Saturday, February 17, 2018

Broken dawn ahead

Being guitars geeks, we have Gibson creeping into our souls for want of its reputation more than anything else, dare I say. Yes, Gibson wielding people are equivalent to Rolex & Mercedes owners strutting their stuff, telling the world they have arrived. Somewhere where it matters, of course. The issue here is, the Gibson name, as we speak, is going down, most probably dragging you down with it.

Here's the current mess- Gibson has till July 2018 to refinance its debts before folding (The Street, Aug 2017). Its credit ratings had been lowered nine notches into rubbish territory. Alarming? The finance sector had cited three primary reasons why Gibson is in this predicament: Product diversity, commercial regulations & management turnover.

We often berate the manufacturer for its lack of variety, often returning to proven success to propel its business. The believers countered by saying we can't push an entity into specializing what it's not famed for. Gibson has its traditional inclinations & that's its selling point. It's also the manufacturer's Achilles' Heel. If you don't move with the times, you'd be consumed by it. However, we note Gibson's foray into audio territory by virtue of Onkyo, KRK & Stanton but the question remains- is it working out?

It is rather unfortunate that current commercial regulations are compounding the struggle. We know what CITES is doing to many instrument manufacturers in general & not just Gibson. Let's not get into details as we've already seen that picture before.

The people running the show is of utmost importance to any organization. Management runs the business. If these people know nuts about your dealings, don't bother having them in your camp. Selling reputation doesn't count; even fishermen can sell furniture but they are not into the furniture per se. They see fish parts making up the furniture & that's gonna bring your company down. 

All this makes some juicy speculations; imagine Fender & Gibson swallowing their egos & merging. Or PRS acquiring Gibson for cheap & forging on. We can't rule out the government from owning/ part owning the company & getting things done. Whatever the case may be, it's a bleak run into the sunset for Gibson. Personally, I have always looked forward to checking Gibson out at the stores expecting to be impressed but that had not been the case. I could have spent good money on Gibsons but I always ended up buying something else. At the very least, Gibson has to ask if their business plan is set in context; you might have the best plan out there but the timing of it all is crucial. What is the buy/sell trend right now? Have you done enough to know what's out there before being out there with the rest who might know more than you. 

Business entities dealing with Gibson; it's the time to re-think & re-consider. I'd just be blunt with you here- renegotiate because you have the upper hand now. 


YusTech said...

They're running out of time and running out of tune all the time. I hope the next management will strengthen both the company finance and product structure. said...

Management must address the demand/supply concerns & not invest in false hope like robot tuners.

YusTech said...

Yes sir I agree. Just to clarify what I wrote about their finance was stop unnecessary spending at acquiring brands from other industry but focus on manufacturing efficiency and strengthening the guitar structure(headstock),tuning,keeping the electronics spec consistent etc while maintaining the traditional outlook. As a tech not luthier I don't know whether that's possible or they refuse to do it.

I have a stupid idea for dealer/distributor worldwide(Gibson well to do fans too) that happens to read this. Maybe you all should get together chipping in some capital to acquire big chunks of the company stake just enough to oust Hendry the trouble maker.

I pity those people down the production line as this has nothing to do with them in the first place. said...

I hear you, bro. Gibson's design are still rooted to traditional design, warts & all. Many of us have come to terms with this, like you said, focus is the key here. I feel for the people down at production as well, most probably they don't have a say in how things are run.