IS GIBSON IN TROUBLE?

So lately this has been quite a discussed subject. Are Gibson not doing well? A lot of people seem to be talking about certain financial difficulties on Gibson’s end. Is this the case? Today we´re having a look at the situation and some key aspects that may have something to do with it.

Let me start by telling you that we have absolutely no intention to give Gibson any bad advertising or discredit them from their amazing work over the years, in fact, we absolutely love Gibson guitars! But it is true that lately not everything seems to be going as well…

 

CURRENT DEBT

According to Moody’s Investor’s Service Inc. the financial rating of Gibson Brands Inc. has dropped to Caa3, which is extremely low. It is not sure whether Gibson Brands Inc. will be able to refinance their debt by July 2018. This could lead to very severe consequences for the brand, making their future uncertain.

 

THE WOOD SCANDAL

Let’s talk about one of the biggest scandals Gibson has ever gone through. On the 17th of November 2009, federal agents raided the Gibson factory in Nashville after Gibson had allegedly been purchasing wood from Madagascar illegally. While still in court, in 2011 the Gibson factories were raided again with a very similar story, this time regarding wood imported from India. Finally, in 2012 Gibson settled with the government for $350k and admitted violating the law regarding the wood from Madagascar.

Ok, so $350k may not sound like much to a company like Gibson, but on top of that you have to keep in mind the high legal fees and bills they have had to pay over the years for both of these cases. Besides, the large amounts of wood stock they lost had to be replaced, leaving the company with millions worth of losses. I’d say that this in particular is one of the key contributors to the situation Gibson finds itself in right now.

 

AUTO TUNING. IS THIS THE RIGHT TYPE OF INVESTMENT?

One thing I have heard Gibson CEO Henry Juszkiewicz say is that he has invested millions of dollars in research and development for their Min-ETune™. In fact you can hear him yourself on this video, approximately 30 seconds into the presentation:

I have to admit the feature itself is quite cool, I can see how I could benefit from it. Nonetheless, we’ve always lived without such features and everything went fine. I’m not against innovation by any means, but I guess spending millions of dollars on what is more of a gimmick for guitarists isn’t exactly the wisest thing to do when you’re facing a severe financial crisis, and to be honest I’d personally prefer to see the extra money invested on higher quality hardware for the production builds as well a higher level of quality control (I’ll get back to this point next). I don’t personally know about every investment Gibson makes right now, but this seems to be an example of where investments may not be made in the right area at the right time.

 

QUALITY

One of the things I hear most complaints about is quality, and to be honest I’ve also experienced some issues myself. Personally I was lucky, as the issues I encountered were mainly cosmetic and didn’t affect playability and sound. Nonetheless, at the price point of these guitars one could expect more attention to detail. Paint jobs on the headstock having some flaws where the paint matches the wood or small dents on the fretboard are two issues I’ve personally encountered. I know a few more people that have complained about badly wax potted pickups or warped necks too, as well as a few other nightmare stories that I was lucky to never experience.

Another thing some players may have noticed is a downgrade in some hardware and electronics. For instance nowadays on many production models you will find bridges made out of alloys (or as some may say,”pot metal”) as opposed to steel machined bridges, which are more resonant as well as more durable than the way cheaper pot metal bridges you find on many production models nowadays. Plastic nuts can also be found on many modern era Gibson models. Again, not what you’d want to expect at this price point. The amount of complaints and downgrades I have heard of in the last few years are quite terrifying, this is not what I am used to with Gibson. In fact, I grew up in a very musical household, my father has always been a guitarist, in my world Gibson always meant premium quality and no compromise. But why has this changed?

For instance, it’s not the first time Gibson faces a bad financial crisis and they have been in debt for quite a while now. I’d assume Gibson have been trying to get back on their feet by cutting on costs yet keeping the production in the USA. But can they justify that despite some of these downgrades the prices have kept increasing? The gap between price and quality seems to be getting wider and these are not good news for the fans of this brand, which seem to start seeking alternatives more frequently

Nowadays it’s very easy to go on the internet and feel discouraged by other guitarists to buy gear from a specific brand after having had a bad experience with them, and I keep reading and hearing all of these stories on the internet, whether many of these may or may not be true, they have constantly been damaging Gibson’s image and left a large part of the market quite sceptical about the more modern Gibsons.

Gibson on their end seem to ignore what is really going on. In fact, I was making some research for this article earlier and I stumbled upon something quite terrifying on their website after a contact of mine had pointed it out.

This screenshot is taken right from the Gibson website, it’s one of the images that you can see on the Tobacco Sunburst 2018 Les Paul Traditional product page:

Exactly, a crack in the headstock. The image may be a bit small, but if you want you can go to the product page and see for yourself. How does something like this happen? Is Quality Control being one of the areas where significant cuts have been made during this financial crisis? Is Gibson being sabotaged? This may sound a big rough but it is simply hard to think something like this has been overlooked at a company that has set such a standard for quality throughout the years.

 

COULD GIBSON  ACTUALLY BE GIBSON’S WORST ENEMY?

Why would I ask this? Well, as I mentioned before, to me Gibson always meant quality, and you’ll have to agree that through the years they have sold exceptional guitars. In fact, nowadays vintage Gibsons have a very high demand and can be found all over the internet. On top of that, these guitars tend to go up in value with the years, so sellers are getting more than what they paid years back. The high demand of vintage models as well as the high amounts of money resellers are making keep the second hand guitar market very active. In fact, I have to admit that if I was looking for a Gibson guitar nowadays I’d probably look for an interesting deal on a used Les Paul online before going to any store looking for a brand new model, and I assume many of you may have this mindset too. Basically, this means less sales for Gibson, and their biggest competitor right now is Gibson.

 

STILL VERY BUSY ON THE LEGAL SIDE

Most of you may know that in the past Gibson has been very active in court. In the 70’s there was an incredible increase in popularity for Japanese imported guitars that were mainly very well made copies of american models, many of which were based on Gibson models among replicas of other manufacturers. In 1977 Gibson sued Hoshino for copying the Les Paul. Gibson has also sued companies like Fernandes in 2000 or PRS in an attempt to stop them from producing their singlecut model back in 2005.

But things didn’t really end there. As a matter of fact, recently, Andrew Miller from Vagina Guitars (if you can get passed the name you’ll see they actually have some quite interesting, appealing builds) and another friend from a different company (who I will not mention in order to respect his privacy) have been having legal issues with Gibson, after having been sent various cease and desist letters and having their social media accounts and websites blocked. It seems quite possible that a number of brands may be going through similar situations with Gibson right now. It is known that other American manufacturers such as Fender have taken other manufacturers to court for similar reasons, but it really seems to be something Gibson is putting special emphasis on. I wonder if this is another consequence of their current financial situation.

CONCLUSION

Gibson does indeed seem to be in quite a complicated situation right now. Nonetheless, I honestly doubt they will simply disappear in a year’s time. Gibson has been a long standing leader in the industry and I am sure they can get back on their feet one way or another. I honestly hope to see Gibson improve and regain the reputation they once had, they have done it before and they can do it again. We’re not really saying that Gibson is really a bad brand. Overall they still produce great guitars we all love, but it is true that a lot of issues are being addressed frequently nowadays and we hope to see that change.

Please feel free to leave a comment below on the subject, I’d definitely love to know what you all think about the current situation with Gibson.

 

Article written by Vincent Baills

Note: The views expressed here are those of the authors and do not necessarily represent or reflect the views of VintageandRare.com