Gibson guitars is going bust
mainOne of the most famous guitar makers faces bankruptcy after 116 plucking years.
It is still making a billion dollars this year.
Read here.
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Not surprising. Quality has steadily declined for decades as the megalomaniac, employee-hostile owner attempts to milk the brand and grow to unsustainable levels. A shame.
A company with a billion dollars in annual revenue is not “still making a billion dollars this year.” In business-speak, the money you “make” is your profit, not your revenue. It’s quite possible for a company with substantial revenues to be operating at a loss, especially if there isn’t a la,regents amount of debt to be serviced.
Bankruptcy also does not mean going out of business. Many times businesses use bankruptcy to force the restructuring of debt to more favorable terms.
I vaguely remember Gibson facing problems with the government seizing some of the wood used to build guitars. I don’t remember the particulars, but it had something to do with a rare wood they had previously imported. Eventually, they were cleared of wrongdoing but not before creating a serious dent in their manufacturing ability at the time. That may still be a factor in this bankruptcy.
They weren’t cleared. They settled for a 300,000 USD penalty plus a community service payment of 50,000 USD. There are so many things wrong with the company’s management that I doubt that these payments contributed much to their current predicament.
Interesting. Thanks for the update.
I had heard that the loss of production cost them a fortune.
The President, Henry Juskiewicz has a deserved reputation as an erratic, dictatorial executive whose style has led multiple executives at Gibson to come and go like a revolving door.
Really? He has been running Gibson since 1986 … that’s one very long spinning revolving door. I’m not saying you’re wrong but erratic, dictatorial executives usually sink a company way before 32 years at the helm.
I just now read an article where he calls out retail music stores for not keeping their end of the bargain by representing the Gibson products properly. I’ve got to say I agree 100% with what he said in that article. You go into any music store to buy a $5k guitar they don’t want you to touch anything, there’s crap everywhere, nowhere to sit, they’re a retail disgrace. Like he says, Gibson are a high end product, they should be sold like how Apple sells their products.
Rumour has it that the world of musical instruments is about to be rocked over sexual abuse claims and Gibson’s CEO, Henry J, will be exposed as the Weinstein of the industry (he’s a laughing stock already), I know of several ex female Gibson employees forced out of their jobs having rejected his advances, I reported directly to him for over 10 years and what I saw was frankly disgusting, in particular his behaviour drunk in Memphis where we had a corporate office prior to the factory (now up for sale) being built. I feel ashamed I didn’t speak up at the time but he still owns his failing company so HR are owned by him and you would not dare go near them. I know of one woman he booted out of the company who is about to make a formal complaint and then the floodgates will open.Watch this space!
Sounds like a wonderful place to be an employee …
Overpriced US labor and shoddy workmanship owe to the demise of this company. Fender next… Good luck.
I worked for Gibson throughout the 90s in a senior role and even then the accountants were tearing their hair out telling me the company was clinging on for dear life on over 200 million dollar bank loans from the Nations Bank Nashville, who really own the company in many respects. The CEO Henry J is a nasty bully and has ruined the company with his micro management over the years, at the end of 10 years loyal service I was lied, cheated and bullied out of my job. Unfortunately he’ll never let go, downsize and just keep treating everyone like dirt as the quality of his products get worse. He is the laughing stock of the musical instrument business.
It is completely unfair to blame labor for management problems. Gibson’s rivals – Fender and C.F. Martin – treat their employees with respect and they are doing fine.
I’ve been expecting Gibson to bust for years. It’s trying to be Ford and Rolls Royce at the same. Way too many daft silly models. The label wont die but expect most production to move east and under new (probably rubbish) ownership.
CEO Henry J has been buying up small brands for years, Mapex & Slingerland drums, Tobias basses, Baldwin pianos etc in an attempt to become the Proctor & Gamble of musical instruments. Unfortunately for these brands he never had the funds nor the inclination to promote them properly., I once had Mike Tobias literally crying into his beer in a Nashville bar very upset that Henry did little or nothing with his brand and said to me, ‘I don’t even own my own name anymore’.
Promoting these brands was just a nuisance for us to have to deal with and a distraction away from the only brands that matter, Gibson and Epiphone guitars.
The only hope is that a rescue deal involves Henry standing down as part of the deal.