Gibson Bankruptcy. Five things the company did right which gets overlooked

Gibson guitar heading towards bankruptcy?

News has it that Gibson bankruptcy is imminent. Many are shocked that one of the largest guitar brands in the world could be under such financial burdens. Faced with so much criticism we may be tempted to forget what Gibson has actually done well in recent years. 

With a heap of trouble that the company is under, many  have rushed to criticize Gibson for their policies over the last decades. These policies have brought them in severe debt which some doubt that the guitar company will be able to pay back. The usual complaints concern the high price for Gibson models, their presumed lack of knowledge of their audience’s needs and their incapacity to adapt to the changes hitting their market niche.

Gibson guitarsAs a guitar player and an owner of a Gibson guitar, I understand this criticism. In large part, I even agree. While there is no denying mistakes have been made in financial matters, as well as how the company has interacted with its audience, the criticism often and conveniently leaves out crucial elements.

Gibson has a rich, treasured history and the positive things they’ve done do not end with the 1960’s. In fact, I believe, Gibson have attempted to change their fortunes in recent years. While not everything has worked according to plan, their actions are still worth mentioning and considering before passing judgment. Here are five good things Gibson has done in recent years, which you may have overlooked:

#1. Tried to introduce more affordable models

The biggest criticism when it comes to Gibson is that only a privileged few can afford their guitars. I can personally attest to the fact that the price for most of their models has always placed them in a prohibitive price bracket. But their roster includes more affordable models,as well, and few will mention this.

Other companies (such as Gretsch or Fender) offer budget and premium guitar models, as well. The budget options are made to meet the quality standard of the company. The Premium models are usually the models the company has made their name on, they may cost more and are largely purchased for their sentimental value. They sell less, are the flagship for the company and so they’re expected to have them released. While they play well (usually), there are cheaper models that can do the same thing for less money.

Many forget that Gibson has attempted a similar strategy. The significant changes may have come a little late in the game for them, but they did exist. Gibson’s Tribute series, for example, were marketed as guitars that replicated the beloved, classic models, but that were available at a mid-range price. The company, however, had a number of competitors in this mid-range sector. One of their biggest rivals is their very own Epiphone, a company owned by Gibson. But more on that later.

 

#2.Attempted to branch out into other industries

Gibson guitars on sale, probably for massive pricesPart of the mess Gibson is reported to be in has to do with loans the company quickly needs to pay back. Why did they borrow the money? Management decided to acquire other high reputation brands from the audio and multimedia sectors. Why was this needed? One of the strategies that Gibson management had in order to steer the ship around, was to rebrand the company. Gibson wanted their brand to be seen as a “global leader in music and sound”. Companies like Philipps were purchased for this purpose.

The company has yet to make a significant dent in this new market sector. But the fact remains that a strategy for growth does exist and the choice to stretch out can be seen as a logical one. Gibson is a world-renowned company and they are banking on their name, which is not in itself a crazy business move.

#3. Attempted to update classic models

Updating the classic Flying V models?! Revising the Les Paul to feature numerous bright colors?! OK. I am not exactly in favor of many of the new designs, personally. But let’s face it. When the ship was going down Gibson did not sit idly about. The measures might seem desperate. But that’s because the situation called for it. The company tried to change in hopes of attracting new buyers. Young guitar players, however, have not yet been persuaded by the brand famously used by the likes of Jimmy Page, Slash or Joe Perry.

#4. Use quality wood and good machinery

Slash, a proud Gibson ownerCritics have called Gibson a company that delivers average guitars for huge prices. That is not exactly true. Sure, their late 50’s models are legendary for the quality of the wood used to make the bodies and their extraordinary sound. Those guitars really sing, as the saying goes. Some periods in the company’s history may not be the same shining examples of craftsmanship and quality.

But in recent years, Gibson guitars have benefitted from good quality control and their most famous models have looked to replicate the classic sound and look they are known for. Yes, there are now companies who do a similar job for less money. But the job itself is not an easy one and Gibson guitar (with some exceptions) are quality products. You can blame them for not being the very best guitar company in the world, but it is unfair to consider their products poor quality.

#5. Kept promises made to their employees

It’s no secret that the majority of goods are not produced in the world’s richest countries. Companies do not shy away from opting to pay lower wages to their personnel. It’s the same for guitars. The lower wages help in keeping prices down.

There are benefits to offshore locations sometimes for both the companies and employees. A different point of view may be that companies are cynical about choosing to employ people who will make low wage demands.

I cannot preach one way or another. But the truth remains that American companies have found it difficult to continue their activities on U.S. soil. Many companies have chosen to leave the country and therefore decrease the cost of their products.

Gibson has opted to continue their production in the United States, thus maintaining, for the most part, the jobs of their employees. That’s to be lauded. In fact, one of the main differences between Gibson and Epiphone,  is that the latter are made in Asia. In this way, the cost can be kept down. It’s a significant thing to note. But it is also important to remember that Gibson have stuck to some of their more important policies.

Closing argument

It’s possible that Gibson will enter bankruptcy. The music world is quickly changing and along with it so are the acquisition habits of the audience. Companies need to adapt to these challenges while also providing high quality products. Gibson may have failed in some aspects, but it’s not a failure all down the board. The brand itself is unlikely to ever disappear completely. As Gibson will enter a new era, it is good to remember what the company managed to achieve even at one of the lower points in their history.

 

Author:  Edward

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