VOL. 126 | NO. 172 | Friday, September 02, 2011
Gibson: Plants ‘Up and Running’ Following Raid
By Andy Meek
Gibson Guitar Corp.’s chairman and CEO says the storied guitar maker is getting its operation back in tune following a raid last week by federal agents of the company’s factories and offices in Memphis and Nashville.
“So we’re trying to figure out what raw materials we have (with which) to build and what we can get in the short term to fill in some very large holes in our production planning.”
–Henry Juszkiewicz
Gibson Guitar Corp.
Chairman and CEO
“We’re back up and running at all our plants,” said Gibson CEO Henry Juszkiewicz about the aftermath of the Aug. 24 raid in both cities, during which agents seized several pallets of wood, electronic files and guitars.
At a post-raid press conference, Juszkiewicz said the company hadn’t been told what it did wrong and assumed the government was probing whether some of the wood being used to manufacture the company’s guitars is illegal. At that appearance, Juszkiewicz took a hard line against the government, which he says still has his company under investigation, has not been forthcoming with details and has taken actions that amount to him as little more than bullying.
While acknowledging the facilities that were closed after the raid have now reopened, he said production is not back to normal levels because of the seizure of a substantial amount of inventory.
During last week’s press conference, he valued the materials taken by agents from the company at around $1 million. In later interviews with reporters, he upped that estimate to between $2 million and $3 million.
“So we’re trying to figure out what raw materials we have (with which) to build and what we can get in the short term to fill in some very large holes in our production planning,” Juszkiewicz told The Daily News in a phone interview from his Nashville office.
From a legal standpoint, he said he’s not sure what happens next. The current investigation presumably has the makings of a criminal case against Gibson, which is still fighting with federal officials in U.S. District Court in Nashville in a separate legal action.
Gibson is trying to get inventory taken during a 2009 federal raid returned to the company.
The government’s position in that case hints at where they might be going with the new case, since they haven’t made any new detailed allegations public yet.
In a filing this month in the older case, the U.S. Attorney’s Office for the Middle District of Tennessee said Gibson didn’t have legal standing to ask that items seized in the earlier raid be returned, including a specific kind of imported wood.
The government’s filing argued, “Gibson lacks standing to contest this forfeiture action because the Madagascar ebony wood is contraband and illegal to possess.” It went on to note the government is not required to return such property.
“We had a call with them,” Juszkiewicz said, referring to a discussion between a Gibson attorney and a representative of the government following last week’s events.
“Our lead attorney on the matter had a call from them. I don’t know who called who. But they had a discussion where the government’s position was clarified and they basically said, ‘Look, our intention was not to close your plants.’ So they made that general statement, which was much less ornery than the letter they wrote, which clearly would have meant closing our plants for a long time.”
Gibson’s CEO said the company employs almost 2,000 people in the U.S. and has hired several hundred new employees in the U.S. in the last two years.
The company very quickly decided what its public stance would be last week. Instead of circling the wagons, Gibson tapped into a broader debate unfolding around the country over the size and scope of the federal government.
At his press conference, Juszkiewicz’s comments were replete with images of class warfare and included his belief that “the federal bureaucracy is just out of hand.”
The company’s postings on Twitter about the matter included the hashtag #thiswillnotstand. Gibson’s Facebook page has been flooded with comments about the raid, including one posted Wednesday from a Facebook user who said other Facebook users should make it their profile picture in support of the guitar maker.
That posting included a picture of a guitar. Underneath it was the phrase “Come and get it.”