Guitar Center workers want to unionize

The music equipment chain's New York employees are trying to battle Bain Capital's shrinking commissions and pressure to sell warranties.

By Jason Notte Apr 26, 2013 3:25PM
File photo of a Guitar Center store on Sunset Boulevard in Los Angeles (Damian Dovarganes/AP Photo)Damn the man, save Guitar Center.

In a case of rockers vs. squares normally reserved for '90s films like "Airheads" -- or at least a time when the increasingly antiquated notion of “rock 'n' roll” still had cultural impact -- Guitar Center workers in New York City are attempting to unionize with some help from the Retail, Wholesale and Department Store Union.

They've filed an election petition to unionize the music equipment chain's flagship store in Manhattan and, according to The Huffington Post, have signatures from 80% of workers in their expected bargaining unit.

Who are the suits inspiring this move? Let's just say they look a lot like this guy. Bain Capital, former Republican presidential candidate Mitt Romney's old firm, bought the Guitar Center chain for $2.1 billion in October 2007, with Goldman Sachs sitting in as an adviser on the deal. Since then, employees claim worker commissions have been increasingly cut as Bain pushes employees to sell unpopular extended warranties.

Founded in 1959 in Southern California, Guitar Center now has 244 stores in 44 states. Its sales totaled $2.1 billion last year. However, Bain Capital doesn't swoop in and buy a company because it's doing well. The chain's parent company, Guitar Center Holdings, is carrying $1.6 billion in debt, had its credit downgraded by Moody's in 2010 and has seen its turf encroached upon by only outlets like Amazon (AMZN).

The union thinks the chain can still compensate its employees better and launched an online petition to generate public interest in the workers' cause. Among the signers so far are musicians including Billy Bragg, Steve Earle, Rage Against The Machine and Audioslave member Tom Morello and Bikini Kill and Le Tigre frontwoman Kathleen Hanna.

Bain refused to comment, but the union notes that Guitar Center has hired the Jackson Lewis firm -- which has built its reputation on helping companies avoid unionization -- as its representative. As for the workers, their move could have far broader implications for retail salespeople, who have the most common job in the country. There are about 4.3 million retail salespeople in the U.S. making an average of $25,000 a year. That's well below the average median wage of $45,790, but still a dream paycheck for Guitar Center workers who make the $7.25-an-hour minimum and have to sell a certain amount of product against their base pay before earning a commission.

More on moneyNOW

May 2, 2013 2:19AM
Guitar Center likes to take things away from employees. Today, the new CEO (Mike Pratt) took away reserved parking spaces of 35 support center managers in California. Sad when you give something to a hard working team member, and then just take it away.....He didn't even tell them in person. They found out from a generic all company email. 
Apr 27, 2013 11:36PM
What kind of crap are they selling that everything needs an extended warranty these days? My grandmother's phone lasted for over 30 years until the day she died; I'll be lucky if the home phone I have now will last a year before the "planned obsolescence" kicks in. This type of short term mentality by big business is KILLING America.
Apr 26, 2013 8:55PM
Best to shop around I play guitar and boy my first Les Paul back in 1977 brand new LP Deluxe w/mini buckers was 700.00 USD. These were not cheaper lacking craftsmanship plastic substituted product. Now a decent Les Paul will cost at least 1500.00 USD and up. Your not going to get quality at lower prices it you played them you'd see and feel the difference. Fender USA has an excellent product American Tele Standard got one of those. But for the most part these products are overpriced shop used look for ebay deals. If you patient you find them. I saved couple grand people who overspend are now scraping for cash and deals are to be had.
Apr 27, 2013 12:26AM
See what happened to Twinkie workers!
Apr 29, 2013 11:00AM
Unfortunately for these workers, they have no skills sets. Every young musician who wants to work in "music" can replace them. They could fire the whole lot and replace them in a week. And as far as extended warranty's they are a rip off, but a good business offering for the store (especially for electronics).  
Apr 28, 2013 6:56PM

Time to close and move out of state...


I would NEVER hire or OPEN a business in any non-right to work state. 


Marxist unions are not the answer...  They are the problem!

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