Gibson Fooked

TTony · February 2018

Garthy said:

Who is the creditor for the secured notes, and were they secured against?

They'll be secured against whatever assets Gibson could identify and present as being of credible value.

Property (assuming that there's some value in whatever they own, over and above any mortgages on that property).
Plant & machinery (limited value given that there's limited demand/re-sale opportunity).
Stock (obviously constantly changing and, given cashflow is an issue, probably kept to a minimum nowadays).
IP (the rights to the Gibson name and the designs that they own).

I'd guess that most value is in the IP rights.

meltedbuzzbox · February 2018

Travisthedog said:

If they put "proper" shape head stocks on epiphones they'd be saved overnight

Gibiphone?

Strangefan · February 2018

RaymondLin said:

My custom has just gone up in value.

Sorry bud it really won't.

scrumhalf · February 2018

meltedbuzzbox said:

Travisthedog said:

If they put "proper" shape head stocks on epiphones they'd be saved overnight

Gibiphone?

Probably. Epson is already taken.

Fretwired · February 2018

Image: http://www.fretwired.com/images/gibson.jpg

darthed1981 · February 2018

My money would be on there being Chinese-made Gibson branded Gibsons in shops before the end of 2019, the buyer will almost certainly be a Chinese company, unless one of the other US makers wants the IP (and why would they?).

If I were a Chinese company I'd want to be "allowed" to build to a US spec for a lower price and turn the market upside-down, currently the major brands are only willing to build lower spec guitars in China, which I suspect irritates the Chinese.

They would almost certainly retain a US manufacturing arm, probably custom-shop only, so that the deal gets past the government.

SteveRobinson · February 2018

There's no point making equivalent quality Gibson guitars in China, they would lose the kudos of US made product and wages are about the same https://www.forbes.com/sites/kenrapoza/2017/08/04/china-like-wages-now-part-of-u-s-employment-boom/#9849ddb128ad

darthed1981 · February 2018

SteveRobinson said:

There's no point making equivalent quality Gibson guitars in China, they would lose the kudos of US made product and wages are about the same https://www.forbes.com/sites/kenrapoza/2017/08/04/china-like-wages-now-part-of-u-s-employment-boom/#9849ddb128ad

The Chinese won't mind about either of those things though...

The "kudos" of US made product is at best an eccentricity of the guitar community, one the US based manufacturers are happy to encourage, as they tier their products that way. If it were possible (and there is no reason to believe it isn't, that I'm aware of) to manufacture to the spec of the current Les Paul Standard, currently going for over £2000 new, and sell it for £1000, if it is a great guitar, it will sell like buckets. Currently you are partly paying the cost of financing Gibson's debt when you buy a new Gibson, that would all be gone.

Wages in China are nowhere near as low as they used to be, but then there is literally nothing stopping a Chinese owner manufacturing in Indonesia, or anywhere else. Yes, it takes time to learn to craft a custom guitar, but it takes very little time to program a CNC machine, and most US made guitars are not hand-made.

You would also get an instant benefit from fixing any manufacturing quirks and eccentricities, and disposing of an entitled US workforce.

Sure, the guitars probably wouldn't hold as much magic for the older generation but the future lies in the younger generation of professional and hobby guitarists. In a world where the west is getting poorer and gilt-edged pensions and high earning middle-ranking jobs are getting rarer, there will be a big market.

Fretwired · February 2018

I suspect that the Gibson guitars part will survive in a cut down form. Focus on the classic designs - Les Paul, SG, 335 etc. drop the weird stuff and slash the range of Les Pauls - they could get away with a Studio, Standard, Modern (locking tuners, hi-gain pickups) and the Custom Shop Historic and artist series. It will be a much small business than it is now which may benefit the customer .. better QC and prices.

SimpleSimon · February 2018

Paul Reed Smith should be drafted in, I'd love to know what he'd do with the legacy given his friendship with the late Ted McCarty. To be honest though i doubt he would be interested......

NelsonP · February 2018

I heard a rumour that chappers had been talking to some investment bankers and was going to put in a bid

SteveRobinson · February 2018

darthed1981 said:

SteveRobinson said:

There's no point making equivalent quality Gibson guitars in China, they would lose the kudos of US made product

The Chinese won't mind about either of those things though...

The "kudos" of US made product is at best an eccentricity of the guitar community, one the US based manufacturers are happy to encourage

Even young Chinese guys buying a Gibson guitar want the heritage that US made gives them.

Rocker · February 2018

Why are so many here against the auto tuners that Gibson fit to some of its guitars? If it does not make a guitar too heavy or (especially) neck heavy (Gibson achieved that with their SG), what is the problem?

tony99 · February 2018

Rocker said:

Why are so many here against the auto tuners that Gibson fit to some of its guitars? If it does not make a guitar too heavy or (especially) neck heavy (Gibson achieved that with their SG), what is the problem?

Sacrilege innit?

Legionreturns · February 2018

Rocker said:

Why are so many here against the auto tuners that Gibson fit to some of its guitars? If it does not make a guitar too heavy or (especially) neck heavy (Gibson achieved that with their SG), what is the problem?

I've had 2 sets, they both malfunctioned and got stuck on one string. Utter nightmare to tune manually and cannot be relied on to auto tune. I wouldn't want to be reliant on that in a pinch.

darthed1981 · February 2018

SteveRobinson said:

darthed1981 said:

SteveRobinson said:

There's no point making equivalent quality Gibson guitars in China, they would lose the kudos of US made product

The Chinese won't mind about either of those things though...

The "kudos" of US made product is at best an eccentricity of the guitar community, one the US based manufacturers are happy to encourage

Even young Chinese guys buying a Gibson guitar want the heritage that US made gives them.

I don't know any young Chinese guitarists so I will have to assume you do and take your word for it

However I actually meant the Chinese investors buying the company of such a thing were to happen.

As I said it's a guitar eccentricity isn't it? Nobody sees US made as a sign of quality for anything else and the Chinese make much more complicated devices by the millions every year.

I'd honestly say moving manufacturing should if it were to happen help build a future which would have to mean massively lower costs, off shoring would and could be part of that without affecting quality.

Cabicular · February 2018

Rocker said:

Why are so many here against the auto tuners that Gibson fit to some of its guitars? If it does not make a guitar too heavy or (especially) neck heavy (Gibson achieved that with their SG), what is the problem?

They slip constantly

ewal · February 2018

So if you were thinking of buying an over-priced 335, would it be a smart move to wait and see?

A_T_W · February 2018

strat1990 said:

NelsonP said:

This is a bit bleak

"That’s when sales figures revealed a serious sales drop over the past decade. Specifically, guitar sales have dropped from approximately 1.5 million units annually to roughly 1 million — all in less than a decade. "

I've heard this a lot. I think a lot of it is to do with the crappy, over manufactured "music" people listen to now, which just doesn't inspire them to pick up and play. Thank God I was bought up on the greats.

So, if Gibson goes under, what happens to epiphone?

I think this sort of attitude is what puts people off of playing the guitar more than anything else to be honest.

SimonC · February 2018

ewal said:

So if you were thinking of buying an over-priced 335, would it be a smart move to wait and see?

It would be a smarter move to buy a Collings i35LC instead.

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