Opinion: The Fall of Gibson Guitars

According to a recent report in the Nashville Post, Gibson Guitars faces a $375 million (£268 million) deadline for a debt repayment in less than six months’ time. A further $145 million worth of loans are due to mature immediately, if those notes are not refinanced or repaid by late July, Gibson guitars may well go bankrupt. It’s CFO recently resigned.

Gibson, one of the oldest American guitar companies, famous for its Iconic Les Paul guitar, may well go under.

Since that article appeared, the CEO of Gibson guitars has given a bizarre series of interviews blaming both music retailers for not making guitar stores “welcoming” enough, followed by an even weirder rant against guitarists themselves. Henry Juszkiewicz, Gibson’s CEO has now blamed guitarists for being too conservative. He says that they are resistant to change. While there is an element of truth in this. There are simpler ways to explain Gibson’s recent woes.

Since taking over the company in 1986. Juszkiewicz managed to improve quality and sales. But some of this was down to sheer luck and timing.

Back in 1986. The Les Paul was a deeply unfashionable guitar. It’s handcrafted form seemed stuffy and old fashioned compared to the bestselling electric guitar in North America. Which in the hair metal heyday of 1986 was made by the Van Halen endorsed Kramer Guitars. The fashion back then was for graphic painted SuperStrat type instruments with high output pickups and the obligatory Floyd Rose locking tremolo system.

But in July 1987 Guns & Roses released Appetite for Destruction. It’s raucous aesthetic combining classic rock songwriting with a punk rock spirit, took the world by storm. The album featured lead guitarist Slash playing a Les Paul (although it was actually a hand built replica of a 1959 Gibson Les Paul by luthier Kris Derrig).

This renaissance of the instrument continued as the 80s gave way to the 90’s. As the grunge movement took hold. The new Rock heroes played more traditional looking instruments. The neon coloured pointy headstock rock machines of the “widdly widdly” 80s became as unfashionable as the Les Paul had been a decade before.

During this time Gibson’s sales increased and the brand was a massive success. However in the late 1990s another American guitar maker rose to prominence.

The Man From Maryland

Paul Reed Smith, a small guitar maker from Maryland, started his company in 1985. Smith took elements from both Gibson’s European craft traditions and Leo Fenders modernist approach to guitar construction to form a new instrument, with both a traditional appeal and a modern usability. Using the finest woods and their own proprietary hardware and electronics. PRS guitars became a runaway success. Which then kickstarted a raft of small boutique guitar makers all offering superb quality instruments at high prices.

But PRS’ real selling point was their outstanding approach to quality control. Although expensive. PRS managed to cater to both pro players and well-heeled baby boomers. The success of the brand was so influential that both Fender and Gibson opened Custom Shops to cater to these markets within two years of PRS starting production. PRS even hired former Gibson president Ted McCarty as a consultant. Then in 1994, they created a McCarty guitar line. With a thicker body, thinner headstock and more traditional Control layouts. It was pretty clear whose market PRS were gunning for. In 2000 they cheekily introduced their own “Singlecut”. A guitar directly designed to compete with the iconic Les Paul. Gibson even tried to halt production of the Singlecut in 2004. But a year later this lawsuit was overturned.

Since then, Gibson has taken on huge debt while acquiring masses of technology brands like Phillips Home Entertainment and is trying to turn itself into a major tech player. But from a guitar perspective, its CEO seems to have had a vision of the instrument that seems completely at odds with not only his own market. But also that of his competitors.

In 2015. The main guitar range was radically redesigned. The new feature set seemed to be directly Henry Juszkiewicz’s doing. He seemed less inspired by Ted McCarty and more by Steve Jobs. While some of these features such as chambering the guitar bodies to save weight, (traditionally the Les Paul has a heavyweight Mahogany body with a carved maple top) or a new player friendly all access heel joint on the Floyd Rose equipped Les Paul Axcess, have been welcome developments. Others are downright bizarre.

The most contentious of these is the Robot Tuners. (later known as G-Force). A set of auto-tuning machine heads. Fitted to the headstock and powered by a battery. The big problem with their design is that traditionally when new guitar strings are fitted, they need to be stretched and played in, in order to become stable.

The Robot Tuners also offer an array of alternative tunings at the push of a button, which are fashionable with many players. But the actual technology is still seen as unreliable. To date I cannot think of a single pro player using Gibson’s system. Although the bridge mounted Trans-performance self-tuning system is used by a few players such as Canadian rock guitarist Jeff Martin (whose band The Tea Party uses a variety of exotic tunings), is a clear success. But this uses a completely different system hard mounted on the bridge and costs considerably more.

But in the main, most pro’s use high quality traditional machine heads or locking machine heads. It seemed like Gibson were trying to solve a problem that wasn’t really there.

This design change was so unpopular with players that Andertons, a major UK music retailer, was offering customers the chance to have their 2015 Gibson Les Pauls retrofitted with traditional tuning machines at the point of purchase, Such was the desperation to shift a product people didn't want.

The other bizarre design change was the so-called “Shredder neck.” A new neck profile with a much wider fingerboard and therefore different string spacing. The intention seems to have been to appeal to more modern players used to the wide flat and thin necks of hard rock/metal guitar players.

Brands such as ESP, Ibanez and Charvel/Jackson dominate this market. But all three brands use player friendly Jumbo sized fretwire. Which makes the guitars easier and more expressive to play. Gibson, however, outfitted their guitars with a smaller low profile wire which looked like something out of the early 1950’s. Even Paul Reed Smith uses Jumbo fretwire on their metal orientated flagship Custom 24 Floyd Rose model. For Gibson to completely ignore such an essential purchase critical requirement of their target market seems to be down to nothing more than blind arrogance.

The “shredder” neck profile also felt nothing like the sort of neck you'd find on a modern rock guitar. Instead, it had a feel more akin to a traditional nylon-stringed classical guitar.

Then finally we had the redesign of Les Paul’s signature on the headstock. Which although authentic, looked ugly and buyers stayed away.

Since the 2015 debacle. Which saw sales plummet, Gibson has divided the range into older style traditional guitars and High-performance spec guitars. The former is selling well. But with each passing year, there is less and less interest in the HP feature set. Those guitars now seem to spend a year on dealers' walls, then appear heavily discounted by big-box retailers like DV24/7 and Amazon.

Therein lies the rub. Gibson is a traditional brand with a long 100-year plus heritage. A similar brand would be Leica cameras. If you've followed Leica’s fortunes, you’ll have noticed a resurgence of late.

This has been largely down to the success of their M series digital rangefinder camera. Which successfully married new technology to the traditional German optical aesthetic. A Leica M in 2018 still looks and feels like a Leica M film camera from 1940. Because the CEO at Leica knows his market, has listened to photographers needs and tried to satisfy the Leica owners desires.

In contrast, Henry Juszkiewicz has fiddled while Rome burns.

So intent has he been on turning Gibson guitars into an Apple-esque technology brand. With guitars that feature batteries and an increase in features with parts that will easily reach obsolescence. His customers stayed away from the new tech guitars and kept their money in their wallets, or simply purchased guitars from his competitors.

In the meantime, Gibson had a scandal in 2012 over the US environment agency confiscating its wood supply over Lacey Act violations, and the custom shop has seen massive price increases in their already expensive recreations of classic guitars from the 1950’s.

What’s most anger-inducing, is that many of the brands acquired have been allowed to fester. In particular, the hard rock/metal orientated Kramer guitars and also the modernist headless guitar brand Steinberger, whose minimalist basses dominate the 1980’s music scene.

It would have made more business sense to resurrect the Kramer brand beyond a range of low budget instruments, to implement innovations and compete for the rock/metal dollar of ESP/Ibanez/Charvel etc. For high tech innovations, the Steinberger brand would have been the perfect brand to implement hi-tech features.

Indeed by missing these obvious options, one wonders if Juskiewicz was actually awake when he earned his MBA.

By July 2018 all of this could well be academic. If Gibson falls, I'm afraid that a large proportion of the blame lies squarely with its CEO. The recent boardroom rumblings of investors talking about ousting Henry Juskiewicz, shows I'm not alone in that opinion.