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 Post subject: Gibson downgrade
PostPosted: Tue Aug 29, 2017 11:57 am 
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Read, and weep.

https://www.moodys.com/research/Moodys- ... -PR_371298

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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 12:37 pm 
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Thanks Chris.

These are pretty dire numbers and Moody is not helping G*bson's prospects of successfully being able to refinance debt with the rating downgrade.

Fender is in poor shape too and one quarter of Fender's production is sold though G*itar C*nter who is over $1,600,000,000.00 in debt and has been considered terminal by a few economists for some years now.

All of these entities depend on the availability of people's disposable income and a decent economy just to make payroll. How long has it been since we've had a recession........

It would not surprise me at all if some of these iconic American companies get acquired by the Chinese but China has their own economic issues recently too.

Sitting in our Ann Arbor shop writing this I'm also not feeling like the brightest bulb in the pack to be in this business but it sure is fun! ;)


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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 1:11 pm 
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Hesh wrote:

Fender is in poor shape too and one quarter of Fender's production is sold though G*itar C*nter who is over $1,600,000,000.00 in debt and has been considered terminal by a few economists for some years now


Is there a decimal error? If not, that is a stunning amount of debt. Wow!
Even 16m would seem to indicate some poor management.

B

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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 1:29 pm 
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No error in the math... :)

https://www.reuters.com/article/us-guit ... SKBN19X2HV


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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 1:47 pm 
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Henry has been so wrong headed the last couple years, it just astounds me. The electronic tuner thing, buying up non-instrument companies like Onkyo, etc. Henry has taken Gibson to the same place Norlin did when he bought it back in 1986. I hope bankruptcy is not in the cards, but if so - I hope whoever saves the company moves back to the core business of high end guitars ONLY, and sell off the rest. It would be a tragedy to lose such a once prestigious American company, even though we know the gap would soon be filled if they ceased to exist.

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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 2:13 pm 
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Well, in a way I think it would be a good thing if some of the ginormous Guitarlike.Inc companies bit the dust or at least (even preferably) were forced to get get back to building high quality, not high volume.

The market is inundated with sub par instruments and most people don't even know they're buying crap.



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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 4:27 pm 
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The Gibson and Fender brands are never going to vanish. The reality is, while those of us that hang here appreciate fine guitars for what ever reason the vast majority of players simply do not need an expensive, perfect guitar to do what they do. I suspect that no matter who ends up with the brands there is no chance that they will only cater to high end users. Just look at the auto industry for the business model. Ie. GM -- Cadillac, Buick, Chevrolet most to least expensive with the least expensive out selling the others 4 or 5 to 1 or more.

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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 4:31 pm 
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meddlingfool wrote:
Well, in a way I think it would be a good thing if some of the ginormous Guitarlike.Inc companies bit the dust or at least (even preferably) were forced to get get back to building high quality, not high volume.

The market is inundated with sub par instruments and most people don't even know they're buying crap.


Completely agree.

Executives who specialize in turnarounds have a few clubs in their bag but the great big Bertha driver of most turnaround artists is returning to core competency and getting the hell out of the extraneous stuff especially what didn't pan out.

In G*bson's case there is a LOT of bad blood in the market. Hundreds if not thousands of smaller music stores who G*bson tried to strong arm in the past requiring them to take all that G*bson would send them and even shedding competing brands. Many of these stores are not so small either with one $30,000,000 operation that I'm failure with having done what most of the small stores did - tell G*bson to get stuffed....

If by chance G*bson was even capable of retiring Thirston Crapbag III and going back to core competencies you know truth be told G*bson was never known for producing high quality stuff. Sure Kalamazoo production was better than today but G*bson always was hand to mouth and a toy company who happened to make guitars. Don't get me wrong I'm a huge fan of Kalamazoo G*bson products anyway.

My hope is that some of the others who have worked very hard to deliver real value PRS, Collings and a few more benefit from any downsizing of G*bson that really needs to happen. Competition is always a good thing when it comes to consumer goods and what we are seeing with Fender, G*bson and G*itar C*nter may be someone else's opportunity. These days opportunities are far more global in reach as well.... meaning we likely can expect to see more North American guitar production going elsewhere.

Martin being privately held is a mystery at least to me but I have to tell you having worked with Martin for a decade now it's a very high quality and ethical company that I'm rather proud to do warranty work for. I doubt that Martin suffers from the things that G*bson self-inflicted upon themselves.


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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 5:16 pm 
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Sorry, I had to...
https://www.youtube.com/watch?v=PtUJ2pVORi0



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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 5:19 pm 
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kencierp wrote:
The Gibson and Fender brands are never going to vanish. The reality is, while those of us that hang here appreciate fine guitars for what ever reason the vast majority of players simply do not need an expensive, perfect guitar to do what they do. I suspect that no matter who ends up with the brands there is no chance that they will only cater to high end users. Just look at the auto industry for the business model. Ie. GM -- Cadillac, Buick, Chevrolet most to least expensive with the least expensive out selling the others 4 or 5 to 1 or more.


Really, it makes sense. There are a lot more poor people than there are rich people!



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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 5:31 pm 
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Kevin that was awful.



These users thanked the author meddlingfool for the post: Hesh (Wed Aug 30, 2017 12:22 am)
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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 5:36 pm 
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meddlingfool wrote:
Well, in a way I think it would be a good thing if some of the ginormous Guitarlike.Inc companies bit the dust or at least (even preferably) were forced to get get back to building high quality, not high volume.

The market is inundated with sub par instruments and most people don't even know they're buying crap.


According to Little Finger, chaos is a ladder.

Of course, Little Finger just got his throat cut Sunday night, so don't listen to that guy!


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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 5:39 pm 
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meddlingfool wrote:
Kevin that was awful.


If I were that announcer, I would want to take a Silkwood shower, then have plastic surgery and change my name. God, that really was awful.



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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 5:59 pm 
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I still remember Charlie Derrington, who did more than anyone to bring the Loar F5 mandolin back to the standing it had in the '20's, degraded to playing mandolin and computer poker up on the second floor of the old Gibson building in Nashville. That was his job along with sending Henry ideas which were always rejected. This is from the horse's mouth folks. Him to me. Charlie was the only one that Bill Monroe would let work on his Loar.
Henry's crowning glory in the mandolin world was to have an F5 made with a flamed maple top because it looked purdy. Probably made Lloyd Loar roll over in his grave.
Henry was an idiot. All he was after was bucks...

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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 6:08 pm 
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Gah! Don!!!

I've avoided all bloody spoilers and it turns up here! :(


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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 6:14 pm 
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Mr. Looker..... YE GODS!!!!!!!!

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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 6:50 pm 
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Mr. Looker...... Yes Sir !!! Make me want to buy one... What was it they were selling?

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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 6:56 pm 
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meddlingfool wrote:
Gah! Don!!!

I've avoided all bloody spoilers and it turns up here! :(


Crap! Ed, I'm sorry. I figured most GOT fanatics would have seen Sunday's finale by now. I apologize!

I think I will go home and watch it again tonight, it was that good.


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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 7:14 pm 
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https://m.youtube.com/watch?v=1V2L6-b8YrE


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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 8:01 pm 
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klooker wrote:
As bad as that is, style and swag are a big part of guitar buying attraction.



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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 8:24 pm 
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Sorry about that God awful YouTube link.

I think I first saw it via David Collins, so he's to blame...



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 Post subject: Re: Gibson downgrade
PostPosted: Tue Aug 29, 2017 9:19 pm 
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Joe Beaver wrote:
Mr. Looker, What was it they were selling?


That was the first thing I said, no wait, it was WTF!

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 Post subject: Re: Gibson downgrade
PostPosted: Wed Aug 30, 2017 7:49 am 
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Kind of reminds me of what Sears is going through. It almost always starts from the top down.


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 Post subject: Re: Gibson downgrade
PostPosted: Wed Aug 30, 2017 8:15 am 
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In order to succeed - you must first survive.

The second part is (And this is great for us here).. More and more "high end" consumers are turning away from high priced factory fare to hand made things.

50 years ago - there was literally no market presence for small shop luthiers hand making instruments except for in a few large, specialty markets... The famous centers in Spain and New York City were about it other than a small handful of custom makers in the entire rest of the world.

As such - Factory "Custom Shops" were the places you got good stuff... (Its the same in many markets from clothes to guns to hand bags to stereos to cars as well...)

Now, though - we are seeing the return of the prominence of "The Work Shop" for low volume/high end stuff... The stuff that it just doesn't make sense to run in a huge factory because its high cost/low volume.....

What changed? The world economies have more or less recovered from WWII.... We don't need to use factories to do things factories are bad at doing because there is literally nobody else to do it....


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 Post subject: Re: Gibson downgrade
PostPosted: Wed Aug 30, 2017 4:35 pm 
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I will not cry when these companies., fall.Time to look for the silver lining that will benefit the qualified luthiers out there. People should be able to buy quality over the dreck that they have been force fed for far too long. I always winced when folks brought in there mass produced guitars/ violins that needed work , due to sloppy production work


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