a few years entirely takes the lustre off the name. (It could happen. I guess Washburn used to be a respected maker - and the name still floats around. But we all know it's meaningless.)

Again, Epiphone seems an ace in the hole here. I suspect, given the recent history and the current situation, many Gibson buyers would accept an upscaled instrument made by Epiphone as a Gibson. If it eventuates that the brand name can only survive through off-shore manufacture, who better than Epiphone to execute it?

As a point of comparison, I know there are still players (and members here) who don't quite accept Terada-made Gretschs as "the real thing." But I think most of us believe Gretsch is well into a period of sustained quality (and success) that at least rivals what it achieved from, say, 1953 through the 70s. Bankruptcy was not the end of the brand - and, for all that we love Gretsch, we have to recognize Gibson as a "bigger" brand with wider consumer recognition.

After the Baldwin bankruptcy, the Gretsch name fell off headstocks for more than 10 years; I doubt Gibson will be missing for even 10 days.

In general I agree with the guys who say the next few months look very bad for Henry J - but not so much for the brand itself. And I have to think that whoever winds up holding the reins will have a reasonable commitment to mining the company's rich product heritage honorably. After all, that's what guitar buyers want - consistently well-made examples of classic Gibson products, offering reliable value for the dollar. (They certainly don't have to be cheap.)

That's what's worked for Gretsch over the past 15 years.


Disclaimer: all the above no more than one whacker's improvised opinions.

21

And that right there is one of the (many) reasons why I'm still lurking on the GDP after 10 or more years.

Thanks for your thoughts Tim.

22

And that right there is one of the (many) reasons why I'm still lurking on the GDP after 10 or more years.

Thanks for your thoughts Tim.

– Shuggie

I agree!

Well said, Tim!

23

There are 2 main reasons I would buy a Gibson over an Epiphone if I was in the market for and had the funds for another holy grail guitar.

  1. Gibson guitars are made in the USA by my fellow countrymen and countrywomen.
  2. They still finish their guitars in nitrocellulose.

If you take away one of these two things then I no longer see the huge difference between Gibson and Epiphone. I've seen some videos of the Epiphone factory and they appear to know what they are doing. I love playing my Casino but if I had the means I would be playing an ES 330 instead.

24

'Wheelhouse of expertise'. Whether this is mocking Henry J or your gentle reader, I find myself prone on the bowsprit of lampoon and laughing anyway. What a hoot!

Consider this phrase entered into the log.

25

We used to play buzzword bingo during company meetings when I worked in computah retail. We waited for words like "synergy" and "orientate". "Wheelhouse of expertise" would have been a winner.

It comes natural.


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