Gibson Guitars - Poor Quality and High Prices and Bankruptcy

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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Thu Mar 01, 2018 11:47 pm

Interesting paragraph there:
just last week, Standard & Poor’s downgraded Gibson to a CCC-minus rating based on low revenues and high likelihood of default. Earlier, Moody’s also downgraded the guitar maker, making it extremely difficult for the company to secure favourable loans in the coming months.
I really can't see Henry J making those upcoming payments it's pretty likely no one is going to bail the company out for the simple reason that it is in potential buyers interests to see the company default. That drives down the price of acquisition so they can get the whole thing for snip.
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Fri Mar 02, 2018 12:30 am

Interesting little video here that pretty much sums up where Gibson are now and how they got there.

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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Miks » Fri Mar 02, 2018 10:13 am

Wow - Gibson's future seems to look bleak... 8O
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Fri Mar 02, 2018 10:59 am

Miks wrote:
Fri Mar 02, 2018 10:13 am
Wow - Gibson's future seems to look bleak... 8O
Certainly looks like it, in purely financial terms anyway. I would say they are definitely heading to a bad place. However I doubt we will see the end of Gibson as a guitar maker. There will be a buyer...if it comes to that but it's what that buyer might do with the brand that is of major concern.

The first thing any new owner(s) would need to do is cut costs. Just being a new owner doesn't make the debts and lack of income go away. So I would guess they would sell off the other companies that Gibson acquired and turn Gibson "guitars" into just that, a business that focuses on their main usp which is making iconic, top quality guitars.

Next there will be staff cuts and maybe a trimming down of the number of guitar models Gibson makes.

They would also need to nail quality control in order to restore confidence in the brand.

I would also assume they will get retailers back on-board by dropping that crazy insistence on them stocking all models. Let the retailers decide what they will stock...like every other successful brand does.

And they may look at moving production to further cut costs although I would imagine they would still need the skilled workforce they have...unless they were going to move production out of the country but that would probably lessen the value of the brand. Hey but they may be looking to just shift as many guitars at a low price as they can. People will still buy if it has 'Gibson' on the headstock just the same as they do Epiphone, Martin and Yamaha. The purists of course won't but they are a minority and this is all about the money.

Still it's early days. That first payment isn't due until July so we are 5 months off seeing what will happen. I think there is a good chance though that Gibson's credit rating may fall into trash territory before then.
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Miks » Fri Mar 02, 2018 11:14 am

Yeah - let's see what will happen. Hoping the best. :?
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Fri Mar 02, 2018 3:08 pm

by the way when I was talking about alternatives to Gibson I forgot to mention the Vigier G.V.Rock which is definitely not on the cheap side of things but an outstanding guitar just the same.
Vigier GV Rock.png
Vigier G.V Rock
Vigier GV Rock.png (151.03 KiB) Viewed 1467 times
http://vigier.co.uk
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Sun Mar 04, 2018 2:05 pm

Seems Gibson are now cutting staff to save money. It's always the workers that get the crap end of the stick isn't it? How about selling off the other "Gibson Brands" that take so much focus away from the core business?
According to the Nashville Post, Gibson has already started laying off employees. So far, that includes 15 employees at an Elm Hill Pike plant this week. Specifically, the cuts were made at the Gibson Custom Shop, which focuses on higher-end, custom guitar manufacturing.

That’s one of several Gibson manufacturing operations sprinkled throughout Nashville, leading to fears of broader cuts ahead. And Gibson’s CEO is doing little to allay those concerns. In comments issued by Gibson chief Henry Juszkiewicz, the layoffs were acknowledged as “part of broad initiative throughout the company to prepare for our refinancing,” and a “Spring cleaning of sorts” to lighten the operational load.
You can read the rest of the article over at https://www.digitalmusicnews.com/2018/0 ... ankruptcy/
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by parametric » Mon Mar 05, 2018 12:12 am

I can't think of anything more perfectly WRONG to do at this point. . . Talk about a Death-Wish.

Loosing skilled workers from the Prestige Shop seem madness to me.

The very staff that make the Special Guitars Special?

Competitors will be clapping with joy, with their cheque books out . . . .

Perhaps they are not interested in guitars any more?

Heading towards a non-specific "Music-Brand" perhaps . . ?

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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Mon Mar 05, 2018 12:20 am

Yep, seems to me the cuts are being made in the wrong place. The best thing for the company right now would be for Henry J to put his ego away, step aside and let someone with more common sense run it and turn the whole thing around. HE is the main source of the problems but he just won't accept it. Instead as usual he blames everyone else and it's those skilled workers who are NOT causing the problem that lose their jobs.

If it carries on like this I'm not sure Gibson will survive as a premium brand :(
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by SysExJohn » Mon Mar 05, 2018 11:21 am

Saul wrote:
Mon Mar 05, 2018 12:20 am
Yep, seems to me the cuts are being made in the wrong place. The best thing for the company right now would be for Henry J to put his ego away, step aside and let someone with more common sense run it and turn the whole thing around. HE is the main source of the problems but he just won't accept it. Instead as usual he blames everyone else and it's those skilled workers who are NOT causing the problem that lose their jobs.

If it carries on like this I'm not sure Gibson will survive as a premium brand :(
Goodness me, this sounds SO familiar. :o
Now, why's that? :? 8O
Oh, yes! I remember. :roll: :cry: :x :evil:
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Mon Mar 05, 2018 11:35 am

Certainly Henry J is not the only CEO to behave in such a manner but how he can't see that he is destroying the brand not saving it is a complete mystery to me. The evidence is there right in front of him and has been for such a long time.

No one is going to re-finance that debt and the reasons are very simple. With Henry J still at the helm your money would not be safe so he would need to go...only he refuses to do so and second why not just wait until the company goes under and buy it up for a token payment?

The danger here though is that were the company to be bought by someone else they may just start producing cheap guitars wit the Gibson logo on the headstock and go for volume over quality. I'm pretty sure people would still buy Gibson guitars but it would not be the people who buy them at the moment.
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by SysExJohn » Mon Mar 05, 2018 12:26 pm

Saul wrote:
Mon Mar 05, 2018 11:35 am
Certainly Henry J is not the only CEO to behave in such a manner but how he can't see that he is destroying the brand not saving it is a complete mystery to me. The evidence is there right in front of him and has been for such a long time.
It's a kind of disease (mental illness) that most people who have the drive to make it to the top have.
It's the total self-belief that what you do is always right, and that you are never wrong.
Narcissism.
He'll never step down, he'll have to be forced out.

A certain president has the same illness.
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Mon Mar 05, 2018 12:50 pm

Indeed the parallels between Henry J and a certain president are quite striking ;)

Not sure exactly how they force him out. Isn't Henry J the majority shareholder? How do you push a majority shareholder out the door?
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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by parametric » Mon Mar 05, 2018 4:18 pm

I would say he's increasingly on thin ice.

Perhaps he wants to take ALL the credit for bringing the Brand DOWN?

Other principal shareholders might have another view - and might be somewhat alarmed at where their

investment is heading?

Any rescue attempt should be conditional on him NOT being the Principal Shareholder any more . .

however THAT can be arranged?

Sadly, the Legacy of the Company and it's history of excellence will mean nothing to the accountants -

who know the COST of everything and the VALUE of nothing - and bottom-line mentality will ultimately decide . . .

Perhaps the new Gibsons will be Spreadsheets fitted with tuners, strings and pups and a whammy-bar :lol:

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Gibson Guitars - Poor Quality and High Prices and Bankruptcy

Unread post by Saul » Mon Mar 05, 2018 4:36 pm

Yeah this is the worry Chris. Once the accountants start dictating the direction of things it never works out well for the consumer.

I have a feeling there will be a lot of dodgy dealing going on to make sure Gibson falls into bankruptcy JUST to get rid of Henry J and drop the buy up price to peanuts. Can't see any other way of getting rid of him at the moment.

What I still don't quite understand is why Epiphone who are part of the same company, can produce excellent quality guitars for relatively little money and Gibson can't? or is it "won't" ?

I would still buy an Epiphone over a Gibson without any qualms at all. I have had a few Ephiphones in the past, the last being the EJ200CE acoustic...which was superb and before that the Epiphone Nighthawk Custom which was a beautiful guitar.
Epiphone Nighthawk Custom.png
Epiphone ej200sc.png
If it's about value for money and quality control Epiphone nails it every time ((i))
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