Gibson ‘running out of time — rapidly’

Discussion in 'The Backstage' started by paruwi, Feb 11, 2018.

  1. ehb

    ehb Chief Discombobulator Premium Member

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    How much do they do in a year? A billion?

    Yeah, it can be saved....

    They would have to cut their losses on some brands and cut them loose.
     
  2. Tone deaf

    Tone deaf Senior Member

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    They do over $1.5B in revenues. I am guessing cash flow must be about $75 million. All of the owners' value is in the equity. Bankruptcy makes the equity worth zero. The owners (Henry et al) have every reason to accommodate the wishes of new debt and equity in order to maintain a hundred to a couple hundred million worth of equity, which they lose the second the company files for BK.

    If this was a public company and management didn't own the company, it would be BK in no time flat. However, management is very skewed to the equity (i.e. the owners of the company) in the Gibson scenario...as they should be.
     
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  3. Dolebludger

    Dolebludger Premium Member

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    And let me clarify something. Just because Gibson may go bankrupt does not mean that Gibson guitars are gone for good. Whether in agreement with the creditors or in bankruptcy (Ch. 11 or Ch7), a buyer will be sought for Gibson's physical and intellectual properties (patents, trademarks, and copyrights). Gibson will be sold, regardless of whether by agreement with creditors, Ch. 11, or Ch. 7. "Gibson" is a well respected name in its sector, despite some recent customer experience. There is some value there, though probably not enough to satisfy all debts and pay the equity holders. The creditors will not be paid 100%, but I think they new the risk going in as evidenced by the 8.75% interest rate in a time when solid corporate debt carries an interest rat of around 3%. But I don't think any buyer is going to waste Gibson's name and designs in the industry, so there will still be Gibson guitars "under new management".
     
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  4. Thumpalumpacus

    Thumpalumpacus Senior Member

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    I wonder, does the US impose duties on, say, Vox amps or Framus guitars?
     
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  5. northernguitarguy

    northernguitarguy SWeAT hOg

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    Not that I know of, but if Harleys, Levi’s and bourbon are on the EU’s potential retaliatory tariff block, why wouldn’t Gibson be considered?
     
  6. Thumpalumpacus

    Thumpalumpacus Senior Member

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    My point is, that if Europe imposes a VAT of 12-19%, isn't complaining about American tariffs a touch hypocritical? They've had that in place for what, a couple of decades now, no?

    Don't get me wrong, I think free trade is best for all involved nations. But as Ebs has pointed out, the American commitment to free trade hasn't always been reciprocated, even by our allies.
     
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  7. paruwi

    paruwi Kraut-Rocker Super Mod Premium Member

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    VAT has nothing to do with those tariffs
     
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  8. Petergrifindor

    Petergrifindor Senior Member

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    Yeah man. A lot of people here think that adding a market of +300.000.000 people, that lives in a high qualified, industrious, productive and rich country would be bad for us.

    Now, don´t ask how in hell they arrived at that conclusion, but they do.

    At least we are making some progress with the canadians. And I´m confident we will arrive at the same place with the US, sooner than later.
     
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  9. paruwi

    paruwi Kraut-Rocker Super Mod Premium Member

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    The point is to 'hurt' the 'supporters' of that blond haired guy at the top
    maybe there is a big supporter in the Nashville area, then it might happen....
     
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  10. northernguitarguy

    northernguitarguy SWeAT hOg

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    Them free hospitals don't pay for themselves. Canada has hefty sales taxes as well (13% in Ontario). Cost for civil society.
     
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  11. JTM45

    JTM45 Premium Member

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    I just hope it doesn't go the way of Hamer, great brand, great guitars and all but disappeared, a shell of what it was
     
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  12. Thumpalumpacus

    Thumpalumpacus Senior Member

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    As was pointed out above, the difference between "tax" and "tarriff" is a distinction without a difference. The net result is that European domestic production gets favored, and US exports have a hurdle in front of them.
     
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  13. Bill Hicklin

    Bill Hicklin Senior Member

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    It was my understanding that the EU slaps a flat 12% import tariff on all non-EU goods. And then the national govermnents pile on 18-20% VAT
     
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  14. Thumpalumpacus

    Thumpalumpacus Senior Member

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    Aren't VATs added to imports but not domestic production?
     
  15. paruwi

    paruwi Kraut-Rocker Super Mod Premium Member

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    VAT is added on all things, regardless if it is import or made in Germany

    VAT is the 'income' of the government
     
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  16. paruwi

    paruwi Kraut-Rocker Super Mod Premium Member

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    I don't think this is true
     
  17. Thumpalumpacus

    Thumpalumpacus Senior Member

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    Thanks for spelling that out, I learnt something today.
     
  18. Bill Hicklin

    Bill Hicklin Senior Member

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    Well, VAT plus substantial income tax.

    (Note to USians- VAT is more or less sales tax, except in Eurooe it's generally included in the marked price)
     
  19. Jymbopalyse

    Jymbopalyse Senior Member

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    In the United States, the Vig always gets a cut.

    In the EU, the VAT always gets a cut. :rofl:
     
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  20. Petergrifindor

    Petergrifindor Senior Member

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    Don´t you have exemptions over there?

    In Spain, for example, anything that has to do with sanity has no IVA (spanish VAT) charge.
     
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