This is an old article that I found on the net.
So what did Gibson do to turn the company around?
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USA TODAY: Did you do anything in particular with the products themselves?
JUSZKIEWICZ: Our employees wouldn't buy our products. They thought they were bad. One practice common in all companies was that if a product didn't make a certain quality level, you would sell it as a second. The problem was that dealers were not necessarily telling their consumers that seconds were seconds. So I got into the factory and I picked up a guitar. Got the employees around. "See this guitar," I said. "This guitar says Gibson on it, and it's not Gibson quality. So, here's what we do." I took the guitar, and I smashed it on the factory floor. I said any guitar that doesn't make the grade is going to be put in a pile, and we are going to take a chain saw to it every week. We are doing that to this day. We have Japanese dealers who just cry when they see the pile. It's a very small pile, though, now.
USA TODAY: What else did you do?
JUSZKIEWICZ: I said we are going to increase prices. Prices were ridiculously low. And people said, the price has been decreasing 20% a year, how can you reverse that? I said I'm just going to double the prices on a lot of models. I actually tested it and got an inverse price curve. Basically it showed that every time I raised prices a certain amount, volume would go up.
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