A Funny Thing Happened On The Way To Bankruptcy or…… What Ever Happened To Gibson?
The Gibson Les Paul guitar brings to mind legendary guitar players from Les Paul himself, to Slash or Zak Wylde. The tone of Gary Moore or Mike Bloomfield set standards for players over generations. So how can a company responsible for so much musical history end up in bankruptcy? First a quick history lesson…
Orville Gibson started selling guitars out of a one man shop in 1894 but died in 1918.
In 1919, the company hired Loyd Loar to create new instruments and gave birth to the L5 archtop (to replace banjos in jazz bands) and the F5 mandolin. They introduced the ES150 (Electro Spanish) in 1936 which became the Charlie Christian model and the first production electric guitar. In 1944 they were purchased by the Chicago Musical Instrument company. Ted McCarty was hired in 1948 and became president in 1950. He brought Les Paul into the company and started building guitars under the Les Paul model in 1952. Gibson remained under CMI until it became a subsidiary of Norlin in 1974, who moved production from Kalamazoo to Nashville by 1984. They were within literal months of going out of business (see, not the first time) when they were purchased by Henry Juszkiewicz, David Berryman and Gary Zebrowski in 1986. The company grew, all the while aquiring other musical instrument companies like Baldwin Pianos and Steinberger Guitars as well as home audio and pro audio firms. In 2009 and 2011, Gibson was raided by US Fish and Game who confiscated illegally imported ebony and rosewood. Gibson filed in 2011 to recover the seized materials but the motion was denied. On May 1, 2018, they filed for bankruptcy protection.
So that is the skeleton history, and there are many books out there detailing everything between. It seems obvious that the management had made many poor choices in acquisitions and production quality, and in fact Henry J himself had become legendary for his aberrant behavior. Was it over? Had we finally run the course of guitar slingers and legends that fueled this company for so long? Even Eric Clapton was quoted as saying “I don’t know…maybe the guitar is over”. DGM reported ” The iconic guitar company Gibson faces seemingly endless troubles, which include an easily enraged micromanaging CEO and a product line perceived as shoddy and overpriced. Based on what we’ve heard lately, it is not a great employer or maker of guitars.”
Well it’s not over….Gibson isn’t dead, it’s not going bankrupt and you will continue to see Gibson products on shelves worldwide for a while yet. The US Bankruptcy Court has approved Gibson’s plans for reorganization. “Today’s confirmation of our plan of reorganization is a significant milestone toward completing our restructuring and beginning a new chapter for Gibson as a stronger company with essentially no debt and a bright future,” wrote Brian Fox, Gibson’s Chief Restructuring Officer.” The head office has been eviscerated, Henry is out and has lost most of his ownership share and all of his authority. The sell off of many acquisitions and properties has begun but….Gibson’s Musical Instruments and Professional Audio units will continue to design and build, manufacture and sell Gibson and Epiphone Guitars, as well as Cerwin Vega and KRK products. If you are a Gibson fan, start breathing easier…according to Brian Fox, “Focusing on our iconic brands and core musical instruments, Gibson is poised to continue as one of America’s premier manufacturers of musical instruments with a clear path that will benefit our customers, business partners and employees over the long term.” Whew…….