Garrison Guitars has been sold to the Gibson Guitar company and the deal means the Mount Pearl-based manufacturer will produce more guitars in the future.
Nashville-based Gibson plans to make a new line of mid-priced acoustic guitars starting at US$750 in the Newfoundland plant.
The goal is to get that plant to full production from the current 12 guitars per day to 60 guitars per day over the next eight months.
Gibson Guitar says the first shipment is scheduled for August.
The deal was announced Tuesday, and neither privately held company is disclosing the purchase price. Its expected to close in less than two months.
Chris Griffiths, president and CEO of Garrison, said Gibson approached him 11 months ago and both sides took their time in reaching a deal Friday.
Im happy to say they came to us, he said. Before I started the company, I knew Id have to sell it eventually because theres investors in it who wanted to get out at some point in the future.
Weve done a good job cutting costs and being a lean manufacturer. Weve done a pretty good job here in Newfoundland of selling guitars all over the world.
A larger company like Gibson, he said, can absorb costs such as marketing and the rising Canadian dollar.
When you add all those things up, being a division of Gibson is exactly whats going to allow us to grow exponentially over the short term.
Griffiths, who will remain with the company along with its 25 employees, will become general manager of Gibsons Newfoundland operations.
At age 26, Griffiths founded Garrison in 1999, capitalizing on his patented invention known as the active bracing system a one-piece, composite brace that resembles a guitar skeleton.
Griffiths expects to ramp up production gradually until the plant reaches 15,000 guitars annually.
Weve always had an installed capacity of 60 guitars a day, he said.
Myself and the CEO of Gibson designed a new line of five different models that will be built exclusively here in our factory.
To do that, the company is also retrofitting the Mount Pearl plant and hiring 40 new employees. Garrison has 22 employees in Newfoundland and three at its distribution facility in Champlain, N.Y.
I dont want to hire 40 people tomorrow, said Griffiths. I want to bring them in over time to get them up to speed.
Gibson is best known as the manufacturer of the Les Paul solid-body electric guitar.
The company says the addition of Garrison allows it to offer acoustic guitars at every major price point.
We are proud to be investing in Chris and his team and will continue to build on Garrisons reputation for being strongly involved in
the community, said Henry Juszkiewicz, CEO of Gibson, in a release.
We expect to grow our presence in Newfoundland for many years to come with new products and projects that are a good fit with Garrisons innovative and forward-looking production style.
Garrison Guitars has a $300,000 loan from the provincial government dating back to January 2004.
That loan was criticized by the provinces auditor general in his 2006 report.
At the time, the auditor general reported Garrison had not complied with the terms of the loan and the province had the right to call it. Instead, the province extended the repayment period.
The province also holds $450,000 in shares in Garrison Guitars a legacy of an unrepaid loan issued in 2001.
There was no response by deadline Tuesday from the Department of Innovation, Trade and Rural Development to a Telegram request for information on the status of both the loan and the shares.