An Official Statement From Gibson Guitar Corp.

[NewsFetcher]

An Official Statement From Gibson Guitar Corp.
http://www.mandolincafe.com/news/publish/mandolins_001176.shtml

Gibson Guitar Corp. of Nashville makes formal statement about being named as a party to approximately 30 lawsuits that claim they conspired to artificially increase and fix the prices of musical instruments.

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[Perry]

"Unfortunately, that process will undoubtedly result in high costs to many organizations that, like Gibson, strive to provide music lovers everywhere with quality instruments, and aggressively compete on price."

Ok so now they have a reason for the increasing prices.

[JimRichter]

I was thinking the very same thing, Perry.

[sunburst]

Wow, a troll from the NewsFetcher...

[mrmando]

Next they'll sue us! I don't know if the denizens of Mandolin Cafe can fix prices, but we can certainly drive up demand.

[Scott Tichenor]

Not a troll, dear John. It's a real news release sent to many news outlets with the work of posting the article done by yours truly. Would you rather read about it on some other site, tomorrow, or here today?

[sunburst]

Just joking Scott, and besides I already found it on another site.

[chip]

People always "pickin" on Gibson....

[GRW3]

A little google snooping and it appears this is an expansion of a lawsuit that originally targeted Guitar Center and NAMM for working toghether to fix prices. Besides Gibson, Fender and Yamaha are evidently included in this expansion.

[barney 59]

I have heard complaints from good dealers over the last few years how hard it is to deal with Gibson and how they have been virtually pushed out of the market of selling Gibson's...if this can be interpreted as price fixing only a lawyer would know for sure...but if a customer wants a Gibson and you can't sell them one----

[bmac]

A lawsuit is terribly expensive for all parties. I was in one for 25 years in NYC and it set a record for length and though I (we) won, I hardly think it was worth the agravation, for either side.

I dont think our opinions on the lawsuit one way or another are worth much... What bringes prices down is competition. What brings prices up is price fixing so the consumer has fewer choices. If the government follows through and can prove its case then prices will go down through laws of supply and demand. If a company can't compete on the open market then it should go out of business...

Gosh... I am sounding like my father.

Bart

[Rob Gerety]

Defendant's in antitrust cases always claim they did nothing wrong and always claim that the cost of defending the claims will just increase prices. Just have to wait and see how the cases go. I hear nothing but bad things about this company. On the guitar side no one I know would buy a new Gibson. Mandolins is a different story. But the company sure seems to be going in the wrong direction. And this comes from the proud owner of a Gibson mandolin - of course it was built in 1916.

[allenhopkins]

Whether it's "price fixing" or not, there have been some interesting practices by Gibson and other manufacturers (Martin, Taylor), to control the way their instruments are marketed and sold. Some on-line and catalog retailers aren't allowed to put their discount prices on the internet or in their catalogs; you get the "call for price" listings. Taylor for a while wouldn't let its dealers advertise that they sold used Taylors, or the prices of them. Several manufacturers have required their dealers to buy "full line" inventories, so the dealers had to take items that were hard to sell, in order to get items that were in demand.

Whether any of this violates anti-trust -- which generally is violated when separate firms collude to fix prices or carve up markets -- I leave to those with legal expertise (which I lack). Unfortunately, some of the above posts just reiterate the "Gibson bashing" with which we're all familiar: "Gibson makes bad instruments, nobody buys them any more, their prices are too high," etc. etc. The question of anti-trust violation is a specific legal one, having nothing to do with product quality, customer service, CEO salaries, or varnish color. Let's see how these 30 lawsuits pan out; wonder if I'll get a letter from some law firm asking if I want to join a class action? Who knows?

[mmukav]

"On the guitar side no one I know would buy a new Gibson".

Wow. What a blanket, BS statement. You'd buy a Gibson mandolin, but not a guitar? I just picked up a used Gibson J-185, and it's the nicest guitar I've ever owned. I also own a Gibson F9 mando. But their guitars are wonderful. I think you're listening to too many store owners who knock Gibson guitars because they're "difficult to deal with". How many professional performers play Gibson acoustics? Tons, and I'll put mine up against any other brand. I got rid of my hard-to-play Martin HD28, and prefer the Gibson to it in tone, fit and finish.

Mike

[Stephen Perry]

Anybody have a PACER account? I'd like to read one of the numerous complaints and the Gibson answer.

[Schlegel]

If there were any thing illegal about the ban of advertising discounts, a vast swath of the manufacturing world would be in trouble. It's very common for all kinds of high-end merchandise.

I don't see right off the bat how price-fixing could even work with guitars. There's how many guitar manufacturers? A whole lot of them, anyway. And guitars at all prices.

[Keith Erickson]

Two sides to every story.

Yes this lawsuit will cost Gibson a lot of $$$.....but who is bringing the lawsuit against Gibson? Who is providing the $$$$ which supports this lawsuit against Gibson? What organizations are supporting this lawsuit?

Inquiring minds what to know......

[Big Joe]

Many companies do not allow selling on the internet or e-bay. If you wish to be a dealer you have to abide by the contract you sign for that privilege. They cannot dictate a price you have to sell at and I have never seen one that does. Gibson does have requirements for stocking that many small shops cannot possible do. That is not price fixing. That is just a decision both companies make. Gibson makes a decision its dealers will carry a certain amount of product and the dealer decides they cannot or will not. These kind of requirements are very normal in business and most of the products we carry have similar requirements.

I thing Gibson makes some great instruments. Particularly the Acoustic Division. I think they are making the best acoustic guitars in Gibson history. I would love to be able to be a dealer for that division. However, I am too small to be able to meet the requirements. I don't harbor any ill will towards companies that I cannot be a dealer for. I just have to continue to grow until I can or find alternative products (as I have) that suit the needs of both me and my customers.

I am not defending Gibson or any other company. Just trying to put some basics back into this discussion. The suits will take their course and continue to completion or be thrown out by a judge at some point. Which matters not directly to me. Just remember that there were many companies named as defendants in this suit and not just Gibson. Just because it makes the papers or just because it hits the courts does not mean there is smoke or fire. On the other hand, it does not mean there is not either.

[MikeEdgerton]

This will turn out to be much ado about not very much as well. If there had been anything here I'd think the justice department would have taken it further.

[MikeEdgerton]

Hmm, I guess we can't do links here. There's an article at this address:

http://www.bizjournals.com/nashville/stories/2010/01/25/daily6.html

[swampstomper]

I can't imagine this suit has any merit. First off, I can buy acoustic guitars from Gibson, Martin, Taylor, and many smaller shops like Santa Cruz, Stonebridge (Furch) etc. in the same price range, plus there is massive competition from PacRim or Mexican imports like Fender (excellent guitars for the money IMHO). I don't have to buy from Guitar Center, there are 100's of dealers most of whom will ship anywhere, and as Big Joe says, they are free to set their prices. There is a Minimum Advertised Price but that is not a restriction on selling. Years ago the camera makers did set minimum selling prices for dealers and that was successfully challenged by anti-trust. I hate the smell of a lawsuit that seems on the face of it just an attempt to extort a settlement.

[Tom Haywood]

Stephen, I no longer have a PACER account, but I would love to see a complaint if you find one.

[resophil]

Ultimately, the consumer's dollar is king, and we, as consumers, control those dollars, and the will of the marketplace is the factor that determines whether a company will sink or swim.

I love nice old guitars as much as the next person, and would have nothing against owning a Gibson guitar, but would I go out and actively look for a new one...? NO!!!

After the hassle I got from Gibson whilst trying to buy one of their recent re-issue series dobros (the Orville Gibson commemorative mando was included in that lot) I swore Gibson off my shopping list. Any company that deliberately and intentionally sets so many roadblocks in a prospective customer's path, and then compound the problem with non-existent or sometimes downright rude customer service, will NEVER get my custom.

Gibson has every right to set it's marketing strategies to whatever they wish. But I don't have to buy into their methods, and they're just going to have to do without my meager number of dollars... If enough potential customers thought the same, Gibson might sit up and take notice, but as long as they have people clamoring to buy their products at inflated prices, they're not about to listen.

I'm not one to get caught up in "hype," but there are a LOT of choices when spending one's dollars on a musical instrument. I've spent a lot on instruments, but I simply won't buy anything new from Gibson any more! When they change their marketing methods and start actually providing customer service, I may be enticed back!

[Greg H.]

Anybody have a PACER account? I'd like to read one of the numerous complaints and the Gibson answer.

Well, here's one of the complaints (taken from the Nashville business site that Mike Edgerton linked to):

http://assets.bizjournals.com/cms_media/nashville/Gibson1.pdf

[MikeEdgerton]

There are currently 30 complaints. What you want is the final compalint that is put together after they compile all the complaints into one.

resophil wrote: "...but I simply won't buy anything new from Gibson any more! When they change their marketing methods and start actually providing customer service, I may be enticed back!"

Honestly resophil, there are many more names on the one complaint here, this has little to do with Gibson and everything to do with the musical instrument industry. Gibson and Fender are going to be on that list because they have the deepest pockets. The car dealer you bought your car from operates under more stringent dealership rules than Gibson puts on their dealers and you still bought the car. If you don't like Gibson I'm fine with that but your post has no bearing on why this suit was brought.