Death by Uberschall
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Gibson in trouble again.
- Thread starter Death by Uberschall
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Watershed
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Wow, mixed emotions on the subject.
Price fixing is bad of course, but I also hate to see yet another US company get destroyed (damaged).
My response to the outrageous prices is the reason I'm on this forum.
But, some people just need their marketing to feel comfortable with a purchase.
We can't exist as a society by extorting the businesses that employ us.
We can't ALL be lawyers...
On the other hand, you don't read about PRS getting into trouble like this.
Bad either way.
Price fixing is bad of course, but I also hate to see yet another US company get destroyed (damaged).
My response to the outrageous prices is the reason I'm on this forum.
But, some people just need their marketing to feel comfortable with a purchase.
We can't exist as a society by extorting the businesses that employ us.
We can't ALL be lawyers...
On the other hand, you don't read about PRS getting into trouble like this.
Bad either way.
I've said this before, but the real culprit is "MAP" pricing, where MAP is "Minimum Advertised Price".
The way it works is that the prices are not allowed to be advertised below a certain price. You can sell for any price, but not advertise that price. We've seen the "Price Too Low to Publish" in the ads. Thats why.
MAP pricing is a way to fix prices for the big box high turn high volume stores. Ever wonder why EVERYTHING is the EXACT SAME PRICE in Lowe's, Home Depot, Home Mart, etc? Every tool, every can of paint, every bag of concrete mix, every light bulb, everything EXCEPT the store brand, or brands owned by the store. You can almost always be sure of sub standard quality on those items, so they can sell low and still make a buck.
Its the same with most electronics, cameras, computers, guitars, etc. They fix the pricing, and call it MAP priced.
Supposedly, the courts have found that MAP pricing is not price fixing. They are free to sell at any price. And, the big retailers say that MAP pricing is generous enough for small stores to compete, offering either the same price or lower, often with more personal service - afforded due to lower overhead. The courts agree, I do not. Its price fixing.
I'd like to see where this leads with Gibson... could be a whole new day for consumers.
The way it works is that the prices are not allowed to be advertised below a certain price. You can sell for any price, but not advertise that price. We've seen the "Price Too Low to Publish" in the ads. Thats why.
MAP pricing is a way to fix prices for the big box high turn high volume stores. Ever wonder why EVERYTHING is the EXACT SAME PRICE in Lowe's, Home Depot, Home Mart, etc? Every tool, every can of paint, every bag of concrete mix, every light bulb, everything EXCEPT the store brand, or brands owned by the store. You can almost always be sure of sub standard quality on those items, so they can sell low and still make a buck.
Its the same with most electronics, cameras, computers, guitars, etc. They fix the pricing, and call it MAP priced.
Supposedly, the courts have found that MAP pricing is not price fixing. They are free to sell at any price. And, the big retailers say that MAP pricing is generous enough for small stores to compete, offering either the same price or lower, often with more personal service - afforded due to lower overhead. The courts agree, I do not. Its price fixing.
I'd like to see where this leads with Gibson... could be a whole new day for consumers.
Actually... there is some good evidence.
For instance - Gibson said it would use MAP pricing to "protect" the little guy from the big guy, and keep the big guys from warring with each other. Thats the purpose of MAP pricing. However, Gibson also went to all the little guys and said - ok, to keep your dealership, you need 60 percent of your wall space "Gibson" and a $260,000 dealer net re-establishment order. That knocked a whooooole lot of dealers out of the game. All those "protected" little guys.
Another was their feud with Elderly. Elderly had their dealership yanked, and the fight is still going on.
All is not good in Gibson land - and its Henry J's nearsighted and heavy handed practices that have done it. His employee turnover is huge, they treat them like poo, and are rated one of the WORST companies in the USA to work for.
No, all is not good in Gibson land. And I think its gonna get worse before it gets better.
For instance - Gibson said it would use MAP pricing to "protect" the little guy from the big guy, and keep the big guys from warring with each other. Thats the purpose of MAP pricing. However, Gibson also went to all the little guys and said - ok, to keep your dealership, you need 60 percent of your wall space "Gibson" and a $260,000 dealer net re-establishment order. That knocked a whooooole lot of dealers out of the game. All those "protected" little guys.
Another was their feud with Elderly. Elderly had their dealership yanked, and the fight is still going on.
All is not good in Gibson land - and its Henry J's nearsighted and heavy handed practices that have done it. His employee turnover is huge, they treat them like poo, and are rated one of the WORST companies in the USA to work for.
No, all is not good in Gibson land. And I think its gonna get worse before it gets better.
O
OzziePete
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To me, it sounds like Gibson is being primed to be taken over. All it takes is one hefty judgement to stick against them, and their board will want to abandon the ship before it sinks - and sell it! Bet they are fielding expressions of interest now, but holding out til they know whether they can still run it or have to deal with a very messy judgement.
TBF, Fender are also implicated in a suit, so it's not like Gibson are on their own against a stack of class action suits.
And on the point of requiring insider information to confirm eveidence of price fixing, there's the thorny issue of the high staff turnover and whether one of them , just one of them, talks to the authorities and steers them in the right direction of where to find said evidence. Or hands in a copy of some document establishing that practice. I bet there'd be a few who'd love to see Henry J. marched out of his office in handcuffs .......
In a workplace where the tradition is huge, the product so well known throughout the world, and the labour so noble, it is a bloody disgrace that the company should fare so badly in opinion polls from it's employees, have people leaving or fired so often that it is noticed by the industry at large and be facing dirty business practices allegations.
TBF, Fender are also implicated in a suit, so it's not like Gibson are on their own against a stack of class action suits.
And on the point of requiring insider information to confirm eveidence of price fixing, there's the thorny issue of the high staff turnover and whether one of them , just one of them, talks to the authorities and steers them in the right direction of where to find said evidence. Or hands in a copy of some document establishing that practice. I bet there'd be a few who'd love to see Henry J. marched out of his office in handcuffs .......
In a workplace where the tradition is huge, the product so well known throughout the world, and the labour so noble, it is a bloody disgrace that the company should fare so badly in opinion polls from it's employees, have people leaving or fired so often that it is noticed by the industry at large and be facing dirty business practices allegations.
I used to own a stereo shop and know all to well the MAP pricing deal. In addition to MAP what maufactures will do is give big corporations their own product number if their volumn is big enough. This allows them to say that they will price match if you find the same product for less elsewhere, but you won't because the product number is unique to them. I carried Kenwood head units and all of the products started with KAC-xxxx. Cicuit City would carry the same exact radio but it would be CP-xxx. I am sure Best Buy probably had their own as well but this just means that the customer pays more because it is taking away the compitition. DEI car alarms do the same thing Viper, Venom, and a few others are all the same but they only put them in certain geographical areas so there is no competition, I carried Viper and the store 2 miles away sold Venom same exact product but different name.
Ocguy.... thanks man. Sometimes I feel like I'm preaching to a brick wall on this stuff.
I had a bank problem a week or so ago. Its not quite settled, but a co-worker said - "See, they need more regulation or the big corporate banks will just take advantage of people". He's a commie socialist.
Sez I: No, we need to let competition flourish, and only in the most extreme cases should there be anyone to step in and regulate. If the banks were left to themselves, I'm sure some of them would find a way to do better for their customers, and once that got out, they'd be in line for some great growth.
The courts have held, and thus regulated, that MAP pricing, and unique numbering of the same item.. its all just fine and dandy. I say - let the competition begin, let American Exceptionalism flourish, and let 'em all be as prosperous as they can be, in accordance to their own creativity, dedication, drive, and lots of hard work.
I first saw MAP pricing in the late 70's, when Leica, then Hasselblad began that in the photo industry. Later Canon and Nikon jumped on board and now its pretty much standard fare in all major retail markets.
I had a bank problem a week or so ago. Its not quite settled, but a co-worker said - "See, they need more regulation or the big corporate banks will just take advantage of people". He's a commie socialist.
Sez I: No, we need to let competition flourish, and only in the most extreme cases should there be anyone to step in and regulate. If the banks were left to themselves, I'm sure some of them would find a way to do better for their customers, and once that got out, they'd be in line for some great growth.
The courts have held, and thus regulated, that MAP pricing, and unique numbering of the same item.. its all just fine and dandy. I say - let the competition begin, let American Exceptionalism flourish, and let 'em all be as prosperous as they can be, in accordance to their own creativity, dedication, drive, and lots of hard work.
I first saw MAP pricing in the late 70's, when Leica, then Hasselblad began that in the photo industry. Later Canon and Nikon jumped on board and now its pretty much standard fare in all major retail markets.
Superlizard
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=CB= said:
Amen.
Competition = lower prices and better service for the Avg. Joe consumer.
CrackedPepper
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=CB= said:
You're not preaching to a brick wall on this CB. Keep preaching about American Exceptionalism. Many of us are tired of the government trying to regulate away risk from the business cycle and distorting markets.
Don't get me wrong here. I'm not a fan of Gibson, nor do I agree with most of their business practices. I think that place is ready to implode and they need to fire a lot of executives first and foremost. The problem is, MAP is legal and even supported by the FTC. Even setting quotas is legal (not that it makes any of this right).
However, they're specifically being accused of price fixing. They'll have to prove that a conspiracy (i.e. an unfair inside pricing agreement) between Gibson and their dealers exists. A deal that is specifically aimed to put someone out of business. The problem with the lawsuit is that Gibson is out to maximize their profit margins, not to put any particular music stores out of business. Anti-trust violations are criminal and are quite serious charges.
This is where that insider witness is crucial. Stolen work documents and hearsay are inadmissible as evidence. It's the horse's mouth, properly seized documents.......or you have zero case.
However, they're specifically being accused of price fixing. They'll have to prove that a conspiracy (i.e. an unfair inside pricing agreement) between Gibson and their dealers exists. A deal that is specifically aimed to put someone out of business. The problem with the lawsuit is that Gibson is out to maximize their profit margins, not to put any particular music stores out of business. Anti-trust violations are criminal and are quite serious charges.
This is where that insider witness is crucial. Stolen work documents and hearsay are inadmissible as evidence. It's the horse's mouth, properly seized documents.......or you have zero case.
Capitalism is a wonderful engine of progress, but unrestrained by rules, it always leads to economic collapse. I like Volker's comment that the only worthwhile modern innovation in banking has been the ATM. Passing aroung exotic financial instruments like a hot potato until they explode is no way for an industry integral to our economy (and suported by government) to behave.
Having no rules also leads to monopoly abuses that restrain competition. For example a large company telling their dealers that they may not carry a new company's products. Unregulated free markets lead to a small number of companies dominating markets, stifiling competition and innovation.
I don't know much about the price fixing thing (though it wouldn't surprise me if true). I do know that the Gibson I bought recently (cheap on clearance at GC) is the worst finished guitar I've ever seen. I will have to re-do the neck because of lifting and chipping finish at the fret ends and side dots and a neck back that gums up in a few minutes.
Having no rules also leads to monopoly abuses that restrain competition. For example a large company telling their dealers that they may not carry a new company's products. Unregulated free markets lead to a small number of companies dominating markets, stifiling competition and innovation.
I don't know much about the price fixing thing (though it wouldn't surprise me if true). I do know that the Gibson I bought recently (cheap on clearance at GC) is the worst finished guitar I've ever seen. I will have to re-do the neck because of lifting and chipping finish at the fret ends and side dots and a neck back that gums up in a few minutes.
And having rules leads to mandated mediocricty.
Capitalism has never failed. The only thing that has failed is attempts to make capitalism thrive in the face of regulation.
Big industry... Gibson.... for instance... if they have MAP pricing - which is legal - and then conspire to put the small guys out of business because they continually sell for less...? How about this scenario, which would "never" happen..... the big box retailers getting the manufacturer to mandate rules which prohibit the small guys, even though it doesn't effect pricing... its all a scam within a scam.
Used to be, there were deals made but those deals had to be offered to everyone. You have 1000 unit special pricing, ok offer it to everyone so they could compete with the big sellers - if they could get their volume up.
Restrictions on capitalism is bad.
Capitalism has never failed. The only thing that has failed is attempts to make capitalism thrive in the face of regulation.
Big industry... Gibson.... for instance... if they have MAP pricing - which is legal - and then conspire to put the small guys out of business because they continually sell for less...? How about this scenario, which would "never" happen..... the big box retailers getting the manufacturer to mandate rules which prohibit the small guys, even though it doesn't effect pricing... its all a scam within a scam.
Used to be, there were deals made but those deals had to be offered to everyone. You have 1000 unit special pricing, ok offer it to everyone so they could compete with the big sellers - if they could get their volume up.
Restrictions on capitalism is bad.
=CB= said:
Never failed to do what? Is has certainly failed to serve society at times. The robber baron age led to fighting in the streets. The free wheeling 20s led to a depression. The banking deregulation led to what we have now.
I'm not a fan of anarchy. Without rules there are always abuses. Capitalism needs restrictions for its own sake.
Death by Uberschall
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Basically it comes down to this:
On Capitalism:
Rules need to be set in place that apply to everybody equally, no exemptions, no exclusions. The rules must protect the business side of the fence along with the consumer side of the fence. Then those rules must enforced while big brother otherwise gets out of the way.
On MAP pricing:
MAP pricing can go either way. It can protect Gibson's, Fender's, etc market values by maintaining a perceived upper market appearance based on price alone. Works well for Mesa Engineering/Mesa Boogie. But in Mesa's defense, the expected quality is there to match the pricing and consistency of the product is much higher. The other side of the coin is that MAP pricing can hurt sales also. We've all picked up guitars that were cheaper to buy from other manufacturers other than Gibson or Fender that played just as well if not better. Warmoth is a good example of that. So if your guitar just has to say Gibson or Fender, you'll have to pay an inflated price to get it. And that right there will cost the big boys some retail sales as some MAP polices regulate that you can't come off list price at all. There are no discounts on new Mesa gear, list is list and no discounts are allowed.
Just my thoughts on it. :icon_thumright:
On Capitalism:
Rules need to be set in place that apply to everybody equally, no exemptions, no exclusions. The rules must protect the business side of the fence along with the consumer side of the fence. Then those rules must enforced while big brother otherwise gets out of the way.
On MAP pricing:
MAP pricing can go either way. It can protect Gibson's, Fender's, etc market values by maintaining a perceived upper market appearance based on price alone. Works well for Mesa Engineering/Mesa Boogie. But in Mesa's defense, the expected quality is there to match the pricing and consistency of the product is much higher. The other side of the coin is that MAP pricing can hurt sales also. We've all picked up guitars that were cheaper to buy from other manufacturers other than Gibson or Fender that played just as well if not better. Warmoth is a good example of that. So if your guitar just has to say Gibson or Fender, you'll have to pay an inflated price to get it. And that right there will cost the big boys some retail sales as some MAP polices regulate that you can't come off list price at all. There are no discounts on new Mesa gear, list is list and no discounts are allowed.
Just my thoughts on it. :icon_thumright:
CrackedPepper
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richship said:
What led to what we have now is not as much deregulation as it was a specific bunch of politicians that decided that it was in their own best interests to force banks into lending money to people that could not afford afford homes in the first place. We're not talking about monopolies here and even corporate greed. Government interfered in the free market and the near collapse of the financial system was the result. Government fails every time in gets involved. That's why the health care system, the education system, the post office, etc. are all failures to various degrees.
Post office isn't part of the government. :laughing11:- Status
