Troubles For Northern Gun Manufacturers
BY Herschel Smith
10 years, 1 month ago
First, Colt:
Colt Defense LLC is seeking capital to stave off an “expected default” next month as gunmakers suffer from lower defense spending and as consumers purchase fewer firearms.
The 178-year-old weapons maker said it’s “probable” it won’t comply with a loan agreement by Dec. 31 and is seeking an amendment to avoid default, according to a filing yesterday. Colt, which didn’t file its annual report on time because of accounting and liquidity issues, also said it’s uncertain it can make a $10.9 million bond interest payment Nov. 17.
Colt, whose credit rating was cut by Standard & Poor’s today to CCC-, has been struggling to service its $308 million of debt after losing U.S. contracts due to defense budget pressures and amid dissipating concern that the government will limit the ownership of firearms.
Next, Remington:
Another round of layoffs has hit Remington Arms’ Ilion facility, local officials said.
A total of 126 workers learned they were being let go Tuesday, according to information Assemblywoman Claudia Tenney, R-New Hartford, said she received from the local plant manager.
Company officials could not be reached for comment.
Tenney said she’d heard the layoffs may be as a result of the dwindling down of the Remington Model 700 rifle recall, which affected rifles with “X-Mark Pro” triggers manufactured between May 1, 2006, and April 9, 2014.
Not just any Remington plant mind you, but their crown jewel – Ilion. This is a shame and you can visit the second article for highly opinionated missives about why this has happened. But there are some simple things that other manufacturers can learn from these failures.
First, Colt jettisoned support for double action revolvers when they sold their soul and focused on the military contract for the M16/M4. Now, if you want high quality revolvers you buy Smith & Wesson (and leave it alone) or Ruger and have a good gunsmith do a trigger job. The good revolver builders have all died or retired from Colt.
They didn’t try to regain the civilian market, and stayed ensconced in a Northern state where union wages drove up the cost of literally everything. As for Remington, their corporate intransigence caused them to refuse to admit the problems with the 700 triggers. People died, sales went down, and then Remington finally had to settle out of court.
Remington has stayed ensconced in the North where unions drove wages up, and while opening plants elsewhere (like Alabama) will help, this may be too little too late. An influx of cash from military sales will help, but in the end 443 rifles – even expensive rifles – will only go so far.
Mossberg, Kimber, Rock River Arms, Smith & Wesson and other manufacturers had better be watching these developments with Colt and Remington.
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On November 14, 2014 at 9:01 am, Geoffry K said:
I believe I read a few weeks ago that Mossberg is abandoning Connecticut for Texas, at least as far as the shotguns. Who knows? Maybe they’ll wise up and move the rifles also.
On November 14, 2014 at 11:43 am, Lina Inverse said:
From the quoted article: “after losing U.S. contracts due to defense budget pressures”
Isn’t it more that they lost first the M16, and then the M4 contracts to FNH? Which just happens to have its US operations located in the Right To Work state of South Carolina?
FNH, as in Fabrique Nationale d’Herstal (National Factory of Herstal in Belgium), also styled FN Herstal, is a very interesting company in that they’ve loved selling guns to American civilians for a very long time. My family still has the papers for the Browning Auto-5 16 gauge my grandfather bought in the ’30s, which has FNH markings. And of course that’s the company Browning the man partnered with after his long relationship with Winchester … which they now own the firearms part of.
More recently they’ve been quoted as being pleasantly “surprised” at the success in sales of the PS90 to us. Or when a batch of SCAR-L receivers came back from the anodizer with the wrong shade of brown, they took them as an opportunity to sell to us as a first special and unique batch of SCAR 16Ses, making lemonade out of what would otherwise be lemons. The US civilian market sure can be handy….
On November 14, 2014 at 11:56 am, Herschel Smith said:
Good points, all. I would also point out that Colt lost QA and appreciation for quality in their manufacturing with their bulk deliveries to the Army / Marines. When Daniel first left the Corps he shot my Rock River Arms AR-15 and said, “Nice gun. The Marines never issued anything that nice to us.”
On November 14, 2014 at 2:06 pm, Lina Inverse said:
That would imply he and his associates in the Marines either got old Colts or FNH’s quality and/or QA wasn’t very good (the specifications for the M16 are very specific, for example cut, not hammer forged barrels), for per the NYT Colt lost the M16 contract in 1988, and I’ve always read the Marines stuck with the 20 inch barrel M16 (that’s 250 yards additional effective range per Martin Fackler).
Caught this gem in the article, about the UAW’s stike at Colt a couple of years earlier: ”We would rather see Colt out of business than have a factory full of scabs,” Philip Wheeler, a top regional union official, said Friday. Sounds like they may well get their wish, after of course the M4 fandango played out.
On November 14, 2014 at 2:29 pm, Herschel Smith said:
I’m pretty sure they got old Colts with actions replaced … and replaced … and replaced …