Gibson Music Inc. struggling?

Seems they are not doing so well?

I know they had some legal issues with the government over importing "protected" wood a few years back.

It got so bad Gibson resorted to using "baked maple" for a rosewood substitute on many guitar models.

I don't think they are even offering real ebony for their fret boards anymore either due to the legal issues.

Anyhow, here's the article:

Moody's downgrades Gibson's CFR to Caa1; rating outlook is negative »

 

And they've just bought Pioneer and Onkyo in the mast couple of years too...

 

Not exactly. Pioneer agreed to sell its AV business to Onkyo and the two companies announced they would join forces to integrate their AV divisions. Under the terms of the deal Pioneer took a 15% stake in Onkyo and thereby became Onkyo's third largest shareholder. Gibson Guitar is the second largest shareholder in Onkyo with a 21 per cent stake.

Gibson has bought a couple of well-known audio brands, but formed an alliance with Onkyo in 2012. Subsequently, Gibson bought TEAC and then acquired Woox Innovations (which was the AV division of Philips).

If only the TEAC AI/UD product lines sounded as good as most of the Gibson guitars I've heard over the years the company would have some serious audio electronics winners on its hands.

We're not going to see the results of any Pioneer/Onkyo collaboration until 2017/2018 when the results of any design & dev headbanging hit the market. That's normal - just because two companies get together doesn't magically make design & dev periods shrink. Gibson brings very little to that table unless there's a backdoor deal to feed into the mix any TEAC IP that might be of value in some sort of IP give & take between Pioneer, Onkyo and TEAC. Gibson is just in it for the money. I think that as Gibson continues to try and hang on to its cash in the face tepid retail sales (like all of retail electronics, music instruments, etc. - except for a few bright spots here and there - since 2009), it will make whatever deals it can with cranky suppliers who are demanding something more than the trickle they're getting against the debt load Gibson is carrying.

My predication is that unless Gibson finds a 10-15% increase in sales by mid-2017, its two biggest creditors are going to pull the plug and force Gibson into Chapter protection. Chapter 13 becomes a possibility if Gibson's prospects are actually good and if Onkyo/Pioneer can be persuaded to act as the Trustee. Problem with that scenario is that retail is lousy for Pioneer and Onkyo too. Chapter 11 would kill Gibson, and the acquistion vultures would swoop in an tear it apart - Epiphone, KRK, etc., etc., would then all end up in other hands which is not necessarily a bad thing.

Retail really sucks for the most part because the sales volumes that used to exist have become just a faded memory. Companies with a lot of legacy fat - companies such as Gibson - should have made themselves exceedingly lean years ago (without sacrificing the quality and heritage of their core products). If they're just getting to that now, they'll end up one of two ways: as less influential shadows of their former selves, or dead.

 

No wonder they are putting out some great deals on some decent guitar models in the last 18 months. They must be just trying to move raws and stock.

 

How can they not use real ebony fretboards and other manufacturers can?

 

Gibson had a big fail with robot tuners on all USA standard guitars (and some other changes). They also raised prices...especially on custom shop stuff. Things will turn around, but 2015 was rough.

 

In many cases it depends on where the ebony comes from. If U.S. Customs & Border Protection determines it originated in a proscribed country or from protected stocks, you get into trouble. For example, ebony sourced from Madagascar is strictly illegal. That ebony is prominent on the Convention on International Trade of Endangered Species (CITES) list, and is designated as an Appendix II (endangered in the wild, and protected through highly regulated forestry management elsewhere). You want nice wood - me too - but it has to be protected and managed for the future before the greedy idiots chop it all down without even half a thought for the future.

A lot of companies (from instrument makers to furniture makers) bid at auction for upcoming ebony (and other protected & managed) wood stocks. They try to build up inventory of those sorts of materials whenever possible and affordable. If company ends up short of stock and has manufacturing commitments to meet, they sometimes engage in end runs around the regs and get into trouble. I'm familiar with other such problems in different kinds of manufacturing, but not specifically with Gibson's problem at all. If a company gets into trouble with CITES violations and endangered species regs in various countries, the company can be barred from certain auctions and materials acquisitions for a time.

 

Out of curiosity, I looked up some of the '16 models recently on a big online store. Prices have dropped from the 2015 models, and most of the guitars no longer have robot tuners (the "high performance models" do). It looks like they switched back to the '14 model specs, but I'm not 100% sure about that. Downside is that many of the models come with a crappy gig bag, and if you want a Gibson hardshell case, that's $200. Most other brands of harshell cases are a lot cheaper. I think the case for my Gretsch was something like $110.

 

Thanks for the info, though I'm inclined to think that some cross fertilisation had already occurred, certainly when looking at the 2015 range from Onkyo's higher end AV receivers, specifically the TX-RZ line, which is significantly different from the company's previous design styling with a much cleaner fascia.

Might be wrong of course, but it seems like quite the coincidence

 

Gibson's guitars are still selling but the numbers, and the quality control, continue to be un-even.

2015 was a disaster with the implementation of these stupid robot tuners on the headstock, and even worse, IC chips on the tone controls inside the cavity. Thats a HUGE no-no as far as many guitarists are concerned... and one wonders if Gibson simply fails to understand their typical customer.

Another problem is that the modern guitars really cant compete with the glorious instruments from their vintage days and the prices for those, continue to go up and up. And partially this is Gibsons own fault. The craftsmen that created all those fabulous instruments back then are mostly all either retired or dead and those skills were apparently not really transferred to the younger generation. Back then, all woodwork was mostly done by hand and when they finished, you got a finely crafted instrument made by master builders.

Today, its all cut out and fitted together with machines. They still play and sound pretty good, with occasional duds... but nothing compares to the mojo you get from a great 60s or even a good 70s model.

Fender is different... Fenders were always modular and little has changed in their overall construction.

 

Gibson has made a few purchases, that haven't made a lot of sense to me and of which, I'm sure has hurt them as a business. First, sometime around 2006, Gibson bought the company "Wurlitzer" (yes, the organ and jukebox company), but the better question is WHY? Under the Gibson ownership, they actually continued to build a few of the last models of their jukeboxes, until 2013, when manufacturing ceased. I actually owned one of them, a cute "half sized" CD version of their original bubbling classic 1015, called the "Princess". I've since sold it to my cousin, who now enjoys it in his home.

Here is a video (not my video) of a Wurlitzer Princess, that I found on youtube …



The other weird desicion by Gibson as of late, but has not proven itself as a good one yet, is that in 2014 they leased the building in L.A., for 15 years, that used to be the former famous home of "Tower Records" on Sunset, but so far, it stills sits vacant … again I ask … WHY?

Gibson to open store at former Tower Records site in West Hollywood »

 

They've priced themselves out of reach of the average player and offered stuff like robot tuners that nobody wants. If they pare back their offerings to maybe only 4-5 versions of each model and focus on quality maybe they can turn things around.

Plus this is a marketplace that is prone to fluctuations. When "guitar music" becomes "cool" again they might make out like bandits. Things got really oversaturated there for a while, particularly when Guitar Hero was all the rage and every cereal commercial had kids playing Les Pauls, so that demographic could have gotten turned off. That happened with skateboarding when I was a kid. All of a sudden skateboarding was all over everything and overnight it became the lamest thing you could possibly ever do (around 1990-96 or so). That "cool factor" was lost.

 

To add to my post #11 …

In regards to Gibson leasing the old Tower Records Building on Sunset in L.A., as far as I can find out that the only thing that has happened to that building since Gibson leased it in 2014, is that it was re-painted as a Tower Records (with a Gibson Guitar Logo) and was used for ONE NIGHT ONLY, as a promo for the great documentary that Tom Hanks son, Colin Hanks, made on the the history of "Tower Records".

Here is a fun little film that some guy shot that week, in October 2015, with his drone camera … (who needs Hollywood?)

 

Gibson's marketing is schizophrenic these days. On one hand, they've gotten very smart with their budget models - giving Epiphone and Fender some real competition.

Then there's the rest of their product line, which is obscenely overpriced. It's like they want to be the Harley-Davidson of Guitars, appealing solely to middle-aged weekend warriors with big portfolios.

Here's a joke:
Hey I just heard Gibson is introducing two new models this year: "The Soul Dentist" and "The Blues Lawyer".

 

They were using machines to build Gibsons in the 50's and they built a of of crappy guitars back then, just like Fender. Maybe the companies had access to better wood, but overall Gibson and Fender are making guitars as good (or better) than they ever did. New guitars don't have the advantage that 6o years of aging.

 

I totally disagree with all of that, but hey, thats what makes the world go round.

 

Hey, I just talk to the guys who work on them and draw from my experience. I get to see and hear a lot where I live. But, whatever makes the world go around.

 

If anyone really needs to learn how Gibson made guitars in the 1950's & '60's, hard to believe, but, go ahead & check out Heritage.

The Story - Heritage Guitar »

 

They ticked off the gubbermint, a few years ago they actually had all their rosewood and ebony confiscated from what I heard.

 

Vintage!

Vintage Everything.

Vintage works.

 

The last 3 Gibson guitars I played couldn't have had worse quality control. Possibly the worst fret work I have even seen on a $2000 plus dollar guitars. What isn't helping them is that brands that are using Asian mfg are getting better and better. There are also a lot of boutique brands doing small batch runs of amazing product a good prices. The variety and customization some can do, Gibson cannot compete with right now.

 

That's a sweet looking Rose & the "16" looks like a real "Sweetie Pie" too.
I've got a little mid '90's H-140 in Vintage Natural - it's light like an single-cut SG with a gorgeous Mpale cap like a Lester.
The last I heard they're still carving their necks with spoke-shaves too.

 

Those are really beautiful but you probably already knew that.

 

Yeah, the Asian guitars have gotten so good & there are so many good US small shops I personally can't imagine anyone going for a Gibson Factory guitar - their Custom Shop, well I guess that makes a little sense.