Now that the dust has began to settle from the impact of Gibson hitting the deck, thoughts turn to what comes next. In particular, what happens if the company, saved from bankruptcy by the ingenious US device of Chapter 11 protection from its creditors, finally divests itself of its controversial CEO, Henry Juszkiewicz. No, that hasn’t been announced, but the one year consultation position he has been awarded by the owners suggests it is, at least, a possibility. Cue dancing in the streets by MI retailers? I think that might be premature. While it’s tempting to predict a blissful future without Juszkiewicz at the helm, I’m not so sure. Let me explain.
According to recent statements from Guitar Center and Sam Ash, doing business with Gibson wasn’t, at least from these two giant US retailers’ point of view, that bad and there are some retailers outside of the USA who would agree with them. While complaints about quality control have been voiced by retailers and forum pundits alike, and there have been misguided, not to say just plain bonkers, design decisions taken in recent years, it does actually seem as if Gibson guitars were (and presumably still are) selling well. And let’s not forget Epiphone which has been consistently successful for years now. Talk privately with some of those UK dealers who bit the bullet by taking on a Gibson dealership and they will tell you that the absence of competition and the lack of fierce price competition that ensued made it a pretty good business decision, despite its difficulties.
Not every one in retail will share some of those big retailers’ satisfaction with Gibson’s performance, of course. Smaller businesses, or those who just refused to jump through Henry’s hoops, complain of having been locked out of potential business. Meanwhile, from those who had gone along with the scheme, complaints were heard about the uncertainty of what they were going to receive and when and the general feeling that they were being bullied.
But if Gibson can be accused of having bossed its retailers around, is it alone? In deference to m’learned friend, I shan’t name names but telling the retailer what he must stock (and what he mustn’t), how he must display it and a great deal more beside, has hardly been unique to Gibson.
There is an argument that the way major brands dominate the marketplace is what sucks the energy out of the industry, destroys retailers’ cashflow and limits brand choice, but was Gibson out on its own, or simply following the current theories about how big companies conduct themselves? I’d suggest the latter.
However much the way Gibson has been doing business has alienated some in the trade, and whatever mistakes it made with its products and marketing, the fact is that it wasn’t the guitar side that trashed the business anyway. That was down to Henry Juszkiewicz ‘s belief that he could turn a guitar company into a ‘lifestyle brand’ and that the way to do it was to borrow a very great deal of money and buy up other companies in what he felt were related segments of the entertainment industry. He may be one of the few people who is surprised it didn’t work.
So if we take Juszkiewicz out of the picture, what will follow? A sales policy that will see us back to the days when anyone could sell a Gibson in a free for all where you can stock a Les Paul, an SG a J-45, all the Epiphones you can sell but not much else? Call me Mystic Meg but allow me to make a prediction: that ain’t going to happen. Whoever takes up the reins at the company is likely to follow the trend of controlling who can and can’t sell its products and calling as many shots about how they can and can’t be sold as the law will allow. To make matters worse, past precedent suggests that the company’s owners might hire someone without MI industry experience who will come up with his (or her) own variety of business school wisdom – and we all know where that can lead. Let’s not forget, the people who actually own Gibson probably aren’t guitar players, either. As we rapidly found out after 1997, things don’t necessarily ‘only get better’ when there’s a change of management.
So don’t expect a sudden change in how Gibson does business if there is a change at the top. Will the quality improve? Well, Gibson quality has been an issue for along while now (I recall lunch with Norlin’s CEO in the 1970s when we discussed this very subject) but as Fender has proved, quality issues can be fixed. If the owners appoint people who know and care about guitars and what their customers want, I don’t see that as being an insurmountable problem. PRS has always managed while making essentially similarly difficult guitars to produce. Likewise sensible design decisions. You don’t need to be Joe Bonamassa to realise that automatic tuning is not going to appeal to many. Just don’t assume we’re going to go back to the relatively free and easy days of the past. That just isn’t the way big companies any longer want to work and the only way to stop them is by refusing to play by their rules. Which is, perhaps, a subject for another day.