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Gibson Guitars and U.S. Government Come To Settlement Over Imported Wood

Sean W. Aug 13, 2012 0

Agenst Raiding Gibson Factories

Gibson Guitars and the U.S. Federal Government have come to a settlement over the issue of importing wood illegally into the United States.  As Gibson agrees to pay the fines for importing the wood, the company’s representative still claims the Federal Government has violated them and wasted taxpayer dollars.

Gibson had some of their plants raided for illegally importing wood from Madagascar into the U.S.  The company will now pay a fine of $300,000 and must make a donation to the National Fish and Wildlife Foundation in the sum of $50,000.  The company must also forfeit the wood that was seized late last year which has a value of $260,000.

The Lacey Act is the law in question that is causing the problems for Gibson and as helps prevent U.S. companies from going to places, like Brazil, and chopping down trees without any concern for the environments in that country nor the government of those countries.  The prize wood is called Brazilian Rosewood and is used in many guitars from companies like Taylor and Gibson, but though Gibson finds the Lacey Act an injustice, companies like Taylor have found alternatives to the wood or legal ways to obtain it.  After the first raid, Gibson called it an attack on an real American company and has maintained that position throughout this investigation.  The investigation by the Department of Justice was over 11 months and followed almost a dozen pallets of unfinished wood.

In a statement from Gibson about why the company settled, they stated the federal agent lied about the CEO being aware the wood was imported illegally.  The company was also concerned about the cost of a lawsuit with the Department of Justice versus the cost of the fine.  To back up the claims of the wood being illegal, they Federal Agents did find wood that was all incorrectly tagged allowing it to slip through customs easier.

Henry Juszkiewicz, Gibson CEO, has continued to shape this entire situation as a political issue by making claims that Gibson was targeted because it’s an American company and the government, essentially, doesn’t want the company to compete.  Last year, a Democratic Senator of Nashville, same place for Gibson’s home factory, introduce legislation that would protect those who unknowingly are breaking the Lacey Act.  The Gibson CEO has held that he was not away this illegal wood was being imported and that’s why he’s innocent in this entire preceding.

Gibson Guitars is an American based company that creates professional guitars including the Les Paul, the SG and the ES-335 models.  Gibson also owns Epiphone guitars, a brand name that is used for Gibson’s low cost overseas manufactured models.  The company’s sales of Epiphone guitars greatly outsell the higher priced U.S.A. models Gibson models.  For example, an Epiphone Les Paul Standard can sell for as low as $500 to $400 as a Gibson Branded model with similar features sell for $2,200 starting.

Via »BusinessWeek