Bad leadership dooming Gibson guitars

By Jeff Linville -
Jeff Linville News Editor -

In the past month, rumors have been mounting that Gibson Brands, one of the most iconic guitar companies in the world, could be headed into bankruptcy proceedings before the end of the year.

Many observers are going on social media to say they believe ownership has driven the once-great company into the ground.

A bankruptcy reorganization (and potential liquidation) would affect production of such classic models as the Les Paul and SG as well as its owned subsidiary brands like Epiphone, Baldwin Piano, Steinberger, Kramer and Dobro.

The CEO of the company, Henry Juszkiewicz, took an interesting approach by telling that the problem is that retail stores have problems moving his product. Then he went on to describe these problems, such as stores not hiring people with enough guitar knowledge or not having adequate places for guitarists to sit and hang out in the shops.

I’m sure the folks at Guitar Center and many locally owned guitar stores felt like they had been stabbed in the back.

Juszkiewicz has something of a reputation in the music world. Go to Google, type in Gibson CEO and the number one suggestion is “Gibson CEO crazy.”

For years, guitar players have been hearing bizarre stories from ex-Gibson workers. Sure, you must take anything from an ex-employee with a grain of salt, but after many, many stories have come to light, you can’t help but wonder.

In 2013, a former employee posted online that working at Gibson had its great moments, but overall, “Gibson is the craziest, looniest, mind-blowingly messed up place I have ever worked. The entire management structure is based around not doing anything to attract Henry’s attention.”

“Being hired on at Gibson is like being drafted into Vietnam,” the person wrote. “As soon as you step off the chopper, you are counting down the days until you either die (get fired) or complete your tour (quit).”

In 2015, posted an email from a woman who said she had interviewed for a position with the CEO and was astonished at his behavior during the meeting.

“So, do you have a social media strategy already?” I asked him.

“Oh yes,” he said, sitting back and smiling knowingly.

“I’d like to know what it is.”

“I bet you would,” he smirked.

According to published reports, Gibson rakes in more than $1 billion a year in revenue, and yet is less than six months from having $375 million in secured notes come due.

Juszkiewicz replied in a written statement that the company is working to refinance these debts “in the ordinary course of business,” but investment companies have said they don’t think the company is a good financial risk right now.

Just look at the move in November where Gibson shut down a music software line that had been around for two decades (a millennium in software years).

In September 2013, Gibson acquired Cakewalk and its SONAR product. In 2015 Gibson announced that Cakewalk products would work off a monthly subscription plan. That didn’t go over well, and two years later Gibson said it had ceased development and production on all Cakewalk products to focus on its “consumer electronics audio business under the Phillips brand.”

Last week Gibson announced it was selling Cakewalk to BandLab.

Juszkiewicz said that Gibson was hit hard by the recession in 2008 like many other companies. However, while many other industries have bounced back, Juszkiewicz said that Gibson is still struggling to get back to its pre-recession sales.

Compare that to Fender, one of its biggest rivals, who said last summer that the company had cut its debt to half the amount owed in 2012. That CEO, Andy Mooney, sent out an email saying that sales had been climbing for the past few years.

Electric guitar sales have been holding steady, Mooney said, but acoustic sales have increased and “ukulele sales are exploding.”

Not only does Fender have the iconic Stratocaster and Telecaster guitars in its electric line, but Fender has plenty of acoustic offerings, both under its own name and through subsidiary Ovation.

Why have acoustic sales gone up? Several retailers have said that more middle school and high school girls took up the instrument after growing up on Taylor Swift videos.

Taylor Swift inspired girls to try guitar. See? That’s where Gibson needs to focus its efforts. Who under the age of 30 is going to inspire boys and girls to pick up an electric guitar?

I’ll throw out a wild guess, but I would say Eddie Van Halen all by himself inspired hundreds of thousands of young men to learn. Before him there were Jimi Hendrix, Eric Clapton, Jimmy Page and Randy Rhoads captivating young imaginations. Before that, think Chuck Berry, George Harrison and Duane Eddy.

If Gibson wants to expand to strengthen its brand, the direction to go isn’t digital software or consumer electronics. Perhaps Gibson should try launching a record label. Give some young guitar stud a chance to make an album and show up in a video. Give teens and preteens someone to admire and emulate.

These days, people love to make fun of the hair bands of the 80s, but guitar makers know that they never had it so good as when boys wanted to sound like Van Halen, Motley Crue, Bon Jovi and Guns ‘N Roses.

And then maybe, just maybe, today’s kids will learn something my generation figured out three decades ago: chicks dig guitarists, not the nerds playing video games. And Gibson will rise again.

Jeff Linville News Editor Linville News Editor

By Jeff Linville

Jeff is the news editor and can be reached at 415-4692.

Jeff is the news editor and can be reached at 415-4692.