Who Should Acquire Gibson? Your thoughts?

[Charmed Life Picks]

I've been pondering this. Assuming Gibson goes on the chopping block, I'd prefer the acquiring firm to already be in the music market space.

If someone had deep enough pockets to acquire the core Gibson and Epiphone business, who would you think?

My vote is Yamaha, for the following reasons:

I had a thought that Yamaha would be a good candidate to acquire Gibson, if the Gibby models remained Made in USA. I say this for several reasons:

1) Absolute fanatics about quality for anything that bears their logo
2) Huge facilities already in place in China which could be geared up to make Epiphones.
3) No outside vendors. As I understand it, all Yammie plants use only their own employees.
4) Very deep financial pockets; very stable institution
5) Still privately held (I believe), thus not driven by the quarterly report and immediate returns. Like Honda or Toyota, they invest for the long haul and are typically more patient for their ROI.

I'm sure many (most?) will disagree. It certainly would be a culture shift from onshore to offshore ownership.

My two cents. Any other thoughts?

scott memmer

[Athens]

It would have to be one of the biggies.

Guild is owned by someone else, Martin is a completely different approach, hmmmmmmmmmm.

But you did say someone already in the music space.

Taylor would be a good candidate, but do they have the working capitol to pull it off?

They would capture a lot of material, I'm assuming that Gibson has lot's of tonewood in storage being aged, so they would acquire that. I don't know if they would want to keep Gibson's present facilities, but the machinery is already there as is an already trained work force.

Whether they could change the mindset to bring the quality and consistency up to Taylor's standard is a different discussion.

Interesting question. I look forward to some lively comments.

[JBCROTTY]

Its a fun question to ponder. Gibson has to figure out a way to get out from under the debt load they are carrying - no acquirer will take on that level of debt. I would guess that there is acquisition interest, but only if the debt can be dramatically reduced or more favorable terms negotiated ahead of purchase.

It may not be necessary to sell the core business. I think a more likely scenario is that Gibson will shed the non-core businesses/assets - either sell them for asset value or scuttle them completely and write them off - and repay debt with the proceeds while negotiating debt terms/restructure as aggressively as possible. This way they could potentially retain control of the core guitar-making business and emerge from bankruptcy with a clean balance sheet and stay focused on growth of the core Gibson guitar brand and product development.

They will sell only if they cannot negotiate a resolution with the debt holders or cannot come up with a viable strategy to drive growth after shedding non-core assets.

The armchair CEOs here are almost as entertaining as Monday morning quarterbacks.

[Nyghthawk]

just my.02 but I would like to see a significant change in management style. The current bunch couldn't manage a two car funeral IMHO. Lime green j-45's and pastel pink Hummingbirds. Sheesh!

[RussL30]

I have no idea, but whoever it is, I hope they keep the Bozeman plant in operation so they can keep cranking out some great acoustic guitars.

[JBCROTTY]

Originally Posted by Nyghthawk

just my.02 but I would like to see a significant change in management style. The current bunch couldn't manage a two car funeral IMHO. Lime green j-45's and pastel pink Hummingbirds. Sheesh!

No question - the debt holders will install new management.

[Mr. Jelly]

Here's what we need. We need somebody to get things together and bring in investors that would love to be involved in rejuvenating Gibson to make the best Gibson guitars ever. The investors need to be people with lots of money to invest. People like Slash, Richard Gere, Johnny Depp and Gene Simmons. There are many many more I'm sure. I picked these out to make a point. The investors sit on the board and advise while employing others to actually run the company. If something like that happened and they actually made decent guitars almost everyone would be buying if not only checking out Gibson guitars.

[JBCROTTY]

Originally Posted by Willie Voltaire

The armchair CEOs here are almost as entertaining as Monday morning quarterbacks.

Football does not start for about 3 more months so we need something to prognosticate.....

[rokdog49]

I would love to offer a comment, but my question, and I think the single most important one is "who would be running the ship?"
Looking at the company, the heritage and the product, it would take someone from within the industry who has an understanding of Gibson in every aspect.
That would likely mean someone from the inside. That someone would spearhead the re-vitalization of the company. That someone would need to be dynamic and have the ability to place the right people in the right spots to make it happen and then let those people do their jobs. That person would have to be the Lee Iacocca of the guitar world. ( use Google if you never heard of him ).
In the interest of a true, pure turnaround, the buyer/investor would absolutely be on board with all this.
Is there such a person? Is there such an investor?
You just never know...

[johntrem]

The supreme irony would be Fender acquiring it.

[Michael Watts]

Gibson has a history of charismatic individuals involved with the company from Orville himself through to Loyd Loar, Ted McCarty, Les Paul and others. I would personally be looking for a figurehead from within the ranks or something akin to Taylor's heir apparent Andy Powers.

Or something...

[jpd]

Originally Posted by RussL30

I have no idea, but whoever it is, I hope they keep the Bozeman plant in operation so they can keep cranking out some great acoustic guitars.

And keep it separate from the rest of Gibsons holdings, including the electric shop in Tennessee. Wouldn't it be something if Larrivee bid on it? Fine company, great facility on the west coast(Oxnard California), great deal of knowledge with acoustics.....a winner

[Charmed Life Picks]

Originally Posted by johntrem

The supreme irony would be Fender acquiring it.

I had thought of that briefly. However, from the little I know I've heard Fender is not in the greatest financial shape either.

Also, even though the Feds have more or less kept their hands off mergers in the last few decades, it seems Fender above all would create the greatest sense of a monopoly or a conflicting trade issue. Again, you can put my knowledge of this on the head of a pen, but I persist.

John, Thanks,
Scott

[Jcamp]

It would b a good if some one like Breedlove or larrivee got it. Or better yet if a group like Taylor, Santa Cruz, larrivee, Breedlove and th B one that I can never spell came together and bought it. Kind of a joint venture of all the good quality small production companies that could get it up and running building consistent quality guitar and a still reasonable price. I’d greatly prefer Gibson stay a American company.