Gibson Guitars in Trouble- filed bankruptcy protection*

the CEO is a dumb ass. he won't admit his own failures, but blame everybody else.

 

"A group of bondholders advised by PJT Partners Inc. is pushing for a restructuring that would hand them ownership of the guitar maker and let them install new leadership, according to people with knowledge of the plans. The holders don’t expect Gibson’s earnings will be strong enough to attract new money for a refinancing to head off a default looming later this year, and creditors are reluctant to invest more funds while Juszkiewicz is still in charge, the people said. They asked not to be identified because the plans remain private.

The bondholders, who claim to control more than two-thirds of Gibson’s outstanding notes that come due in August, would allow management to keep a small ownership stake, according to the people. Juszkiewicz, who has run Nashville, Tennessee-based Gibson for more than 30 years, says he has no plans to give up majority control and brought back Benson Woo for a second tour of duty as his chief financial officer."

Investors want a new CEO at Gibson

 

Hopefully the Custom Shop survives but they need to look st their pricing.

 

Not for long. They've sold out to a company, who has just laid off most of their luthiers. No more hand crafted instruments will be made at Heritage for long. They are going to more machines & mass production.
Not good.

 

That's a shame. The only knock I had on Heritage was the hideous headstock. Almost as bad as Seagull guitars (but not as bad as those pointy Jackson guitar headstocks).

 

I agree with the point about the headstock being kinda fugly. I believe that Heritage did that as a homage to the original Gibson acoustic headstocks around the turn of the century.

 

That's awful. The hand crafted instruments will be a thing of the past unless you're getting a $8k master built custom shop model.

 

Agreed. There are a lot of factors contributing to their precarious situation, and again, over leveraged is the main culprit. If the debt problem wasn’t as big of an issue, a restructuring to be more in line with current market realities might make the Gibson brand and associated companies attractive to a seasoned music industry executive who could right the ship and make it profitable, sustainable and appealing to current and future customers.

I can’t imagine the depth of contractual commitments Gibson, Inc has with its dealers,
Distributers, manufacturing and cities in which they do business. If their business partner agreements are as much of a mess as their internal structures. I highly doubt they are even remotely attractive to an outside bidder. Thus, bankruptcy is the only way a new management group would be interested in having the Gibson brand when a crapload of administrative work is waiting for them to get the name and all that might come with it.

Just from an outside glance, having manufacturing in Nashville, Memphis, Bozeman is inefficient. Epiphone is probably self sufficient enough and profitable, that arm is probably worth keeping as is. A small, high quality, high dollar, high margin custom shop is a relatively easy division to make profitable, IF you have the right expectations and right people in place, but it is only a small drop in the bucket or line item on the balance sheet.

But the biggest problem I see is the monstrous economy of scale Gibson has created and expects in their current business model. As the market has now begun to prove, it is completely unsustainable and if GC goes down, which is also likely, Gibsons current dealer network will be radically altered and new management would have to figure THAT out as well...along with creating a corporate structure and culture that would be attractive to skilled labor and craftsman.

They are out there, many of whom are ex-Gibson employees. Doubt they would want to come back unless it was lucrative or they had personal vested interest in being a part of a rebuild. It could happen though. Most luthiers I know are not in it for the money. They love the work and the culture they thrive in is being around other people who are just as passionate and creative as they are and have mutual respect for each other. The guys I know who work at Collings, Tom Anderson, Grosh, Taylor have CRAZY MAD skills and they all push each other and have tremendous respect for each other and the boss man’s name on the guitar. Henry J never could cross that bridge with his folks. The new Gibson CEO would have to figure that out if he or she isn’t a builder themselves.

 

Sadly, Heritage isn’t doing much better these days, financially. They are also in the middle of a market and business re-evaluation. Many of the guys who stuck around when Gibson left for Nashville are retiring or being let go. Plus, that old building, as cool and iconic as it is, is in many ways outdated. And the “old way”’of building guitars is very expensive and in some respects, inefficient and frankly, subject to wild inconsistencies in manufacturing. Some call it cool and charming and where the “mojo”’comes from, but a bad neck is a bad neck. I sold an inventory of NOS Heritages after a dealer went out of business and 2 of the 5 had serious build flaws. Too bad too...the guitars did have mojo, they just weren’t playable.

 

Heritage headstocks are pretty conservative. They look a bit like the early Gibson "snakehead," but with slightly different proportions. If you think they're hideous, the sight of a PRS, Dean, Parker Fly or Peavey Wolfgang might send you to the ER.

I really is a shame if Heritage is in trouble.

 

Plus, what percentage of people that want to play guitar are really 'serious' and have serious money to blow on a brand new Gibson?

That's part of the problem, too - what Gibson has hung their hopes on (market projection) vs. the reality of who buys a new Gibson and how often.

 

Most of us can barely afford one Gibson in a lifetime much less multiple and probably not any custom shop stuff at all. Their prices are out of reach for most musicians.

 

Gibson doesn't make a Firebird with original pickups or a wraparound bridge---the two biggest contributors to the growl of a real Firebird.
And these features are EXACTLY what collectors are paying BIG prices to find USED.
Epiphone made a great Firebird "Joe Bonamassa" model with early style pickup and wraparound bridge---then STOPPED making it once the word got out that it worked great.
Collectors have immediately jacked the price on the few that got made before they stopped.
I paid over two grand for a brand new Gibson Advanced Southern Jumbo and the top has pulled itself apart and cracked because the wood was not able to lived through the first cold snap without cracking.
It even came with a big warning in the box telling me that "all Gibsons crack unless carefully isolated from the cold and dry conditions that exist in the world." Or some such bull pucky.
Funny but there are tons of pre-World War II Gibson acoustics whose tops STILL haven't cracked.
And there is the reason I think Gibson deserves to die.
They are stupid.
They don't make the models collector-players want.
They make crap and charge a fortune for it.
Screw Gibson.
What a shame.

 

I've been wanted a Non-Reverse Firebird with two miniHums and a Maestro in a color choice besides Pelham Blue. Probably not a guitar most people want. But the last time they showed up was as a special run for one shop and priced at over $3000. I didn't want that particular make that much. But that' my problem, right? I like Sunburst overall - you can't go wrong with Sunburst. But I think Gibson/Epiphone has overused the Pelham Blue lately.

Special online ordering of certain models might be the way of the future. If they cut out the middle-man for certain niche guitars, keep the standard models in the stores - it might make sense, as long as people don't use it as a wholesale station - which is probably what they are afraid of - people buying their theoretically 'affordable Gibsons' and jacking up the price on the market to current Gibson prices. An American-made Gibson is still worth something - it's just a question of how much and to whom. The global economy has created a lopsided effect on such things in terms of supply/demand, and productions costs in first vs. third world and 'emerging' economies (manufacturing go-zones).

It will be interesting how the Gibson market and company get recalibrated to meet the times. Hopefully some genius comes along and solves all their problems. There will be some money thrown away in the process, maybe close to all their debt, that much is certain, but someone like Amazon could easily write that off. Gibsons sold directly on scAmazon (sorry to hold them up, as they are basically an antitrust gray area 51 or just plain right-place-right-time lucky), manufactured here (Custom Shop) and there (possibly even abroad) might work.

 

"Gibson Guitars In Trouble"-
..sounds like the title to a GREAT movie!

 

There is money to be made selling guitars with the Gibson logo on them. Someone will come along to make that money.

Whether the guitars they make will be worth playing, and how many people will lose their jobs in the process, time will tell.

 

I'm kinda looking forward to a music world without Gibson and Guitar Center.

 

How about "Trouble with Gibson guitars?"

 

I am a former Gibson employee and I would never think of working there again. I remember being concerned about the amount of product being pumped into the market 20 years ago. It seemed unsustainable then. Now, the industry is set for a major culling, with Gibson going down first.

 

price drops already started? Went and played a fabulous 2018 LP Standard last month at Guitar Center - $3200. Stopped in there today and all the 2018 Standards were on sale - $2649 (store sale price, not online). It was hard to keep the credit card in my wallet.

 

Well, Gibson never actually dies. It just goes through time, being tossed from owner to owner. I like some of my Gibsons from the beer/cement maker owner era (Norlin); some like the pure CMI days best. I remember years and years going by where a lot of models were out of production. At the moment, there are what, 80,034 Gibson models to choose from? None that I want, but you can't say Henry didn't go for depth in his reign. Which may actually continue on for a while. Maybe not.

 

What Gibson needs is a $1500 proper Les Paul standard. Plain grain maple cap, simple electronics no coil splitting etc... Sunburst or Gold top your choice. This and flexible dealer contracts.......get back to basics.

 

Does anyone know what plans are in store for Teac/Esoteric now that Gibson has filed for Chapter 11 reorganization?

 

I think Teac was one of those "lifestyle" brands Gibson was hoping to fit into their ill-fated strategy. My guess is that they sell it to someone like-minded and already in the audio business.

 

Can't imagine Teac won't be snapped up by an audio conglomerate.