Some “experts” think not.
A manufacturer of a robustly popular product wants to capture what it perceives as missed-opportunity sales by opening a third production plant, this one in North Carolina.
The company is pledging to create hundreds of jobs and bring a renowned brand and sure-fire economic shot-in-the-arm to the community.
However, there are analysts skeptical of the expansion plans, saying the company already is facing saturation of its product in the U.S. marketplace amid formidable competition. They aren’t sure consumer demand will continue to outpace supply even though the short-term future is bright.
The company: Dell Inc., the world’s largest PC manufacturer. The time: summer 2004. The community: Winston-Salem.
Fast forward six years, and Dell is preparing to close its $110 million plant and finish eliminating the remainder of a workforce that reached 1,400 at its peak. The company is shifting production to third-party vendors after falling laptop prices eroded its market share for desktops and consumers proved increasingly indifferent to a customized product.
Fast forward another three years, and you find Rockingham County reveling in what local officials and residents consider as a godsend – an announcement that Sturm, Ruger & Co. Inc. has chosen a 220,000-square-foot plant in Mayodan as its preferred site for a third firearms manufacturing plant.
If an unknown amount of local and state incentives are approved in August, local economic officials say they are confident Ruger will commit to spending $30 million on capital investments and hiring a workforce of 300 to 700 full-time employees. The plant would be expected to open by early spring.
It would be the first manufacturing expansion for the Southport, Conn., company since 1988. The company also has plants in Newport, N.H., and Prescott, Ariz. There are about 2,100 employees companywide.
Still, there are analysts who question whether opening a third Ruger plant is prudent. They wonder how many firearms gun buyers want or need before feeling fully stocked.
“While most industry executives believe this surge in demand should still have some steam left in the tank, it’s safe to say it certainly won’t last forever,” said Steve Symington, an analyst with The Motley Fool.
Yes, our “expert” is with The Motley Fool. Give yourself time to quit laughing and let’s cover what’s really happening here.
First of all, Ruger is having trouble meeting demand, and the U.S. is as in love with its guns as it has ever been. There is always a demand for good gun manufacturing, especially with firearms made in the U.S. (including every part and component).
But second, take note of the location of the home office. Connecticut. What this “expert” with The Motley Fool doesn’t understand is the loyalty of gun owners, or conversely, the wrath of their judgment wrought upon gun manufacturers disloyal to America. For a brief primer on this, consider the Smith & Wesson boycott.
Ruger is betting on expansion, but not just any expansion. They’re relocating South. Look for operations in Connecticut to decrease over time. If Ruger doesn’t take this step, they will go out of business, just like Remington in New York.
If firearms manufacturers stay in the North, they will become obsolete and eventually go out of business. If they relocate to the South, a welcome party awaits. So much for the “experts.” Ruger knows what they’re doing.