Gibson guitar manufacturer files for bankruptcy

For those who are fellow guitar players here and follow the news regarding guitar companies and the downturn in sales many are having this is hardly unexpected but one hopes they can restructure. Having them disappear would be a little bit sad but they were relying entirely too much on their previous rep and quality control had become quite awful and the use of gimmicky ideas also contributed to this.

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Hmmm. Thanks for the info. I was not expecting that.

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Yes, they’d been getting a bit gimmicky. The robo-tuners were ridiculous. If you can’t tune your guitar, you have no business owning an expensive guitar anyway.

It’s too bad. I always wanted to have an L-5, like Wes Montgomery. Way too expensive, of course, but still.

I think I read that the company was going to divest itself of ancillary businesses and get back to just making musical instruments, and that that guitar division was still making money – it was the other stuff that sent Gibson into bankruptcy.

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It was with Fender also…
What is with guitars… Such brands as these…

Breaks my heart to see an American business go this way.

The writing has been on the proverbial wall for awhile now.

God bless.

Cathoholic

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This from a couple of months or so ago . . .

Gibson Guitar Faces Imminent Bankruptcy After 116 Years In Business
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Paul Resnikoff February 16, 2018
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Gibson Guitar is now falling on hard times, and softer guitar sales are just part of the picture. According to details surfacing this week, the company remains deluged in debt, with desperate sell-offs to service a growing list of creditors.
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Ringing the scary alarm is Nashville Post reporter Geert De Lombaerde, who unearthed mountainous debt obligations and a worsening financial crisis. De Lombaerde pointed to a recent, $16.6 million coupon payment by Gibson to service $375 million in senior secured notes that come due this year.
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The debt pile wasn’t a secret to frustrated bond holders. But De Lombaerde is seeing an iceberg ahead. “The situation facing the iconic Nashville-based music instrument maker, which has annual revenues of more than $1 billion, is far from normal,” De Lombaerde remarked. “CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature.”
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“On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013 . . .

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The end of an era

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And THIS (below) heavy-handed action didn’t help matters . . .

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The Gibson Guitar Raid
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John Hayward | Friday Aug 26, 2011
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The Justice Department raided the Gibson Guitar factory in Nashville on Wednesday morning. From a Gibson press release:
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On August 24, 2011, around 8:45 a.m. CDT, agents for the federal government executed four search warrants on Gibson’s facilities in Nashville and Memphis and seized several pallets of wood, electronic files and guitars. Gibson had to cease its manufacturing operations and send workers home for the day, while armed agents . . .
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This actually happened once before:
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In 2009, more than a dozen agents with automatic weapons invaded the Gibson factory in Nashville. The Government seized guitars and a substantial amount of ebony fingerboard blanks from Madagascar. To date, 1 year and 9 months later, criminal charges have NOT been filed, yet the Government still holds Gibson’s property. . .

From NPR . . .

. . . Juszkiewicz says the government won’t tell him exactly how — or if — his company has violated that law.
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“We’re in this really incredible situation. We have been implicated in wrongdoing and we haven’t been charged with anything,” he says. "Our business has been injured to millions of dollars. . . .
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https://www.npr.org/sections/therecord/2011/08/31/140090116/why-gibson-guitar-was-raided-by-the-justice-department

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The true villains behind the Gibson Guitar raid are revealed
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John Hayward | Friday May 30, 2014
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. . . Nothing about this caper ever smelled right: a raid coming from out of nowhere, without warning, to kick Gibson’s doors down, ostensibly because they violated some vaporous provision of import laws when bringing hardwood into the country. It wasn’t even American law they were supposedly violating, but an American law that said they were in hot water for violating the laws of India and Madagascar, which came as something of a surprise to authorities in India and Madagascar. In a delightful inversion of American legal principle, the folks at Gibson were never allowed to see the sealed warrant that supposedly authorized the raid. Guilty until proven innocent! We’ll get back to you later on what you’re allegedly guilty of.
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It was long suspected that the Gibson raid was a political hit, carried out because CEO Henry Juszkiewicz, made campaign donations to Republicans. The financial disruption to the company was considerable – a $250,000 settlement, a $50,000 payoff to environmentalist groups, over $2 million in legal fees, plus the cost of being essentially shut down for a while by the raid. . . .
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. . . . Gibson Guitars is located in Tennessee, which is a right-to-work state; their competitors are not. At one point in the saga, Juszkiewicz was told by government agents he could make his problems go away if he used foreign labor for manufacturing. . . .
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. . . The good news is that Gibson Guitars eventually got back all the hardwood confiscated from it by the government. . . .

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I remembered that raid and wondered if there was any connection.

It sounds like in addition to the raid, they had made some bad decisions, but bankruptcy does not always mean The End. K-mart used to file for bankruptcy what seemed like every year; debts were re-structured and their “life” went on. Hopefully.Gibson will be able to pull put of this.

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One thing I respect Gibson for. They never had guitars built overseas with a Gibson logo slapped on the headstock. Can’t say the same for Fender.

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Maybe not the Gibson logo, but that’s exactly what they do with the Epiphone logo. And they’re pretty good guitars, too.

They’re doing exactly what Fender does. Their top of the line guitars are made in the US factory, and the less expensive guitars are made outside the US (in Mexico, in Fender’s case, and they’re great guitars). Gibson just uses a different name. Fender doesn’t.

Right but I was referring to the MIC, MIK, and MIJ Fenders.

Less younger people take up guitar which has hurt Fender and Gibson, also the ‘mojo’ of their brands whilst still special is not as special as it once was and people are prepared to look elsewhere. Other companies make guitars as good as theirs, often better, for cheaper prices. Their price to acquire as items in non-US markets has become ludicrously high, this is especially true of Gibson. A Les Paul standard in the UK would cost the best part of a month’s wage for someone, a Les Paul custom would cost several times that. They were never cheap but they have become very costly. Fender is another story and in some respects it’s MIJ guitars and higher end Squiers actually beg the question of ‘why buy an American model?’ For Americans you may buy one for patriotic reasons, for non-Americans that is not a consideration and when an USA made Strat costs around a thousand pounds and the MIJ one costs 40 percent less but sounds as good and is as well made, if not better at times, then you can guess what people are going to buy.

I have a Mexican Telecaster. It’s a really nice guitar. I’ve never played a Chinese or Korean Fender.

I know that Japanese Fenders are highly regarded for their quality and are actually sought out by Fender fans.

Very highly regarded, I’ve owned a couple. Both were much better made than the 3 or 4 American Fender’s I’ve had. Recently I bought a Telecaster and instead of buying a Fender one I bought a Japanese Tokai copy of one as the Fender one was nowhere near the Japanese one’s level of quality and twice the price.

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I’m not knocking imported instruments.

I was just pointing out an iconic American brand that has never put their logo on an instrument they didn’t build here in the States.

My favorite acoustic that I’ve ever owned, and still do own, is a Yamaha FG 335 made in Taiwan. I’ve owned a lot of instruments but have never got as many compliments on one as I do on how that one sounds.

They of course do use Epiphone as pointed out earlier in the thread for their non-American stuff and Epiphone was once very much an American brand.

They still make nice guitars. I have an Epiphone acoustic, an EL-00. Nice little blues box, perfect for fingerstyle Delta blues stuff. Sounds pretty good for Irish trad stuff, too.

Right now I’m contemplating buying an Epi Emperor. I’d love an L5 or a Super 400, but I couldn’t afford one without emptying the kids’ college funds. Maybe not even then. The Emperor Broadway will do just fine. And I can’t play well enough to bring out the total quality of sound of a Super 400 anyway.

Oh they make some great guitars, one of the nicest Les Paul copies I ever owned was an Epiphone, sadly it eventually got damaged so badly it was unrepeairable. However I’m not really convinced of the cost of the highest end Gibson or Fender guitars been justified. This applies in particular to some of the custom shop reissues stuff both companies produce which I regard with some cynicism, especially the whole trend towards 'making them look like relics. One website did a hilarious test concerning that where they took a standard Telecaster and Stratocaster and decided to see how well they could ‘relic’ them using home methods. A couple of hours later with methods varying from throwing keys at them to applying a blow torch very lightly they had achieved fairly convincing results for a few pennies.

Absolutely agreed. I was always amused by the “relic” and “roadworn” guitars. It’s like Fender is saying “hey, for an extra $500, we’ll smash up your guitar for you!”

Fad of the worst order is how I see it. One guy trying to relic his guitar got great results by simply actually playing it a lot. Amazing that hey?

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