Fox Business:

Alienating firearms backers would “cause the greatest reputational and financial harm” to American Outdoors Brand Corp., the manufacturer disclosed in a federal filing on Friday

“The one overriding factor mitigating the effectiveness of gun control groups to damage the reputations of those in the firearms business is the passion and strength of firearms owners in defending their rights at the ballot box, in the course of legislative debates, and in the marketplace,” Smith & Wesson’s parent company wrote.

The candid remarks encapsulate the difficulty proponents of new gun laws have faced in their quest. While such campaigns often garner intense media attention, the core support among gun owners and the significant political weight the group carries has stymied any significant legislation on the issue.

It also highlights the difficulty firearms producers and retailers face in trying to navigate the intense political landscape on gun control. Dick’s Sporting Goods’ decision in 2018 to ban the sales of AR-15-style rifles helped contribute to a 4.5 percent decline in sales in its hunting business. The backlash among conservatives and others firearms supporters “could affect future results,” the Pittsburgh-based sporting goods retailer disclosed in November.

Friday’s study from American Outdoors Brand Corp. (AOCB) was released following a successful effort by shareholders, including a group of nuns, to force the company to analyze how its products are associated with gun violence and what steps the Springfield, Massachusetts-based firm is taking to make its firearms safer.

In the report, the company disputed the need to direct resources towards developing so-called “smart gun” technology, which includes facial recognition software to only allow an authorized user to fire it. Doing so would “require a significant investment” and the products would come at a cost that could alienate many of its key consumers.

“This pricing difference alone, at best, limits the commercial viability of ‘smart guns’ to a very small niche market. AOBC’s reasonable business judgment is that an investment in such an unknown, niche market is not a sound business decision,” the firm wrote, adding that it will “continue to regularly assess the market.”

Why would they have to make a “federal filing” over a stockholder vote?  The article doesn’t say.

As for what the author said in the article, it isn’t clear if Smith & Wesson really, really want to invest in “smart guns” and just can’t because of the financial damage (which would be very real and potentially deadly to the company), or the author is just making up this supposed conundrum for gun manufacturers.

As for Smith & Wesson, I’ll make the same observation I have for Ruger, Savage and all other manufacturers.  Hedge against this sort of thing by ensuring that if you do go public in order to raise revenue, your employees own a majority of the stock.  Make it an employee-run company.

Most manufacturers won’t have the wisdom to do that.

Reuters:

A decade ago, Kentucky’s Anderson Manufacturing was a small machine shop that didn’t make firearms.

By 2016, it was making more rifles than Smith & Wesson, according to the latest available data from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Anderson’s big seller: assault-style rifles that cost up to $2,100 and require no lubrication. Anderson says it made nearly 454,000 rifles that year, or about 57,000 more than Smith & Wesson.

Anderson is the leader among a cluster of small, private companies that are taking market share from America’s biggest gun makers. They are doing so with catchy marketing or weapons that have, for example, more knockdown power for hunting wild pigs.

Some rifles made by companies such as Patriot Ordnance Factory and Daniel Defense fire larger .308-caliber rounds instead of the .223-caliber rounds more commonly used in AR-15s. Another firm, Kel-Tec CNC Industries Inc, makes the hot-selling Sub-2000 rifle – which folds up small enough to fit into a backpack. It costs $500 and fires popular 9mm handgun ammunition.

By contrast, America’s leading gun makers have struggled over the past two years, with the three biggest seeing their rifle market share slip to 44 percent in 2016 from 57 percent in 2011, according to ATF data. Over the same period, a cluster of about 30 small companies combined for 51 percent of overall rifle production, up from 37 percent.

Top rifle maker Remington Outdoor Company emerged from bankruptcy in May. Net firearms sales at Sturm Ruger & Company Inc fell 7 percent during the nine-month period that ended Sept. 30. And American Outdoor Brands Corp, parent of Smith & Wesson, saw shipments of long guns, including rifles, fall 32 percent in fiscal 2018, compared to the previous year.

Smaller players largely have sidestepped scrutiny about their products or their financing because activists have mostly focused on pressuring big retailers and gun makers with publicly traded stock or debt held by mutual funds. Excluding the big three, there were 28 companies that made 10,000 or more rifles in 2016, up from 20 companies in 2011, according to ATF data.

“The number of manufacturers was shocking to me,” said Christopher Ailman, chief investment officer for the $219 billion California State Teachers’ Retirement system, which this fall started a new effort to press gun makers and retailers on safety.

But small gun makers have plenty of options for capital outside of public markets. Smaller rifle makers get financing from community banks, credit unions and makers of metal-cutting machines, according to a Reuters analysis of firearms financial disclosures filed with more than a dozen secretaries of state.

“We’re not going to starve any of these companies of capital because there’s always someone” willing to lend gun makers money, said John Streur, chief executive of Calvert Research and Management. The Calvert unit, part of Eaton Vance Corp, has pressed big retailers to restrict gun sales.

Windham Weaponry in Maine received an $8 million revolving credit line and a $3 million term loan last year from Bar Harbor Bank & Trust, according to local real estate records. The company and the bank did not respond to requests for comment.

Anderson Manufacturing received financing in 2013 from The Bank of Kentucky as its rifle sales began to surge, according to financing reports filed with the Kentucky secretary of state. The bank has since been acquired by North Carolina-based BB&T Corp, which did not respond to a request for comment.

Clearly, the author and interviewees are befuddled at the proliferation of calibers for AR style rifles, from pistol caliber carbines (PDW) to the .450 Bushmaster.  It’s as if the AR was only ever good for 5.56mm.  Sometimes these articles can be amusing.

Equally amusing is that apparently no one in the controller movement understood that there are too many manufacturers now to tackle by squeezing their lines of logistics.  The key here is to [1] have employee-owned companies, [b] be serviced by small banks, [c] minimize debt, [d] keep your employees happy, and [e] make an excellent product.

Or in other words, run your business based on a Biblical model.  God will bless it.

Reuters:

Bank of America Corp is preparing to provide critical financing to Remington Outdoor Co, which makes assault-type rifles, just weeks after the U.S. bank said it would stop financing “military-style” firearms for civilians.

The bank is contributing $43.2 million to a $193 million lending package funded by seven banks, according to court documents, which will help put Remington back on stable footing as it emerges from bankruptcy later this month into an uncertain environment for gun makers.

The package replaces a similar credit facility the banks committed to providing Remington. Both were agreed in late March, before Bank of America, the second-largest U.S. bank by assets, changed its policy to stop financing companies that make military-style guns for civilian use.

Anne Finucane, Bank of America’s vice chair, said in April that the bank had decided on its pledge to help reduce mass shootings, saying in an interview with Bloomberg TV that “it is not our intent to underwrite or finance military-style firearms on a go-forward basis.”

[ … ]

But withdrawing from the deal would hurt the bank’s reputation for standing by its lending agreements and could undermine Remington’s survival, according to one person familiar with the bank’s thinking.

Surely BoA knew about this loan package before it’s stupid announcement on other firearms manufacturers.

That means one of two things.  Either BoA is full of liars and crooks who were only trying to make an appearance of cooperating with the gun controllers, or Remington has been strong armed and is preparing to jettison its Bushmaster line of guns.

If the first is true, it doesn’t mean BoA will lend in the future to firearms manufacturers.  It just means that they are liars.  If the second is true, this is the end for Remington.  There will be no recovery.  Tikka can easily supplant the Remington 700 because it’s a better gun.

WTOP:

Another company, this one among the largest ammunition makers in America, is distancing itself from firearms following the massacre at Marjorie Stoneman Douglas High in February.

Vista Outdoor Inc. has been pressured for months by retailers that sell its other goods like Bell bicycle helmets and CamelBak water carriers, to stop manufacturing firearms.

The Utah company said Tuesday that it will be seeking buyers for its firearms manufacturing business, and will focus on products for outdoor enthusiasts. It will continue to sell ammunition, its biggest core businesses.

REI, the national outdoor retailer, suspended all orders from Vista in March after it refused to say if it would continue to manufacture weapons. REI said it’s aware of Vista’s announcement, but did not say if it would resume doing business with the company.

During a conference call Tuesday, Vista CEO Cristopher Metz said that the company was already moving in the direction of shedding its firearms business, “way before any of the noise came about eight weeks ago.”

[ … ]

Vista last year had revenue of $2.5 billion. It is looking for buyers for its Savage and Stevens firearms brands, and other product lines not related to firearms.

They’ve made noises of keeping the gun community as patrons though.

The firm will stop manufacturing guns but will continue to produce ammunition, which the company described as being its “largest core business.” Vista will also focus on its outdoor products.

“An increased focus on our heritage ammunition business will manifest itself in more innovative and breakthrough new products introduced over the next few years,” Vista Outdoor CEO Chris Metz said in a release.

I bolded the words “innovative and breakthrough new products.”  I’m not stupid.  I expect ammunition that has a higher muzzle velocity, expands better (for PD ammo), has a higher ballistic coefficient, has higher and better QA, more consistent and reliable bullet CoG and gyroscopic stability, and that no one else has.

Or else I’ll call you a crapweasel, liar and douchebag.  I’ll remember this conversation, Mr. Metz.  You said these things, I didn’t.  You said innovative and breakthrough.  You need to get the best engineers in-house immediately to make that happen.  You’re going to have to dump a lot of money into this project.  In the mean time, I’m sorry for Savage.  They make good guns and I hope they land on their feet.

Market Watch:

Banks and credit-card companies are discussing ways to identify purchases of guns in their payment systems, a move that could be a prelude to restricting such transactions, according to people familiar with the talks.

The discussions are preliminary but could be deeply controversial. Gun-rights groups have long resisted any effort to monitor which Americans own guns; there are federal laws limiting the government’s use of electronic databases of gun sales.

The financial companies have explored creating a new credit-card code for firearms dealers, similar to how they code restaurants, or department stores, according to people familiar with the matter. Another idea would require merchants to share information about specific firearm products consumers are buying, some of the people said.

They’re driving us towards a cash-based exchange for firearms and ammunition.  It should be cash-based anyway, you say.  I understand the sentiment.  Without cash to back up credit cards, you lose the credit card.  Besides, that’s poor form.  A man always honors his obligations.

But there is more to it than that, and you know it.  Even if it’s a firearm that you hold on 90-day lawaway with the local gun shop, you seldom make all the payments in cash.  Even if you do, you seldom carry around enough cash to buy a firearm outright.  Most of the time, you float it with a credit card or ATM card until the next day, or the end of the month when you get paid.

Even if you don’t do that, many buyers do.  This will affect the financial health of everything from local gun shops to large firearms manufacturers.  I’ve warned about this before.  In addition to the advice I gave firearms manufacturers – remove all avenues of leverage, get out of debt, and cut ties with corporate America – there is much more than can be done.  Hornady is showing us the way and is an example of responsible corporate support of our rights and liberties (via TTAG).

Today, the State of New York did one of the most despicable acts ever perpetrated by any state by asking New York banks, financial institutions and insurance companies to stop doing business with the gun and ammo industry.

While it may not make a difference to New York, Hornady will not knowingly allow our ammunition to be sold to the State of NY or any NY agencies. Their actions are a blatant and disgusting abuse of office and we won’t be associated with a government that acts like that. They should be ashamed.

I don’t know if it will make a difference or not, but I know what will make a difference.  It would be like trying to herd cats, but if the firearms and ammunition industry could finally avoid the temptation to whore after government contracts, not just FedGov but state, county and local governments too, when they take positions that run contrary to our liberties, it would effectively end this charade in a single day.

So let’s suppose that Daniel Defense, CMMG, BCI Defense, Knight’s Armament, Rock River Arms, FN, Springfield Armory, LaRue Tactical, Ruger, Barrett, Savage and all other firearms manufacturers, refused to sell to governments that took positions like the state of New York where officials were working with banks to effect gun control measures or encourage non-patronage of the firearms community by banks.  Let’s also suppose that ammunition manufacturers – Remington, Federal, Double-Tap, Magtech, Winchester, and others – joined them in refusing to sell ammunition to such entities.  Thus those entities could obtain neither firearms nor ammunition for government officials, including LEOs.

What do you think would be the outcome of such a large, dovetailed response of the community to this overreach and bigotry?  I suspect the bigotry would end overnight.  It would certainly end if they inquired if any of the products were to be used in security operations for Bank of America, Citibank, Amalgamated, Wells Fargo, and the other large operations, and also refused to sell to their security teams.

It’s possible to end this bigotry, it’s just a matter of will and strategy.  We know what to do, it’s a matter of doing it.  You can help by forwarding this article to every firearms and ammunition manufacturer who will listen.  The banks can back down from this war with firearms owners before it is too late and unpleasant things happen.

As for Hornady, I suspect they will benefit immensely from this decision.  If you are a firearms or ammunition manufacturer, straighten up and pay attention.  This is how you do it.  This is how you pay your dues and earn the trust and respect of the community.  The community rewards such trust and respect.

Bloomberg:

Remington Outdoor Co. has only been in bankruptcy for a month, but creditors are already planning an out.

The U.S. firearms and ammunition juggernaut will likely go up for sale directly following its bankruptcy, according to people with knowledge of the situation. Certain stakeholders, some of whom haven’t been publicly identified, have already started putting out feelers for potential strategic buyers, these people said.

Rather than hold the collection of 13 brands that includes a 200-year-old rifle maker, ammunition manufacturers, silencer companies and traditional firearms manufacturers, the lenders will be trying to offload at a particularly fraught time.

You can say that again.  This isn’t a good time for Remington to be doing anything like this, and I don’t expect them to last long.

CNBC:

Owners of Remington’s popular Model 700 rifle can now examine for themselves literally millions of pages of internal company documents that have led critics to conclude that the guns are unsafe.

The documents — more than 130,000 files in all — have been assembled in a searchable online database by the advocacy group Public Justice. The organization, which battles against secrecy in the courts, fought successfully last year to make the documents public.

“These documents show the extreme danger of court secrecy,” said Public Justice Chairman Arthur Bryant. “They prove that court secrecy kills. Literally.”

With millions sold since the design first went on the market in the 1940s, Remington claims its Model 700 is the best-selling bolt-action rifle ever made. But lawsuits have alleged that for decades the company covered up a deadly design flaw that allows the guns to fire without the trigger being pulled, resulting in dozens of deaths and hundreds of injuries. The company has denied the allegations.

The documents show Remington engineers wrestling with what they called a “very dangerous” situation as early as 1947 — before the guns went on sale. Company officials eventually decided that a design change was not worth the added cost, a conclusion they would reach again and again.

We’ve discussed this at length before.  While shooters are responsible for following all of the rules of safety, firearms manufacturers are responsible for designing and producing firearms that don’t discharge a round when the trigger isn’t being pulled.  It’s called “defense in depth.”

Take a look at the incredible cache of documents there.  It’s staggering.  As I’ve said before to firearms manufacturers, when you find problems you’d better admit them and get out in front of the problem, recall it, announce it, and fix it.

Engineers, don’t ever sacrifice your ethical integrity at the behest of corporate lawyers.  You say, “But this pertains to my career and this is a very difficult decision to make, and it could affect my ability to support my family.”  Yes it does, and yes it may.

That’s why it’s call ethics.  It isn’t ethics when it’s easy.  Been there, done that.  I know what it’s like.

Continuing the rumor mill, Uncle reports that Remington may move operations to Tennessee.  We’ve discussed a potential Remington move several times, but I’m not so sure it’s Tennessee.

Gov. Cuomo’s tough new gun law has put a target on the state’s gun makers.

Cities, counties and states from across the country have been making lucrative pitches to New York’s firearms companies, urging them to relocate. Their argument: They have a gun-friendly atmosphere, and New York does not.

“They receive solicitations . . . on almost a daily basis,” said Lawrence Kean, senior vice president and general counsel of the National Shooting Sports Foundation, a trade group.

“CEOs have told me they could basically move their factories for free.”

Cuomo pushed his new gun law through the Legislature a month after the deadly shooting rampage in Newtown, Conn. The law broadened the definition of what is considered a banned assault weapon, and it reduced the size of permissible gun magazines to seven rounds, from 10.

Since then, the state’s remaining firearms companies, including major employers like Remington Arms in upstate Ilion and Kimber Manufacturing in Yonkers, have been wooed by officials from places including South Carolina and Texas.

Anthony Testa, general manager of Just Right Carbines in upstate Canandaigua, southeast of Rochester, said his company received at least a dozen offers from other states.

Just Right, which employs about a dozen workers and produces an assault rifle now banned under the state’s new law, has decided to stay put.

The owners, Testa said, have strong family ties to the region. “That’s the only reason they are not considering these things more seriously,” Testa said.

“You combine the high tax load along with the fairly restrictive and fairly anti-gun stance that the state has, it makes it difficult to do business selling a product that the state doesn’t like.”

Let’s be clear about this.  Cuomo is a Putz, and New York is a totalitarian state.  Furthermore, I haven’t said much about the union at Remington, but the workers simply can’t adopt collectivist practices and policies, forcing New Yorkers into collective bargaining agreements (as opposed to say, South Carolina which is a right to work state), and then gripe and complain because Cuomo institutes collectivist policies of his own.  You must be consistent.

Move South.  Ruger has already produced its first firearm at its new North Carolina plant, months ahead of schedule.  The workers are skilled and loyal, and the people appreciate firearms and their place in America.  What are you waiting for?

Prior:

Freedom Group And Remington

National Review On Remington

Should Ruger Be Planning For Expansion In North Carolina?

Maryland Set To Pass Sweeping Gun Control, Beretta Set To Move

Remington To S.C.?

It’s Time For Gun Industry To Move South

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.