Gibson (Nashville) Custom Shop layoffs

**rhoadsscholar** · 03-02-2018, 12:06 AM

First Heritage, now Gibson custom shop. Hold on to your guitars tight.

Gibson lays off staff in Nashville custom shop | Nashville Post

**vinnyv1k** · 03-02-2018, 12:31 AM

Sad times indeed.

**blille** · 03-02-2018, 01:33 AM

Not to be that guy but by laying off 15 people you’re not solving a debt of $375M.

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**Jabberwocky** · 03-02-2018, 07:29 AM

Anybody wants to start a new guitar company? 12 seniors from The Heritage, 225 Parsons Street, 15 seniors from Gibson Custom Shop, Elm Hill Pike. Ready to go to work.

**Al Br.** · 03-02-2018, 07:30 AM

Why not just sell the company off. Do it now before even the name holds little value.

**goldenwave77** · 03-02-2018, 08:15 AM

"Selling the company" off is not possible. The claims against it would still be there and far exceed what anybody would pay for it.

Nobody would buy it. Not going to happen.

What would you pay for a house worth $100, that has a $200 mortgage on it....the answer should be "nothing".

That's why a workout or bankruptcy is needed. The claimants will settle for less than they're owed (say 60 cents on the dollar), new money, or a new purchaser will come in, and run it....and the company will go on. If it goes into a death spiral and stops operating, and all value is destroyed, they'll get 10 cents on the dollar.

**73Fender** · 03-02-2018, 08:34 AM

I hate to see anyone lose their job and my thoughts go out to them.

**skiboyny** · 03-02-2018, 08:35 AM

Gibson needs only to make cuts enough across their spectrum of companies to show some type of profit or growth in each department. That might make funding possible. The first place to start unfortunately is labor. There are many reasons investors invest. Henry seems confident that he will get the financing he needs, and business will go on as usual. I'm thinking he is right.

**Jazzstdnt** · 03-02-2018, 09:56 AM

I hate to see anyone lose their job too. Best to them from here!

But - my wife and I have both been laid off before and the internet didn't commiserate over us. We were older, management types, expensive, and there was a business downturn. Sound familiar? And when we told folks, even our families about it? Ha! I can assure you that nobody gives a darn for more than a few seconds. Just a topic of conversation before they say - "so what else have you been up to"?

You just have to go out and get another gig.

Anyway, these were older workers and supervisors. If they are making fewer guitars over at Gibson then this is a logical move, at least in general terms.

**Greentone** · 03-02-2018, 10:08 AM

Gibson will go into bankruptcy protection and reorganize. With debt relief--sorry to the folks holding unsecured debt--the company will become marketable. Someone will tender an offer. Another possibility is that Gibson will emerge from court with the ability to soldier on a la GM.

Meanwhile, they will not be making high end archtops. The capacity/workforce for that is now gone. Same at Heritage.

This is how Heritage started. Gibson abandoned the high-end craftsmen in K'zoo and moved to Nashville. The K'zoo guys formed Heritage. (Aaron Cowles started his own thing and produced Unity and Jubal instruments as a hand-built deal.)

I don't know if the market yet exists for such instruments, but the Heritage and Gibson Custom Shop folks could indeed form a group that could make some great archtop guitars. A CNC machine, or--better yet--the old Gibson table that Heritage will doubtless discard now (in favor of CNC), and these guys could turn out L5 and Super400-like guitars all day...well, one a day.

**BigMikeinNJ** · 03-02-2018, 10:18 AM

Originally Posted by Jazzstdnt

I hate to see anyone lose their job too. Best to them from here!

But - my wife and I have both been laid off before and the internet didn't commiserate over us. We were older, management types, expensive, and there was a business down turn. Sound familiar? And when we told folks, even our families about it? Ha! I can assure you that nobody gives a darn for more than a few seconds. Just a topic of conversation before they say - "so what else have you been up to"?

You just have to go out and get another gig.

Anyway, these were older workers and supervisors. If they are making fewer guitars over at Gibson then this is a logical move, at least in general terms.

Been there, you’re dead right. Nobody knows you when you’re down and out.
Greentone, that would be something if this guys did exactly what you described.

**Jazzstdnt** · 03-02-2018, 10:22 AM

Originally Posted by Greentone

Meanwhile, they will not be making high end archtops. The capacity/workforce for that is now gone. Same at Heritage.

I don't know how you guys keep concluding this when it has not been said. Firstly, Gibson is not Heritage. Second, some of these at least were supervisors (i.e. people who don't make guitars, or at least full time because they are supervising). Archtops have better margins, don't they?

I'm not sure how you are coming to this conclusion when there are no before/after numbers for the line that makes archtops, and Gibson has not said that they will stop making archtops, or ANY fancy Crimson guitars, for that matter.

**Jazzstdnt** · 03-02-2018, 10:25 AM

Another thought, if you were making the case to bail out your company, or making the case to sell it, what is being bailed out or sold?
A company without its "franchise players"?

No. You can't sell that idea.

**BigMikeinNJ** · 03-02-2018, 12:29 PM

Originally Posted by Jazzstdnt

Another thought, if you were making the case to bail out your company, or making the case to sell it, what is being bailed out or sold?
A company without its "franchise players"?

No. You can't sell that idea.

You have two questions, let me reply to this one... You probably sell off everything except the actual Gibson guitar making property. Cut it down to one thing, and have a business plan you can show that proves how you intend to be profitable doing that one thing. Period.

When I got downsized from IBM they were so bloated, they had decided to use their fabled IBM Field Engineer Service teams to do stuff as varied as repairing appliances - you could buy a warranty from IBM and they'd come out and fix your stuff (that wasn't their product). Well there was a serious intervention, IBM hadn't laid anyone off since the 30s... But if they'd stayed on the course they were on they would have folded... So they started offering attractive "early retirement packages". Word was getting around that they were going to start laying people off. They instituted something called "ranking" - and everyone in every office was ranked on how well their efforts (no matter how outstanding your performance reviews went) to the new mission goals helped. Well hell man I was low man on the mega office structure being a very good computer operator/help desk/network tech/jack of all trades guy. The bosses were protecting their buddies. A newer package was offered, they called this was a "Bridge To Retirement Age" - I didn't wait to get "ranked" out of my job, I signed up for that Bridge... it was offered on my birthday. And when the July 1st deadline came and went to take that bridge people started getting laid off, bam... And then IBM sold some of it's most profitable divisions, FSD (Federal Systems Division) was one. Their personal computer making arm, sold. Their copier/scanner/service arm. Sold... And on and on.

Gibson is gonna have to do the same thing. Yeah it sucks those guys are gonna get let go later in life - good luck finding work at their age. Been there done that got the t-shirt...

BUT there is a chance that all these old former Gibson and Heritage employees might start calling each other and decide they wanna give it one more run. Grab up all the equipment from Heritage and Gibson that they'll be disposing of and keep building hand built (non CNC) archtop and specialty guitars THE OLD WAY...

Who knows. I can't argue with you because we don't know what's gonna happen. A lot of those Nashville guys are comfortable where they live, they may not want to relocate for a job, they may find a way to do custom builds, repair and piece work in Nashville (like Aaron Cowles and Pete Moreno did up in Kalamazoo).

We'll find out...

**Doctor Jeff** · 03-02-2018, 12:32 PM

Jazzstdt and Big Mike: I care! I'm sorry to hear anyone lose a job for something that's not their fault. My SIL lost a chef job just this week. Thank goodness there's a super-tight labor market out there. (Not sure about for making guitars, though.)

Let's not lose sight of one important point. Bankruptcy IS a business model for many CEO's. Some of them even get "promoted" to very important jobs.

**Doctor Jeff** · 03-02-2018, 12:35 PM

Big Mike: one of my very best friends got cut from IBM in Rochester, MN, in the early 90's and was transferred to Burlington, VT, where the layoff thing happened again. He then decided to take a buyout and retire. I think he did some private consulting work for a while.

He was much happier after he left IBM, I can assure you.

**vinnyv1k** · 03-02-2018, 12:51 PM

Originally Posted by 73Fender

I hate to see anyone lose their job and my thoughts go out to them.

Amen !

**jads57** · 03-02-2018, 02:52 PM

The Boom & Bust Cycle just gets faster and faster. especially now that I'm 60 LOL!

**2bornot2bop** · 03-02-2018, 04:23 PM

Gibson and Heritage both in the same week. Who'd have predicted that? I feel bad for anyone losing their jobs in the guitar making world.

**Cunamara** · 03-02-2018, 05:14 PM

Everything ends, all businesses have a life cycle. I think it's hopefully unlikely but it's not impossible that we are seeing the end of Gibson's life cycle (say 60/40 odds based on the publicly available information). In retrospect, looking from the outside and probably not knowing what I'm talking about anyway, it appears that Gibson management made some very expensive choices that did not pan out and are dragging the company down. Those choices were specifically buying into other market sectors where they were not successful and now selling those acquired businesses off. They may lose some money on those deals, I don't know, but the sales will free up some cash to put towards servicing their debt coming due. Combine that with a shrinking market for their core business (guitars) and the cash flow problem is significant. They are either going to have to sweettalk their debt holders or come up with infusion of new money and that is not easy.

**LtKojak** · 03-03-2018, 06:01 AM

Who was the one that got fried, cut in half, chewed and spit out just for saying "winter is coming"?

And what is happening? And it's just the beginning, folks.

Norlin... does that ring a bell somehow...? I think there must be some smart, brainy quote somewhere about history repeating itself...?

Don't you just hate it when it happens...?

**plasticpigeon** · 03-03-2018, 06:24 AM

Yuou got fried for gloating and winding people up and generally being obnoxious, which is what you are being now.

**LtKojak** · 03-03-2018, 06:42 AM

Originally Posted by plasticpigeon

Yuou got fried for gloating and winding people up and generally being obnoxious, which is what you are being now.

Sure, stating the obvious might be interpreted as you described for certain people, I see. BTW, in psychology, it's called "projection".

"For those who believe, no proof is necessary. For those who don't believe, no proof is possible"
- Stuart Chase

**plasticpigeon** · 03-03-2018, 06:54 AM

I'm glad you agree that calling you obnoxious is stating the obvious.

**LtKojak** · 03-03-2018, 08:06 AM

Originally Posted by plasticpigeon

I'm glad you agree that calling you obnoxious is stating the obvious.

Due to the obvious lacking of reading and comprehension skills, hence the impossibility of comunicating at the same level, then yes. I'm sure you prefer to be happy than right, so as I'm in agenerous mood, then have it your way. Coming from you, I consider it as a cumpliment.