Listen up.

Now Remington’s guns and ammunition businesses has been sold off to various bidders:

• Ruger got the Marlin firearms business.
• Vista Outdoor paid $81 million for the Remington brand ammunition business.
• Sportsman’s Warehouse purchased the Tapco parts and accessories business.
• Sierra Bullets bought the Barnes ammo business for $30 million.
• JJE Capital Holdings, which placed a $65 million stalking horse bid for Remington to kick off the auction process, acquired various firearms and accessories manufacturers.
• Investment company Roundhill Group acquired the historic Remington brand of guns, for $13 million.
• Franklin Armory bought the Bushmaster brand.

Altogether, the auction process raised over $150 million for the various pieces, and now that they are in the hands of better financed companies, the brands can grow once again.

Ruger will be moving the manufacturing of the Marlin firearms business to its own facility.  “The value of Marlin and its 150-year legacy was too great of an opportunity for us to pass up,” said Ruger President and CEO Chris Killoy. “The brand aligns perfectly with ours and the Marlin product portfolio will help us widen our already diverse product offerings.”

Ruger will be moving the manufacturing of the Marlin firearms business to its own facility.

What does that mean?  Connecticut, Arizona or North Carolina?

You’d better stay away from union (collective bargaining) states and move South into right-to-work states like North Carolina.  And you’d better stay away from states (like Connecticut) where they want to see your industry perish.

Can you grok that, Ruger?

You’ll be sorry if you don’t.

Ruger.

Sturm, Ruger and Company, Inc. (NYSE: RGR) announced today that its offer to purchase substantially all of the Marlin Firearms assets was accepted by Remington Outdoor Company, Inc. and approved by the United States Bankruptcy Court for the Northern District of Alabama. The Company will pay the $30 million purchase price from cash on hand at the time of closing, which is expected to occur in October.

“The value of Marlin and its 150-year legacy was too great of an opportunity for us to pass up,” said Ruger President and CEO Chris Killoy. “The brand aligns perfectly with ours and the Marlin product portfolio will help us widen our already diverse product offerings.”

The transaction is exclusively for the Marlin Firearms assets. Remington firearms, ammunition, other Remington Outdoor brands, and all facilities and real estate are excluded from the Ruger purchase. Once the purchase is completed, the Company will begin the process of relocating the Marlin Firearms assets to existing Ruger manufacturing facilities.

“The important thing for consumers, retailers and distributors to know at this point in time,” continued Killoy, “is that the Marlin brand and its great products will live on. Long Live the Lever Gun.”

It sounds like they have their finger on the pulse of the American gun-buying public.  This is good news.  I’m sure Ruger will do a good job with Marlin designs, maybe bringing it back to original quality.

Maybe they’ll also be more competitive with lever gun prices.

News from Pennsylvania.

The Pennsylvania Superior Court, in a strongly worded decision, ruled Monday that a lawsuit filed by the parents of a 13-year-old Mount Pleasant boy who was killed accidentally when his friend fired a gun at him can move forward.

It is the first appeals court in the country to find that the federal Protection of Lawful Commerce in Arms Act is unconstitutional and could, ultimately, have sweeping ramifications on suits brought against gun manufacturers.

“It is a huge deal,” said Jonathan Lowy, chief counsel for the Brady Center to Prevent Gun Violence, who argued the case on behalf of Mark and Leah Gustafson.

The Gustafsons filed the complaint against Springfield Arms (sic) and Saloom Department Store in 2018, alleging negligence and strict liability for the manufacture and sale of a defective handgun.

J.R. was at a home in Westmoreland County on March 20, 2016, when his 14-year-old friend obtained the homeowner’s handgun and removed the clip. Believing the gun was unloaded, the friend, John Burnsworth III, pulled the trigger and shot J.R.

Burnsworth ultimately pleaded delinquent in juvenile court to involuntary manslaughter and served more than a year at a Cambria County reform school before his release.

In their lawsuit, the Gustafsons argued that the gun that killed their son had a design defect because it lacked a safety feature that would disable it from firing without a clip inserted.

However, the defendants filed preliminary objections and asserted immunity under the federal Protection of Lawful Commerce in Arms Act.

Westmoreland County Common Pleas Judge Harry F. Smail threw the case out, agreeing with the defendants that the act prohibited the lawsuit.

The Gustafsons appealed, arguing that the act is unconstitutional.

In a 63-page opinion filed Monday in Superior Court, a three-judge panel of the court agreed that it is.

“[T]he Act is unconstitutional in its entirety,” Judge Deborah A. Kunselman wrote. “The only portions of the [act] that do not offend the Constitution are its findings and purposes … and a few definitions.”

Instead, she said, it was an act of “constitutional overreach” and a violation of the Tenth Amendment, which gives power, such as the tort reform intended by the act, to individual states.

According to the court, the act in question says that a “’qualified-civil-liability action may not be brought in any federal or state court” against members of the gun industry. Such a lawsuit ‘shall be immediately dismissed by the court in which the action was brought or is currently pending.’”

There are enumerated exceptions in the act, which did not apply in the Gustafson case.

Instead, the Superior Court chose to address the constitutionality of the act, which was passed in 2005 after intense lobbying in Congress by the gun industry. Kunselman noted in the opinion that guns kill approximately 30,000 people annually.

“The act immunizes the gun industry from every conceivable type of joint and comparable liability known to the common law,” the court wrote, even if a product is faulty and causes harm.

The act, the opinion continued, is unsustainable, because “it grants the gun industry immunity regardless of how far removed from interstate commerce the harm arises.”

The decision can be found here.  This paragraph struck me as presumptuous.

We find the logic of the Supreme Court of Alaska in Kim unpersuasive. That court erroneously believed that allowing claims for ordinary negligence (or any other cause of action based in negligence) would render the PLCAA’s exception for claims of negligence per se and negligent entrustment surplusage. That court and the trial court misunderstood the PLCAA’s goal, which is to protect only those members of the gun industry who obey state or federal statutes from common-law liability. As we will explain below, Congress passed the PLCAA to immunize what they considered to be law-abiding members of the industry — in Congress’s mind, those who follow federal and state statutes.

And this court happens to know better.  And that “better” includes protection only of “law-abiding” manufacturers.  The trick is to know that law, which in this case is decided by a court, i.e., that Springfield Armory designed an unsafe weapon.

So it’s left up to a court who has probably never used weapons to decide what’s safe and unsafe.  Springfield Armory didn’t violate a single law in the design of this weapon, and Smith & Wesson (in the design of their M&P) and Glock also manufacture pistols that will discharge without a magazine being inserted.

There was nothing at all defective about this handgun, and nothing defective about the design.  Don’t point guns at other people and pull the trigger.  This case is remarkably different than the case against Remington 700, in that Remington had repeatable test cases where a rifle falling over, even with the safety on, caused a round to discharge, or the simple act of closing the bolt caused a round to discharge.  Remington made a defective product.  Springfield Armory did not.

Perhaps some users want that feature.  It’s there for very good reason (e.g., tactical reloads where a previously unseen assailant is approaching and you need that round still left in the chamber before you get the reload accomplished).

Never mind training, never mind user desires for features, never mind the rules of gun safety, which if they had been followed would have prevented this event.  The court knows better, that court being completely ignorant of gun designs.

This is why the law was passed to begin with.  So their presumptuous attack on prior applications ends up hoisting them on their own petard.

But watch and see and heed this warning.  I suspect Bloomberg money was behind this lawsuit, but in any case, yet another manufacturer will have to defend itself in endless court appearances, demands for discovery, and on and on the circus goes.  Springfield Armory won’t be the last manufacturer to be hit with lawsuits like this one, and in the end, the controllers will demand a federal law for firearms design.

Court behavior most of the time would be amusing if it wasn’t so sad and farcical.

From Sniper’s Hide.

As to how this sort of thing can happen, one commenter notes:

Lawsuits
Unions
RP9 Pistols
R51 Pistols
Ho Hum AR’s
Ruger, Howa, Tikka, Bergara, and the rise of “production class” customs eating your lunch in the bolt action segment
Hornady

Bad decisions.  True enough, being in a collective bargaining state rather than a right to work state harmed them, as it will any company.  They should have relocated as should any firearms manufacturer located in the Northeast.

But they have made some extremely bad business and financial decisions like waiting far too long to acknowledge the problems associated with the 700, failures they even duplicated in non-trivial numbers by their own testing.

Other firearms manufacturers have been smarter and faster, and the firearms-buying public has too many very good options to settle for mediocre products these days.

There is also the issue of the fact that Cerberus / Freedom Group was essentially a company of “financial engineers” (I loath that term for reasons that would send me off on a rant) who worked hard to squeeze every last drop of money out of the company and leave it bankrupt.

This serves as an object lesson to firearms manufacturers everywhere.  [1] Don’t sell out to financial engineers who want to rape the company, [2] admit and fix flaws in guns, and do it fast, [3] get out of union states, [4] give the public what they want by being innovative, cost effective and smart, but don’t make trash, and finally, [5] hire good engineers.

We’re all watching the remaining firearms manufacturers located in the Northeast.  If you are one of them, why are you still there?

Prior: Gun Valley Moves South

Forbes.

Gun and ammo makers are staying cautious ahead of the election despite surging sales, because they remember all too well the crash that happened after the election of President Trump.

Gunmakers can barely keep up with demand. Sales have been booming since the start of the pandemic, fueled by fears of coronavirus and civil unrest. FBI background checks have been breaking records. Makers of guns and ammo are reporting double-digit increases in revenue. Handguns are flying off the shelves and ammo is selling out and getting scarce.

“It’s the 2013 shortage all over again,” said Brian Rafn, a gun industry analyst who recently retired from Morgan Dempsey, referring to the run on ammo during the Obama administration. Rafn, whose family owns shares in Sturm, Ruger, said that nowadays buyers of popular ammo like 9 mm have to hunt for it from store to store like “the guy who’s buying milk during the hurricane.”

But gun and ammo makers are hyper-cautious about ramping up manufacturing capacity. They don’t want to get burned like in 2016, when sales surged to record levels only to implode on Election Day. Sales then were driven by fears of gun control fueled by mass shootings, but those fears evaporated with the election of President Trump, a Republican endorsed by the National Rifle Association. Gun sales plunged immediately after his election, resulting in layoffs and sliding stocks for Sturm, Ruger and Smith & Wesson.

Gun makers fear that fickle consumers could slow down spending, depending on election results, the severity of the pandemic, or the persistence of clashes between police and protesters.

“Firearm manufacturers are making prudent decisions to keep up with extraordinary demand during these past few months,” said Mark Oliva, director of public affairs for the National Shooting Sports Foundation, a gun industry group. “Manufacturers are producing firearms and ammunition as quickly as they can to meet customer demand.” But he said that gunmakers must meet the skyrocketing demand, which has outstripped production, “in a way that is going to ensure sustained participation in tomorrow’s market.”

Spikes in demand result in bullet shortages because the ammo manufacturing industry, dominated by Vista Outdoor and Olin’s Winchester, is less flexible than guns. Dionisio said bullet makers manufacture huge batches of ammo with massive machines to maximize efficiency, with no wiggle room to match fluctuations in demand.

“That’s an industry that has less of an ability to max up or max down,” he said. “You’re not going to buy this expensive machine just because demand is going to be up for six months.”

Manufacturers are trying to forecast the future for firearms. Will the election results increase sales or trigger a decline?  Will civil unrest and coronavirus continue to drive sales?

“Like any other manufacturing base, firearm and ammunition makers forecast their best analysis for what the demand will be for their products in the coming year,” said Oliva of the NSSF. “That includes placing orders for raw materials, including bar stock to make barrels, component materials to make ammunition and predicting labor, warehousing and shipping costs, distribution channels and retail demand.”

Logistics is everything.  Warehouse min-max must be adjusted, the upstream supply must match the adjustments, transportation must follow, machinery must be procured, machinery operators must be trained, QA inspectors must be trained, and on the list goes.

As with any industry, it can’t make these switches in an instant.  Moreover, even if they could simply hire a lot of folks, with the time and investment in training, the demand might have gone away at that point.

That would mean a drop in stock prices, the sunk costs of idle machinery, warehouse min-max that needed to be readjusted, and potential layoffs and the corollary severance packages for those manufacturers who want a good reputation for the future.

I know we’ve discussed primers as being the logistical sticking point right now, but this explanation makes the most sense of anything I’ve heard yet.  A fluctuation in demand is difficult to deal with for companies that rely on logistics networks outside of their control and who use complex CNC machinery.

It would be best if you already had what you needed.  I have actually ordered 5.56mm and .45 ACP ammunition for the last size months, even up through last week, at regular cost or perhaps slightly above (10%).  I had to search long and hard for it, but it was there.  But that ammunition was in the pipeline – the availability has basically gone away at the moment.

There may be deals in the future, keep your eyes open.  One thing I have found, for instance, is that the cost of personal defense ammunition has decreased even as the cost of ball range ammunition has increased while it also became unavailable.

If you’re willing to purchase reman ammo (re-manufactured), the deals are a little better.  I’ve found reman ammo to be quite reliable, e.g., through Freedom Munitions.

In the end, it makes no sense for the manufacturers to drop a lot of capital in expansion when their own polls are telling them that they won’t need it in the future.

Strange news.

Remington Arms, America’s oldest gun maker, is preparing to file for Chapter 11 bankruptcy protection and is in advanced talks for a potential sale to the Navajo Nation, The Wall Street Journal reported on Friday.

Remington is making preparations for the Native American tribe to serve as the lead bidder to purchase its assets out of Chapter 11, the Journal reported here, citing people familiar with the matter.

The report added that the filing could come with in days.

I think everyone in the gun community expected Remington to go down the toilet, especially after being bought by Cerberus with financial “engineers” skimming money from profits.

But this is odd – Navajo Nation?  I wonder what that’s all about?  What does Navajo Nation intend to do with Remington?

New Hampshire Union Leader.

Taurus Holdings is expected to bring 300 jobs to Bainbridge, population 12,000. In exchange, Taurus will receive a government-incentive package that’s worth more than the $30 million the company said in 2017 it was willing to spend to settle claims that it manufactured defective firearms.

The trend continues unabated.  Now for the next step.  Firearms manufacturers need to collectively refuse to sell firearms to all law enforcement agencies in states where citizens are denied their second amendment rights.  Some manufacturers already do this.  Unfortunately, the list is small.  Readers can feel free to create the list in comments, with evidence for their laudable stand.

NSSF on Firearms sales.

• The estimated total number of firearms in civilian possession from 1986-2018 is 422.9 million, according to data reported in the ATF’s Firearms Commerce Report in the United States 2019 report and including the preliminary 2018 Annual Firearms Manufacturing and Exportation Report (AFMER) figures.
• 17,740,000 Modern Sporting Rifles are in private ownership today.
• More than half (54%) of all rifles produced in 2017 were modern sporting rifles.
• In 2017, 7,901,218 total firearms were produced and imported. Of those, 4,411,923 were pistols and revolvers, 2,821,945 were rifles and 667,350 were shotguns.
• An interim 2018 estimate showed a total 7,660,772 total firearms were produced and imported. Of those 4,277,971 were pistols and revolvers, 2,846,757 were rifles and 535,994 were shotguns. Those are interim reports and will be updated as complete information becomes available.
• Firearms-ammunition manufacturing accounted for nearly 12,000 employees producing over $4.1 billion in goods shipped in 2017. An estimated 8.1 billion rounds, of all calibers and gauges, were produced in 2018 for the U.S. market.

So how’s that plan to confiscate 18 million MSRs going, controllers?  You think you’ll get them all?

Here is a useful graph from Ammoland.

There has been a general trend upwards for a very long time.  Excel or TableCurve-2D could easily fit a smoothed curve with that data with a decent correlation coefficient.  Do you see that increase right at the end of 2019?  It’s seasonal, no doubt, like the rest of the repeatable perturbations.

But I don’t expect to see it go back down very far or fast in 2020.  I think 2020 is the year you want to be in the firearms manufacturing and sales business.

From a reader.

November 18th, 2019

Stag Arms LLC (“Stag” or the “Company”) is pleased to announce the appointment of a new President as well as its new location.

Stag’s Board of Directors today announced that Chad Larsen has been appointed Stag’s President effective immediately. The Company also announced that it will be relocating to Cheyenne, WY, by the end of the year. In June, the Company disclosed its decision to move from Stag’s former headquarters in New Britain, CT, and accordingly initiated a national search for a new location.

In making today’s announcement, Elie Azar, Founder and CEO of White Wolf Capital, LLC, which owns a controlling interest in Stag Arms, said: “We decided it was time to do a complete refresh of the Company. We needed to solve for three things: visionary customer-centric leadership, a business-friendly, pro-growth economic environment, and a cultural climate that reflects Stag’s brand image of independence and free spiritedness. I am pleased to report that we have found a solution that hits all these points.”

To find a new location for the Company, Stag’s Board of Directors conducted a rigorous process comparing dozens of potential sites against a stringent set of criteria. “Cheyenne came out on top on most of the individual criteria,” said Azar, “and considering our requirements as a whole, it was by far the superior site. Not only is Wyoming an incredibly hospitable place to do business, it is also a top destination for outdoor recreation, including hunting and shooting sports, which reflects its citizens’ unwavering support for the Second Amendment.”

Wyoming Governor Mark Gordon, upon learning of Stag’s decision to relocate to his state, issued the following statement:

“I am pleased to welcome Stag Arms to Wyoming and to know that our state came out on top of a broad look at potential new homes for the sought-after company. We have a deep-seated commitment to the Second Amendment that I will continue to uphold. Ultimately, Stag Arms had to make a business decision and I believe this announcement is an affirmation that Wyoming is continuing to cultivate a culture that allows private enterprise to flourish. My administration will work collaboratively with the Wyoming Business Council and Cheyenne LEADS to ensure Stag’s move goes smoothly. I thank Stag’s Board of Directors and Chad Larsen for selecting Wyoming.”

Stag began working with Cheyenne LEADS, the economic development organization for Cheyenne and Laramie County, in June of this year after they reached out offering their assistance. LEADS assisted with site location, workforce evaluation and navigating the community.

Stag’s decision to relocate to Wyoming follows similar recent moves by other firearms companies, most notably Weatherby and Magpul. In addition to being firearm-friendly and outdoor-oriented, Wyoming has been very proactive in its efforts to attract high-skilled/high-paying manufacturing jobs to the state. Communities like Cheyenne have invested significantly in recent years in skilled-training capabilities.

Chad Larsen comes to Stag from Aero Precision, LLC, a leading manufacturer of AR-15 components located in Tacoma, WA, where he spent the last six years leading new product development. Azar noted, “Chad’s innovative genius with the Modern Sporting Rifle platform stems from his personal emersion in the shooting and hunting community. He knows what customers want—and what they don’t—because he is one of them.” Mr. Larsen is both an avid hunter and a registered 3-Gun, Multi-gun and USPSA competitor.

Mr. Larsen added, “I am both honored and humbled to have been selected to lead the charge to revitalize this iconic brand. The Stag team and I are totally committed to continuing Stag’s legacy of innovation—for example, we were the first AR platform to manufacture left-handed rifles—as well as continue our pledge of being 100% made in the United States.” Mr. Larsen succeeds Anthony Ash who was president of Stag since 2016.

Stag has begun the process of relocating all of its operations to Cheyenne and plans to be fully settled in its new accommodations in the upcoming months.

For questions or comments on this announcement, please email questions@stagarms.com.

No firearms manufacturer can stay in Connecticut and survive.  I’m surprised it took them this long to make the decision and engage the move.

Although I have to say that I’m disappointed they didn’t follow so many other firearms manufacturer’s moves and relocate South.

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.