Ruger’s Expansion

Mike Fifer, CEO of Sturm, Ruger, announced at their shareholders’ Annual Meeting on April 30th, that Ruger is actively searching for a third manufacturing facility. They are using a site selection consultant, Greyhill Advisors of Austin, TX, to help them narrow the search.

According to Mr. Fifer and the slides shown at the Annual Meeting, they have identified three “attractive sites” in the states of North Carolina, South Carolina, and Texas. Ruger is not planning to build a plant but rather is seeking a manufacturing facility of about a quarter million square feet that is not being used currently. Fifer says they are looking for something relatively new, that has “phenomenal electricity”, and good transportation  that is located in a community that is Second Amendment friendly. The community should also have a good existing workforce and a number of engineers.

This expansion is being driven by new product introductions and not unit volume or capacity driven. Ruger has found over the last few years that new product introductions have not cannibalized existing product lines as expected. The freeing up of existing machines dedicated to mature products just didn’t happen. Fifer said that customers would go to the gun store spurred on by interest in the new Ruger products and end up buying both the new guns and the older guns.f

The goal is to move a new product line to the plant, transfer some lead employees to help get it started, and to be off and running in the new plant.

The rationale behind the third manufacturing facility is that they have just plain run out of space at the existing plants in New Hampshire and Arizona. Since 2006, they have increased the workforce from 1,300 employees to 2,100 employees while producing approximately four times as many firearms. Fifer said their run rate in firearm sales has grown in the same time period from $140 million annually to over $600 million annually.

Now it just remains to be seen which of the three sites they pick. As a North Carolinian, I hope they pick the Tar Heel State. Our unemployment rate is higher than the other two states under consideration, we have a governor and legislature that is pro-Second Amendment and pro-business, we have a great transportation network, we have plenty of engineers, and we have better BBQ.