Posted on 08/29/2011 12:09:44 PM PDT by Shout Bits
Last week, Gibson Guitar made the news as armed agents of the Division of Fish and Wildlife raided its factories in Tennessee. The gist of the federal complaint is that Gibson may have violated the laws of Madagascar and India by importing only partially finished guitar components and then further processing the materials with US labor. The 'may' qualifier refers to the fact that the multi-year investigation has yielded no charges whatsoever against Gibson. Whatever the specious merits of the government's investigation, the broader lesson is that federal regulatory authority is so expansive and vague, it enables corrupt bureaucrats to intimidate and punish nearly any honest business that falls under Washington's crosshairs.
It's worth mentioning that Gibson is a successful domestic manufacturer that employs hundreds of people that would normally work overseas. Musical instruments are a labor intensive product, and Gibson could easily reduce its costs by moving its operations to Asia. Like a few iconic brands like Harley Davidson, Gibson trades on its reputation for quality by maintaining US operations. To many professional musicians, Gibson is synonymous with guitars, the USA, and quality. While the US is losing its manufacturing base, especially where labor is a dominant component, Gibson has found a way to prosper, and provide employment to Americans.
Rather than thanking Gibson for its entrepreneurial spirit and being an ambassador for the US everywhere guitars are played, the Obama Administration has used a book of dirty tricks to stymie Gibson. Gibson's factories were raided two years ago, when government agents seized valuable inventory, yet the government never brought charges and refused to explain why it was still keeping Gibson's property. When Gibson sued the Federal Government for its right to private property, the Obama Administration responded with last week's new raid. One theory posits that Gibson is being targeted for retribution after it moved its factories from union friendly Michigan to right-to-work Tennessee – just as Boeing is being sued for opening a factory in South Carolina.
The government's motivation to punish a US manufacturer for using small amounts of rare woods is open only to speculation, but its tactics are textbook. Unlike any other litigant, the government has enormous advantages when it sets it sights on a victim. The government can confiscate any property it wishes without probable cause, as Gibson has learned. Such victims must sue to prove their innocence, which can take years. Meanwhile, the government's victim may not be able to continue to earn the profits required to defend itself. The government may time its action to inflict the most damage, as it did with Boeing by suing the airplane manufacturer only after it had invested $750mm in a new factory. Worst of all, the government frequently sidesteps or simply ignores court orders to cease its abuses.
The Gibson story is not a unique case of the government's capricious attitude toward the rights of businesses. There are so many laws and regulations that any company can become entangled in the web of a crafty bureaucrat. The Gibson abuses call for serious regulatory reform, and Shout Bits has a few ideas to start the process: 1.Congress should pass a law that requires agencies that seize property to either file a complaint against the alleged violator or return the property within 90 days. This is clearly the intent of the Fourth and Fifth Amendments, but somehow the Executive Branch does not read the Constitution honestly. 2.Pres. Obama should issue an executive order stating that companies, such as Gibson, that have longstanding non-violent histories may not be subject to violent military-style raids. One of the government's dirty tricks is to raid the offices of mid-level managers with guns drawn, as was the case with Gibson. This tactic is nothing more than violent intimidation designed to coerce disclosure without the trouble of subpoenas or Miranda rights. The US does not need to resort to Stasi tactics to protect rosewood trees. 3.Congress should pass a law requiring agencies to publish safe harbor standards for its regulations. Even if Gibson is somehow guilty of misusing rare woods, the Government has never stated how Gibson could legally obtain and use these essential materials. As with many regulations, Gibson is forced to guess what procedures might comply with an ever shifting government interpretation of the law. On its face, the lack of known compliance standards is arbitrary and capricious, as that allows bureaucrats to upend decades old practices without warning.
Of course real Washington reform can only come from denying rogue agencies the free-time to concoct novel prosecutorial theories such as Gibson's reworking of fret-board wood as a violation of Indian law, or Crocs claim that its shoes are anti-microbial as a violation of pesticide laws. A Congressman needs to ask these would-be Napoleons 'by how much do we need to cut your budget for these abuses to stop?'
“Gibson moved to Memphis 5 years ago during the Bush years.”
That’s not true. I know for a fact that I toured the Gibson Memphis facility and it was well over 5 years ago (more like 10).
This is what Wikipedia says:
“Between 1974 and 1984 production of Gibson guitars was shifted from Kalamazoo to Nashville, Tennessee. Early Nashville-built guitars suffered from both inexperienced workers, and climate-control problems in the humid South. The Kalamazoo plant was kept going for a few years as a custom-instrument shop, but was closed in 1984.[7] The Gibson Guitar Corp. was within three months of going out of business before it was bought by Henry E. Juszkiewicz, David H. Berryman, and Gary A. Zebrowski in January 1986.[8] The survival and success of Gibson today is largely attributed to this change in ownership. Currently, Juszkiewicz stands as CEO and Berryman as president of the company. More recently new production plants have been opened, such as Memphis, Tennessee as well as Bozeman, Montana. The Memphis facility is used for semi-hollow and custom shop instruments, while the Bozeman facility is dedicated to acoustic instruments.”
“Not entirely true. Gibson offers the same models under it’s Epiphone brand, made in China”
If it is an Epiphone it “AIN’T A GIBSON.”
Bought my daughter a Hummingbird a couple years ago. Got the artist price on it or we wouldn’t have been able to afford one. Sounds great unplugged and on stage. She’s had a Martin, an Epiphone and an Ibanez. By far the best guitar she’s ever played is the Gibson. And it gorgeous. Oh, and FUBO!
Gibson has obtained sworn statements and documents from the Madagascar government and these materials, which have been filed in federal court, show that the wood seized in 2009 was legally exported under Madagascar law and that no law has been violated.
And the federal response is a 2nd raid. My question stands, where is that million dollars worth of Madagascar Ebony, right now? Why didn't the government ever file charges if the first raid did indeed net illegal exotic woods?
Maybe you have greater faith in the Holder Justice Department, but I don't. If you ask me whose word I'm going to trust, well it ain't the DOJ's.
It's in one of two places:
Martin guitars, where Obama's supporter ar using the free wood to lower thier costs
On pallets on the loading dock of some US government warehouse. Soaking in the sun and rain until such time that it actually gets returned. Of course it's now ruined but who cares, right?
I understand that's what Gibson's press release says.
At the time Gibson obtained the Madagascar Ebony on what it's own emails termed the "grey market," Madagascar's government was under the control of Marc Ravalomanana, right? And under Marc Ravalomanana's government, export of the unfinished Madagascar Ebony was generally illegal, right? (As it had been under previous governments, except for some occasions when storms had knocked down large amounts of ebony).
And there was a military coup in March 2009, right? And Andry Rajoelina is now in power? And armed rebels during the political strife that brought Andry Rajoelina to power were involved in the illegal logging of Madagascar's national forests, primarily for rosewood and ebony, which was 'laundered' through the nations of Reunion and Mauritius, among other countries, right?
So the question is, does Gibson have sworn statements from the government that was in power when Gibson, by its own emails, bought 'grey' market Madagascar Ebony , the same government that made the exports illegal at that time . . . or does Gibson have sworn statements from the 'current' government, which had no say as to the legality of export of Madagascar Ebony at the time Gibson decided to buy 'grey market' products because its own employees say there was no way to legally buy the ebony?
I don't know. If you know, then I'd love it if you would send me the links to the references.
Because otherwise, it sounds as if Gibson is trying to cover its butt today with letters from a government that wasn't even in charge when the product was considered illegal to export.
As for the Madagascar Ebony itself, if you read the style (the United States v. X) of a lot of import-type cases, you'll find funny styles. Things like "United States vs. 302 Pound of Ground African Elephant Tusk." Sometimes, when a product is brought illegally into the United States, the product is simply considered contraband. It's illegal to own. It's like when the agents at the Mexican border taken away the wallets, belts, and cowboy boots made from sea turtle that people buy in Mexico. They don't press charges against the purchaser.
Do I trust the DOJ? No. Do I trust Gibson? No. Gibson's press releases are full of half-truths and conveniently leave out all of the negative facts. For example, were you aware from Gibson's press release that Gibson's own employee sent to Madagascar had sent back an email saying there was no legitimate way to buy the ebony, and that it was only available on the grey market?
What do you think they use over at the White House to grill those Wagyu steaks? Plain old charcoal? Naw...that just wouldn't do.
Just moved? Gibson's been completely gone from Kalamazoo since 1984. Seventeen years. Some of Gibson's manufacturing moved to Nashville in 1974. Twenty-seven years.
Does any of that qualify as "just moved"?
People are making stuff up left and right to pimp their blogs and to try to create a conspiracy out of this.
Epiphone is under the Fender Label, but I’d say it belongs under a Mattel product line. I know because I had one in high school and it’s by far my worst guitar ever.
You do know that “grey market” does not mean illegal, right?
If ebony was no longer available for direct import due to storm downed trees being depleted/already sold off, then having to go grey market makes perfect sense and is in itself not an indication of illegality.
The fact that some DOJ flunkie tries to make it sound illegal tells me that they are either liars or fools.
When I didn’t think it was possible to be more disgusted with the Obama Administration, along comes the raids on Gibson.
Democrats - Thugs, Thieves, Thralls and Thickheads.
A few Epiphones are Gibsons, and in my experience, they're great guitars.
Some of the artist model Epiphones that are made to the specs of 'old' (generally 1960s era) Epiphones are made by Gibson in the USA and simply labeled Epiphone. It gets confusing because Gibson will often issue several similar guitars.
When "Epiphone" issued Casinos about three years ago to honor John Lennon and his use of a 1965 Casino, it made 1,965 Sunburst and 1,965 'sanded-to-the-wood" "Revolution" Casinos, all built to 1965 specs, down to the 14-degree headstock. They came in a brown case with John Lennon's self-portrait on the case and ran, at retail, around $3,000. All of them were made in the USA by Gibson.
However, Gibson also made some "Inspired by John Lennon" Epiphone Casinos made in Asia that ran, at retail, for about $1,000.
It's the same thing with the $15,000 "John Lennon's 70th Birthday" J-160e "Museum" that Epiphone's making. It comes from the Gibson custom shop in Memphis.
Sure, I know that.
You do know that "grey market" means "it's in the shadowy area and not necessarily legal", right?
Particularly when the "grey area" email was preceded by one from the same employee saying "there's no way we can buy it legally"?
Respectfully, Fender is a completely different company, located in California.
Fender is the company that probably should have been pointed to as Gibson's principal competitor, not C.F. Martin.
Gibson's primary product is electric guitars - its most famous being the Les Paul, SG, and the ES line.
Fender's famous products are the Stratocaster and the Telecaster.
Gibson goes to Asia for its lower-level line, and calls it "Epiphone."
Fender makes its lower-level line in Mexico and still calls it Fender. (Fender used to make its low-end guitars in Japan; there are still Fenders made in Japan for the Asian market, but they're not considered low-end).
Nonsense, grey market doesn’t mean shadowy. It means parallel or secondary market. Ebay is full of grey market goods. Buy something on clearance at an authorized retailer and resell it. Buy the inventory of a business shutting down and resell it. You are grey market. No illegal acts have been committed.
If there is no Madagascar Ebony available from the government authorized exporters due to scarecity, you would turn to the grey market to find someone who purchased it legally and buy it from them.
This would be no surprise as I imagine knowledgeable exporting companies might invest in whatever legal ebony becomes available and stockpile it to trade in at profit.
Mine is lowest of the lowest end, claimed to be Fender, it’s made in Mexico and says ‘epiphone’ somewhere. Maybe some kind of shenanigans. Thanks for this and #53, very interesting.
No, Epeiphone is owned by Gibson since they bought them back in the 50s or 60s. Squier is the Fender equivelent. Actually I've owned a lot of Epis of over the years and they have all been good insturments. The old USA made Epis were almost equal to Gibsons (John Lennon used to use an Epiphone ES330). The new ones are not quite as good but still nice insturments. I recently sold my 2002 Korean made Epi Les Paul Standard, and it was a nice guitar. The Alinco pickups were not quite as good as the ones on Gibsons, and there are some other shortcuts that they take like using veneers on their flame tops instead of solid wood, but they are still good guitars.
Squiers go from cheap to pretty good, depending on the model. Even the cheap ones are far, far better than the cheap guitars when I was starting out back in the 60s. I also own a Squier standard strat. It plays very nice. I replaced the crappy electronics with a quality prewired pickguard, and it plays and sounds great.
Know what? I’m maybe losing my memory already or I should have paid more attention back then. It says Epiphone, it also says Gibson, it’s no doubt way low end, and I better already don’t claim to know anything else about it. Maybe it wasn’t even real brand. But I clearly don’t remember owning a Gibson back then. Weird :P
Thank you too, I’ve dusted it off and mostly everything I remember about it (except, I’m sure, the quality) is wrong.
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