Fender Versus Gibson

Gibson sells guitars under a variety of brand names and builds one of the world's most iconic guitars, the Gibson Les Paul. Many Gibson instruments are highly collectible. Gibson was at the forefront of innovation in acoustic guitars especially in the big band era of the 1930s; the Gibson Super 400 was widely imitated. In 1952, Gibson introduced its first solid-body electric guitar, the Les Paul, which became its most popular guitar to date. It was designed by Ted McCarty and jazz musician and inventor Les Paul.

In the late 50s, McCarty knew that Gibson was seen as a traditional company and began an effort to create more modern guitars. In 1961 the body design of the Les Paul was changed due to the demand for a double-cutaway body design. The new body design then became known as the SG (for "solid guitar"). The Les Paul returned to the Gibson catalog in 1968.

The Norlin Years

The company had been bought by Chicago Musical Instruments in 1944, which was then acquired by the E.C.L. conglomerate that changed its name to Norlin Inc. Many observers see this as the beginning of an era of mismanagement. Under Norlin management in the late 1960s Gibson's quality and fortunes took a steep decline until early 1986, when the company was acquired by its present owners.

On December 22, 1969 Gibson parent company, Chicago Musical Instruments, was taken over by a South American brewing conglomerate, E.C.L. Gibson, Inc. remained under the control of CMI until 1974, when it became a subsidiary of Norlin Musical Instruments (a member of Norlin Industries - named for ECL president Norton Stevens and CMI president Maurice Berlin). This began an era characterized by corporate mismanagement and decreasing product quality.

Between 1974 and 1984 production of Gibson guitars was shifted from Kalamazoo to Nashville, Tennessee. The Kalamazoo plant kept going for a few years as a custom-instrument shop, but was closed in 1984; several Gibson employees led by plant manager Jim Duerloo established Heritage Guitars in the old factory, building versions of classic Gibson designs.

In 1977 Gibson sued Hoshino/Elger for copying the Gibson Les Paul. In 2000, Gibson sued Fernandes Guitars in a Tokyo court for allegedly copying Gibson designs. Gibson did not prevail. Gibson also sued PRS Guitars in 2005, to stop them from making their Singlecut model. The lawsuit against PRS was initially successful. However, the United States Court of Appeals for the Sixth Circuit reversed the lower court decision and ordered the dismissal of Gibson's suit against PRS.

The company 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. New production plants were opened in Memphis, Tennessee, as well as Bozeman, Montana. The Memphis facility was used for semi-hollow and custom shop instruments, while the Bozeman facility was dedicated to acoustic instruments.

Current Status

On May 1, 2018, the company filed for Chapter 11 bankruptcy protection, and announced a restructuring deal to return to profitability by closing down unprofitable consumer electronics divisions such as Gibson Innovations.

Chief Executive Officer Henry Juszkiewicz, who initially returned the company to profitability after the Norlin years, is widely seen to have been the greatest reason for the decline in the company's recent fortunes. He has been forced out as part of the corporate restructuring.

The company began as Fender's Radio Service in late 1938 in Fullerton, California. It got its name from the surname of its founder Leo Fender. As a qualified electronics technician, Leo Fender had been asked to repair not only radios, but phonograph players, home audio amplifiers, public address systems and musical instrument amplifiers. (At the time, most of these were just variations on a few simple vacuum-tube circuits.) All designs were based on research developed and released to the public domain by Western Electric in the 1930s and used vacuum tubes for amplification. The business also sidelined in carrying records for sale and the rental of self-designed PA systems. Leo became intrigued by design flaws in contemporary musical instrument amplifiers and began building amplifiers based on his own designs or modifications to designs.

By the early 1940s he had partnered with local electronics enthusiast Clayton Orr "Doc" Kauffman and together they formed the company K & F Manufacturing Corp to design, manufacture, and market electric instruments and amplifiers. Production began in 1945 with Hawaiian lap steel guitars (incorporating a patented pickup) and amplifiers sold as sets. By the end of the year Fender became convinced that manufacturing was more profitable than repair and he decided to concentrate on that business instead. Kauffman however remained unconvinced and he and Fender amicably parted ways by early 1946. At that point Leo renamed the company the Fender Electric Instrument Company. The service shop remained open until 1951, although Leo Fender did not personally supervise it after 1947. Fender owed its early success not only to its founder and talented associates such as musician/product engineer Freddie Tavares but also to the efforts of sales chief, senior partner and marketing genius Don Randall. According to The Stratocaster Chronicles, Mr. Randall assembled what Mr. Fender's original partner Doc Kauffman called “a sales distributorship like nobody had ever seen in the world.” Randall worked closely with the immensely talented photographer/designer Bob Perine. Their catalogs and ads were innovative—such as the "You Won't Part With Yours Either" campaign, which portrayed people surfing, skiing, skydiving, and climbing into jet planes, all while holding Jazzmasters and Stratocasters.

The 1950s and early 1960s

In Fender guitar literature of the 1960s, attractive, guitar-toting teenagers were posed with surfboards and Perine's classic Thunderbird convertible at local beachside settings, firmly integrating Fender into the surfin’/hot rod/sports car culture of Southern California celebrated by the Beach Boys, beach movies, and surf music. . This early success is dramatically illustrated by the growth of Fender's manufacturing capacity through the 1950s and 1960s.

Sale to CBS

In early 1965, Leo Fender sold his companies to the Columbia Broadcasting System, or CBS for $13 million. This was almost two million more than they had paid for The New York Yankees a year before. CBS entered the musical instruments field by acquiring the Fender companies (Fender Sales, Inc., Fender Electric Instrument Company, Inc., Fender Acoustic Instrument Company, Inc., Fender-Rhodes, Inc., Terrafen, Inc., Clef-Tronix, Inc., Randall Publishing Co., Inc., and V.C. Squier Company), as well as Electro-Music Inc. (Leslie speakers), Rogers drums, Steinway pianos, Gemeinhardt flutes, Lyon & Healy harps, Rodgers (institutional) organs, and Gulbransen home organs.

This had far-reaching implications. The sale was taken as a positive development, considering CBS's ability to bring in money and personnel who acquired a large inventory of Fender parts and unassembled guitars that were assembled and put to market. However, the sale also led to a reduction of the quality of Fender's guitars while under the management of "cost-cutting" CBS. Several cosmetic changes occurred after 1965/1966, such as a larger headstock shape on certain guitars. Bound necks with block shaped position markers were introduced in 1966. A bolder black headstock logo, as well as a brushed aluminum face plate with blue or red labels (depending the model) for the guitar and bass amplifiers became standard features, starting in 1968.

The culmination of the CBS "cost-cutting" may have occurred in 1983, when the Fender Stratocaster received a short-lived redesign lacking a second tone control and a bare-bones output jack, as well as redesigned single-coil pickups, active electronics, and three push-push buttons for pickup selection (Elite Series). Additionally, previous models such as the Swinger (also known as Musiclander) and Custom (also known as Maverick) were perceived by some musicians as little more than attempts to squeeze profits out of factory stock. The so-called "pre-CBS cult" refers to the popularity of Fenders made before the sale.

The Post-CBS Years

In 1985, in a campaign initiated by then CBS Musical Instruments division president William Schultz (1926–2006), the Fender Electric Instrument Manufacturing Company employees purchased the company from CBS and renamed it the Fender Musical Instruments Corporation. Behind the Fender name, the Fender Musical Instruments Corporation has retained Fender's older models along with newer designs and concepts.

Fender is currently owned mainly by the private equity firm of Weston Presidio (43%), and the Japanese distributors Yamano Music (14%) and Kanda Shokai (13%).