NYT:

Cerberus Capital Management dodged a bullet with its recent decision to let investors sell out of one of the world’s biggest gunmakers, Remington Outdoor. It’s the company that made the assault rifle used to kill 20 children and six of their teachers in a Connecticut elementary school in December 2012.

Cerberus’s chief executive, Stephen A. Feinberg, has a clear motivation to offer the likes of gigantic pension funds like the California State Teachers’ Retirement System, or Calstrs, the choice to dump their Remington shares. He hopes it will allow his private equity firm to put this bloody chapter behind it and get to work raising a new $3.5 billion buyout fund.

There’s no question this was a victory for the social activists who led a push for public pension funds to shed their holdings in the arms business after the Sandy Hook Elementary School massacre two and a half years ago in Newtown — my hometown. Even the rapper and former gun-toter Snoop Dogg made pleas for divestment.

But what if there was a better way to effect change by persuading investors to behave more like shareholder activists than social ones?

Calstrs and the other limited partners in the Cerberus funds that own Remington, formerly known as Freedom Group, have a month to decide whether to sell their shares to Remington or remain as investors. Most of them will probably just unload. The better, albeit more difficult, route would be to hang on and make some noise at Remington.

[ … ]

They could, for instance, insist that Remington ensure all its guns are sold through distributors who conduct more rigorous background checks, or that the company ramps up investments in developing weapons that won’t go off when a child finds them in a negligent parent’s night stand. They might even demand Remington stop supporting the National Rifle Association.

Oh this is just rich.  Mr. social action is recommending that investors crash Remington.  He knows it.  We all know it.  We all know that the job Remington started with commitment to labor unions, staying ensconced in New York, focusing on military contracts, and ignoring the Remington 700 trigger issues, the job of almost destroying Remington, would be finished with social action agitation by investors.

So let’s queue it up.  I dare you.  Hold on to your shares, agitate social action, and watch the value of your stocks evaporate before your eyes.  I don’t believe the gun grabbers have the balls to do something like this.  But if there is any putting your money where your big mouth is, this is the chance.

Do it.  I dare you.  Any takers?

Utica Observer-Dispatch:

Jennifer Brown is scared, and with good reason.

When Remington Arms laid off 105 people Aug. 22, they were chosen strictly based on seniority. Now, 26-year-old Jennifer, who was hired in January 2013, is No. 9 on the list.

“I have my family to support,” the mother of two said. “A house, a car payment.”

“The morale in (the Ilion factory) is really low and people are waiting for more,” said her father, Frank “Rusty” Brown, chairman of the UMWA Local 717 Compac Committee.

For a family such as the Browns, more layoffs could be detrimental.

Rusty’s mother, Barbara, 71, joined Remington in the 1970s on the bottom floor, slowly working her way upward in the million-square-foot facility before retiring in 2005. Her husband, Steve, worked there, too.

Rusty and his wife, Lisha, followed in their footsteps in the mid-1990s — Rusty a furnace technician and Lisha working in inventory control.

Now, Jennifer and her sister Jessica have carried on the tradition.

Jessica, 27, was hired in 2009 when Remington Arms was bringing in new product lines, such as Marlin brand firearms.

“I was working at Kmart before there,” she said. “Trying to support a kid off minimum wage is not easy.”

The Brown family epitomizes the Ilion-Remington Arms relationship.

“You’re looking at three generations of people who have the experience, who’ve gone into that factory and have learned from Day One and have advanced through the machinery changes,” Rusty said.

“(Remington Arms is) going to find a big difference in employees when they go to Alabama,” Barbara added.

Rusty doesn’t think the move has anything to do with politics, though.

“I’m tired of hearing everybody say, ‘It’s the SAFE Act and it’s Gov. Cuomo,’” Rusty said. “The company’s not telling anyone that.”

Instead, he said, it’s because business has slowed down.

“The biggest thing with the upsurge that we had in hiring was that we were supposed to be the facility of choice,” Lisha said. “They brought everything to us.”

At its height, Rusty said, the Ilion facility was producing almost 2,000 Bushmasters a day — and that’s just one Remington Arms product.

“We overproduced,” he said. “We did what was demanded, or asked, of us. We met every challenge we had. Now, we see product lines going away.”

And with those lines went the jobs.

So exactly what difference will Remington find in employees when they move to Alabama, except for non-union wages and the corollary company loyalty?  Is he suggesting that the “hicks” in Alabama can’t do what he can do?  There are good mechanics in Alabama too, sir.

To him, it has nothing to do with politics.  It has everything to do with the fact that they did everything demanded of them, they met all obligations and expectations, and so they overproduced and are now in a pickle.

Sour grapes much?  Does he think the union should have held back some on the production line?  Perhaps they would still have a job if the union had just done their job.

And there you have it, folks.  Unions.  Nothing more needs to be said.  Just watching and listening explains everything.

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

The Tennessean:

One of the nation’s largest gun manufacturers, Remington Arms, has looked at sites around Nashville for a potential corporate relocation or expansion that would likely include hundreds of manufacturing jobs.

The Madison, N.C.-based company, which is part of the nation’s largest firearms company and has its largest plant in Ilion, N.Y., has scouted sites near Nashville’s airport, Lebanon and in Clarksville, Tenn.

Remington is among a growing number of gun manufacturers nationwide that have been courted by states pitching themselves as more gun-friendly. The wooing came after a handful of states, including New York, passed tougher gun control laws in the aftermath of last December’s shooting at Sandy Hook Elementary School in Newtown, Conn., which claimed the lives of 20 first-graders and six educators.

Remington’s roughly 1,200-employee plant in Ilion makes rifles such as the Bushmaster semiautomatic weapon, which is now banned under New York’s Secure Ammunition and Firearms Enforcement Act, the first law passed by any state post-Newtown.

In addition to the much stricter definition of assault weapons, which now includes semiautomatic pistols and rifles with detachable magazines and one military-style feature, the New York SAFE Act banned magazines that contain more than seven rounds, required instant background checks on all ammunition purchases at the time of the sale and required mental health professionals to report concerns about a gun-owning patient who posed a risk of harming himself or others.

Quick passage of that law upset not only the gunmakers, but also residents of that state who own certain guns, said Erin Crowe, office coordinator for the Mohawk Valley Chamber of Commerce in Utica, N.Y. “Ilion, New York, is Remington — if it wasn’t for Remington, Ilion wouldn’t exist,” she said. “There’s not a lot of new industries coming to central New York, so if you take a huge company like that and they leave, our unemployment rate is going to skyrocket.”

People familiar with Remington’s exploration of sites said the company looked around the Nashville area as recently as within the past month …

In Middle Tennessee, firearms maker Barrett already has 100 employees at its headquarters and manufacturing plant in Murfreesboro. And the National Rifle Association booked Nashville’s Music City Center convention hall for its 2015 annual convention with about 5,000 delegates.

Analysis & Commentary

This would be a welcome change.  Cerebus / Freedom group, as we’ve seen, purchased numerous smaller gun manufacturers and closed out business while moving said manufacturing to Ilion.  They conglomerated and centralized, and that is good neither for small businesses nor the communities they serve.  There is a difference between buying to make businesses more efficient from business model changes, and buying in order to close down the competition.

Furthermore, in spite of the silly, fawning article National Review did on the plant in Ilion, gun owners never forgive and never forget.  As we’ve discussed, see the Smith & Wesson boycott for a lesson in payback.  Doubtless, Remington Arms didn’t support the recent New York gun laws.  Nevertheless, at least a fraction of money going to purchase Remington products made in Ilion goes towards taxation for a totalitarian state to continue to do their thing.

In the end, I would have preferred that Remington relocate based on principle.  But as I have previously remarked, I am in the market for a good bolt action rifle and was looking at the Remington 700 series.  I am no longer considering Remington at all (for a 1911 either) because of the fact that Remington is primarily located in New York.  Some of my readers weighed in similarly.  With this change, if Remington indeed relocates its plant in Ilion, perhaps I’ll reconsider.  If principle cannot force Remington to move, then perhaps market pressure can.  Ruger is already ahead of the game.

Finally, I would prefer that Remington consider South Carolina.  Remember, anywhere in S.C. is no more than several hours from one of the best beaches on earth and some of the most beautiful mountains on earth.  Then again, Middle Tennessee ain’t bad.  Remington should be encouraged to move.  Their employees can enjoy the vista at Mount Le Conte and Clingman’s Dome within a few hours drive from where they will live.  They will find good churches, and the people are warm and friendly.

Make it happen without delay.

Pressconnects.com:

Not too long ago the Internet was filled with warnings that some mysterious company, supposedly owned by ultra-liberal businessman George Soros, was buying major firearms manufacturers with the idea that they would be closed down.

It wasn’t true, although I’ve spent months countering versions of the story sent to me. But one big company — investment group Cerebus — was indeed buying up gun companies under its Freedom Group name.

It already owned Remington when the story broke, then added Marlin and H&R/New England Firearms; then Bushmaster and DPMS and Dakota Arms. A lot of the manufacturing for all of them has been swept from their former homes and is now being done at the Remington plant in Ilion.

You can imagine the paranoia returning since Reuters News Service broke a report this week that Alliant Techsystems was in the final stages of acquiring Bushnell Outdoor Products from investment group MidOcean Partners.

ATK is known for making rockets, tank and artillery ammunition and has the contract for small arms ammo for the armed forces. It also owns the nation’s largest ammo maker, Federal Cartridge, and recently purchased Savage/Stevens Arms. It already owned Alliant Powder, CCI, RCBS, Speer, Weaver Optics, and Champion Targets.

Acquisition of the Bushnell brand portfolio would give ATK an instant market presence with Bushnell, Butler Creek, Final Approach, Hoppe’s, Millett, Night Optics, Primos Hunting, Simmons, Tasco, Stoney Point and Uncle Mikes brands.

According to Jim Shepherd’s Outdoor Wire, the acquisition would put ATK on equal or slightly higher footing than Cerebus/Freedom Group.

Paranoia be damned, having so many ordnance manufacturers under stable regimes good news.

My feelings concerning Remington and the plant in Ilion (and their commitment to the state of New York) are well known.  As for Cerebus / The Freedom Group, I have monitored from a distance and tried to let the free market dictate the outcome.

But according to the article, as for the companies they bought, “A lot of the manufacturing for all of them has been swept from their former homes and is now being done at the Remington plant in Ilion.”

If this is true, then Freedom Group essentially bought out the competition rather than acquiring it, making it better and letting it contribute to the community.  They closed down manufacturing and put it all in Ilion.

Good grief.  They centralized and conglomerated rather than managed, and now it’s all concentrated in a totalitarian state.  Nothing good came from it, and it won’t end well for anyone involved.  How sad.

And my opinions concerning Remington haven’t changed.  If anything, they have become stronger.

NR:

Ilion has a spa; a shoe shop; a trio of pizza joints (Franco’s, Sorrento, and Lombardo’s); a McDonald’s; a bowling alley; and a few more of exactly the sorts of places that you’d imagine you’d find in towns of its size. Pretty much all of the businesses rely on Remington for their livelihood. “That little shoe shop, for example,” Kollitides says, pointing, “makes all of our safety shoes.”

And so Remington tends to get its way in matters civic. “They moved the town so we could expand,” I’m told by plant manager Paul Merz. “See that factory building there? That used to be the center of town.” Later, I’m shown photographs of houses literally being picked up and transported down the street to make way for the plant.

They moved the Erie Canal, too. In 1827, the company, seeking access to the new waterway and to the expanding domestic market, switched from its original location in the Remington family forge at Ilion Gulch to a new position closer to the canal. Business boomed. Eighty-eight years later, the tables were turned: To facilitate the company’s growth, the town altered the canal’s path. “Ilion has molded itself to Remington,” Kollitides smiles.

[ … ]

I ask the predictable question: Despite the plant’s history and the cohesion of the town, do New York State’s business environment and sweeping new anti-gun legislation tempt the company to move? Some disgruntled gun enthusiasts believe that manufacturers should leave states that are hostile to their interests. Remington produces many weapons that are now illegal in New York State.

In answer, I am referred to a statement that was released immediately after Governor Cuomo signed the disastrous SAFE (Secure Ammunition and Firearms Enforcement) Act in January. It reads: “Remington will not run or abandon its loyal and hard working 1,300 employees without considerable thought and deliberation. Laws can be overturned and politicians voted out of office, but the decisions we make today will affect our people, their families and entire communities for generations.”

Charles C. W. Cooke got taken to the cleaners in this article.  He rolled over and failed to address the hard issues or press the hard questions.  He soft-pedaled one of the best questions, and was satisfied to be referred to a press release.

Every union shop knows that the company needs to operate.  That’s a horrible answer, and it doesn’t change the fact that union shops destroy companies.  Remington has recently announced expansion in North Carolina, not by any stretch a union shop state.

The labor pool will be just as good and cheaper than a union shop.  And Remington no more believes that New York is reconcilable with constitutional rights than you and I do.  Their press release kicks the can down the road and fails to deal with hard issues.   The notion that gun control can be reversed in New York is a fiction.  The answer is to move and leave New York to the consequences of its actions and decisions.

Their union shop knows the company needs to operate.  But it doesn’t, not really.  The bottom line will decide whether Remington can stay in Ilion.  As for me, I have begun to look for alternatives to that nice Remington 700 series rifle I wanted.  Too bad.  If they relocate their entire operation to the South, I might reconsider.