Must Read Article: CEO Forum: Music man turns Gibson Guitar around - Guitars101

**stingx** · 03-01-2006, 01:05 PM

http://www.usatoday.com/money/compan...m-gibson_x.htm

The best part of the Q&A...

Q:What else did you do?
A: I said we are going to increase prices. Prices were ridiculously low. And people said, the price has been decreasing 20% a year, how can you reverse that? I said I'm just going to double the prices on a lot of models. I actually tested it and got an inverse price curve. Basically it showed that every time I raised prices a certain amount, volume would go up.

Very interesting article, IMHO, that does illustrate that there is a great deal of truth in the prices of these guitars being rediculously inflated.

**supercharged 350** · 03-01-2006, 01:27 PM

Wow! What a "suit"! Gotta love it. Rediculously inflated may be an understatement. Cool read Stingx.

wahwah · 03-01-2006, 01:29 PM

Fuck, that was a superb read and re-inforces what I've always said about the guy getting out of bed in Kalamazoo and the guy getting out of bed in Seoul and doing the same job but making a hash in Kalamazoo now and again whilst the $150 Squier is a winner. I made that analogy up but looks like it was spookily close!!!!! Great read...especially when asked about '59 Pauls and he replies, 'What makes a market?'. Fucking true! Rich 50 somethings buying up Gibson Les Pauls and Harley D's...they should be SHOT because that bandana does not suit a grey beard with Aviator shades!!!!!!

Thanks mate, great read.

**stingx** · 03-01-2006, 01:33 PM

Quote:

Originally Posted by supercharged 350

Wow! What a "suit"! Gotta love it. Rediculously inflated may be an understatement. Cool read Stingx.

Isn't funny in a way? In the 80s everyone and their mother wanted a super-strat. You could buy a LP for cheap. People equate cheap with "shit product". How brilliant is that to double the price and, lo and behold, your sales start increasing :jerkit:

I am not trying to rag on LPs. They have a unique sound a a special place in rock music. I just finally got the proof out of the CEO's mouth that proves all along that you are taking it in the ass when you buy a Gibson. It kinda sucks that, on top of the regular profit margin, you are being doubly exploited because you want to own a product they make.

PRS charges boutique prices for guitars made on CNC machines! They aren't even hand made. The SAME MACHINES used in Japan and in Korea. This will hopefully open people's eyes and stop the predujice to overseas guitars, esp Korean. All guitars today are milled the fucking same. The only difference is in the details...hand filing the frets, the electronics used, and the attention to the small details. That's it.

**stingx** · 03-01-2006, 01:38 PM

Interesting point on Harley, Chris. I have been riding for years. I have owned Harleys, Truimphs, Hondas, Suzukis...you name it. The best bike I ever had is the one I have now...a HONDA VTX 1300C. All my Jap bikes spent ZERO time in a shop. My Harley was a beautiful bike but it was no better than the competition for the money I spent on it. In fact, I could have bought TWO Japanese bikes WITH LARGER DISPLACEMENT for the same money. Fak!

People are sheep and are easily swayed. Not me. Not for a long time. I really hope this shuts the label crowd up once and for all. This was one of the most revealing articles I have read in a long time.

El_jalepeno · 03-01-2006, 03:34 PM

Excellent articel

HOWEVER, I think what the guy is doing is great. If there is a market they can satisfy, so be it, and if that means people are willing to pay for it, so be it. As many of you know, and I drop this as much as I can

, I recently ordered a Wayne guitar. Now THAT costs some serious bones, even compared to the Gibsons. But the guitar is completely hand made to my exact specs. Gibson has extremely tight tolerances now, but that doesn't mean I would pay $3k for a Gibson. But I would for a Wayne

As Wah says, and I have quoted him several times, you really can get the same quality or damn close between the Asian made guitars and the US made guitars. Some people, and I know one guy in particular who is just ignorant. He thinks Epis are made from saw dust and cardboard. How fucking stupid can you get??? Gibson still has a name to protect with the Epis, and just like car manufacturers, Gibson anticipates an Epi user would eventually move on to a Gibson once they buy that Harley and aviator sun glasses

I still say spend a few extra bucks and get a true custom hand made guitar if ytou are looking for an expensive guitar. Shelling out that kind of cash for a machine made guitar is just stupid.

**VHF** · 03-01-2006, 04:04 PM

I'll stick with my EPI...can't find a thing wrong with em.

**stingx** · 03-01-2006, 04:30 PM

I posted this on Harmony Central and after a good amount of responses it was deleted. The whole thread was just ganked. It makes perfect sense when you realize who owns Harmony Central and how much money they make off selling Gibson products, though. To me that is the icing on the cake and only reinforces the content of the article. Wow...I bet a certain CEO is going to be getting A LOT of calls for this article.

**KC_ArtRocker** · 03-01-2006, 06:17 PM

Quote:

Originally Posted by stingx

...I bet a certain CEO is going to be getting A LOT of calls for this article.

Yeah, what an idiot! As i was reading it, i was thinking, "why is this guy admitting this???" Perhaps he was more interested in feeling good amongst the CEO crowd (explaining his strategy on the forum site) than worrying about keeping his profit-building philosophy a secret to ensure its longevity.

Wolfman · 03-01-2006, 08:49 PM

How ironic that this was posted tonight - I had just been discussing this article with coworkers and teachers at the shop.

I read this in the print edition of USAToday last week, and it made me sick to my stomach. I'm not going to mince words here - those of us that work in guitar shops are sick and tired of Juszkiewicz and his wacky ways. I have heard stories upon stories about this guy over the last two years while I have worked in a shop. Unless you are Guitar Center (or Musician's friend ... same difference), this guy does not care about you as a dealer. We have had our chain yanked so many ways by this guy's policies, it is unreal. I could tell you some stuff about our ordeals with Gibson that would make you think twice about the integrity of this "turnaround" by Gibson since Henry took over, but there's some things that I really shouldn't repeat publicly. Suffice it to say that we are no longer a dealer, partly by choice, partly by having our hand forced by unreasonable policies.

A Harvard business student who "played a little guitar" growing up comes in and takes over one of the greatest guitar companies ever, models his busines plan after Nike, jacks prices up, and claims that his customers support his way of thinking. I'd like to meet some of these customers, because I don't think they exist - they are figments of an imaginative "spin", as far as I'm concerned. Let me tell you something - if you are going to justify doubling prices, your product better back it up - and I have seen Les Pauls come in that should never have left the factory. We have a teacher at our shop that worked for both Gibson and PRS, and he said he couldn't believe the quality of instruments that were allowed to be shipped out when he was there. That whole line about how Gibson emplyees wouldn't buy Gibson guitars? According to this teacher, that comment was right on the mark.

I have no problem with paying for quality, but that kind of price gouging is far from justified. The quality is not any better than it was in the past (which is not bad - it's still a Gibson product, of course), no matter what Juszkiewicz has himself believing and wants the public to swallow.

Gibson has always built instruments of hallowed status and much better than average quality, but I have experienced the current shape of Gibson first-hand on multiple instruments, and it is not anything like the article would lead you to believe. It's a shame that an MBA and some good spin can hide the reality of things.

As sting suggested, this CEO is going to be taking a lot of flak for that article. Furthermore, as KC said - it's a CEO's world for this guy, and I'm sure he will come out smelling like a rose among the "business crowd" for being so bold. To the rest of the world, he's a jackass.

.

.

El_jalepeno · 03-02-2006, 04:21 AM

I am reading the responses and need to speak up.

First, Gibson isn't price gouging anyone. The price of their guitars is fairly consistent, and the market for those guitars aren't fluctuating like the need for gas or hotel rooms during an emergency.

Second, owning a Gibson is neither a right nor required to be a musician. There are many many alternatives to Gibson. If you are in the market for a Les Paul Standard and have only $300, you can get a somewhat comparable guitar. You are buying the name more than anything.

Third, some folks are talking like they have some right to buy Gibson guitars cheaper since the CEO admits hiking the price. Price determination is driven by the market demand, and the guy clearly stated that demand rose as prices rose. This concept is what our entire US economy is based on.

Take each of you right now: You get paid a certain wage at your job, and you are fine with it. You get an opportunity to make more money at another place doing the same work and getting same benefits and so on. Many of you would take it. For those of you who stayed behind at your job when your buddy left to make more money may think you are being faithful to your employer. How nice. But your employer finds he can hire a guy to replace you with more skills and asking for less money and benefits. You're headed out buddy.

It's called Supply and Demand. This is not price gouging or illegal or some of the other stuff you guys are writing. What I am reading here, and I mean no offense, but because some of you don't have or want to spend the money you think Gibson should lower prices for you. Not going to happen, because as they CEO responded, the demand is already there. I used to have an Epi and recently sold it making room for the 4 non-existent ZW Epis on their way. It was one of the best guitars I ever paid. Sure I would have loved for it to say Gibson across the top, but I wasn't going to pay for the name. Just like I wouldn't deliberalty buy an Orville, but it is still a Gibson.

As for Gibson policies, I would love to hear about it Wolf, but let's do it through email. As you mentioned, probably not the right thing to do in public.

**stingx** · 03-02-2006, 04:42 AM

EJ, I work in corporate America. I understand and the CEO is doing exactly what the shareholders expect. My problem is that he's telling you, in no uncertain terms, that the product IS overinflated. As guitarists we all know there is a huge markup on the instruments we play. This guy not only gets you with the usual markup, but he doubly reaming you on top of that...and he's telling you he is

Still, you buy what you want. I have no problems spending big bucks on custom, hand crafted instruments. There is no way, being who I am, that I can justify spending two bills on a CNC crafted instrument from ANY country of origin. This is capitalism at its best though so all he is doing is making money from a market that's willing to pay what he's asking. I hope this article does wake some people up though and make them think twice about how to spend their cash.

El_jalepeno · 03-02-2006, 05:28 AM

Quote:

Originally Posted by stingx

...I hope this article does wake some people up though and make them think twice about how to spend their cash.

I totally agree with you on this. Those guys out there thinking they HAVE to have a Gibson need to read the article before paying all that money. Like I said earlier, I know a guy who insists Gibson is worth every penny and Epiphones are sawdust. He's a fucking moron! I laugh at those kind of guys because they act like they know everything but don't know shit and haven't researched anything...

**KC_ArtRocker** · 03-02-2006, 06:40 AM

Quote:

Originally Posted by El_jalepeno

As for Gibson policies, I would love to hear about it Wolf, but let's do it through email. As you mentioned, probably not the right thing to do in public.

Just curious as to why this should not be discussed publicly.

**Mondy** · 03-02-2006, 06:56 AM

Great article and just further goes to prove that if you think a guitar's good for you, then it is good !

I'd sound medicre whatever I play, cuz I don't practise enough to get better, so I'm not gonna pay £2,000 to still sound medicre !

I'd love a Gibson just cuz they seem to hold their value, but I've never had a spare £2,000 to chuck away on one, and I know I probably never will have !

A freebie Epiphone from 357 customs is more in my price range (if it ever bladdy well turns up !!!)

I also cannot seem to locate the "o" key whenever I try to spell mediOcre !!!