Friday, August 26, 2011

Federal Agents Raided Gibson Guitar Factories - Again!

Yes, the Federal government raided Gibson factories in defense of the Lacey Act. At this point, Gibson CEO, Henry Juszkiewicz has reported that Gibson buys wood from Forest Stewardship Certified Suppliers. Henry feels that the Federal Government is harassing the company.

I am intimately aware of the various intricacies of import and export. The paperwork must be infinitely tidy. Each item must be properly listed in proper categories. With a guitar being comprised of various pieces of wood, failing to list a piece of ebony during shipment would be cause enough for the Federal agents to seize material. The wrong doing could also occur on the distributors side, say, India, where if they fail list something then it would appear that they are trying to avoid duty taxes. Those that do import and export labeling are held to very high standards. The fines for can be exorbitant. To make matters more complicated, often, the Department of Homeland Security is also involved which further complicates the legalities. Personally, I doubt this is an issue of environment consequences, moreover, it is a violation of duty tax - Money talks, saving the environment walks to coin a phrase.

Gibson press conference with Henry Juszkiewicz
Of course this is the Gibson Stance. The Federal Government's position has yet to be articulated. Of course Gibson is going to play the victim. Keep that in mind while forming your opinion. Something is fishy because we don't see Martin, Fender, Taylor or other major manufacturers being raided by the Federal Government. Why is Gibson singled out?

Whether it is Gibson Guitars fault, the people they get their supplies from, or a witch hunt - Time will tell.

*UPDATE* - It appears that Gibson was sourcing Ebony from Madagascar. There was a coup in Madagascar in 2009 where the military took over the government of Madagascar. Most guitar manufacturers stopped using the island as a source of Ebony. The reason is logical, the Lacey act requires the end user to be able to trace the origins of the product to the location of the tree. It appears that there is evidence that Gibson continued to source ebony through illegal channels.
^ The Lacey Act is tough on business even for legitimate operations because the law is retroactive and vintage music, antique dealers must provide details for products that might have been produced centuries ago according to the letter of the law. Literally, a tough Act to follow - pun intended!


Scott said...

As a small company guitarmaker, the biggest issue is not the desire to comply with the CITES Treaty and the LACEY Act, but the ability to comply. The laws as written are virtually impossible for anyone to comply. It makes the end user guilty for the sins of the suppliers. If a major company like Gibson, with full time wood buyers and compliance officers, cannot accurately comply, imagine how impossible it is for the small companies. The end user is also dependent on the competence of the freight forwarders and customs brokers they use to import or export product. Also, it costs the same amount of time and money to file the paper work and fees for importing or exporting a container of 1000 guitars as to import or export one guitar.

Roger Sadowsky
Sadowsky Guitars

Anonymous said...

What few in this case have pointed out is that 1) Gibson's best-selling guitars, made by its Epiphone brand, are low cost instruments produced in China while the quality of its high-end instruments (made in Nashville) have been decried for slapdash quality, 2) Gibson's lack of revenue in its core high-end business has consistently positioned the company within the industry as a barely surviving acquisition target, 3) Henry J has regularly received some of the worst CEO marks in America at given by his own employees, 4) Gibson has lost millions of dollars based on Henry J's investment in unusuable technology, along with high-profile but worthless branding efforts (tennis tournaments, as an example), 5) Gibson's executive turnover is among the highest in the nation. Let's start looking at who's really behind the whole mess and how he might have brought it on himself. Investigative journalism, anyone?

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