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Graphite Design makes a bad move closing its doors

graphite design tiger woods tour ad di

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#1 zakkozuchowski

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Posted 02 November 2012 - 12:01 PM

Posted Image

GolfWRX Staff Editorial

Strategies don't often change in the middle of a hot streak.

That's why it came as a shock to the golf industry that Graphite Design International, the company that manufactures Tiger Woods' driver shaft, has decided to vacate North America, closing its U.S. headquarters in San Diego and laying off all of its employees effective Nov. 30.

Margins for shaft makers have been shrinking in recent years, as OEMs have insisted on lower prices from component makers. But the timing of GDI's decision is strange, given the success the company has enjoyed in recent years.

The company was founded in Japan in 1989, where it has dominated marketshare for more than a decade. But since Woods first began using the company's Tour AD DI 6X shaft in his driver in 2010, the GDI products have seen a spike in usage on the PGA Tour.

Webb Simpson, Matt Kuchar, Jonas Blixt, Mark Wilson and Johnson Wagner all trusted at least one GDI shaft in route to victory on the PGA Tour in 2012. And Adam Scott, who is No. 6 in the Official Golf World Rankings, plays the company's shafts in his driver and hybrid.

According to sources who spoke on the condition of anonomity, GDI decided to consolidate operations to its world headquarters of Chichibu, Japan for tax purposes. They said that the company will also remove its shaft representatives from the PGA Tour in 2013 and is in the process of ending its current contracts in North America.

PGA Tour players depend on reps for product information and custom shaft services. How can GDI expect to maintain its presence on the PGA Tour and its affiliated tours in North America without representation? Does the company expect OEM tour reps to provide these services for them?

Chances are they won't. In the ultra-competitive golf shaft industry, OEMs will work with companies that provide great products and great service. Who is Nike supposed to call for support when Tiger wants a new shaft for an updated driver model ... Japan?

GDI will find out what a bad decision this was in the years to come. Graphite Design's recent success can be directly attributed to the usage of its products by Woods and other top golfers. The company's decision to leave North America jeopardizes PGA Tour usage of GDI products, and also adds communication hurdles between the GDI and major OEMs.

If Graphite Design sticks to their current strategy, "Graphite who?" will become the sentiment in the Americas.


SEE POST 147 LETTER FROM GDI TO GD DEALERS

Edited by pitbull808, 04 November 2012 - 03:21 PM.
LETTER FROM GDI TO DEALERS POST 147


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#2 floycota

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Posted 02 November 2012 - 12:04 PM

Very strange move indeed.  They make/made some great shafts.  Let the hording begin for all the GDI lovers.

#3 Bogey's Belly

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Posted 02 November 2012 - 12:04 PM

You will see a lot of companies selling, closing, or moving before the end of the year due to uncertainty over tax issues in the coming year(s)

#4 Ryan2587

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Posted 02 November 2012 - 12:11 PM

Wow. I mean you cant blame them and might see other companies following right behind them.

#5 freddy1682

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Posted 02 November 2012 - 12:15 PM

I agree that this could be the dumbest move ever for GDI.  Yes, they will likely save some money, but they will undoubtedly lose much more with the lack of North American presence.  I see this ending very badly for them and I hope that they have some thoughts about reconsidering.


#6 golfware

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Posted 02 November 2012 - 12:15 PM

NO!!!  While I don't currently use any GD products at the moment, I've had them and they are great. But I'm really sad for Eric Boysen and the great people at GD!!  Eric is AWESOME and always treated me well with respect and class. Good luck to ALL of the employees there and I certainly wish you the best!!

#7 drifter12

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Posted 02 November 2012 - 12:15 PM

disappointing as I would have loved to see GDI grow and continue to bring innovation in the US. I've tried a boatload of driver shafts and never hit longer or straighter than with my BB6.
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#8 acquadiice

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Posted 02 November 2012 - 12:16 PM

wow... seriously?

#9 shankapotamus

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Posted 02 November 2012 - 12:20 PM

View PostClubho25, on 02 November 2012 - 12:11 PM, said:

Wow. I mean you cant blame them and might see other companies following right behind them.

your're correct.  tax consequenses in the US means lower margins. They, and many other companies in the near future,  simply can't afford to stay here.

#10 DoYouKnowTheMuffinMan

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Posted 02 November 2012 - 12:23 PM

Oh boy

Edited by DoYouKnowTheMuffinMan, 02 November 2012 - 12:23 PM.

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#11 Puppetmaster

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Posted 02 November 2012 - 12:23 PM

Wow, that's sort of a shocker. Love the DI that I have, and BB that I demoed, even the older stuff like the YS, UT, Throttle, etc is great. It'll be interesting to see if and how they try to maintain market share with no real US presence.
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#12 boxerjoe2011

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Posted 02 November 2012 - 12:25 PM

i guess the profit margins just weren't there.  They must have decided that downsizing and focusing only on the japan market was the way to go.  I don't think it will effect the PGA Tour as much as this article suggests.  If there are premium shafts out there, guys on tour will get them.  I remember when graphite design was tour only and it was a real gem to get a shaft for yourself.

#13 NotEvenJail26

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Posted 02 November 2012 - 12:25 PM

Do bare in mind that GD are huge in Japan and have been for more than a decade. I understand that Tiger plays the shaft, but I think the PGA Tour is really a much smaller proposition for them in comparison. Very sad for the guys that work at GDIntl, they're a great bunch.

#14 tbowles411

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Posted 02 November 2012 - 12:37 PM

View Posteldog-in-the-hizouse, on 02 November 2012 - 12:23 PM, said:

Pretty simple, corporate taxes in America are forcing industries to leave the United States and forcing companies to layoff employees and eliminate jobs. This isn't a golf story as much as it is about the knuckleheads we have on both sides of the aisle in DC who are ruining our country.
This....to a point.  I'm in a private company who recruits for the Government.  Salaries have dropped and it's getting harder and harder to attract good people at a fair wage.  We're hostages to what the Government allows us to do, and it's not a great situation to be in where we ask employees to take 30% paycuts to keep working and newer contracts are at ridiculously low salaries.  If you're not making a profit after taxes, you go where you can and jettison what is pulling you down.  I'm not surprised, but it's still sad nonetheless.

Golf wise, it could be a bad move, but if your parent company can take a call from Nike and ask to overnight 10 shafts for Tiger to try, that's doable and cheaper than employing one person in the USA to take the call and place the order.  That's just business, unfortunately.

Edited by tbowles411, 02 November 2012 - 12:38 PM.


#15 NavyLD12

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Posted 02 November 2012 - 12:41 PM

Wow this just doesnt make any sense at all. I could see movig the company but pulling your PGA tour support????? I currently game the P9003x in my driver and its great. I dont see this end well for GD.


#16 jimpsycho

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Posted 02 November 2012 - 12:49 PM

So what does this mean for their prices in the near term and what do we do if we currently own a shaft that needs to be replaced for defect?

#17 easyyy

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Posted 02 November 2012 - 12:51 PM

Lets fast forward the film. No PGA tour play or wins and no US equipment with their shafts.

No presence on the pga tour for years equals no pga tour play. No presence in the US for OEM support equals no GDI shafts in any clubs in US retail.

Hmmmm.... what are they thinking? In the midst of a great couple of years they choose to fold tent? I don't think they made a good decision if they even care about this division. Who knows what the priority is at a corporate level but it is obvious they are not looking to grow the graphite shaft business.

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#18 Bogey's Belly

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Posted 02 November 2012 - 12:52 PM

View Posteldog-in-the-hizouse, on 02 November 2012 - 12:23 PM, said:

Pretty simple, corporate taxes in America are forcing industries to leave the United States and forcing companies to layoff employees and eliminate jobs. This isn't a golf story as much as it is about the knuckleheads we have on both sides of the aisle in DC who are ruining our country.


This is exactly what I was saying above (although I am shocked a Beaker has the good sense to know this as well).

Imagine what this means for the price of a AD-Di, on top of the Tiger effect I am sure there will be an additional price increase for import duties, etc.

#19 nohny noke

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Posted 02 November 2012 - 12:57 PM

Big deal!  Someone else will gladly take GD's place in the market.

Cue the left-bashing.

#20 RookieBlue7

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Posted 02 November 2012 - 12:57 PM

The good news is their eBay closeout store has deep discounts. The Purple Ice in YSQ graphics is $37.50.


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#21 gregcindyh

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Posted 02 November 2012 - 01:09 PM

Taxes in the state of California for business is a joke, that's why many business' have left to other states and or countries. Our gasoline tax alone is the highest at .50 a gallon. Callaway moved most of their opperation to Mexico from San Diego. In central Cali we see it on a regular bassis. I think we will see a lot of this in the very, very near future. Be careful who you vote for this week...just sayin!

Edited by gregcindyh, 02 November 2012 - 01:11 PM.

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#22 Jamboy72

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Posted 02 November 2012 - 01:11 PM

I'm sure they have looked at possible economic implications and considering costs and profits....and this is the most logical decision...maybe tough for us to understand, but it is probably the "right" call on their part...sometimes I think in the US if it doesn't place us at the center of the conversation, we automatically assume it is the "wrong" decision...

#23 HateTheHighDraw

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Posted 02 November 2012 - 01:11 PM

and cue the price increase on the BST for AD DIs

#24 CTEagle

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Posted 02 November 2012 - 01:12 PM

Does this really mean the average U.S. consumer won't be able to get GD shafts?

#25 tbowles411

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Posted 02 November 2012 - 01:15 PM

View PostKYMAR, on 02 November 2012 - 12:57 PM, said:

View PostBogey, on 02 November 2012 - 12:04 PM, said:

You will see a lot of companies selling, closing, or moving before the end of the year due to uncertainty over tax issues in the coming year(s)

OMG! man this is twice in one day! I was going to post almost this exact same thing!
Scary...  :)


#26 FairwayGolfUSA.com

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Posted 02 November 2012 - 01:27 PM

This is a very surprising but not shocking move. Like all stated very well above there are good reasons. GD will just be a tad more harder to get but you will be able to get them rather easily especially from a company like us.

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#27 chiphunt

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Posted 02 November 2012 - 01:44 PM

View PostRookieBlue7, on 02 November 2012 - 12:57 PM, said:

The good news is their eBay closeout store has deep discounts. The Purple Ice in YSQ graphics is $37.50.

Thanks for posting that.

#28 tommy89

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Posted 02 November 2012 - 01:46 PM

So does this mean i can finally have the shafts i like without huge price tags?
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#29 Sakman

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Posted 02 November 2012 - 01:54 PM

View PostRookieBlue7, on 02 November 2012 - 12:57 PM, said:

The good news is their eBay closeout store has deep discounts. The Purple Ice in YSQ graphics is $37.50.

..and accepting offers of $20

#30 jimb

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Posted 02 November 2012 - 02:02 PM

Wow, that's it.  I getting rid of my CR-V!!!!!

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