The Great American Ammunition Conspiracy

BY Herschel Smith
2 years, 4 months ago

The American Prospect.

At a glance, Americans appear to have a variety of ammunition companies to choose from: Remington, Winchester, Speer, CCI (Cascade Cartridge, Inc.), Federal Premium. Winchester bills itself as “The American Legend” and has been in business for over 150 years, while Remington has been making guns and ammo for over 200 years and states that their company is as “boundless as the American spirit.” These companies associate their brands with freedom, independence, and toughness. What most customers do not know, however, is that they are all owned by the same two entities: Olin Corporation and Vista Outdoor.

This consolidation in the small arms ammunition market by corporations and private equity firms is hurting businesses, consumers, and workers. And it’s producing a massive shortage, just as demand for ammunition picks up. It looks like the problem could get worse, not only in the commercial shooting market, but where it really matters: for our national security.

He goes on to talk about the ability of the FBI, DHS and others to get ammunition, something I don’t care one whit about.  I’d prefer they have none.

But due to consolidation within the industry, only a couple of incumbent companies have that ability to make it through low-demand periods. When demand surges, they are no longer forced to produce, but can focus instead on “efficiencies.” They can raise prices and generate shortages, knowing that no one else exists to meet the demand that they cannot or will not fill.

Such refusals to invest in increased capacity can clearly be seen as Vista’s plan over the last few years. According to their annual reports, Vista is focused on “long-term shareholder value,” and when they have influxes of cash, they acquire more companies that “deliver top-line growth … within one year of purchase.” They do not build more plants, even though they project more long-term increased demand; building a plant to increase capacity is a long-term project, one that does not return a profit in a year, much less a quarter.

[ … ]

Remington’s story involves some twists and turns and financial engineering. In 2007, private equity firm Cerberus Capital Management bought the then-thriving Remington, using it as a piggy bank. To execute the buyout, Remington borrowed hundreds of millions of dollars it immediately handed over to Cerberus, which meant that Cerberus would make money on the deal no matter whether Remington succeeded.

Initially, Cerberus made “hundreds of millions of dollars” from Remington, due to high gun sales during the Obama years. But when demand decreased after Donald Trump’s election, Remington was forced to file for bankruptcy in 2018. The firm restructured its debt and continued operating under new creditors, but due to continued mismanagement and lawsuits, Remington filed for bankruptcy again in 2020. Vista Outdoors bought Remington’s ammunition brand later that year.

Winchester’s story is more straightforward. Chemical producer Olin Corporation bought Winchester in 1931 and is now “a leading U.S. manufacturer of ammunition.” Olin’s most recent annual report revealed that Winchester sales increased from $665.5 million in 2019 to $927.6 million in 2020. This increase is reportedly due to “higher commercial and military sales, which included ammunition produced at Lake City, and higher commercial ammunition pricing.” Olin won a $28.3 million, ten-year contract to operate the Department of Defense’s Lake City Army Ammunition Plant in September of 2019. It also won contracts with the Secret Service, Customs and Border Protection, and the FBI.

It’s certainly the case that the proliferation of law enforcement entities in America is one of the causes of ammunition prices.

On the whole, I think consolidation is a very bad thing.  I did when Cerberus bought Remington (they set their sights on others as well), and I do now.  I think it’s better to have many medium size and small companies.

This ensures competition and innovation, despite the fact that a large corporation can bring financial resources to bear on R&R.  Corporations rarely focus on their employees, R&D or building.  Rather, they focus on stock prices, dividends and returns.


Comments

  1. On October 21, 2021 at 10:09 pm, Big Country Expat said:

    Agree with you (if I followed your line of reasoning after 6 Vodka-and-Cokes) but yeah, selling to the ‘normal supply chain?’ Exactly THAT. IF they announced a MAJOR diversion of ammo for ‘fedreasons’ THEN you should make a stink.. currently under my diminished capacity should I be commenting but OMG rly? as my millennial step daughter would say?

  2. On October 22, 2021 at 12:42 am, scott s. said:

    Well, ya got your Wolf and Aquila, which brings up, what’s the supply of 7.62×39 like these days?

    scott s.
    .

  3. On October 22, 2021 at 3:19 am, Georgiaboy61 said:

    Re: “On the whole, I think consolidation is a very bad thing. I did when Cerberus bought Remington (they set their sights on others as well), and I do now. I think it’s better to have many medium size and small companies.”

    Small is beautiful, right? Or it can be at any rate. One of the greatest scams sold to the American public over the last forty-to-fifty years or so is that “bigger is better” where corporations and other organizations are concerned. That’s when the first waves of corporate mergers and acquisitions started coming on pretty hard-and-fast.

    “Better for whom?” we might ask. Certainly for the big-money men on Wall Street and the richest people in the country, but all of those much-touted “economies of scale” and whatnot – while true often enough to provide a fig-leaf for the whole enterprise – did not turn out to be true. At least not for the little guy on Main Street U.S.A.

    There is a particular phenomenon which occurs as a business is created by its owner(s) and grows from being a small start-up to a going concern and eventually into a large corporation or even a multinational one: Small businesses and those that own/operate them tend to believe in free markets and may the best product/service win.

    But as a firm gets larger, you tend to see their owners try and pull up the ladder of success behind them. They tend to gravitate towards socialism and big-government – primarily because they see that big government can restrict competition or even do away with it entirely.

    The ammunition business is a case in point (no pun intended!): Since there is substantial government regulation of that business, larger firms tend to be able to afford the extensive staffs of regulatory specialists, accountants and lawyers needed to navigate the rocks-and-shoals of those regulations and red tape.

    And once the market is down to only a few big players, then the owners of these businesses, especially if they are now judged “essential,” can really turn the screws on people. They now have a monopoly or near-monopoly on that product.

    And vis-a-vis the right to keep/bear arms, it can’t be ruled out that clearing the decks of all but one or two very large ammunition-manufacturing firms is a backdoor form of gun control via eventual ammunition control, i.e., placing a stranglehold on access to it. The big money men are enjoying their huge profits too much for that now, but such a move shouldn’t be ruled out in the future. Brave New World and all of that.

  4. On October 22, 2021 at 5:45 am, Slave Larry said:

    Question: What do all big companies want to be when they grow up?

    Answer: Government

  5. On October 22, 2021 at 6:46 am, Furminator said:

    Well, yeah, commodity ammo is pretty much locked up by the big manufacturers. But there are plenty of smaller operations such as DoubleTap, Buffalo Bore, and Grizzly just to name some in the Redoubt, that make better quality/niche loads like your fave 450 SMC, +P+ 44, 10 mm penetrator, etc. And let’s not forget Hornady.

  6. On October 22, 2021 at 7:50 am, Fred said:

    Every time the unelected government bureaucrats make a new rule a large company gets bigger and several small companies close their doors.

    So the big corps catch on and start lobbying for rules only they are large enough to navigate. The politicians love the money (1 Timothy 6:10) from the lobbyists. Then it gets so bad that the pols end up just telling the corporate lawyers to write any law they want, for a price. It’s fascism and it’s working exactly as it always does.

  7. On October 23, 2021 at 5:49 pm, Ned said:

    Furminator: Hornady is drinking the statist Kool Aid… https://postimg.cc/gnHGXmn8

RSS feed for comments on this post. TrackBack URL

Leave a comment


You are currently reading "The Great American Ammunition Conspiracy", entry #28450 on The Captain's Journal.

This article is filed under the category(s) Ammunition and was published October 21st, 2021 by Herschel Smith.

If you're interested in what else the The Captain's Journal has to say, you might try thumbing through the archives and visiting the main index, or; perhaps you would like to learn more about TCJ.

26th MEU (10)
Abu Muqawama (12)
ACOG (2)
ACOGs (1)
Afghan National Army (36)
Afghan National Police (17)
Afghanistan (704)
Afghanistan SOFA (4)
Agriculture in COIN (3)
AGW (1)
Air Force (40)
Air Power (10)
al Qaeda (83)
Ali al-Sistani (1)
America (22)
Ammunition (275)
Animals (280)
Ansar al Sunna (15)
Anthropology (3)
Antonin Scalia (1)
AR-15s (372)
Arghandab River Valley (1)
Arlington Cemetery (2)
Army (86)
Assassinations (2)
Assault Weapon Ban (28)
Australian Army (7)
Azerbaijan (4)
Backpacking (2)
Badr Organization (8)
Baitullah Mehsud (21)
Basra (17)
BATFE (217)
Battle of Bari Alai (2)
Battle of Wanat (18)
Battle Space Weight (3)
Bin Laden (7)
Blogroll (3)
Blogs (24)
Body Armor (23)
Books (3)
Border War (18)
Brady Campaign (1)
Britain (38)
British Army (35)
Camping (5)
Canada (17)
Castle Doctrine (1)
Caucasus (6)
CENTCOM (7)
Center For a New American Security (8)
Charity (3)
China (16)
Christmas (16)
CIA (30)
Civilian National Security Force (3)
Col. Gian Gentile (9)
Combat Outposts (3)
Combat Video (2)
Concerned Citizens (6)
Constabulary Actions (3)
Coolness Factor (3)
COP Keating (4)
Corruption in COIN (4)
Council on Foreign Relations (1)
Counterinsurgency (218)
DADT (2)
David Rohde (1)
Defense Contractors (2)
Department of Defense (210)
Department of Homeland Security (26)
Disaster Preparedness (5)
Distributed Operations (5)
Dogs (15)
Donald Trump (27)
Drone Campaign (4)
EFV (3)
Egypt (12)
El Salvador (1)
Embassy Security (1)
Enemy Spotters (1)
Expeditionary Warfare (17)
F-22 (2)
F-35 (1)
Fallujah (17)
Far East (3)
Fathers and Sons (2)
Favorite (1)
Fazlullah (3)
FBI (39)
Featured (189)
Federal Firearms Laws (18)
Financing the Taliban (2)
Firearms (1,758)
Football (1)
Force Projection (35)
Force Protection (4)
Force Transformation (1)
Foreign Policy (27)
Fukushima Reactor Accident (6)
Ganjgal (1)
Garmsir (1)
general (15)
General Amos (1)
General James Mattis (1)
General McChrystal (44)
General McKiernan (6)
General Rodriguez (3)
General Suleimani (9)
Georgia (19)
GITMO (2)
Google (1)
Gulbuddin Hekmatyar (1)
Gun Control (1,630)
Guns (2,298)
Guns In National Parks (3)
Haditha Roundup (10)
Haiti (2)
HAMAS (7)
Haqqani Network (9)
Hate Mail (8)
Hekmatyar (1)
Heroism (4)
Hezbollah (12)
High Capacity Magazines (16)
High Value Targets (9)
Homecoming (1)
Homeland Security (3)
Horses (2)
Humor (72)
Hunting (31)
ICOS (1)
IEDs (7)
Immigration (104)
India (10)
Infantry (4)
Information Warfare (4)
Infrastructure (4)
Intelligence (23)
Intelligence Bulletin (6)
Iran (171)
Iraq (379)
Iraq SOFA (23)
Islamic Facism (64)
Islamists (98)
Israel (19)
Jaish al Mahdi (21)
Jalalabad (1)
Japan (3)
Jihadists (81)
John Nagl (5)
Joint Intelligence Centers (1)
JRTN (1)
Kabul (1)
Kajaki Dam (1)
Kamdesh (9)
Kandahar (12)
Karachi (7)
Kashmir (2)
Khost Province (1)
Khyber (11)
Knife Blogging (7)
Korea (4)
Korengal Valley (3)
Kunar Province (20)
Kurdistan (3)
Language in COIN (5)
Language in Statecraft (1)
Language Interpreters (2)
Lashkar-e-Taiba (2)
Law Enforcement (6)
Lawfare (14)
Leadership (6)
Lebanon (6)
Leon Panetta (2)
Let Them Fight (2)
Libya (14)
Lines of Effort (3)
Littoral Combat (8)
Logistics (50)
Long Guns (1)
Lt. Col. Allen West (2)
Marine Corps (280)
Marines in Bakwa (1)
Marines in Helmand (67)
Marjah (4)
MEDEVAC (2)
Media (67)
Medical (146)
Memorial Day (6)
Mexican Cartels (41)
Mexico (61)
Michael Yon (6)
Micromanaging the Military (7)
Middle East (1)
Military Blogging (26)
Military Contractors (5)
Military Equipment (25)
Militia (9)
Mitt Romney (3)
Monetary Policy (1)
Moqtada al Sadr (2)
Mosul (4)
Mountains (25)
MRAPs (1)
Mullah Baradar (1)
Mullah Fazlullah (1)
Mullah Omar (3)
Musa Qala (4)
Music (25)
Muslim Brotherhood (6)
Nation Building (2)
National Internet IDs (1)
National Rifle Association (95)
NATO (15)
Navy (30)
Navy Corpsman (1)
NCOs (3)
News (1)
NGOs (3)
Nicholas Schmidle (2)
Now Zad (19)
NSA (3)
NSA James L. Jones (6)
Nuclear (62)
Nuristan (8)
Obama Administration (221)
Offshore Balancing (1)
Operation Alljah (7)
Operation Khanjar (14)
Ossetia (7)
Pakistan (165)
Paktya Province (1)
Palestine (5)
Patriotism (7)
Patrolling (1)
Pech River Valley (11)
Personal (72)
Petraeus (14)
Pictures (1)
Piracy (13)
Pistol (4)
Pizzagate (21)
Police (647)
Police in COIN (3)
Policy (15)
Politics (969)
Poppy (2)
PPEs (1)
Prisons in Counterinsurgency (12)
Project Gunrunner (20)
PRTs (1)
Qatar (1)
Quadrennial Defense Review (2)
Quds Force (13)
Quetta Shura (1)
RAND (3)
Recommended Reading (14)
Refueling Tanker (1)
Religion (491)
Religion and Insurgency (19)
Reuters (1)
Rick Perry (4)
Rifles (1)
Roads (4)
Rolling Stone (1)
Ron Paul (1)
ROTC (1)
Rules of Engagement (75)
Rumsfeld (1)
Russia (37)
Sabbatical (1)
Sangin (1)
Saqlawiyah (1)
Satellite Patrols (2)
Saudi Arabia (4)
Scenes from Iraq (1)
Second Amendment (667)
Second Amendment Quick Hits (2)
Secretary Gates (9)
Sharia Law (3)
Shura Ittehad-ul-Mujahiden (1)
SIIC (2)
Sirajuddin Haqqani (1)
Small Wars (72)
Snipers (9)
Sniveling Lackeys (2)
Soft Power (4)
Somalia (8)
Sons of Afghanistan (1)
Sons of Iraq (2)
Special Forces (28)
Squad Rushes (1)
State Department (23)
Statistics (1)
Sunni Insurgency (10)
Support to Infantry Ratio (1)
Supreme Court (52)
Survival (185)
SWAT Raids (57)
Syria (38)
Tactical Drills (38)
Tactical Gear (14)
Taliban (168)
Taliban Massing of Forces (4)
Tarmiyah (1)
TBI (1)
Technology (21)
Tehrik-i-Taliban (78)
Terrain in Combat (1)
Terrorism (96)
Thanksgiving (13)
The Anbar Narrative (23)
The Art of War (5)
The Fallen (1)
The Long War (20)
The Surge (3)
The Wounded (13)
Thomas Barnett (1)
Transnational Insurgencies (5)
Tribes (5)
TSA (24)
TSA Ineptitude (13)
TTPs (4)
U.S. Border Patrol (6)
U.S. Border Security (18)
U.S. Sovereignty (23)
UAVs (2)
UBL (4)
Ukraine (10)
Uncategorized (98)
Universal Background Check (3)
Unrestricted Warfare (4)
USS Iwo Jima (2)
USS San Antonio (1)
Uzbekistan (1)
V-22 Osprey (4)
Veterans (3)
Vietnam (1)
War & Warfare (412)
War & Warfare (41)
War Movies (4)
War Reporting (21)
Wardak Province (1)
Warriors (6)
Waziristan (1)
Weapons and Tactics (79)
West Point (1)
Winter Operations (1)
Women in Combat (21)
WTF? (1)
Yemen (1)

March 2024
February 2024
January 2024
December 2023
November 2023
October 2023
September 2023
August 2023
July 2023
June 2023
May 2023
April 2023
March 2023
February 2023
January 2023
December 2022
November 2022
October 2022
September 2022
August 2022
July 2022
June 2022
May 2022
April 2022
March 2022
February 2022
January 2022
December 2021
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006

about · archives · contact · register

Copyright © 2006-2024 Captain's Journal. All rights reserved.