Black Cloud Over Gibson

[Mark Gunter]

That follow-up article on the problems facing Gibson, linked on the Cafe home page, is a sad read.

https://www.bloomberg.com/news/artic...0-million-debt

There appears to be no going back. The closely held company skipped January’s National Association of Music Merchants show, the music industry’s leading trade event.

Another obstacle to the company’s resurgence is its broken relationship with some retailers. A number of them have stopped selling the brand, citing unmanageable demands ...

“In the last couple of years, everybody bailed,” said Glionna, owner of The Music Gallery in Highland Park, Illinois. “The company is in the worst place I’ve ever seen it in my decades as a dealer.”

Seems the investors want the CEO Henry Juszkiewicz out, I wonder if there's anyone in the wings with a solid new plan to salvage it?

[DataNick]

And the beat goes on....too much brand/recognition and resources for the company to just simply go away...I believe Gibson will be around for years to come, perhaps with an adjustment to its business model, but still around.

It's also nice to see David Harvey and his mandolin group continue to go forward producing their cataloged items, whilst also offering new custom models as released thru TMS, etc...talked to David last week and all I can say is that Gibson mandolins are in good hands!

[Br1ck]

The Gibson brand is worth money. Someone will buy it in a liquidation.

[Seter]

The Oscar Schmidt brand name has been around since 1871, and Washburn since 1883. If those brand names have maintained their cachet over the centuries I'm sure the Gibson brand name will too and the next in the string of owners picks it up. Who picks it up is the question.

[multidon]

If the same thing happens to the Gibson name as happened to Oscar Schmidt and Washburn, then it will be owned by a company with no real connection to the original company whatsoever, and they will be slapping “Gibson” decals on the headstocks of their 100 percent made in China lineup, none of which will bear any resemblance to the models we know and love at present.

I would like it better if they went the way of Lyon and Healy. That company decided to stop trying to make, or sell, everything under the sun and just concentrate on one thing they were, and still are, very good at: making high quality harps.

[MikeEdgerton]

The bad news is that you could sell a guitar made anywhere with the Gibson brand name on it. The good news if there is any is that Fender has managed to stay alive by slapping their name on anything made anywhere. I don't think Gibson will end up that way. The bigger problem I see are the numbers of brand names they actually own across different product lines.

...In addition to guitars, Gibson offers consumer electronics through its subsidiaries Gibson Innovations (Philips brand), TEAC Corporation (Teac and Esoteric brands), Onkyo Corporation (Onkyo and Pioneer brands), Cerwin Vega and Stanton,[6] as well as professional audio equipment from KRK Systems, pianos from their wholly owned subsidiary Baldwin Piano, and music software from Cakewalk.

I still go back to the question what divisions are dragging them down and what divisions are making money? Something in that list has to be profitable.

[MikeZito]

The Oscar Schmidt brand name has been around since 1871, and Washburn since 1883. If those brand names have maintained their cachet over the centuries I'm sure the Gibson brand name will too and the next in the string of owners picks it up. Who picks it up is the question.

Wouldn't it be an absolute riot if Fender bought Gibson?

[Tom Coletti]

Wouldn't it be an absolute riot if Fender bought Gibson?

It would certainly turn more heads than when Gibson bought OMI/Dobro in the '90s, and that was still a bit before everyone began to jump ship in favor of Beard, Scheerhorn, and a bunch of other builders so the reso market's future as a whole was somewhat uncertain.

As for the Gibson name being bought and ran off with, didn't that already happen way back in the early 1900s when new investors gave Orville the boot?

[mrmando]

Oscar Schmidt and Washburn certainly do not have the cachet they once had.

There was indeed a time (the 1970s) when Gibson did in fact put its name on inferior instruments made in Japan. This damaged the Gibson cachet, and it took quite a while for that cachet to be restored.

[pheffernan]

If the same thing happens to the Gibson name as happened to Oscar Schmidt and Washburn, then it will be owned by a company with no real connection to the original company whatsoever, and they will be slapping “Gibson” decals on the headstocks of their 100 percent made in China lineup, none of which will bear any resemblance to the models we know and love at present.

Gibson has had no problem consigning brands like Epiphone, Dobro, and Flatiron to similar fates.

[sgarrity]

Henry is the worst thing to ever happen to that company. Someone needs to buy the rights to the mandolin and banjo brands and keep them alive.

[Mark Gunter]

It's also nice to see David Harvey and his mandolin group continue to go forward producing their cataloged items, whilst also offering new custom models as released thru TMS, etc...talked to David last week and all I can say is that Gibson mandolins are in good hands!

Good to hear that David Harvey was optimistic as of last week.

I would think that most cafe goers are the most interested in the Gibson mandolin line ... maybe many are also interested in the iconic guitar models Gibson makes as well. I wonder how important those are to the investors and shareholders? Mandolins are practically never mentioned in the business and financial articles, and probably not a very big piece of the pie.

Gibson says sales are strong, but guitars don’t have the mystique they did in King’s day.

“We have a younger generation coming in with tastes toward a different type of music,” said Al Di Meola, a Grammy-winning jazz guitarist.

I doubt guitar sales were in so much trouble that Juszkiewicz was forced to diversify so much, but he felt compelled to do it - probably in an effort to find new markets to keep sales and profits growing. If guitar sales have been truly declining, while quality has risen and prices dropping on pac rim instruments, maybe Gibson should have considered scaling back instead of diversifying so much. Too late now for that. Corporate greed would motivate desperate measures to keep sales and profits growing even while their musical instrument market share softens - and therein lies a big problem involving risky ventures and too much financial leverage.

The question is, how much weight will a history of excellence in mandolin building have in the coming market decisions? I sure don't have any clue, and only time will tell IMO. I'd like to think, as some do, that they won't lose or compromise on their successful guitar or mandolin models, but that doesn't seem to me to fit with reality.

And yeah, some say "Washburn" and "Oscar Schmidt" survived, but that is incorrect as most of us know. What's called by those names is something totally different than what they were originally.

[Louise NM]

It's sad to see this happen.

I worked in the art supply business for many years and saw similar situations with many companies. They started as privately owned businesses with a goal of selling carefully crafted products, providing solid jobs for longtime employees, and making enough money to pay everyone, make the owner some money, and keep it all running.

Economic downturns, death or retirement of founders, ill-advised expansions, and other misadventures caused the owners (or their heirs) to sell the company. New buyer sees it only as an investment and treats it as such, compromises on quality, cuts back on less-profitable items, mistreats retailers, the whole shebang. Company gets sold a few times more and ends up in worse shape every time. Management needs to make money for the stockholders and knows nothing about the needs of artists, and it's all seen as "product," as has been discussed in another thread.

This works if you are manufacturing and selling garbage bags or paper cups, perhaps, but with mandolins or high-end oil paints and brushes, etc., it's sad to see the business lose the craftsmanship it was founded and built upon.

[Luna Pick]

I'm probably contrary to many on the thread, but I question the long term value and name recognition of the Gibson name. I have a fabulous Gibson banjo and had three (four counting Flatiron) great Gibson mandolins, but my take is the business management, vision, and market understanding side of the house didn't keep pace with the creativity, product side of the house, but then tried to leverage the Gibson brand, too little too late, too many very capable and quality competitors. When I think of mandolins more often than not the first names that come to mind are not Gibson. But that's just me.

[rcc56]

Have no fear, folks. We are living in a Renaissance age of fine instruments. Some of the best mandolins that have ever been made are being made right now. They just don't necessarily have the Gibson name on them.

I am a fan of the rebirth of fine instruments being made by individuals and small shops, rather than corporate behemoths.

As for Gibson, the current management may survive for quite awhile. They have a history of somehow getting out of more trouble than they should be able to survive. But if they don't, the name will go into other hands. Sooner or later, it will have to, because Juszkiewicz and Berryman are not going to live forever. Maybe the future owners will be better, maybe not. Maybe the name will finally turn to dirt, maybe not. But someone will be making good instruments.

[Mark Wilson]

Some of the best mandolins that have ever been made are being made right now. They just don't necessarily have the Gibson name on them.

I am a fan of the rebirth of fine instruments being made by individuals and small shops, rather than corporate behemoths.

+1

[DataNick]

...This works if you are manufacturing and selling garbage bags or paper cups, perhaps, but with mandolins or high-end oil paints and brushes, etc., it's sad to see the business lose the craftsmanship it was founded and built upon.

Not true with mandolins since the Flatiron acquisition in 1987, and taken to another level by Charlie D. and since 2007, David Harvey.

[TonyP]

I think the thread should have been called "Brain Cloud over Gibson".

For some of us we've seen this dire proclamation so many times it seems more like a ploy than an actual fact. This has got to be the longest "death throws" in history. I wish they would let Mr. Harvey have the Gibson or OAI brand and let the rest of the behemoth go off and sink into swamps of " it's not personal, it's only buisness" to be torn apart by circling jackels of venture capitalists. Sadly actually producing something of quality is not a high priority and the minds of corporate "persons" and they would never do a handoff to someone who could actually keep the brand alive. Sad.

[Mark Gunter]

For some of us we've seen this dire proclamation so many times it seems more like a ploy than an actual fact.

Brings up another point. Is the article linked in the OP overly dramatized? If so, what's the motivation? The author does use some factual info, and it's a sad read, but it can't be the whole story. One thing's for certain, mandolins are not at the top of the priority list - most folk aren't sure what a mandolin is. Mandolins are important to a very small wedge of the overall population, and even a very small wedge of the musical world I think.

I think many of us are surprised when we encounter total ignorance of mandolin in the real world, even if we know factually that most people have not a clue about it ... it still seems a bit jarring when I encounter it, because I spend every day playing one and a lot of time here at this site. As an example, a Folk Music group I belong to recently posted this photo with a caption reading, "David Grisman is 73 years old today!"



A lady commented, "Ooh, what's that he's playing?!"

I have little hope in the bean counters who are tampering with Gibson.

[Luna Pick]

This spin around the Gibson saga merry-go-round the bottom line appears to be the bottom line. A $560M debt is enormous for a company making discretionary products in an industry with more competition than ever. Gibson may slice and dice to address some of the financial issues but the Gibson product line and brand look like they're in for dramatic changes pretty soon.

[dhergert]

I can just see the March 29 2025 Variaty headline now...

"Gibson Musical Instruments, formerly known as Two Ole Hippies, has just announced that their move of Gibson musical instrument production to the three new factories in Vietnam and Myanmar has been completed. From this date forward, all Gibson label electronic musical instruments will be robot-produced and robot-assembled in the two new fully automated factories in Vietnam while the Gibson label acoustic musical instruments will be hand made and hand assembled in the new factory in Myanmar."

[TonyP]

Brings up another point. Is the article linked in the OP overly dramatized? If so, what's the motivation? The author does use some factual info, and it's a sad read, but it can't be the whole story. One thing's for certain, mandolins are not at the top of the priority list -

I have little hope in the bean counters who are tampering with Gibson.

This reminds me of this article that was pointed to on another forum about trying to connect the demise of Toys R Us and how kids only want to stare at screens. The OP is always trying to say that this is what has led to the off shoring etc because people don't want to make anything. The author is a college prof and goes on about how toys have changed and tastes have changed, just hammering away. Meanwhile he never once addresses how it was a takeover of the original and was one hostile take over after another. The point ALWAYS being to hold a brand hostage while they strip the carcass and leave it to be down cycled by another set of economic pirates. You look back at Gibson it's been in a "death spiral" since '24 when they fired Loar IMHO. He would have put them a decade before anybody as evidenced by his company Vivatone. It would seem the function of buisness is to stamp out quality and smother creativity. All the while blaming their poor economic performance on fickle customers and their changing tastes. Meh.

[Doug Goodhill]

Oscar Schmidt and Washburn certainly do not have the cachet they once had.

There was indeed a time (the 1970s) when Gibson did in fact put its name on inferior instruments made in Japan. This damaged the Gibson cachet, and it took quite a while for that cachet to be restored.

I have a 1962 Gibson J-45 (Kalamazoo) that was very poorly designed - plywood bridge plate, horrible adjustable bridge, Strangely thick pick guard. I have had all of these things replaced over the years as playing it and its sound is far more important than its historic condition. It is a wonderful sounding guitar now because the wood selection and construction were all sound. The improvements to the early fifties J-45s attribute to all the failures that requires updating. (I purchased this guitar in 1965 from a friend.) My point is that these lines get exploited by the maker until the public no longer buys them, then they reboot so to speak - say as Gibson's Bozman factory has done for them.

[Caleb]

Kind of like Guitar Center. I’ve been hearing for years that they are broke, going out of business, etc. And each time I drive by they are open for business.

[sblock]

Maybe Gibson is some kind of a zombie company that refuses to die, because it's already undead?