1 00:00:04,160 --> 00:00:07,160 Speaker 1: Get in touch with technology with tech Stuff from how 2 00:00:07,240 --> 00:00:13,920 Speaker 1: stuff works dot com. Hey there, and welcome to tech Stuff. 3 00:00:13,960 --> 00:00:17,119 Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer and 4 00:00:17,200 --> 00:00:19,920 Speaker 1: how Stuff Works and I love all things tech. And 5 00:00:20,000 --> 00:00:23,000 Speaker 1: in the last episode I talked about the founding of 6 00:00:23,040 --> 00:00:26,640 Speaker 1: the Gibson Guitar Company, and that yet about how Orville 7 00:00:26,680 --> 00:00:29,320 Speaker 1: Gibson kind of sort of founded the company that bore 8 00:00:29,360 --> 00:00:31,920 Speaker 1: his name. I say kind of sort of because he 9 00:00:32,120 --> 00:00:36,280 Speaker 1: was a luthier, someone who makes mandolins and guitars, and 10 00:00:36,600 --> 00:00:42,040 Speaker 1: sought out the help of some businessmen in Calamazoo, Michigan, 11 00:00:42,560 --> 00:00:45,440 Speaker 1: after he started getting more requests for his work than 12 00:00:45,520 --> 00:00:49,360 Speaker 1: he was able to provide for it was it was great, 13 00:00:49,440 --> 00:00:52,280 Speaker 1: his work was in demand, but he wanted to to expand, 14 00:00:52,360 --> 00:00:55,240 Speaker 1: so he got together with a group of businessmen who 15 00:00:55,280 --> 00:00:59,480 Speaker 1: all made a business that they called a the Gibson Company, 16 00:01:00,080 --> 00:01:04,280 Speaker 1: um specifically the Gibson Mandolin Guitar Manufacturing Company, and Orville 17 00:01:04,640 --> 00:01:07,240 Speaker 1: was not a partner in that company. Instead, he sold 18 00:01:07,280 --> 00:01:10,880 Speaker 1: a patent to the group and he got a kind 19 00:01:10,880 --> 00:01:14,360 Speaker 1: of a pension from them, but other than that he 20 00:01:14,480 --> 00:01:16,960 Speaker 1: was not heavily involved in the business. After a couple 21 00:01:16,959 --> 00:01:20,839 Speaker 1: of years. I also talked about acoustic guitars and how 22 00:01:20,880 --> 00:01:23,520 Speaker 1: they work. I talked about electric guitar pickups and how 23 00:01:23,600 --> 00:01:26,319 Speaker 1: they work, as well as the evolution of Gibson in 24 00:01:26,360 --> 00:01:31,200 Speaker 1: its first six decades are so arguably seven decades depending 25 00:01:31,240 --> 00:01:34,240 Speaker 1: upon how you're counting. Now today we're going to look 26 00:01:34,280 --> 00:01:37,560 Speaker 1: at how Gibson has changed hands over the years leading 27 00:01:37,600 --> 00:01:40,880 Speaker 1: up to the company declaring bankruptcy in two thousand eighteen. 28 00:01:41,040 --> 00:01:44,920 Speaker 1: So what happened and is Gibson alone in this or 29 00:01:45,040 --> 00:01:50,080 Speaker 1: are other major guitar brands also facing financial difficulty? Well, first, 30 00:01:50,080 --> 00:01:51,840 Speaker 1: we have to backtrack just a bit. So in the 31 00:01:51,880 --> 00:01:54,120 Speaker 1: last episode I ended by talking about what was going 32 00:01:54,160 --> 00:01:57,920 Speaker 1: on in Gibson in the nineteen sixties. But earlier, back 33 00:01:57,960 --> 00:02:03,120 Speaker 1: in nineteen Gibson's ownership changed hands. A company called Chicago 34 00:02:03,240 --> 00:02:07,360 Speaker 1: Musical Instruments or c m I acquired Gibson, and the 35 00:02:07,360 --> 00:02:10,520 Speaker 1: founder of c m I was a guy named M. H. Berlin. 36 00:02:11,200 --> 00:02:14,680 Speaker 1: Berlin was born in eighteen ninety five in Romania, and 37 00:02:14,760 --> 00:02:17,720 Speaker 1: his family immigrated to the United States in the early 38 00:02:17,840 --> 00:02:22,760 Speaker 1: nineteen hundreds. They moved to Chicago. Berlin attended school through 39 00:02:22,840 --> 00:02:27,080 Speaker 1: the eighth grade and then left school to work at Wurlitzer's, 40 00:02:27,120 --> 00:02:30,519 Speaker 1: a retail store in Chicago. After serving in the U. S. 41 00:02:30,600 --> 00:02:33,120 Speaker 1: Navy during World War One, Berlin would return to the 42 00:02:33,200 --> 00:02:36,200 Speaker 1: United States and, after working for a musical instruments company 43 00:02:36,240 --> 00:02:40,120 Speaker 1: as a salesman, would eventually be the founder of CMI 44 00:02:40,360 --> 00:02:45,080 Speaker 1: in nineteen twenty. In nineteen forty four, only one of 45 00:02:45,120 --> 00:02:50,079 Speaker 1: the original five Kalamazoo businessmen who founded Gibson was still alive. 46 00:02:50,680 --> 00:02:54,520 Speaker 1: That was John Adams, not the president, and he was 47 00:02:54,600 --> 00:02:58,640 Speaker 1: eighty five years old. He decided he wanted to sell Gibson. 48 00:02:59,120 --> 00:03:02,040 Speaker 1: C m I had own into a successful musical instruments 49 00:03:02,080 --> 00:03:06,800 Speaker 1: distributor company, and Berlin's company bought out Gibson. For the 50 00:03:06,840 --> 00:03:10,960 Speaker 1: next two decades, Gibson performed well in the market and 51 00:03:11,000 --> 00:03:16,680 Speaker 1: introduced numerous innovations in their products. In nine, an odd 52 00:03:16,919 --> 00:03:21,320 Speaker 1: merger happened. C m I, the parent company for Gibson, 53 00:03:21,520 --> 00:03:25,079 Speaker 1: would merge with a company called E C L. Well. 54 00:03:25,120 --> 00:03:29,440 Speaker 1: What was e C L It was a brewery and 55 00:03:29,760 --> 00:03:35,720 Speaker 1: concrete company in Ecuador? What the what? Well? It was 56 00:03:35,760 --> 00:03:39,480 Speaker 1: a company that was founded in Ecuador. Uh was had 57 00:03:39,760 --> 00:03:44,040 Speaker 1: several different interests there, including concrete and cement as well 58 00:03:44,080 --> 00:03:47,360 Speaker 1: as a brewery, So the board of e c L 59 00:03:47,480 --> 00:03:50,000 Speaker 1: were really the owner of e c L. Purchased publicly 60 00:03:50,040 --> 00:03:52,880 Speaker 1: available stock in c m I enough of it to 61 00:03:52,920 --> 00:03:56,320 Speaker 1: assume control of the company. This is technically what we 62 00:03:56,360 --> 00:03:59,760 Speaker 1: would typically call a hostile takeover, the idea that you're 63 00:04:00,280 --> 00:04:04,680 Speaker 1: going through shares of stock rather than talking with leadership 64 00:04:04,880 --> 00:04:08,440 Speaker 1: about a transition from one style of company to another. 65 00:04:08,880 --> 00:04:10,560 Speaker 1: The chairman of v c L was a guy named 66 00:04:10,560 --> 00:04:15,680 Speaker 1: Norton Stevens, and the new merged company was called Now Orleans. 67 00:04:16,279 --> 00:04:19,160 Speaker 1: And Now Orland came from combining the first three letters 68 00:04:19,400 --> 00:04:23,400 Speaker 1: of Norton Stephen's first name with the last three letters 69 00:04:23,440 --> 00:04:27,919 Speaker 1: of MH. Berlin's last name, No Orlan. No Orlean had 70 00:04:27,960 --> 00:04:32,839 Speaker 1: three main businesses. One was brewing, one was musical instruments, 71 00:04:33,279 --> 00:04:37,520 Speaker 1: and the third was somewhat vaguely defined as technology. There 72 00:04:37,520 --> 00:04:41,200 Speaker 1: are some accounts from Gibson employees dating around this period 73 00:04:41,240 --> 00:04:45,680 Speaker 1: that suggests their new peers, their new business owners, were 74 00:04:45,720 --> 00:04:50,239 Speaker 1: more focused on maximizing profits than on building high quality 75 00:04:50,320 --> 00:04:53,479 Speaker 1: instruments for musicians. And it wasn't that they wanted to 76 00:04:53,560 --> 00:04:56,440 Speaker 1: make substandard products, but rather they just didn't have an 77 00:04:56,520 --> 00:05:00,719 Speaker 1: understanding of what it takes to make a good music instrument. 78 00:05:00,760 --> 00:05:05,040 Speaker 1: They weren't Louthier's, they weren't even musicians necessarily, and according 79 00:05:05,080 --> 00:05:08,159 Speaker 1: to Stan Rendell, who was serving as the president of 80 00:05:08,200 --> 00:05:11,320 Speaker 1: Gibson at the time, the new way of doing business 81 00:05:11,440 --> 00:05:15,680 Speaker 1: ended up hurting Gibson and included a fundamental change in 82 00:05:15,720 --> 00:05:20,799 Speaker 1: the way the company approached products. Before the acquisition, Gibson 83 00:05:21,040 --> 00:05:26,040 Speaker 1: had a single customer that was c m I. Gibson 84 00:05:26,040 --> 00:05:30,200 Speaker 1: didn't sell directly to people. Gibson sold their products to 85 00:05:30,320 --> 00:05:32,840 Speaker 1: their parent company, c m I, which was a distributor. 86 00:05:33,240 --> 00:05:36,600 Speaker 1: So here's how it would work. Gibson would manufacture musical 87 00:05:36,600 --> 00:05:39,640 Speaker 1: instruments and then essentially would sell them to c m 88 00:05:39,680 --> 00:05:42,520 Speaker 1: I at a profit. So whatever it cost Gibson to 89 00:05:42,560 --> 00:05:44,599 Speaker 1: make the musical instrument, they would mark that up a 90 00:05:44,600 --> 00:05:47,479 Speaker 1: bit so they can see see a profit sell that 91 00:05:47,560 --> 00:05:49,920 Speaker 1: to c m I. C m I would distribute those 92 00:05:49,960 --> 00:05:53,200 Speaker 1: musical instruments at a marked up price to make their profit. 93 00:05:53,920 --> 00:05:57,520 Speaker 1: So each stage, the price of the guitar or whatever 94 00:05:57,560 --> 00:06:00,279 Speaker 1: it may be, it was a mandolin or avenge or 95 00:06:00,279 --> 00:06:05,080 Speaker 1: whatever would go up. So from Gibson to c m I, 96 00:06:05,160 --> 00:06:08,279 Speaker 1: price goes up. From c m I to say a 97 00:06:08,440 --> 00:06:11,000 Speaker 1: retail store somewhere the price goes up, and the price 98 00:06:11,040 --> 00:06:14,240 Speaker 1: goes up a little bit more to the end customer, 99 00:06:14,320 --> 00:06:18,760 Speaker 1: the musician. So that explains partially why these guitar prices 100 00:06:18,800 --> 00:06:22,920 Speaker 1: would get pretty high eventually, because you're talking about several 101 00:06:22,960 --> 00:06:26,680 Speaker 1: different middlemen that have to get their cut before it 102 00:06:26,720 --> 00:06:30,360 Speaker 1: ever gets to the customer. If Gibson were selling directly 103 00:06:30,400 --> 00:06:33,200 Speaker 1: to the customer, the prices might be a little lower, 104 00:06:33,440 --> 00:06:37,359 Speaker 1: not necessarily significantly lower. Because Gibson was always in the 105 00:06:37,400 --> 00:06:41,240 Speaker 1: business of making high end guitars. Their guitars were known 106 00:06:41,400 --> 00:06:46,400 Speaker 1: as UH some of the flagships in especially in electric guitars. 107 00:06:46,720 --> 00:06:49,560 Speaker 1: It was essentially Gibson and Fender were the two big names, 108 00:06:50,279 --> 00:06:53,599 Speaker 1: and so they could charge a premium because they were 109 00:06:53,640 --> 00:06:56,280 Speaker 1: selling the premium products. Everyone else was kind of selling 110 00:06:57,160 --> 00:07:02,040 Speaker 1: either slightly lower cost, lower quality ones or knockoffs, and 111 00:07:02,120 --> 00:07:06,839 Speaker 1: that was about it. Well, the Gibson would take the 112 00:07:06,880 --> 00:07:09,840 Speaker 1: profit that they made by selling to c m I 113 00:07:10,240 --> 00:07:13,080 Speaker 1: and they would use that money to fund research and development. 114 00:07:13,240 --> 00:07:15,680 Speaker 1: They would give raises to people who were innovating a 115 00:07:15,800 --> 00:07:20,760 Speaker 1: musical instrument design, they would improve manufacturing processes. Essentially, they 116 00:07:20,800 --> 00:07:24,200 Speaker 1: would reinvest their profit back into the business, back into 117 00:07:24,240 --> 00:07:26,880 Speaker 1: the people in the business, and it was a good 118 00:07:26,920 --> 00:07:31,520 Speaker 1: way to create an incentive to do good work. However, 119 00:07:31,640 --> 00:07:36,160 Speaker 1: upon normilists becoming the new reality, things would change. Nor 120 00:07:36,280 --> 00:07:40,800 Speaker 1: Leists operated Gibson as a cost center, meaning normilists would 121 00:07:40,840 --> 00:07:43,920 Speaker 1: just pay the bills as Gibson incurred them. So instead 122 00:07:43,920 --> 00:07:47,640 Speaker 1: of Gibson trying to balance everything by taking the revenue 123 00:07:47,640 --> 00:07:50,200 Speaker 1: it got from c m I and then paying off 124 00:07:50,440 --> 00:07:54,160 Speaker 1: whatever bills it had and investing in the business wherever 125 00:07:54,160 --> 00:07:56,680 Speaker 1: it needed to, nor Less would just say, oh, well, 126 00:07:56,720 --> 00:07:59,280 Speaker 1: if you incur age expense, we'll pay it. There was 127 00:07:59,320 --> 00:08:02,360 Speaker 1: no profit model for Gibson to pursue anymore, and according 128 00:08:02,400 --> 00:08:06,840 Speaker 1: to Randell, this removed any incentive to innovate and work hard. 129 00:08:06,920 --> 00:08:09,000 Speaker 1: He said, if your bills are being paid, whether you 130 00:08:09,040 --> 00:08:12,760 Speaker 1: work hard or not, your inclined not to work very hard. 131 00:08:14,000 --> 00:08:17,200 Speaker 1: So that was kind of an interesting point. Now, I 132 00:08:17,200 --> 00:08:20,280 Speaker 1: will say that that doesn't necessarily hold true in all 133 00:08:20,480 --> 00:08:23,640 Speaker 1: venues where if your bills are paid, you aren't inclined 134 00:08:23,640 --> 00:08:25,760 Speaker 1: to work hard. But that but if it's if it's 135 00:08:25,760 --> 00:08:30,880 Speaker 1: a thing where uh you know, in this particular arrangement 136 00:08:30,920 --> 00:08:34,559 Speaker 1: that Gibson had with new or Less, essentially that does 137 00:08:34,600 --> 00:08:37,600 Speaker 1: seem to be one of the reasons why quality started 138 00:08:37,600 --> 00:08:41,280 Speaker 1: to slip, but the company did soldier on. It produced 139 00:08:41,280 --> 00:08:44,239 Speaker 1: a few instruments in that era that we're not praised 140 00:08:44,520 --> 00:08:47,120 Speaker 1: very much, possibly due to the new focus on the 141 00:08:47,160 --> 00:08:51,720 Speaker 1: streamline manufacturing process to maximize output. Some employees later expressed 142 00:08:51,720 --> 00:08:54,640 Speaker 1: opinions that this was at the cost of build quality. 143 00:08:54,679 --> 00:08:58,000 Speaker 1: Others would say, no, we made good guitars, they just 144 00:08:58,320 --> 00:09:02,000 Speaker 1: they just weren't the best, most innovative designs. But things 145 00:09:02,000 --> 00:09:04,160 Speaker 1: really took a downhill turn in the eyes of guitar 146 00:09:04,280 --> 00:09:07,600 Speaker 1: lovers in the mid to late seventies. That's when Gibson 147 00:09:07,640 --> 00:09:11,319 Speaker 1: began producing guitars that got what we'll call a mixed reception. 148 00:09:11,440 --> 00:09:14,600 Speaker 1: That's being kind. There are certainly some fans of Gibson's 149 00:09:14,600 --> 00:09:16,400 Speaker 1: guitars from this era, but there are a lot of 150 00:09:16,480 --> 00:09:18,840 Speaker 1: outspoken critics as well. In fact, I say that the 151 00:09:18,880 --> 00:09:23,160 Speaker 1: critics far outnumber the fans. So let's take the Marauder 152 00:09:23,640 --> 00:09:29,200 Speaker 1: as an example. Gibson introduced this line in nineteen seventy 153 00:09:29,240 --> 00:09:32,360 Speaker 1: four and went into mass production the following year. It 154 00:09:32,400 --> 00:09:35,360 Speaker 1: was a departure for Gibson designs as it featured a 155 00:09:35,440 --> 00:09:38,559 Speaker 1: bolton neck Gibson guitars up to that point had been 156 00:09:38,640 --> 00:09:42,679 Speaker 1: set in neck joint guitars being the next would slot 157 00:09:42,760 --> 00:09:45,160 Speaker 1: into the body of the guitar and then would be 158 00:09:45,200 --> 00:09:48,600 Speaker 1: secured by glue. So if you remember in the first 159 00:09:48,600 --> 00:09:50,720 Speaker 1: episode I talked about the anatomy of a guitar, you 160 00:09:50,760 --> 00:09:53,640 Speaker 1: have the body, that's the part that has the sound 161 00:09:53,720 --> 00:09:56,440 Speaker 1: hole in it. For an acoustic guitar. You have the 162 00:09:56,559 --> 00:10:00,080 Speaker 1: neck that's the part that joins onto the body, and 163 00:10:00,120 --> 00:10:03,319 Speaker 1: it's the part that the strings are are strung against 164 00:10:03,400 --> 00:10:05,920 Speaker 1: and have frets where you can press the string against 165 00:10:05,920 --> 00:10:08,200 Speaker 1: the frets to make different notes. And then you have 166 00:10:08,280 --> 00:10:11,800 Speaker 1: the head of the guitar. That's where these strings attached 167 00:10:11,840 --> 00:10:15,080 Speaker 1: to the tuning bags and you can tune the strings. 168 00:10:15,120 --> 00:10:17,280 Speaker 1: So where the neck and body would meet, you could 169 00:10:17,360 --> 00:10:21,360 Speaker 1: do what is called a set in neck joint, where 170 00:10:21,480 --> 00:10:24,120 Speaker 1: it has sort of the seamless look to it, where 171 00:10:24,120 --> 00:10:27,079 Speaker 1: the neck of the guitar sets into the body of 172 00:10:27,120 --> 00:10:31,160 Speaker 1: the guitar. But the Marauder was different. It was a 173 00:10:31,200 --> 00:10:34,120 Speaker 1: bolt on, which is what it sounds like. Once you 174 00:10:34,160 --> 00:10:36,560 Speaker 1: fit the neck to the guitar body, you secure the 175 00:10:36,600 --> 00:10:40,400 Speaker 1: neck to the body with screws or bolts, so Fender 176 00:10:40,440 --> 00:10:44,520 Speaker 1: guitars were frequently bolt on neck guitars and Gibson had 177 00:10:44,600 --> 00:10:48,240 Speaker 1: usually opted for set in neck guitars, so the Marauder 178 00:10:48,360 --> 00:10:50,520 Speaker 1: was a new direction. Some people said, oh, they're kind 179 00:10:50,520 --> 00:10:53,920 Speaker 1: of copying Fender, and some guitars said that it actually 180 00:10:53,960 --> 00:10:56,720 Speaker 1: sounded more like a Fender guitar than a Gibson guitar, 181 00:10:57,160 --> 00:11:00,160 Speaker 1: which was due to the difference in the pickup that 182 00:11:00,200 --> 00:11:02,640 Speaker 1: they used. So if you remember in my last episode 183 00:11:02,679 --> 00:11:04,640 Speaker 1: I talked about what a pickup is. I'll talk a 184 00:11:04,640 --> 00:11:07,320 Speaker 1: little bit more about it again in a second, but 185 00:11:08,120 --> 00:11:11,880 Speaker 1: Gibson pickups have sort of a more mellow sound to 186 00:11:11,920 --> 00:11:15,079 Speaker 1: them typically than Fender ones do. Fenders have a little 187 00:11:15,080 --> 00:11:18,320 Speaker 1: more not not twangy, but there's a little more of 188 00:11:18,320 --> 00:11:22,000 Speaker 1: a metallic sound to Fender pickups. And it's not that 189 00:11:22,080 --> 00:11:25,680 Speaker 1: one is better than the other necessarily. They give off 190 00:11:25,679 --> 00:11:28,480 Speaker 1: different qualities of sounds, So it all depends upon what 191 00:11:28,559 --> 00:11:31,000 Speaker 1: kind of sound you want to go for, what is 192 00:11:31,040 --> 00:11:34,600 Speaker 1: the tone that you're looking for, and that would help 193 00:11:34,640 --> 00:11:37,360 Speaker 1: determine which pickup you would most want to go with. 194 00:11:37,920 --> 00:11:41,920 Speaker 1: It's not necessarily that the Gibson model was superior Defender. 195 00:11:42,120 --> 00:11:45,199 Speaker 1: It was just different. But the marauder was also a 196 00:11:45,240 --> 00:11:48,400 Speaker 1: bit of a Frankenstein's monster. The marauder had the body 197 00:11:48,600 --> 00:11:51,880 Speaker 1: of a Less Paul edition Gibson guitar, so it was 198 00:11:51,960 --> 00:11:54,560 Speaker 1: shaped in the same way as a less Paul Gibson, 199 00:11:55,160 --> 00:11:58,080 Speaker 1: but the head at the end of the neck was 200 00:11:58,200 --> 00:12:00,920 Speaker 1: not from a Less Paul Asian guitar. It was from 201 00:12:00,920 --> 00:12:04,120 Speaker 1: a Flying V guitar, so it was a different style 202 00:12:04,200 --> 00:12:06,280 Speaker 1: head than what you would normally see with that style 203 00:12:06,360 --> 00:12:10,280 Speaker 1: of body. And the guitar had a pair of humbucker pickups. Now, 204 00:12:10,360 --> 00:12:12,880 Speaker 1: I mentioned the humbucker in the last episode, but I 205 00:12:12,920 --> 00:12:15,199 Speaker 1: did not go into much detail. So let me give 206 00:12:15,200 --> 00:12:17,480 Speaker 1: you a quick rundown. Now, as I said in the 207 00:12:17,520 --> 00:12:21,160 Speaker 1: last episode, electric guitars have at least one coil of 208 00:12:21,200 --> 00:12:24,920 Speaker 1: conductive wire, typically wrapped around a permanent magnet, and the 209 00:12:24,960 --> 00:12:29,040 Speaker 1: strings on electric guitar are ferromagnetic, and the area above 210 00:12:29,080 --> 00:12:33,240 Speaker 1: the picnic pickup gets magnetized just through proximity. So because 211 00:12:33,280 --> 00:12:36,120 Speaker 1: those strings are close to a permanent magnet, they get 212 00:12:36,200 --> 00:12:39,000 Speaker 1: a little They're magnetized to a small degree, and as 213 00:12:39,000 --> 00:12:44,000 Speaker 1: those strings vibrate, they create a fluctuating magnetic field over 214 00:12:44,080 --> 00:12:47,240 Speaker 1: the coil of conductive wire. That's inside the pickup. This 215 00:12:47,360 --> 00:12:51,840 Speaker 1: induces a change in voltage and thus current to flow 216 00:12:52,200 --> 00:12:55,480 Speaker 1: through this coil of conductive wire. That current can be 217 00:12:55,520 --> 00:12:57,840 Speaker 1: sent out to an amplifier and then two speakers to 218 00:12:57,880 --> 00:13:01,440 Speaker 1: produce sounds. You can also do lots of effects on 219 00:13:01,480 --> 00:13:03,719 Speaker 1: the signals and create all sorts of different things like 220 00:13:03,760 --> 00:13:06,559 Speaker 1: distortion and stuff. But what does that have to do 221 00:13:06,679 --> 00:13:11,079 Speaker 1: with a humbucker. Well, I'll tell you in just a second, 222 00:13:11,120 --> 00:13:14,080 Speaker 1: but first let's take a quick break to thank our sponsor. 223 00:13:21,360 --> 00:13:24,840 Speaker 1: A humbucker is a type of a double coil pickup 224 00:13:25,240 --> 00:13:28,280 Speaker 1: in which you have one coils magnets with their north 225 00:13:28,320 --> 00:13:32,080 Speaker 1: poles pointing up towards the strings, and the other coils 226 00:13:32,080 --> 00:13:35,920 Speaker 1: magnets have their south poles facing up towards the strings. 227 00:13:36,320 --> 00:13:39,120 Speaker 1: So that's where we get the double coils. Now, you 228 00:13:39,120 --> 00:13:43,200 Speaker 1: can have multiple magnets within the coils, but you only 229 00:13:43,200 --> 00:13:46,240 Speaker 1: have two coils, but the two coils connect together out 230 00:13:46,360 --> 00:13:49,200 Speaker 1: of phase. So why would you do this? Why would 231 00:13:49,200 --> 00:13:53,240 Speaker 1: you have one set one coils magnets with the north 232 00:13:53,240 --> 00:13:55,880 Speaker 1: pole facing up one coils magnets with the south pole 233 00:13:55,920 --> 00:13:58,600 Speaker 1: facing up, and why the heck connect them out of phase? Well, 234 00:13:58,600 --> 00:14:01,280 Speaker 1: as it turns out, can act of coils aren't just 235 00:14:01,480 --> 00:14:04,120 Speaker 1: good at picking up magnetic fluctuations. They are good at that, 236 00:14:04,160 --> 00:14:06,719 Speaker 1: but they're good at other things too, Like they're good 237 00:14:06,720 --> 00:14:09,120 Speaker 1: at being antenna in general, and they can pick up 238 00:14:09,120 --> 00:14:11,760 Speaker 1: all sorts of stuff which can produce a hum in 239 00:14:11,800 --> 00:14:14,880 Speaker 1: an outgoing signal from the guitar. So you could have 240 00:14:14,920 --> 00:14:19,080 Speaker 1: a guitar plugged into an amplifier and you can hear 241 00:14:19,120 --> 00:14:21,520 Speaker 1: a hum from the guitar even though you're not doing 242 00:14:21,520 --> 00:14:25,160 Speaker 1: anything with the guitar. There's that sort of distortion that's 243 00:14:25,200 --> 00:14:28,080 Speaker 1: coming in this little signal, and it can interfere with 244 00:14:28,160 --> 00:14:30,640 Speaker 1: the sounds you want to create with your guitar, because 245 00:14:30,680 --> 00:14:34,040 Speaker 1: once you amplify a signal, that hum becomes audible, and 246 00:14:34,440 --> 00:14:36,480 Speaker 1: chances are it's not what you want people to hear. 247 00:14:36,880 --> 00:14:41,840 Speaker 1: The humbucker, as the name implies, bucks the hum by 248 00:14:41,880 --> 00:14:44,720 Speaker 1: putting those two connected coils out of phase. Now allow 249 00:14:44,760 --> 00:14:48,080 Speaker 1: me to explain. By connecting the coils out of phase, 250 00:14:48,120 --> 00:14:53,000 Speaker 1: the two coils can eliminate incoming distortion signals. Now, this 251 00:14:53,080 --> 00:14:57,680 Speaker 1: is sort of how noise canceling headphones work. Visualize a 252 00:14:57,840 --> 00:15:00,760 Speaker 1: sound wave with peaks and val so the way we 253 00:15:00,800 --> 00:15:04,000 Speaker 1: typically think of sound waves where we've plotted against an 254 00:15:04,160 --> 00:15:07,840 Speaker 1: x y axis, and we've got those nice smooth curves 255 00:15:07,880 --> 00:15:13,040 Speaker 1: that represent the amplitude of the uh. The height represents 256 00:15:13,040 --> 00:15:16,480 Speaker 1: the amplitude of the sound wave, and the length of 257 00:15:16,560 --> 00:15:19,320 Speaker 1: that represents sort of the well the wavelength and then 258 00:15:19,480 --> 00:15:22,640 Speaker 1: ultimately the frequency if you have any sort of designation 259 00:15:22,680 --> 00:15:26,160 Speaker 1: of time on there. So visualize the sound wave with 260 00:15:26,600 --> 00:15:29,680 Speaker 1: peaks and valleys. That's a really steady tone, so it's nice. 261 00:15:29,800 --> 00:15:33,320 Speaker 1: And even now imagine you have a second wave identical 262 00:15:33,360 --> 00:15:35,480 Speaker 1: to the first. It's got the exact same wavelength, that's 263 00:15:35,520 --> 00:15:39,640 Speaker 1: got the exact same amplitude. But now imagine you offset 264 00:15:39,680 --> 00:15:43,080 Speaker 1: it so that if you overlay the second wavelength or 265 00:15:43,400 --> 00:15:47,200 Speaker 1: second wave on top of the first wave, the peaks 266 00:15:47,240 --> 00:15:50,280 Speaker 1: of one match with the valleys of the other, and 267 00:15:50,400 --> 00:15:54,160 Speaker 1: vice versa. So where wave one is at its highest 268 00:15:54,200 --> 00:15:57,360 Speaker 1: most point, wave two is as lowest most point, and 269 00:15:57,520 --> 00:16:01,920 Speaker 1: vice versa. These two waves cancel each other out. The 270 00:16:02,040 --> 00:16:04,680 Speaker 1: dips of one wave match the peaks of the other wave, 271 00:16:04,760 --> 00:16:07,760 Speaker 1: and you end up with a straight line. Mathematically speaking, 272 00:16:07,800 --> 00:16:10,720 Speaker 1: and in fact, as far as actual sound is concerned, 273 00:16:10,800 --> 00:16:13,440 Speaker 1: they cancel each other out. You you wouldn't hear anything, 274 00:16:14,040 --> 00:16:18,120 Speaker 1: so any incoming distortion signal would be picked up by 275 00:16:18,200 --> 00:16:21,800 Speaker 1: both coils. And you have one that's with these magnets 276 00:16:21,800 --> 00:16:23,960 Speaker 1: facing north and one that's with the magnets facing south, 277 00:16:24,720 --> 00:16:28,840 Speaker 1: and the two coils are connected out of phase. So 278 00:16:28,920 --> 00:16:33,280 Speaker 1: once the connections come in, you get these the noise 279 00:16:33,360 --> 00:16:35,800 Speaker 1: canceled out. So why doesn't the humbucker do the same 280 00:16:35,840 --> 00:16:38,120 Speaker 1: thing to the signals it picks up from the strings. 281 00:16:38,720 --> 00:16:41,840 Speaker 1: It's canceling out noise. Why doesn't can't Why doesn't it 282 00:16:41,920 --> 00:16:45,800 Speaker 1: cancel out the actual playing? Well, this has to do 283 00:16:45,840 --> 00:16:49,520 Speaker 1: with that old Star Trek trick of reversing the polarity. 284 00:16:49,560 --> 00:16:55,680 Speaker 1: So for the purposes of just eliminating distortion, the north 285 00:16:55,760 --> 00:16:59,040 Speaker 1: south designation of the magnets doesn't matter so much. That's 286 00:16:59,040 --> 00:17:01,040 Speaker 1: not really what's important. What's important is the fact that 287 00:17:01,080 --> 00:17:04,200 Speaker 1: the two coils are out of phase. But in order 288 00:17:04,240 --> 00:17:07,840 Speaker 1: to actually get sound from this electric guitar, that north 289 00:17:07,920 --> 00:17:11,840 Speaker 1: south orientation matters a lot. So one coil has the 290 00:17:11,880 --> 00:17:14,800 Speaker 1: north pole orientation towards the strings, one coil has the 291 00:17:14,880 --> 00:17:18,080 Speaker 1: south pole orientation towards the strings. That means the direction 292 00:17:18,280 --> 00:17:22,040 Speaker 1: of alternating voltage of one coil is opposite that of 293 00:17:22,080 --> 00:17:25,400 Speaker 1: the other. Coil, but you've connected the two coils out 294 00:17:25,400 --> 00:17:29,720 Speaker 1: of phase, so this effectively flips one signal so that 295 00:17:29,760 --> 00:17:34,119 Speaker 1: now you have an additive output rather than a canceled one. So, 296 00:17:34,160 --> 00:17:36,879 Speaker 1: in other words, all those peaks and valleys I was 297 00:17:36,920 --> 00:17:40,560 Speaker 1: talking about before they line up as opposed to offsetting 298 00:17:40,600 --> 00:17:42,919 Speaker 1: each other, they they are set up so that they 299 00:17:42,960 --> 00:17:46,479 Speaker 1: are directly lined up with one another because of that 300 00:17:46,560 --> 00:17:50,359 Speaker 1: out of phase connection. That's what flips that last switch 301 00:17:50,680 --> 00:17:53,399 Speaker 1: to make sure that they're lined up properly. This dramatically 302 00:17:53,440 --> 00:17:57,359 Speaker 1: improves your signal to noise ratio. You reduce hum and 303 00:17:57,400 --> 00:18:00,959 Speaker 1: you hear the signal much more clearly. So the humbucker 304 00:18:01,200 --> 00:18:06,840 Speaker 1: was a really clever UH innovation, and it wasn't necessarily 305 00:18:07,160 --> 00:18:10,280 Speaker 1: it wasn't just developed at Gibson. It's that Gibson really 306 00:18:10,720 --> 00:18:14,439 Speaker 1: um adopted the humbucker as their approach to pickups, as 307 00:18:14,440 --> 00:18:19,200 Speaker 1: opposed to something like the Fender Stratocaster line, which used 308 00:18:19,200 --> 00:18:22,800 Speaker 1: a single coil pickup. The position of the humbucker on 309 00:18:22,840 --> 00:18:26,240 Speaker 1: the body of the guitar also matters. Many guitars will 310 00:18:26,240 --> 00:18:30,400 Speaker 1: actually have multiple pickups. They'll have them positioned at different 311 00:18:30,560 --> 00:18:34,280 Speaker 1: points along the body of the guitar. Underneath the strings. 312 00:18:34,640 --> 00:18:38,200 Speaker 1: Typically you might find one with two pickups. One would 313 00:18:38,240 --> 00:18:41,080 Speaker 1: be positioned closer to the neck and one closer to 314 00:18:41,119 --> 00:18:44,000 Speaker 1: the bridge, And those guitars typically have a switch or 315 00:18:44,000 --> 00:18:46,800 Speaker 1: a knob that allows you to go from one or 316 00:18:46,840 --> 00:18:50,000 Speaker 1: the other, or even blend the two together, and you 317 00:18:50,040 --> 00:18:53,080 Speaker 1: get a different quality of sound that way. So if 318 00:18:53,119 --> 00:18:55,280 Speaker 1: you switch it to the neck, you're gonna be able 319 00:18:55,280 --> 00:18:57,840 Speaker 1: to tell the difference than if it were at the 320 00:18:57,840 --> 00:19:00,400 Speaker 1: bridge before. And of course there's some that even three 321 00:19:00,440 --> 00:19:03,520 Speaker 1: pickups where you've got one in between those other two, 322 00:19:04,080 --> 00:19:06,720 Speaker 1: and you can get all sorts of different combinations, and 323 00:19:06,760 --> 00:19:10,159 Speaker 1: it all ends up affecting the tone of the of 324 00:19:10,200 --> 00:19:12,359 Speaker 1: the sounds you're making. You're still creating the same notes, 325 00:19:12,840 --> 00:19:17,760 Speaker 1: the frequencies you create remain the same, but the actual 326 00:19:17,920 --> 00:19:21,440 Speaker 1: tone the feel of the sound changes, and it's very 327 00:19:21,480 --> 00:19:23,719 Speaker 1: hard to put it into words. It's much easier if 328 00:19:23,760 --> 00:19:26,679 Speaker 1: you go and find videos where people are showing the 329 00:19:26,680 --> 00:19:31,120 Speaker 1: difference between the different pickups, then you can really perceive 330 00:19:31,160 --> 00:19:33,159 Speaker 1: it much more easily. It's a lot harder to just 331 00:19:33,200 --> 00:19:37,440 Speaker 1: put into words. Anyway. Back to Gibson's guitars, the marauder 332 00:19:37,480 --> 00:19:39,159 Speaker 1: was what we were talking about a second Ago. But 333 00:19:39,240 --> 00:19:42,320 Speaker 1: in addition to the Marauder, Gibson released guitars like the 334 00:19:42,359 --> 00:19:46,000 Speaker 1: Gibson S One, which had a single coil pickup made 335 00:19:46,040 --> 00:19:49,400 Speaker 1: it sound more like a Fender Um. Then you also 336 00:19:49,400 --> 00:19:52,760 Speaker 1: had the Gibson Corvus, which is a hard one to 337 00:19:53,040 --> 00:19:56,199 Speaker 1: describe physically. The body of the Corvus was meant to 338 00:19:56,240 --> 00:20:00,359 Speaker 1: look like a bird. Corvus actually means crow in Latin, 339 00:20:00,800 --> 00:20:03,800 Speaker 1: but a lot of musicians had trouble visualizing the crow 340 00:20:03,960 --> 00:20:07,399 Speaker 1: from the guitar design because it's somewhat abstract, So instead 341 00:20:07,440 --> 00:20:10,960 Speaker 1: they referred to this guitar as Gibson's can opener because 342 00:20:10,960 --> 00:20:13,600 Speaker 1: I had kind of a hook look to it, which 343 00:20:13,640 --> 00:20:16,680 Speaker 1: made it look like an old fashioned manual can opener. 344 00:20:17,520 --> 00:20:18,760 Speaker 1: You need to look at a picture of one of 345 00:20:18,800 --> 00:20:20,640 Speaker 1: those to kind of get an idea of why they 346 00:20:20,680 --> 00:20:23,720 Speaker 1: called it this thing. Again, this isn't to say these 347 00:20:23,720 --> 00:20:26,560 Speaker 1: instruments didn't have fans. There are some people who love 348 00:20:26,680 --> 00:20:31,080 Speaker 1: these guitars, but the general consensus was that Gibson was 349 00:20:31,160 --> 00:20:35,280 Speaker 1: losing its way, and Gibson was not unique in this position. 350 00:20:35,359 --> 00:20:39,879 Speaker 1: In the nineties sixties, electric guitars were incredibly popular. The 351 00:20:40,040 --> 00:20:44,320 Speaker 1: music of the time was very heavily skewed towards electric guitars. 352 00:20:44,320 --> 00:20:47,439 Speaker 1: You had a lot of different genres that were UH 353 00:20:47,480 --> 00:20:50,080 Speaker 1: that were becoming very popular and some that were emerging. 354 00:20:50,200 --> 00:20:54,000 Speaker 1: So you had rhythm and blues, you had UH, you 355 00:20:54,080 --> 00:20:57,240 Speaker 1: had the early rock and roll guitars, you had surf rock. 356 00:20:57,320 --> 00:21:00,040 Speaker 1: You had all these sort of genres coming up and 357 00:21:00,040 --> 00:21:02,520 Speaker 1: and electric guitars took front and center and most of 358 00:21:02,560 --> 00:21:07,320 Speaker 1: those genres. So it became an attractive asset for larger 359 00:21:07,359 --> 00:21:10,240 Speaker 1: companies that were looking to diversify their holdings. They were saying, hey, 360 00:21:10,280 --> 00:21:14,280 Speaker 1: you know, the electric car electric guitar craze is crazy, 361 00:21:14,400 --> 00:21:18,399 Speaker 1: Let's let's invest in that. And so with Gibson, you 362 00:21:18,520 --> 00:21:23,280 Speaker 1: had this brewery in Ecuador that swooped in to purchase CMI. 363 00:21:24,240 --> 00:21:28,359 Speaker 1: Leo Fender of Fender Fames sold his companies to the 364 00:21:28,440 --> 00:21:34,880 Speaker 1: Columbia Broadcasting System better known as CBS in nineteen sixty. Epiphone, 365 00:21:34,920 --> 00:21:38,240 Speaker 1: which was another musical instruments company, was purchased by Chicago 366 00:21:38,320 --> 00:21:41,600 Speaker 1: Musical Musical Instrument Company in nineteen fifty seven c m 367 00:21:41,680 --> 00:21:45,520 Speaker 1: I that was the parent company of Gibson. UH. So 368 00:21:45,760 --> 00:21:49,200 Speaker 1: CMI buys Gibson N four, they buy Epiphone in nineteen 369 00:21:49,240 --> 00:21:52,359 Speaker 1: fifty seven, and originally the two businesses were kind of 370 00:21:52,440 --> 00:21:55,440 Speaker 1: kept separate from each other under the ownership of c 371 00:21:55,640 --> 00:21:59,440 Speaker 1: m I, but Epiphone would gradually end up building more 372 00:21:59,480 --> 00:22:03,520 Speaker 1: and more um musical instruments that were based off Gibson designs, 373 00:22:03,560 --> 00:22:07,520 Speaker 1: but at a lower cost point, using lower quality stuff 374 00:22:07,560 --> 00:22:11,119 Speaker 1: maybe or maybe not as precious materials. Maybe that's a 375 00:22:11,119 --> 00:22:14,520 Speaker 1: better way of putting it. They were frequently considered a 376 00:22:14,560 --> 00:22:17,400 Speaker 1: sub brand of Gibson and sort of looked at as 377 00:22:17,440 --> 00:22:21,359 Speaker 1: the entry level for guitars that followed the Gibson style, 378 00:22:21,520 --> 00:22:24,040 Speaker 1: so that maybe you would want to go and get 379 00:22:24,040 --> 00:22:26,639 Speaker 1: an epiphone before you went and got to Gibson, because 380 00:22:26,680 --> 00:22:31,480 Speaker 1: Gibson's really expensive and epiphones were less so. But there 381 00:22:31,480 --> 00:22:34,280 Speaker 1: are plenty of electric guitar experts who feel that this 382 00:22:34,359 --> 00:22:38,080 Speaker 1: era led to some really bad decisions among major electric 383 00:22:38,119 --> 00:22:41,760 Speaker 1: guitar companies, not just Gibson. They point to cost cutting 384 00:22:41,800 --> 00:22:44,720 Speaker 1: measures that were meant to bring down the manufacturing expense 385 00:22:44,720 --> 00:22:48,040 Speaker 1: for guitars, to make them easier to produce in larger numbers, 386 00:22:48,320 --> 00:22:52,600 Speaker 1: and to make them less breakable. Uh really, they were saying, 387 00:22:52,680 --> 00:22:56,360 Speaker 1: why what can we do to make these cheaper? To produce, 388 00:22:56,960 --> 00:22:58,959 Speaker 1: make it easier to produce a lot of them, and 389 00:22:59,040 --> 00:23:02,840 Speaker 1: to try and reduce the number of customers who bring 390 00:23:02,960 --> 00:23:06,000 Speaker 1: back these instruments that are under warranty and then we 391 00:23:06,040 --> 00:23:08,760 Speaker 1: have to replace something. And the way you do that 392 00:23:08,840 --> 00:23:12,280 Speaker 1: typically is that you start cutting back on features. You 393 00:23:12,320 --> 00:23:16,920 Speaker 1: start simplifying the guitars so that there are fewer things 394 00:23:16,920 --> 00:23:19,800 Speaker 1: to break, and it's faster and easier to make them. 395 00:23:20,280 --> 00:23:25,320 Speaker 1: And you might take some liberties when you're making your designs, 396 00:23:25,400 --> 00:23:28,640 Speaker 1: things that a luthier would not have considered. The most 397 00:23:28,640 --> 00:23:31,000 Speaker 1: frequent way I saw it referenced during my research was 398 00:23:31,040 --> 00:23:34,480 Speaker 1: that the design of instruments was taken away from luthiers 399 00:23:34,480 --> 00:23:38,199 Speaker 1: and musicians and handed over to accountants and beam counters. 400 00:23:38,960 --> 00:23:42,400 Speaker 1: For Gibson. This era stretched into the early nineteen eighties, 401 00:23:43,000 --> 00:23:47,600 Speaker 1: when two companies called Rooney Pace Group and Piezo Electric 402 00:23:47,680 --> 00:23:51,600 Speaker 1: Products moved to make a hostile takeover of New Orland. 403 00:23:52,240 --> 00:23:55,800 Speaker 1: Rooney Pace Group was a brokerage and private investment firm 404 00:23:56,080 --> 00:23:59,320 Speaker 1: with a specialty for helping companies preparing to hold an 405 00:23:59,359 --> 00:24:01,960 Speaker 1: initial pub like offering or i p O. That's when 406 00:24:02,000 --> 00:24:05,879 Speaker 1: a private company turns into a publicly traded company. Piezo 407 00:24:05,960 --> 00:24:08,760 Speaker 1: Electric Products was a growing company that just held its 408 00:24:08,800 --> 00:24:11,800 Speaker 1: own I p O and was looking for an acquisition target. 409 00:24:12,200 --> 00:24:15,119 Speaker 1: And so they joined forces and started looking around, and 410 00:24:15,119 --> 00:24:18,119 Speaker 1: they settled on now Orland. Now, the management in no 411 00:24:18,200 --> 00:24:21,480 Speaker 1: Orland was not keen on this idea. They attempted to 412 00:24:21,560 --> 00:24:24,880 Speaker 1: fight it off. They tried to get an injunction with 413 00:24:25,080 --> 00:24:28,800 Speaker 1: the courts, but the courts denied them this and ultimately 414 00:24:28,840 --> 00:24:31,679 Speaker 1: no Orland would lose this fight and ceded to the 415 00:24:31,720 --> 00:24:36,880 Speaker 1: two partners on August nine. Norton Stevens, who had been 416 00:24:36,880 --> 00:24:38,880 Speaker 1: the head of no Orland, was bumped down to vice 417 00:24:38,920 --> 00:24:42,480 Speaker 1: president and the founder of Rooney Pace, which was a 418 00:24:42,480 --> 00:24:46,280 Speaker 1: guy named Randolph K. Pace, became the new chairman of 419 00:24:46,280 --> 00:24:48,800 Speaker 1: the company, and one of the first things that he 420 00:24:48,800 --> 00:24:51,800 Speaker 1: said he wanted to do was sell Gibson from the 421 00:24:51,800 --> 00:24:56,480 Speaker 1: company's holdings, which they eventually did in January nine six. 422 00:24:56,520 --> 00:24:59,280 Speaker 1: There was actually danger of Gibson just going away if 423 00:24:59,320 --> 00:25:01,960 Speaker 1: no one stepped to buy them. Before I continue on 424 00:25:02,000 --> 00:25:04,720 Speaker 1: with Gibson, a few more words about Pace and this 425 00:25:04,760 --> 00:25:08,240 Speaker 1: hostile takeover business. Now, in the nineteen eighties, there were 426 00:25:08,280 --> 00:25:11,800 Speaker 1: a string of hostile takeovers, which at the time were 427 00:25:11,800 --> 00:25:15,240 Speaker 1: generally considered a legit strategy, but the takeover of No 428 00:25:15,359 --> 00:25:19,600 Speaker 1: Orlan would later be viewed as damaging, expensive, and indicative 429 00:25:19,680 --> 00:25:23,760 Speaker 1: of a complete lack of competence. Hostile takeover fiasco's would 430 00:25:23,840 --> 00:25:26,240 Speaker 1: lead to the development of new strategies to prevent such 431 00:25:26,280 --> 00:25:29,000 Speaker 1: things from happening so readily in the future, such as 432 00:25:29,040 --> 00:25:32,520 Speaker 1: poison pills. Now I talked about poison pills in an 433 00:25:32,520 --> 00:25:35,399 Speaker 1: earlier episode of Tech Stuff. It's just a measure that 434 00:25:35,480 --> 00:25:39,440 Speaker 1: companies will take in order to discourage hostile takeover attempts. 435 00:25:39,680 --> 00:25:42,960 Speaker 1: At Pace himself would later plead guilty to charges that 436 00:25:43,000 --> 00:25:47,040 Speaker 1: he had secretly manipulated a brokerage firm called Sterling Foster 437 00:25:47,520 --> 00:25:51,399 Speaker 1: that had been involved in securities fraud shenanigans, and uh 438 00:25:51,440 --> 00:25:54,159 Speaker 1: and to the tune of like two million dollars At 439 00:25:54,200 --> 00:25:56,439 Speaker 1: that point. Pace was sentenced to pay more than a 440 00:25:56,480 --> 00:25:59,600 Speaker 1: hundred thirty million in restitution to investors and he got 441 00:25:59,680 --> 00:26:03,120 Speaker 1: sent of eight years four months in prison. So things 442 00:26:03,119 --> 00:26:06,520 Speaker 1: did not end well for Mr. Pace. As for Gibson, 443 00:26:06,880 --> 00:26:10,720 Speaker 1: big changes continued to happen at that company. Around that time, 444 00:26:10,760 --> 00:26:16,320 Speaker 1: Gibson shut down its historic Kalamazoo, Michigan manufacturing facility, the 445 00:26:16,359 --> 00:26:21,240 Speaker 1: home of Gibson shifted from Kalamazoo to Nashville, Tennessee. It 446 00:26:21,359 --> 00:26:24,439 Speaker 1: had a second manufacturing facility there, and that became the 447 00:26:24,520 --> 00:26:28,080 Speaker 1: new headquarters for Gibson. The new owners of the company 448 00:26:28,280 --> 00:26:32,919 Speaker 1: where David Berryman, Gary A. Zabrowski, and Henry Jessica Witz. 449 00:26:33,440 --> 00:26:35,720 Speaker 1: More on them in just a second, but first let's 450 00:26:35,720 --> 00:26:46,680 Speaker 1: take another quick break to thank our sponsor. Gibson's new 451 00:26:46,760 --> 00:26:51,359 Speaker 1: owners bought the company for the princely sum of five 452 00:26:51,680 --> 00:26:56,240 Speaker 1: million dollars. Consider for a moment that some Gibson guitars 453 00:26:56,240 --> 00:27:01,360 Speaker 1: have been auctioned off for near a million dollars each. Now, granted, 454 00:27:01,400 --> 00:27:04,199 Speaker 1: those are guitars that were played by famous musicians like 455 00:27:04,359 --> 00:27:07,080 Speaker 1: Eric Clapton, but still it's tough to think of a 456 00:27:07,080 --> 00:27:10,920 Speaker 1: company that sold premium guitars for thousands of dollars of 457 00:27:11,000 --> 00:27:16,240 Speaker 1: guitar selling for five million dollars itself. In addition to Gibson, 458 00:27:16,480 --> 00:27:21,040 Speaker 1: the three new business owners would lead the way to 459 00:27:21,160 --> 00:27:25,200 Speaker 1: acquire the Flat Iron Mandolin Company out of Bozeman, Montana 460 00:27:25,320 --> 00:27:29,119 Speaker 1: in nineteen seven and turn it into a new manufacturing 461 00:27:29,160 --> 00:27:33,280 Speaker 1: plant for Gibson acoustic guitars and other instruments. In nineteen 462 00:27:33,400 --> 00:27:37,000 Speaker 1: eight nine, things were looking up. The Gibson name was 463 00:27:37,040 --> 00:27:39,879 Speaker 1: returning to a revered spot in the world of music. 464 00:27:40,359 --> 00:27:43,880 Speaker 1: People were starting to forgive the the era of the 465 00:27:43,920 --> 00:27:47,760 Speaker 1: mid seventies to early eighties, where the guitars were viewed 466 00:27:47,800 --> 00:27:50,960 Speaker 1: as being of lower quality. They were starting to say, well, 467 00:27:51,000 --> 00:27:53,520 Speaker 1: things look like they're back on track now, and the 468 00:27:53,560 --> 00:27:57,840 Speaker 1: company continued to grow through acquisitions. Gibson would buy companies 469 00:27:57,880 --> 00:28:04,119 Speaker 1: like Steinberger and Tobias Basses, Cramer Guitars, Slingerland Drums, O 470 00:28:04,440 --> 00:28:07,800 Speaker 1: m I, and Baldwin Pianos over the next several years. 471 00:28:08,520 --> 00:28:13,119 Speaker 1: In nine, the company celebrated one years since Orville Gibson 472 00:28:13,160 --> 00:28:16,200 Speaker 1: started selling his guitars, and they introduced a new model 473 00:28:16,280 --> 00:28:20,520 Speaker 1: called the Nighthawk, which would later win the Most Innovative 474 00:28:20,560 --> 00:28:24,560 Speaker 1: Guitar Award at the National Association of Music Merchants trade show. 475 00:28:25,000 --> 00:28:28,000 Speaker 1: The night Hawk had elements that made it again kind 476 00:28:28,000 --> 00:28:29,920 Speaker 1: of sound a little bit like a Fender, and then 477 00:28:29,960 --> 00:28:32,480 Speaker 1: other elements that made sound more like a Gibson. But 478 00:28:32,560 --> 00:28:35,399 Speaker 1: despite all these accolades, it was never really a top 479 00:28:35,480 --> 00:28:41,400 Speaker 1: selling guitar. It was discontinued by nine. Gibson would reintroduce 480 00:28:41,440 --> 00:28:43,320 Speaker 1: the line a couple of times since then. They would 481 00:28:43,360 --> 00:28:47,600 Speaker 1: have a little limited edition run of Nighthawk guitars, but 482 00:28:48,440 --> 00:28:52,320 Speaker 1: some of them were only superficially similar to the nine model, 483 00:28:52,360 --> 00:28:55,200 Speaker 1: Like some of them just looked like the old Nighthawk 484 00:28:55,240 --> 00:28:57,800 Speaker 1: guitar but did not have the same sort of pickups 485 00:28:58,400 --> 00:29:02,360 Speaker 1: that the original run of Nighthawks did, So they were 486 00:29:02,400 --> 00:29:07,360 Speaker 1: really just Nighthawks in name and shape, but not in performance, 487 00:29:07,760 --> 00:29:10,200 Speaker 1: which makes things really confusing when you start talking about guitars. 488 00:29:10,200 --> 00:29:12,240 Speaker 1: It also means that if you are shopping for a guitar, 489 00:29:12,320 --> 00:29:14,440 Speaker 1: this is just a good note for anybody. And this 490 00:29:14,240 --> 00:29:17,360 Speaker 1: this extends beyond Gibson. If you're shopping for a guitar 491 00:29:17,840 --> 00:29:21,600 Speaker 1: and you've heard about a particular model of guitar that 492 00:29:21,760 --> 00:29:24,720 Speaker 1: you really like, because maybe there's a musician you admire 493 00:29:24,880 --> 00:29:28,479 Speaker 1: and he or she plays that guitar, find out what 494 00:29:28,600 --> 00:29:33,880 Speaker 1: year that guitar was made. Because different times throughout the 495 00:29:33,960 --> 00:29:37,880 Speaker 1: history of these manufacturers, uh, they have used different types 496 00:29:37,920 --> 00:29:42,400 Speaker 1: of technology in reissues of guitars, and it may turn 497 00:29:42,440 --> 00:29:44,760 Speaker 1: out that if you go out and buy a new 498 00:29:44,960 --> 00:29:47,640 Speaker 1: version of that same model, that it will not sound 499 00:29:47,720 --> 00:29:51,760 Speaker 1: anything like the one that you are familiar with. For me, 500 00:29:51,840 --> 00:29:55,040 Speaker 1: it wouldn't sound anything like anything, because I am not 501 00:29:55,160 --> 00:29:59,360 Speaker 1: a musician and it would just be awful. But for 502 00:29:59,440 --> 00:30:02,440 Speaker 1: my musician and friends out there, narrow it down not 503 00:30:02,560 --> 00:30:06,520 Speaker 1: just to the the model and manufacturer, but the year 504 00:30:07,000 --> 00:30:09,680 Speaker 1: of the guitar. Well. In the early two thousand's, Gibson 505 00:30:09,720 --> 00:30:14,320 Speaker 1: introduced a new protocol called Media Accelerated Global Information Carrier 506 00:30:15,080 --> 00:30:18,320 Speaker 1: or MAGIC, which is pretty cute. The company featured the 507 00:30:18,320 --> 00:30:21,600 Speaker 1: protocol on a new product called the Gibson Digital Guitar, 508 00:30:21,720 --> 00:30:24,960 Speaker 1: which they introduced in the late part of the first 509 00:30:24,960 --> 00:30:28,080 Speaker 1: decade of two thousand. Boy, that's a really where are 510 00:30:28,080 --> 00:30:32,120 Speaker 1: you wait to say? Two thousand six two thousand seven? Anyway, 511 00:30:32,600 --> 00:30:35,200 Speaker 1: this guitar had your standard quarter inch jack that you 512 00:30:35,200 --> 00:30:37,960 Speaker 1: could plug into an amplifier, but it also had an 513 00:30:38,000 --> 00:30:40,960 Speaker 1: Ethernet port and you could plug in a CAP five 514 00:30:41,040 --> 00:30:43,400 Speaker 1: cable into the either net part and then plug the 515 00:30:43,440 --> 00:30:46,800 Speaker 1: other end into a PC and send signals straight to 516 00:30:46,800 --> 00:30:50,680 Speaker 1: the PC. The digital guitar even has the ability to 517 00:30:50,720 --> 00:30:54,440 Speaker 1: capture information from each string individually, which meant you could 518 00:30:54,440 --> 00:30:57,600 Speaker 1: apply effects to specific strings and you can leave that 519 00:30:57,640 --> 00:31:01,880 Speaker 1: effect off other strings. So you could add an effect 520 00:31:01,920 --> 00:31:03,920 Speaker 1: on say the eastering, and leave it off of all 521 00:31:03,920 --> 00:31:06,640 Speaker 1: the others. If you wanted to um, I think that's 522 00:31:06,640 --> 00:31:09,480 Speaker 1: an interesting idea, and it was. It showed that Gibson 523 00:31:09,600 --> 00:31:13,040 Speaker 1: was really trying to push for the next era in 524 00:31:13,600 --> 00:31:17,160 Speaker 1: electric guitars, especially with this eye on how electric music 525 00:31:17,200 --> 00:31:21,560 Speaker 1: electronic music was really, uh, the new thing. Digital music 526 00:31:21,680 --> 00:31:23,719 Speaker 1: was big and so and still is big, but was 527 00:31:23,960 --> 00:31:26,280 Speaker 1: getting big at this point, so the company was trying 528 00:31:26,320 --> 00:31:28,240 Speaker 1: to get out in front of that. It did not 529 00:31:28,360 --> 00:31:33,560 Speaker 1: necessarily receive a whole lot of enthusiasm from professional musicians, 530 00:31:34,200 --> 00:31:36,080 Speaker 1: but there were a lot of technologies who thought it 531 00:31:36,120 --> 00:31:38,200 Speaker 1: was pretty darn cool. I remember seeing it for the 532 00:31:38,200 --> 00:31:40,320 Speaker 1: first time and thinking, wow, that's kind of interesting. I've 533 00:31:40,360 --> 00:31:44,320 Speaker 1: never really considered having a Ethernet port on an electric 534 00:31:44,360 --> 00:31:48,800 Speaker 1: guitar before Gibson started to encounter a problem that was 535 00:31:48,840 --> 00:31:51,840 Speaker 1: affecting a lot of guitar companies. This was the demand 536 00:31:52,200 --> 00:31:54,920 Speaker 1: for guitars. It was on the decline. It wasn't just 537 00:31:54,960 --> 00:31:57,160 Speaker 1: for Gibson, it was for everybody now. Gibson, of course, 538 00:31:57,560 --> 00:32:00,880 Speaker 1: again being a premium guitar man you facturer, meant that 539 00:32:01,240 --> 00:32:04,360 Speaker 1: they were feeling it pretty hard, because you know, they're 540 00:32:04,360 --> 00:32:09,040 Speaker 1: they're they They really relied on selling fewer guitars at 541 00:32:09,040 --> 00:32:12,640 Speaker 1: a higher price, and when you're your number of orders decreases, 542 00:32:13,240 --> 00:32:17,120 Speaker 1: you're gonna feel it pretty pretty heavily. More and more 543 00:32:17,240 --> 00:32:19,880 Speaker 1: music was entering the digital age. More and more music 544 00:32:19,960 --> 00:32:23,680 Speaker 1: was being created without any actual musical instruments being involved. 545 00:32:23,720 --> 00:32:28,400 Speaker 1: You could create stuff by computer, and so uh. Guitar 546 00:32:28,440 --> 00:32:31,800 Speaker 1: companies in general were facing really big problems. But in 547 00:32:31,840 --> 00:32:36,080 Speaker 1: two thousand seven, Gibson would purchase Garrison Guitars, Still moving forward. 548 00:32:36,080 --> 00:32:39,280 Speaker 1: Garrison was an acoustic guitar company based out of Canada, 549 00:32:39,560 --> 00:32:43,360 Speaker 1: and Gibson would then introduce a technology called the Meny 550 00:32:43,560 --> 00:32:46,480 Speaker 1: Tune and two thousand and eight it became something of 551 00:32:46,640 --> 00:32:51,240 Speaker 1: a joke among musicians. The device consisted of a tuner, 552 00:32:52,200 --> 00:32:55,720 Speaker 1: as in a little device that has a microphone in it, 553 00:32:56,120 --> 00:32:58,640 Speaker 1: and it detects the frequency of a strum string. So 554 00:32:59,160 --> 00:33:01,080 Speaker 1: there are lots of different kinds of tuners out there. 555 00:33:01,400 --> 00:33:03,640 Speaker 1: I've used tuners before. I did say I'm not a musician, 556 00:33:03,640 --> 00:33:05,840 Speaker 1: but I do play ukulele on occasion, and I have 557 00:33:05,880 --> 00:33:09,040 Speaker 1: a ukulele tuner. So what happens is you play a 558 00:33:09,080 --> 00:33:12,040 Speaker 1: string and the tuner detects what the frequency of the 559 00:33:12,080 --> 00:33:15,600 Speaker 1: strummed string is. It compares it to what it should be, 560 00:33:15,840 --> 00:33:17,640 Speaker 1: and so it starts to tell you whether you need 561 00:33:17,680 --> 00:33:21,000 Speaker 1: to tune the string so that you add more tension 562 00:33:21,080 --> 00:33:24,560 Speaker 1: to it and increase the pitch, or decrease the tension 563 00:33:24,640 --> 00:33:27,800 Speaker 1: and decrease the pitch of the played note until you 564 00:33:27,880 --> 00:33:31,600 Speaker 1: hit the exact frequency you are looking for. So if 565 00:33:31,640 --> 00:33:34,440 Speaker 1: the strings frequency matches up, everything's good to go. But 566 00:33:34,520 --> 00:33:37,680 Speaker 1: if not, well, the mini tune would trigger a mechanism 567 00:33:37,800 --> 00:33:41,160 Speaker 1: to turn the tuning pegs of the missed tuned or 568 00:33:41,200 --> 00:33:44,200 Speaker 1: miss tuned strings to get them to tune up properly. 569 00:33:44,800 --> 00:33:49,000 Speaker 1: So you get this little robotic as the little tuning 570 00:33:49,040 --> 00:33:52,240 Speaker 1: pegs would turn and it would put on more and 571 00:33:52,280 --> 00:33:55,560 Speaker 1: more tension or less tension in order to get the 572 00:33:55,560 --> 00:33:59,040 Speaker 1: the strings tuned exactly to the right note. Some musicians 573 00:33:59,040 --> 00:34:02,760 Speaker 1: complained then, not only was this an unnecessary gimmick, but 574 00:34:02,840 --> 00:34:05,320 Speaker 1: that it also would add several hundred dollars to the 575 00:34:05,320 --> 00:34:07,920 Speaker 1: price tag of a guitar. So, in other words, they 576 00:34:07,960 --> 00:34:10,520 Speaker 1: were saying that Gibson was trying to create a license 577 00:34:10,560 --> 00:34:13,239 Speaker 1: to print money. They were including features no one really 578 00:34:13,280 --> 00:34:15,960 Speaker 1: needed as an excuse to charge more for their guitars, 579 00:34:16,520 --> 00:34:19,080 Speaker 1: And essentially the argument boils down to this Tuning a 580 00:34:19,080 --> 00:34:21,640 Speaker 1: guitar is easy. You just need the tuner. You play 581 00:34:21,640 --> 00:34:23,920 Speaker 1: a string, you look at the tuner. It tells you 582 00:34:23,960 --> 00:34:26,080 Speaker 1: if you're too higher too low. You adjust the string, 583 00:34:26,120 --> 00:34:28,200 Speaker 1: You play it again, and you do this a few 584 00:34:28,239 --> 00:34:31,520 Speaker 1: times until you've tuned into the right frequency. And it 585 00:34:31,640 --> 00:34:33,279 Speaker 1: might mean that you have to do it three or 586 00:34:33,320 --> 00:34:35,200 Speaker 1: four times. Maybe if you have a really good ear, 587 00:34:35,239 --> 00:34:37,040 Speaker 1: you don't need to do it that frequently, or you 588 00:34:37,040 --> 00:34:39,080 Speaker 1: know that frequently need to get to the right the 589 00:34:39,200 --> 00:34:43,440 Speaker 1: right a note. But it doesn't really take up that 590 00:34:43,520 --> 00:34:46,240 Speaker 1: much time. And so the convenience of the mini tune 591 00:34:47,080 --> 00:34:51,480 Speaker 1: was questionable according to these musicians, that why would you 592 00:34:51,520 --> 00:34:54,600 Speaker 1: pay an extra three four hundred dollars on a guitar 593 00:34:55,160 --> 00:34:58,960 Speaker 1: for something that you could easily do yourself for a 594 00:34:59,080 --> 00:35:01,120 Speaker 1: third or a quarter of that price with a good 595 00:35:01,200 --> 00:35:04,520 Speaker 1: tuner and just a little patience. In two thousand nine, 596 00:35:04,560 --> 00:35:08,879 Speaker 1: Gibson faced some legal trouble. The company's manufacturing facilities were 597 00:35:08,920 --> 00:35:11,840 Speaker 1: the center of a raid led by the United States 598 00:35:11,880 --> 00:35:16,040 Speaker 1: Fish and Wildlife Services. Which might sound really weird to you. 599 00:35:16,200 --> 00:35:20,840 Speaker 1: What was Gibson somehow using guitars to torture fish and wildlife? Well, no, 600 00:35:21,000 --> 00:35:23,960 Speaker 1: it turned out that Gibson had purchased ebony wood from 601 00:35:23,960 --> 00:35:28,520 Speaker 1: Madagascar and the would was illegally imported that would be 602 00:35:28,560 --> 00:35:31,520 Speaker 1: a violation of a US law called the Lacey Act. 603 00:35:32,000 --> 00:35:34,960 Speaker 1: Two years later, Gibson was rated a second time when 604 00:35:34,960 --> 00:35:38,680 Speaker 1: the company imported would from India that the US government 605 00:35:38,760 --> 00:35:42,360 Speaker 1: said had been labeled incorrectly when it went through US customs. 606 00:35:42,920 --> 00:35:46,880 Speaker 1: Gibson's CEO, Henry jessica Witz, claimed that the government was 607 00:35:47,080 --> 00:35:50,799 Speaker 1: unfairly targeting Gibson, going so far as to suggest it 608 00:35:50,840 --> 00:35:53,080 Speaker 1: was due to his own alignment with the Tea Party, 609 00:35:53,360 --> 00:35:56,759 Speaker 1: and then the whole thing was politically motivated and got 610 00:35:56,800 --> 00:35:59,840 Speaker 1: into a big argument about property rights. The government maintained 611 00:35:59,840 --> 00:36:01,960 Speaker 1: its argument that the goods were brought into the country 612 00:36:02,000 --> 00:36:06,239 Speaker 1: illegally was the real reason that they targeted Gibson, and 613 00:36:06,320 --> 00:36:09,600 Speaker 1: that Gibson eventually would be compelled to settle out of court. 614 00:36:10,000 --> 00:36:12,840 Speaker 1: Though jessica Witz continued to protest the whole thing and 615 00:36:12,960 --> 00:36:15,879 Speaker 1: got all have support from certain people in the Tea 616 00:36:15,960 --> 00:36:19,560 Speaker 1: Party movement, others said no, if you break the rules, 617 00:36:19,760 --> 00:36:22,799 Speaker 1: then you pay the consequences, and if you think the 618 00:36:22,840 --> 00:36:25,440 Speaker 1: rules are unfair, then you lobby to have the rules changed. 619 00:36:25,520 --> 00:36:28,279 Speaker 1: But you can't just be complained that you're being You 620 00:36:28,320 --> 00:36:32,160 Speaker 1: know you're being held up when you are caught breaking 621 00:36:32,200 --> 00:36:36,200 Speaker 1: the rules. In an effort to diversify beyond music instruments, 622 00:36:36,239 --> 00:36:39,840 Speaker 1: Gibson acquired a company called the Stanton Group. By this stage, 623 00:36:39,920 --> 00:36:43,760 Speaker 1: Jessica Witz was envisioning Gibson transitioning into a lifestyle brand, 624 00:36:44,160 --> 00:36:47,480 Speaker 1: not just a musical instrument brand, so that would include 625 00:36:47,520 --> 00:36:53,160 Speaker 1: audio equipment like monitors, loudspeakers, headphones, turntables. Gibson launched a 626 00:36:53,200 --> 00:36:57,360 Speaker 1: new department called Gibson Pro Audio. Gibson would build this 627 00:36:57,400 --> 00:37:00,359 Speaker 1: out further with a partnership with Kio Corporation, in which 628 00:37:00,360 --> 00:37:03,520 Speaker 1: made home theater systems. So this was really Gibson saying, 629 00:37:03,680 --> 00:37:07,400 Speaker 1: let's look into the consumer electronics market and try to 630 00:37:07,480 --> 00:37:13,000 Speaker 1: make a spot for us there because the guitar business 631 00:37:13,480 --> 00:37:16,760 Speaker 1: has been slowing down so much. In two thousand thirteen 632 00:37:16,800 --> 00:37:20,200 Speaker 1: and two thousand fourteen, the company continued to push for 633 00:37:20,280 --> 00:37:24,560 Speaker 1: a diversified portfolio and an increased presence in consumer electronics. First, 634 00:37:25,000 --> 00:37:28,560 Speaker 1: Gibson purchased a majority stake in a Japanese electronic company 635 00:37:28,640 --> 00:37:33,080 Speaker 1: called Teak Corporations U T E T e a C. 636 00:37:33,960 --> 00:37:37,360 Speaker 1: Then it acquired the consumer electronics division of another company 637 00:37:37,400 --> 00:37:41,040 Speaker 1: called Royal Phillips, and while making those moves, Gibson was 638 00:37:41,080 --> 00:37:44,960 Speaker 1: spending a lot of money and taking out high interest loans, 639 00:37:45,600 --> 00:37:48,320 Speaker 1: and that, paired with flagging guitar sales, would spell trouble 640 00:37:48,360 --> 00:37:51,800 Speaker 1: for the venerable company. By two thousand eighteen, the question 641 00:37:51,880 --> 00:37:55,600 Speaker 1: appeared not to be if Gibson would declare bankruptcy, but 642 00:37:55,760 --> 00:37:59,239 Speaker 1: when the company's acquisitions led to a great deal of debt, 643 00:37:59,480 --> 00:38:03,000 Speaker 1: that would be do. In July two eighteen, according to 644 00:38:03,040 --> 00:38:06,440 Speaker 1: The New York Times, Gibson as a company brought in 645 00:38:06,480 --> 00:38:10,000 Speaker 1: more than one point to billion dollars in revenue annually, 646 00:38:10,360 --> 00:38:12,840 Speaker 1: but had more than five hundred million dollars in debts, 647 00:38:13,320 --> 00:38:15,480 Speaker 1: and then that was going to increase if the company 648 00:38:15,560 --> 00:38:18,960 Speaker 1: was unable to pay those debts. By July, the company's 649 00:38:19,040 --> 00:38:22,279 Speaker 1: lenders were really getting concerned, and that concern was largely 650 00:38:22,360 --> 00:38:25,120 Speaker 1: due to the fact that Gibson's earnings, the stuff that's 651 00:38:25,120 --> 00:38:27,960 Speaker 1: actually around once you take the costs out of your revenue, 652 00:38:28,280 --> 00:38:32,200 Speaker 1: had been dropping steadily. In Gibson had three hundred million 653 00:38:32,239 --> 00:38:35,800 Speaker 1: dollars in revenue, so a fraction of that one point 654 00:38:35,800 --> 00:38:38,279 Speaker 1: to billion we were just talking about but they had 655 00:38:38,320 --> 00:38:42,200 Speaker 1: a twelve point nine percent earnings before taxes and interest margins, 656 00:38:42,200 --> 00:38:45,040 Speaker 1: so the profit margin was twelve point nine percent. In 657 00:38:45,080 --> 00:38:48,759 Speaker 1: two thousand and fifteen, Gibson had an astonishing two point 658 00:38:48,800 --> 00:38:52,520 Speaker 1: one billion in revenue, a huge amount of money in revenue, 659 00:38:52,760 --> 00:38:55,640 Speaker 1: but the profit margin was down to four percent, so 660 00:38:55,680 --> 00:38:57,319 Speaker 1: it was less than a third of what had been 661 00:38:57,360 --> 00:39:00,680 Speaker 1: a few years earlier. So they were making more in sales, 662 00:39:00,719 --> 00:39:04,600 Speaker 1: but they were capturing less an actual profit. The company 663 00:39:04,680 --> 00:39:07,120 Speaker 1: was over extended and time was running out to pay 664 00:39:07,160 --> 00:39:10,840 Speaker 1: the bills. In addition, more news came out about Gibson 665 00:39:10,840 --> 00:39:13,960 Speaker 1: employees who felt that Jessica Witz's managed management style was 666 00:39:14,000 --> 00:39:18,480 Speaker 1: intrusive and confrontational. He was often accused of being a 667 00:39:18,600 --> 00:39:21,680 Speaker 1: micro manager, that he was getting involved in way too 668 00:39:21,800 --> 00:39:24,160 Speaker 1: much stuff. If you go to glass door and you 669 00:39:24,200 --> 00:39:27,320 Speaker 1: look up employee reviews for Gibson, you're gonna find numerous 670 00:39:27,360 --> 00:39:29,680 Speaker 1: stories from people who felt the CEO was just involving 671 00:39:29,760 --> 00:39:33,920 Speaker 1: himself too much in tasks that his executive management team 672 00:39:33,920 --> 00:39:37,120 Speaker 1: and below should be handling, like hiring new employees or 673 00:39:37,160 --> 00:39:40,640 Speaker 1: overseeing raises and things like that. Some even said that 674 00:39:40,680 --> 00:39:44,239 Speaker 1: you couldn't even hire a janitor without taking it ultimately 675 00:39:44,280 --> 00:39:48,080 Speaker 1: to the CEO for approval, which is definitely a little 676 00:39:48,080 --> 00:39:52,720 Speaker 1: excessive for any really big company. Well, by May time 677 00:39:52,800 --> 00:39:57,040 Speaker 1: had run out. By Mayen, that is, Gibson filed for 678 00:39:57,440 --> 00:40:01,200 Speaker 1: Chapter eleven protection with the tend to divest itself of 679 00:40:01,239 --> 00:40:03,960 Speaker 1: all those electronics companies that had picked up over the 680 00:40:04,040 --> 00:40:08,840 Speaker 1: last few years and concentrate once again on producing musical instruments. 681 00:40:08,840 --> 00:40:11,919 Speaker 1: So the goal now is to liquefy all the parts 682 00:40:11,960 --> 00:40:15,680 Speaker 1: of the business that are not related to producing musical instruments, 683 00:40:16,040 --> 00:40:18,000 Speaker 1: pay off as much of the dead as it can, 684 00:40:18,200 --> 00:40:21,080 Speaker 1: refinance the new streamline company, and try to focus on 685 00:40:21,120 --> 00:40:23,400 Speaker 1: what the company had been founded on in the first place. 686 00:40:24,000 --> 00:40:27,640 Speaker 1: In addition, there may be a move to oust the CEO, 687 00:40:28,040 --> 00:40:31,120 Speaker 1: Henry jessica Witz, that's in the process now. I've seen 688 00:40:31,160 --> 00:40:34,880 Speaker 1: a lot of articles suggesting that lenders want jessica Witz 689 00:40:34,920 --> 00:40:37,880 Speaker 1: out and to have new leadership at the company, But 690 00:40:38,120 --> 00:40:41,120 Speaker 1: as of the recording of this episode, he is still 691 00:40:41,200 --> 00:40:44,239 Speaker 1: CEO of Gibson and owns about thirty six percent of 692 00:40:44,239 --> 00:40:46,680 Speaker 1: the company. So we'll have to wait and see if 693 00:40:46,719 --> 00:40:50,239 Speaker 1: Gibson's lenders demand his resignation as part of the refinancing deal. 694 00:40:50,280 --> 00:40:52,120 Speaker 1: In fact, by the time this episode goes live, that 695 00:40:52,239 --> 00:40:54,879 Speaker 1: may have already happened. A lot of people are also 696 00:40:54,920 --> 00:40:58,800 Speaker 1: saying that Gibson's efforts to get into consumer electronics was 697 00:40:58,880 --> 00:41:01,040 Speaker 1: just an enormous mist ache from the get go, which 698 00:41:01,080 --> 00:41:03,840 Speaker 1: is probably true, but I'm not so sure that it 699 00:41:03,880 --> 00:41:07,000 Speaker 1: was obvious back when the company started making those acquisitions 700 00:41:07,000 --> 00:41:11,600 Speaker 1: because guitar sales were falling and they had to do something. 701 00:41:11,640 --> 00:41:17,520 Speaker 1: Gibson had to figure out how to offset flagging guitar 702 00:41:17,600 --> 00:41:21,840 Speaker 1: sales and stay in business. Again, they produced the higher 703 00:41:22,000 --> 00:41:25,840 Speaker 1: end of guitar models, so if they had started cutting 704 00:41:25,880 --> 00:41:29,640 Speaker 1: costs and cutting prices in order to boost sales, Gibson 705 00:41:29,680 --> 00:41:34,040 Speaker 1: would have the danger of of making its brand become 706 00:41:34,560 --> 00:41:37,799 Speaker 1: less important in music. They were kind of stuck. It's 707 00:41:37,840 --> 00:41:40,720 Speaker 1: like it's like if you were a luxury car manufacturer 708 00:41:41,360 --> 00:41:45,760 Speaker 1: and you suddenly realized that no one wanted luxury cars anymore. 709 00:41:45,880 --> 00:41:47,759 Speaker 1: It would be really hard to move from that to 710 00:41:48,600 --> 00:41:52,359 Speaker 1: making standard vehicles because your whole brand is based off 711 00:41:52,400 --> 00:41:57,360 Speaker 1: of a different appearance. And again, it wasn't just Gibson 712 00:41:57,400 --> 00:42:01,200 Speaker 1: that was facing this. A lot of different guitar companies 713 00:42:01,239 --> 00:42:04,280 Speaker 1: were having the same issue. Musical taste have moved away 714 00:42:04,320 --> 00:42:08,480 Speaker 1: from guitar driven music. That's decreased the demand for new instruments, 715 00:42:09,040 --> 00:42:12,280 Speaker 1: and there's a big interest in vintage musical instruments as well, 716 00:42:12,680 --> 00:42:15,359 Speaker 1: which also is not great for Gibson. So you've got 717 00:42:15,400 --> 00:42:18,880 Speaker 1: people who are serious musicians who want Gibson guitars, but 718 00:42:18,920 --> 00:42:22,719 Speaker 1: they don't want current Gibson guitars necessarily. They might want 719 00:42:22,760 --> 00:42:25,799 Speaker 1: a nineteen fifty nine Gibson Less Paul, which means you 720 00:42:25,840 --> 00:42:27,200 Speaker 1: have to go and find one, you have to go 721 00:42:27,239 --> 00:42:30,359 Speaker 1: and buy a used one, and you're not buying a 722 00:42:30,440 --> 00:42:33,440 Speaker 1: new instrument. So that doesn't help out companies like Gibson. 723 00:42:33,440 --> 00:42:36,040 Speaker 1: And again that's not just Gibson. Fender also is seeing 724 00:42:36,080 --> 00:42:39,200 Speaker 1: the same sort of stuff where people are fans of 725 00:42:39,239 --> 00:42:44,120 Speaker 1: specific years of of specific models of guitars, and that's 726 00:42:44,120 --> 00:42:46,480 Speaker 1: what they're going for and they're not interested in buying 727 00:42:46,520 --> 00:42:48,520 Speaker 1: a new one. So unless you were able to produce 728 00:42:49,440 --> 00:42:54,120 Speaker 1: brand new guitars using the exact same technologies as the 729 00:42:54,160 --> 00:42:57,680 Speaker 1: original ones, and then sell them at a price that 730 00:42:57,719 --> 00:43:00,839 Speaker 1: would be lower than what people are asking for for 731 00:43:00,920 --> 00:43:04,440 Speaker 1: the vintage models, you might be kind of stuck. But 732 00:43:04,480 --> 00:43:07,120 Speaker 1: then you'd also get accused of not innovating in the space. 733 00:43:07,160 --> 00:43:10,680 Speaker 1: It's kind of a really tough position to be in. Now, 734 00:43:10,960 --> 00:43:14,239 Speaker 1: that doesn't mean that Gibson is doomed. It may very 735 00:43:14,239 --> 00:43:16,360 Speaker 1: well be that this is exactly what is needed to 736 00:43:16,440 --> 00:43:19,719 Speaker 1: refocus the company, get it back on track, and to 737 00:43:20,280 --> 00:43:23,719 Speaker 1: get back into the good graces of the music industry. 738 00:43:23,880 --> 00:43:27,720 Speaker 1: But for now, that is Gibson's story. Maybe I'll tackle 739 00:43:27,920 --> 00:43:30,560 Speaker 1: Fender in a future episode and we can rock out again. 740 00:43:31,120 --> 00:43:33,520 Speaker 1: In the meantime, If you guys have any suggestions for 741 00:43:33,800 --> 00:43:36,240 Speaker 1: topics I should cover in future episodes of tech Stuff, 742 00:43:36,520 --> 00:43:38,759 Speaker 1: why don't you let me know about them. Write me 743 00:43:38,840 --> 00:43:42,280 Speaker 1: an email the addresses tech Stuff at how stuff works 744 00:43:42,320 --> 00:43:45,880 Speaker 1: dot com or draw me a line on Facebook or Twitter. 745 00:43:46,080 --> 00:43:48,719 Speaker 1: They handle it both of those. Is tech Stuff hs W, 746 00:43:49,239 --> 00:43:52,200 Speaker 1: follow us on Instagram, and remember you can watch me 747 00:43:52,280 --> 00:43:55,560 Speaker 1: record shows live on twitch dot tv slash tech Stuff. 748 00:43:55,920 --> 00:43:57,480 Speaker 1: Just go to that u r L you'll see the 749 00:43:57,480 --> 00:43:59,839 Speaker 1: schedule there. You can join in on the chat room 750 00:43:59,840 --> 00:44:02,279 Speaker 1: when ever I'm recording, and we can have ourselves a 751 00:44:02,280 --> 00:44:05,920 Speaker 1: good old time and I'll talk to you again. Release 752 00:44:06,040 --> 00:44:13,840 Speaker 1: it for more on this and thousands of other topics. 753 00:44:14,080 --> 00:44:25,200 Speaker 1: Is that how stuff Works dot Com