Gibson files for Chapter 11 Bankruptcy Protection

[Chownybass]

Link https://www.usatoday.com/story/money/2018/05/01/gibson-guitar-chapter-11-bankruptcy/567821002/

We've clashed with Gibson's Lawyers in the past - so half of me thinks this is comeuppance - and half of me thinks this isn't great at all.

 

[stevie]

I wonder if a Chinese company will snap it up. It wouldn't be the first time.

 

[JohnDaBass]

Sad day.

 

[Daz39]

US firms of suitably massive size go into and out of Chapter 11 all the time: airlines love doing it. It’s like a CVA but even more in favour of the company and gives them plenty of leeway to slash costs (jobs!) before rebadging or merging. 

They probably are a good target for buyout, would much change though?

[NancyJohnson]

If they survive this, hopefully the restructuring will help this company shed the ridiculous leisure brand acquisitions (Onkyo, TEAC, Philips) and just get back to making affordable instruments.

https://www.prnewswire.com/news-releases/gibson-brands-reaches-restructuring-support-agreement-to-reorganize-around-core-businesses-300639935.html

[NancyJohnson]

Cheers to Dave at LBO

https://www.bloomberg.com/news/articles/2018-05-01/gibson-files-for-bankruptcy-with-deal-to-renew-guitar-business

https://www.reuters.com/article/brief-gibson-brands-reaches-restructurin/brief-gibson-brands-reaches-restructuring-support-agreement-to-reorganize-around-core-businesses-idUSASC09YH1

 

[Guest adi77]

change is good 

 

lol

[luckman67]

It is a sad day I hope an American company/investors take over.

[Dan Dare]

I think that making "affordable instruments" is part of Gibson's problem. In addition to the leisure brand acquisitions referred to above, they appear have spread their core business too thin, trying to appeal to everyone. They make solely in the USA (and fair play to them for that), pay people proper wages and as a result, are never going to compete with far eastern manufacturers who hire children, pay them in bags of gravel, don't have to abide by any workplace or materials regulations, etc, etc. When I was young (a loooong time ago), a Gibson was something you aspired to owning. I saved up for several years to buy my first Gibson instrument. Now, every shop seems stuffed with them and they are trying to sell at all price points. They should go back to making things that are special/desirable and leave the entry-level instruments to the mass producers, even if that means, as it undoubtedly  will, that they become smaller (and also leaner and fitter). Just my opinion, of course.

[Cato]

Chapter 11 bankruptcy in the US is a bit different from bankruptcy in the UK.

https://en.m.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code

It basically gives a financially struggling company a period of protection from their creditors while they try to get their house in order.

In Gibson's case my guess would be that they will try to sell off the plethora of non musical instrument related companies that they've acquired over the last 20 years.

There may also be some commercial value in the intellectual property of some of the music tech companies that they have bought and subsequently let fold.

They might also try to sell or remortgage physical assets such as land and manufacturing equipment.

Only if this fails to raise enough revenue to appease their creditors will proceedings begin to transfer all Gibson assets, including the brand itself, to their creditors who will then be free to either keep the  brand tnemselves or auction it off to the highest bidder.

Whatever happens it's extremely unlikely that the Gibson brand will disappear although it may well change hands.

[Mykesbass]

1 hour ago, Dan Dare said:

I think that making "affordable instruments" is part of Gibson's problem. In addition to the leisure brand acquisitions referred to above, they appear have spread their core business too thin, trying to appeal to everyone. They make solely in the USA (and fair play to them for that), pay people proper wages and as a result, are never going to compete with far eastern manufacturers who hire children, pay them in bags of gravel, don't have to abide by any workplace or materials regulations, etc, etc. When I was young (a loooong time ago), a Gibson was something you aspired to owning. I saved up for several years to buy my first Gibson instrument. Now, every shop seems stuffed with them and they are trying to sell at all price points. They should go back to making things that are special/desirable and leave the entry-level instruments to the mass producers, even if that means, as it undoubtedly  will, that they become smaller (and also leaner and fitter). Just my opinion, of course.

This. Don't understand economics, especially the constant need for growth. Small company building highly desirable items at a high, but reasonable cost. What's wrong with that?

[CalDeep]

Annoying that they sighted electronic music as the problem rather than the 15 year decline in quality and hike in price. Its very sad to see but unfortunately I feel everyone has known this was coming for a good while. 

[uk_lefty]

11 hours ago, Mykesbass said:

This. Don't understand economics, especially the constant need for growth. Small company building highly desirable items at a high, but reasonable cost. What's wrong with that?

Shareholders?

[Woodinblack]

I think this could be great for the world (if you don't work for gibson, don't know how good it is for them). The problem that Gibson has had for years has been the management and the desire to buy up every other company and remove the value from them and the belief that all Gibsons problems are caused by other people. Gibson the brand is too valueable to not be bought up and continue to make guitars, Gibson the company is mad. Get some management that just want to concentrate on making guitars and  I think it will be a win for everyone

[NancyJohnson]

To echo comments made elsewhere, Gibson was/is a brand you aspired to; I remember when I started out, I'd get a Bells catalogue or drool over stuff in Beat Instrumental, but on my paperboy salary Gibson (and Fender) were well out of my league.

From a bass perspective, our Gibson choice has been very limited; by comparison with our six string bretheren, we have experienced limited model choice, limited colour pallettes, limited options.  Yes, I know other manufacturers are available, but when you want something, you want it, eh?

I've seen that Joe Bonnamassa is interested in taking the business over.  Honestly, love him or not, having a musician running things might make things better.  There was an interesting video posted elsewhere where three guys were discussing the decline of Gibson and summed up that you need to be able to buy a decent guitar for $1,000 as beyond that figure, you're looking at people on doctor and lawyer salaries.  Perhaps (if Gibson survive), it'll be a case of giving the publice what they want, less custom shop pricing, more choice, less reliance on Les Pauls and SGs. 

There's a lot of demand for double cut Les Paul Juniors, so why didn't Gibson start making them again, preferring to go with the Firebird X or these ridiculous limited run models?  Because they became detatched from this customer base and diversified into other markets.  They're a company selling (apparently) 170,000 guitars a year.  They shouldn't be in the state they're in.

[Daz39]

Joe must own a sizeable percentage of their stock; have you seen pics of his collection?

Yep; too many special editions to cater for collectors and high salary earners who played in college and are now able to indulge. Problem is that’s a market full of shiny offerings from PRS and boutique makers.

[Woodinblack]

2 hours ago, NancyJohnson said:

 There was an interesting video posted elsewhere where three guys were discussing the decline of Gibson and summed up that you need to be able to buy a decent guitar for $1,000 as beyond that figure, you're looking at people on doctor and lawyer salaries. 

Yeh - which led to short term financial gains, but meant that the kids of the day were not seeing actual musicians playing gibsons at the level they used to.

[EliasMooseblaster]

2 hours ago, NancyJohnson said:

From a bass perspective, our Gibson choice has been very limited; by comparison with our six string bretheren, we have experienced limited model choice, limited colour pallettes, limited options.  Yes, I know other manufacturers are available, but when you want something, you want it, eh?

Perhaps (if Gibson survive), it'll be a case of giving the publice what they want, less custom shop pricing, more choice, less reliance on Les Pauls and SGs. 

I bought a copy of Rob van den Broek's Gibson Bass Book - mostly just for the gear pr0n photography, I'll be honest, but it turned out to be a really interesting read. I had never previously guessed that Gibson had experimented with so many different designs, especially in the '60s and '70s.

I guess, much like Fender, they've become victims of their own success, in that a group of people will always just want a straightforward LP, SG or Thunderbird, but you have to wonder why they didn't at least push some of the variations a bit harder - double-cut LP Juniors (as you rightly say), "Melody Maker" SGs with single-coil pickups, or SGs with PAFs, or even - that radical idea which they only seemed to pick up on in the last couple of years - a f***ing 5-string bass.

Seriously, did none of the bigwigs in the company pop the telly on during the last few decades and think "eh-up, some of these bass players have got more than four strings on them there bass guitars...I wonder if there's a market there?" I know I've stuck to fours myself, but I'm not so blinkered as to believe that a 5-string bass is still a strange and exotic variation on the bass guitar's design. FFS, if Mike Lull can stick a low B on a T-bird shape with minimal ballache, what was stopping them? I thought those EB models from the last few years showed a promising change of direciton, but clearly too little, too late.

[eude]

17 minutes ago, EliasMooseblaster said:

I bought a copy of Rob van den Broek's Gibson Bass Book - mostly just for the gear pr0n photography, I'll be honest, but it turned out to be a really interesting read. I had never previously guessed that Gibson had experimented with so many different designs, especially in the '60s and '70s.

Oooh, I'm going to have to pick a copy of that up! Thanks for the tip.

Now back to the original topic

Eude

[miles'tone]

Good. I hope a sustainable, simplified quality conscious Gibson emerges from the ashes.

[skankdelvar]

Despite suggestions that Mr Henry Juskiewicz may continue as CEO one hopes that whoever assumes control will sideline Hapless Hank into a powerless 'continuity' role, wrap him up tight in an NDO and pay him for a year to keep his mouth shut, at the end of which period they fire him out of a howitzer into a barbed-wire factory.

It's a tragedy in the truest sense of the word. A man sets out to do good, succeeds for a while then succumbs to hubris and madness. Fate beckons. The cannon roars.

Curtain.

One of the most piquant details of this sad drama: having tried - and signally failed - to thrust auto-tuning upon guitarists, Gibson now finds itself being sued by Tronical Systems, the license-holder for the much-despised digital Min-e-tuners. Indeed, so loathed are these excrescences that there is actually a land-fill the size of Wolverhampton comprised exclusively of Robo-tuners removed from Gibsons.

It remains to be seen why the Hamburg-based Fritzes at Tronical have it in for Hank but being sued for $50m can't have helped Gibson in the last week or so.

Juskiewicz: victim of circumstance? Or just a hopeless tw4t?

Edited May 2, 2018 by skankdelvar

[Woodinblack]

50 minutes ago, skankdelvar said:

Despite suggestions that Mr Henry Juskiewicz may continue as CEO one hopes that whoever assumes control will sideline Hapless Hank into a powerless 'continuity' role, wrap him up tight in an NDO and pay him for a year to keep his mouth shut, at the end of which period they fire him out of a howitzer into a barbed-wire factory.

 

Gibson were offered a bail out package to keep going from their creditors if he stood down as CEO, it was the fact he wouldn't that is why they are there. 

There is no option that someone will bail out Gibson while he is in any management role.

[uk_lefty]

1 hour ago, skankdelvar said:

victim of circumstance? Or just a hopeless tw4t?

A phrase I will be using at work A LOT from now on!! Thank you!

[skankdelvar]

3 minutes ago, uk_lefty said:

A phrase I will be using at work A LOT from now on!! Thank you!

Delighted to be of service 

[Billy Apple]

On 5/1/2018 at 18:09, Dan Dare said:

I think that making "affordable instruments" is part of Gibson's problem. In addition to the leisure brand acquisitions referred to above, they appear have spread their core business too thin, trying to appeal to everyone. They make solely in the USA (and fair play to them for that), pay people proper wages and as a result, are never going to compete with far eastern manufacturers who hire children, pay them in bags of gravel, don't have to abide by any workplace or materials regulations, etc, etc. When I was young (a loooong time ago), a Gibson was something you aspired to owning. I saved up for several years to buy my first Gibson instrument. Now, every shop seems stuffed with them and they are trying to sell at all price points. They should go back to making things that are special/desirable and leave the entry-level instruments to the mass producers, even if that means, as it undoubtedly  will, that they become smaller (and also leaner and fitter). Just my opinion, of course.

I agree, but everyone hates Rickenbacker.