Does the current state of the economy mean Fender and Gibson are going into a new dark age?

dumdums

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The Fender and Gibson guitars I bought that were built just prior to covid were excellent instruments. Gibson in particular really upped its game, I found.

With a supply chain shortage, a recession and skyrocketing increases in the cost of materials does this mean that Fender and Gibson will be making lower quality products to stay afloat, or will they keep the quality high, reduce the number of instruments they produce and sell them for higher prices?

I don't know the economics of the guitar business, but I should imagine that they will be selling significantly less instruments after the 2020-2021 guitar boom and now with inflation, rising interest rates and less access to credit, people probably won't be buying as much gear for a while.

What do you think?
 

budg

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Well Fender makes the Affinity Bullet and a Gibson owns Epiphone . Seems they already have those bases covered. I’ve bought from both since covid and their quality has been great on the guitars I purchased . Not really sure what you mean.
 

poppunk

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This forum is a graveyard of predictions of companies' performance and fortunes. Also topics regarding economics. The speculation is probably fun for some, but nobody knows what is going to happen. The vast majority of the ideas we see pop up in these threads are just people extending running themes to some bigger idea.

Remember how everything was supposed to collapse economically at the beginning of the pandemic? What actually ocurred was counter to what almost everybody thought would happen.

We have a world population inching up to 8 billion people. There are thousands of publicly traded companies in the United States, where there is a population of over 300 million.

You're not going to wrap your brain around this and objectively predict things with a reasonable probability of being right. You're just gambling with ideas.
 
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Brent Hutto

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Well it's an easy prediction to guess that over the next year and a half there will be fewer guitars sold than there were between Summer, 2020 and early 2022. For a few months that boom was historically unprecedented so it's extremely unlikely to continue at anything like that pace right on and on and on.

The real question is whether the musical instrument business returns to the state it was in for the decade or so ending in 2021 or will it crash much deeper than that. Any answer to that is crystal ball stuff, impossible to say as anything other than a wild guess.

If I wanted to bet a nickel one way or the other I'd probably put my money on "crash deeper than that" but it's really not something that can be predicted.
 

Huckleberry

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I've been seeing the complaints about Gibson since late last year. I have a 2020 SG Junior that is just about perfect. I was really thinking they'd upped their game after avoiding them forever (I couldn't resist at least TRYING the Junior when they announced the series). The price hikes vs. quality posts online have me concerned.

Having said that, I'm not obligated to spend my money with them.
 

NSDQRKR

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I was in a local shop the other day that has been trying to become a Gibson dealer for 2 years and can’t because Gibson USA can’t make enough guitars to add more dealers. I think they will be fine. They will raise price before dipping quality on the USA made stuff because that market is solid and will pay more. The budget lines capture most of the guitar market and both have that covered well. New Epiphones are the best they have ever been for about the same price.
 

Short Tooth

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Dumb question, and possible silver lining scenario... Doesn't inflation offer more Margin to work within for a while until things stabilize?.. Yes, that margin is diluted with more cash in the system. But every company has to face that situation. And some can now play around with adding features to compete better with other country's manufacturers (i.e. China)
 

wired

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Inflation will continue as long as consumers are willing to keep paying higher prices, demand exceeding supply, etc. So much talk about the economy struggling, but there are still more jobs available than people to fill them. I would be more concerned with smaller builders like Suhr or Music Man, but it looks like they both have pretty healthy backlogs of orders to fulfill.
 

dumdums

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950
The guitar market is very far down the list of my concerns.
This forum is a graveyard of predictions of companies' performance and fortunes. Also topics regarding economics. The speculation is probably fun for some, but nobody knows what is going to happen. The vast majority of the ideas we see pop up in these threads are just people extending running themes to some bigger idea.

Remember how everything was supposed to collapse economically at the beginning of the pandemic? What actually ocurred was counter to what almost everybody thought would happen.

We have a world population inching up to 8 billion people. There are thousands of publicly traded companies in the United States, where there is a population of over $300 million.

You're not going to wrap your brain around this and objectively predict things with a reasonable probability of being right. You're just gambling with ideas.
I'm mostly wondering if Gibson is going to be able to keep the QC pretty high without increasing their price astronomically.
 

dumdums

Member
Messages
950
Inflation will continue as long as consumers are willing to keep paying higher prices, demand exceeding supply, etc. So much talk about the economy struggling, but there are still more jobs available than people to fill them. I would be more concerned with smaller builders like Suhr or Music Man, but it looks like they both have pretty healthy backlogs of orders to fulfill.
I'm a Canadian, so I can't comment on the state of the American economy. Are you guys doing better down there?
 

stomped box

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'not being an economist and drunk as well...'

My prediction is that anything could happen. I really don't know much about history, but I suspect both Fender and Gibson may have weathered rocky economic times, which I suspect may have occurred sometime on the past 70 years or so. But I don't know much about time -- has there been 70 years???
 
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stomped box

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I'm mostly wondering if Gibson is going to be able to recent QC pretty high without increasing their price astronomically.

In recessionary phases of the economic cycle, you can expect downward pressure on operating costs, from wages on.
 

dumdums

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950
They will still make guitars of the same quality. Most likely there will be a change in the economic situation after the November midterms and that COULD help. I don’t see the Big Two going anywhere any time soon.
Neither company is going to go away...I was mostly wondering if they can keep the quality high without raising the prices to ridiculous levels. I also find the business side of the gear industry intriguing and was interested in what people with knowledge on the subject had to say.
 




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