Hartford Courant On The AR-15 And CT’s Gun Companies

The cover of today’s Hartford Courant featured the following headline – “America’s Rifle”: Factories Boom. Under the title the subtitle read, “As Debate Goes On, State Gun-Makers Cash In On Popular AR-15.”

Reporter Dan Haar of the Courant had two stories regarding the AR-15 and the role that Connecticut gun makers have in producing it. Both stories were well-balanced and fair. While the Violence Policy Center and Josh Sugarmann got quoted, so too did the heads of Colt, Stag Arms, and Mossberg.

The first story concentrated on the investments that Connecticut firearms manufacturers have made in upgrading plant and equipment. Combined the companies have spent well over $50 million in upgrading their plants with most of the investment going towards making the AR-15. Given that investment, the head of Mossberg agreed that it would be hard to up and leave the state even if they couldn’t sell rifles there. That said, the crap they are getting from their own legislators doesn’t give them a warm and cozy feeling.

Echoing other local owners and executives, Bartozzi said Mossberg would never threaten to pick up and leave if Connecticut were to adopt a strict ban. “That is not our style,” he said, and besides, he added, it’s not only a history the company has in Connecticut but more to the point, a skilled and loyal workforce.

“It is damn hard to move a factory,” he said.

On the other hand, Bartozzi said, “To say that Mossberg is not looking at other options would be wrong. … I’m not feeling a lot of love from many of our legislators. It’s getting tiring. It really is getting tiring. … It takes a lot out of you.”

Mossberg, with a factory of similar size in Texas, has had active talks with officials from Southern states trying to drive a wedge between the firm and its home state. All of the firms have similar stories.

 The second story by Haar looked at the history of the AR-15 and its rise in popularity. He did a good job of examining the versatility of the AR as contrasted to its “military cosmetics”. The article did an excellent job in looking at the development of the AR-15 by ArmaLite which was an offshoot from Fairchild Engine and Airplane Corp., the role of Colt in licensing the design, and how other companies entered the field.

I don’t normally say good things about the mainstream media but in this case, the Hartford Courant and Dan Haar, did an excellent job. Just as importantly, they played it straight and they got their facts right.

More Revenue Than Ford Motor Company

The One Minute MBA studied the business of guns and found that the firearms industry generated $10 billion more revenue that Ford Motor Company. It also employs five times as many people as Google. As Exurban Kev noted at Misfires and Light Strikes, this shows “why Magpul’s potential move out of Colorado matters.”

Unless two Democrat state senators change their vote Monday on the final vote on HB 1224, I’m afraid the good people of Colorado are going to find out this out first-hand. Even if the Colorado Republican sweep the Democrats out of office in 2014, Magpul and their jobs will still be gone. Once they move I sincerely doubt that they would ever relocate back to Colorado.

Jobs And Ideology, Part 2

You can add certain legislators in the state of Colorado who care more about their gun prohibitionist ideology than they do about jobs for state residents. As the press release from Magpul makes clear, if Colorado HB 1224 passes, Magpul will have to cease operations in that state effective July 1st. This would eliminate 200 direct jobs and up to another 700 jobs at subcontractors and suppliers.

Factories and machinery can be relocated to other states much more readily nowadays. The Governor’s Office of Economic Development in South Dakota which is a mere one state away has a special program to attract companies in the firearms and shooting industry. Likewise, Texas which is also just one state away from Colorado has a strong business climate and a very pro-Second Amendment state government. I’m sure adjoining states like Kansas and especially Wyoming are already preparing packets to send to Magpul if any of these bills pass.

Too bad some legislators care more about their misguided ideologies than they do about good paying jobs.

In addition to the national battle to protect our firearms rights, many states are currently engaged in their own fights. Here in CO, a state with a strong heritage of firearm and other personal freedoms, we are facing some extreme challenges to firearms rights. We have been engaged in dialogue with legislators here presenting our arguments to stop legislation from even being introduced, but our efforts did not deter those of extreme views.

After the NRAs visit last week, several anti-freedom bills were introduced by CO legislators, and a very aggressive timeline has been set forth in moving these bills forward.

The bills include:
HB 1229, Background checks for Gun Transfers–a measure to prohibit private sales between CO residents, and instead require a full FFL transfer, including a 4473.

HB 1228, Payment for Background Checks for Gun Transfers– a measure that would require CO residents to pay for the back logged state-run CBI system (currently taking 3 times the federally mandated wait time for checks to occur) instead of using the free federal NICS checks.

And finally, HB 1224, Prohibiting Large Capacity Ammunition Magazines–a measure that bans the possession, sale, or transfer of magazines over 10 round capacity. The measures and stipulations in this bill would deprive CO residents of the value of their private property by prohibiting the sale or transfer of all magazines over 10 rounds. This bill would also prohibit manufacture of magazines greater than 10 rounds for commercial sale out of the state, and place restrictions on the manufacture of military and law enforcement magazines that would cripple production.

We’d like to ask all CO residents to please contact your state legislators and the members of the Judiciary Committee and urge them to kill these measures in committee, and to vote NO if they reach the floor.

We also ask you to show your support for the 2nd Amendment at the Capitol on Tuesday, Feb 12, for the magazine ban committee hearing and Wednesday,
Feb 13, for the hearing on the other measures.

Due to the highly restrictive language in HB 1224, if passed, and we remained here, this measure would require us to cease PMAG production on July 1, 2013.

In short, Magpul would be unable to remain in business as a CO company, and the over 200 jobs for direct employees and nearly 700 jobs at our subcontractors and suppliers would pick up and leave CO. Due to the structure of our operations, this would be entirely possible, hopefully without significant disruption to production.

The legislators drafting these measures do so in spite of the fact that nothing they are proposing will do anything to even marginally improve public safety in CO, and in fact, will leave law-abiding CO residents less able to defend themselves, strip away rights and property from residents who have done nothing wrong, and send nearly 1000 jobs and millions in tax revenue out of the state.

We like CO, we want to continue to operate in CO, but most of all, we want CO to remain FREE.

Please help us in this fight, and let your voices be heard!

We have included the contact information for the House Judiciary committee for your convenience:

House Judiciary Committee
Rep. Daniel Kagan, Chair: 303-866-2921, repkagan@gmail.com
Rep. Pete Lee, Vice Chair: 303-866-2932, pete.lee.house@state.co.us
Rep. John Buckner: 303-866-2944, john.buckner.house@state.co.us
Rep. Lois Court: 303-866-2967, lois.court.house@state.co.us
Rep. Bob Gardner, 303-866-2191, bob.gardner.house@state.co.us
Rep. Polly Lawrence, 303-866-2935, polly.lawrence.house@state.co.us

They Ditch The Firearms Registry And Now This

First the Canadian government ditches the firearms registry and now you have Canadian pension plans buying US firearms accessories manufacturers.

The Ontario Teachers’ Pension Plan just bought Plano Molding Company of Plano, Illinois. Plano makes everything from tackle boxes to cosmetics cases with a large line of gun cases in the middle. I know about those gun cases because I have a number of them.

From the press release by OTPP:

TORONTO (November 28, 2012) – Ontario Teachers’ Pension Plan (Teachers’) today announced an agreement for the acquisition of Plano Molding Company, Inc. (Plano), the premier supplier of outdoor sports storage systems.

Based in Plano, Illinois, and founded in 1932, Plano is recognized as the leading brand in fishing and fall sports markets where it enjoys dominant market shares in tackle boxes, bait storage, gun cases, archery cases, and ice fishing products. It also produces cases for cosmetics, tools and crafts, as well as storage containers and shelving for home and office.

Teachers’ is making the acquisition through its private equity investment division, Teachers’ Private Capital (TPC). Terms of the transaction are not being disclosed.

“Plano has exceptionally strong brands and product categories supported by attractive market characteristics. It also benefits from its long-standing relationships with top North American retailers,” said Jane Rowe, Senior Vice-President of TPC. “Plano’s proven management team has a record of solid organic growth and has strongly positioned the company to benefit from acquisition opportunities. We look forward to supporting their success.”

“The Plano management team and I are extremely excited to be partnering with Teachers’,” stated Tom Hurt, the Company’s President and CEO. “Together we look forward to growing Plano’s heritage brands to their full potential and continuing our dedication to exceeding our customer expectations in product innovation, market leadership and world-class customer service. An exciting new journey has just begun for Plano, our valued associates and the many market leading brands under our umbrella. The Teachers’ partnership in Plano promises to yield more exciting opportunities than ever before.”

H/T The Outdoor Wire

“We’re Doing Really Well” – Mike Fifer, Ruger CEO

Sturm, Ruger and Co., Inc. will be featured in the November 5th edition of Forbes Magazine. That issue will feature Forbes’ Best Small Companies in America list and Ruger is number four on the list.

Intimacy with the product–and the customer–has been key to Ruger’s turnaround. That, plus embracing industry trends like compact guns and military-style weaponry, has vaulted the company to the No. 4 spot on our list of the Best Small Companies in America. Since Fifer took over in late 2006 Ruger’s share price has jumped sixfold to a recent $49. Over the last 12 months it has netted $55 million on $406 million in revenue; half a dozen years ago it barely managed $1 million on $168 million in sales.

Read the whole article. It is a good read and doesn’t indulge in anti-gun hysteria. It did elicit this absurd comment from a reader named “Greg”.

 The business of murder machinery can be highly profitable.
A good sin stock.

Sure, Greg, whatever. Nonetheless, I’m glad to see that Ruger has rebounded from the Bill Ruger, Sr. days and has adopted new ideas, new manufacturing techniques, and ditched the limited capacity magazine nonsense. As a shareholder, I’m doubly glad.

H/T Lars at NRA Blog

2011 – A Mixed Bag For Firearms Production

The Bureau of Alcohol, Tobacco, Firearms and Explosives released their 2011 interim Annual Firearms Manufacturing and Export Report on Tuesday of this past week. These summary statistics provide a view of the trends in the firearms industry over the past year and especially when compared to the prior year’s report. The table below shows both the absolute and relative changes by category in firearms production in 2011 from the prior year.

If 2010 was the Year of the .380, 2011 certainly was not. Production of .380 pistols fell by 128,449 or 19.3%. It appears that demand for small pistols has shifted from the .380 to the micro-nines such as the Ruger LC9, the Kimber Solo, the Beretta Nano, and the Kahr family of small pistols. In their letter to shareholders for the first quarter of 2011, Ruger attributed new introductions such as the LC9 (and the Gunsite Scout rifle) for 29% of the quarter’s sales.

There was significant growth in the medium and larger pistol calibers with 9mm production growing by 33.3% and the greater than 9mm calibers growing by 32.9%. With the way the ATF compiles manufacturing statistics, it is impossible to break out production of the .40 S&W from the .45 ACP. I did suggest last year that I expected to see an increase in this category as 2011 was the centennial of the 1911. While the 1911 did garner a lot of attention in 2011, I just don’t think the amount of growth in the category can be attributed to that alone. I do think that a good deal of the growth in these categories can be traced to what Michael Bane calls Gun Culture v. 2.0. That is, That is, those who have come to guns not through growing up in a hunting family – Gun Culture 1.0 – but as a result of the concealed carry movement.

Change in Firearms Production From 2010  to 2011
To .22
To. .22
To .25
To .32
To .32
To .357 Mag
To .380
To .38 Spec.
To 9mm
To .44 Mag
To .50
To .50
Total Pistol
Total Revolver
Total Rifles
Total Shotguns
Total Misc. Firearms

While overall production of revolvers was up 2.48%, production fell in all categories except the very smallest and the very largest. The detailed report which shows production figures in each category by manufacturer are not yet available. Thus, I can’t say the 29.2% increase in revolver production in calibers larger than .44 Magnum is only due to increased production of the Taurus Judge and S&W Governor as opposed to a large growth in the number of Single Action Army revolvers in .45 Colt. Nonetheless, it is a reasonable assumption given the marketing campaigns for both the Judge and the Governor by their respective manufacturers.

I think we can safely say the market for long guns has rebounded. After experiencing a significant decline last year, production of both rifles and shotguns grew by double digit percentages for 2011. Even more importantly, both categories saw more shotguns and rifles produced in 2011 than in the banner year of 2009. I anticipate that rifle production in 2012 will be even greater given the continuing unease that gun owners and would-be gun owners feel about President Obama and potential gun control measures his administration might enact in a second term.

One final category of note is what the ATF calls miscellaneous firearms. They define this category as consisting of items that don’t fall into the normal firearms classifications of handgun or long gun. Included within it are silencers. As the American Silencer Association pointed out last month, applications for the NFA tax stamp for silencers are growing by leaps and bounds. That would be consistent with the 169% growth in production in this category.

This last year was a good year for the firearms industry. If the continuing year-over-year growth in NICS checks is any indication – and I think it is – 2012 will be an even better year for the firearms industry.

CORRECTION: In my original chart, I compared the Interim 2011 numbers with the Interim 2010 numbers. I have corrected the 2010 numbers to reflect the final report for that year. It does not change the trends but it does change some of the percentages. I have corrected them within the original post.

Colt Expands To Florida

Given the relatively hostile climate for gunmakers in Massachusetts and Connecticut, I think it should come as no surprise that Colt’s Manufacturing Company – the civilian side of Colt – announced yesterday that it is setting up a regional headquarters and production facility in Florida. According to the announcement from Florida Gov. Rick Scott’s office, Colt is making a $2.5 million capital investment in a building owned by Osceola County. They expect to have a staff of 63 that will begin phasing in during 2012.

I don’t have a crystal ball but I think this is only the first of many expansions by firearms makers outside of their traditional “Gun Valley” home. I think the moves will be made for two major reasons: a more favorable  (and gun friendly) business climate in the new location and lower personnel costs due to non-unionized workforces. It was only last year that Olin Corporation’s Winchester Division began moving most of its center-fire ammunition production from East Alton, IL to Oxford, Mississippi. That move was done for both those reasons.

I would also keep my eye on announcements out of the state of South Dakota. They have an industrial development project run out of the governor’s office that is targeting firearms manufacturers and others in the gun industry. They promote their gun-friendly attitude as an attraction for businesses in the industry.

The full announcement for the office of Gov. Rick Scott (R-FL) is below:

12/1/2011 Osceola County, Fla. – Today, Colt’s Manufacturing Co. LLC announced its commitment to create 63 jobs in Osceola County for its new regional headquarters and product manufacturing center. The center will hire people for engineering and manufacturing jobs, among others. In 2012, Colt is projected to begin phasing in the first of 63 jobs paying an average salary of $45,060 to be created during the following three years. Governor Rick Scott and Colt’s Manufacturing Company President and CEO Lieutenant General M. William Keys USMC (Ret.) were joined by the Osceola County Board of County Commissioners for the announcement.

“As a supporter of new job creation and the Second Amendment, this announcement sends the clear message that Florida is both open for business and a defender of our right to bear arms,” Florida Governor Rick Scott said. “My primary responsibility as governor is to be our state’s chief advocate for job creation. My personal involvement in bringing Colt to Florida demonstrates my administration’s deep commitment to rebuilding our economy.”

Colt is making a $2.5 million capital investment in a vacant building, which the company will lease, that is owned by Osceola County. Governor Scott and his economic development team at Enterprise Florida Inc. and the Osceola County Economic Development Department worked with Colt to bring this project to fruition. State incentives include $250,000 from the Governor’s Quick Action Closing Fund and funds for workforce training. Osceola County is offering additional incentives, including renovation of the building and rent concessions.

“Colt looked at many possible sites across the nation, but we ultimately decided to locate our new facility in the State of Florida,” Gen. Keys said. “Florida offered a strong pro-business incentive package. Coupled with the low cost of doing business in Florida and a favorable regulatory environment, opening this new facility was very attractive to us. Governor Scott’s personal commitment to both Colt’s growth plan and America’s right to bear arms was instrumental in our decision.”
“Attracting an American icon like Colt, which is one of the world’s top brands, is a real coup for our economic development efforts,” said Commission Chairman John Quiñones. “Beyond creating new, high-wage jobs, Colt is going to be a great asset to our community.”
“Colt’s expansion to Osceola County is a perfect fit for the region,” said Dr. Sanford Shugart, president of Valencia College, which will design a specialized training program for the company. “Valencia College stands ready to deliver the best trained, best educated workforce possible. We welcome Colt’s Manufacturing Company to Osceola County and commit to partnering with them and serving their employees and families for many years to come.”

Osceola County is located southeast of Orlando and just due west of Cape Canaveral.

Thirteen Is A Lucky Number

The National Shooting Sports Foundation is reporting that their adjusted NICS check figures show the 13th straight month-over-month increase in the NSSF adjusted NICS figures.

The June 2011 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 679,840 is an increase of 12.8 percent over the NSSF-adjusted NICS figure of 602,908 in June 2010. For comparison, the unadjusted June 2011 NICS figure of 1,157,714 is an increase of 16 percent over the unadjusted NICS figure of 998,262 in June 2010.

The figures are adjusted to drop out those checks which can be attributed to CCW background checks as used by states such as Utah, Kentucky, and Iowa among other things.

The NSSF graphic below shows the pattern in adjusted NICS checks for the month of June for the past 10 years. This past June was a definite improvement over the prior two years and is the high watermark for the past ten Junes.

2010 – The Year Of The .380

The Bureau of Alcohol, Tobacco, Firearms and Explosives released their 2010 interim Annual Firearms Manufacturing and Export Report on Thursday of this past week. These summary statistics provide a clear view of the trends in the firearms industry over the past year and especially when compared to the prior year’s report. The table below shows both the absolute and relative changes by category in firearms production in 2010 from the prior year.

Production of rifles in all calibers dropped by over 650,000 rifles or a drop of 28.4% when compared to the previous year. By contrast, total pistol production was up by 19.25% for a total of 2,227,871 pistols manufactured in 2010. Revolvers are in a separate category from pistols. Production for that category was flat with an insignificant drop from the prior year. Shotgun production was also flat with 1.2% drop in the number produced in 2010 as compared to 2009.

The production figures by manufacturer within each category are not yet available. Thus, I can’t say for sure that the drop in rifle production is due to the bubble bursting for AR-15’s but I think that is a reasonable supposition. With the fear of a new Assault Weapons Ban that began with the inauguration of Barack Obama fading, the market for “modern sporting rifles” or “sport utility rifles” is returning to normal.

Change in Firearms Production From 2009  to 2010
To .22
To. .22
To .25
To .32
To .32
To .357 Mag
To .380
To .38 Spec.
To 9mm
To .44 Mag
To .50
To .50
Total Pistol
Total Revolver
Total Rifles
Total Shotguns

While the market for rifles has dropped, the same can’t be said about pistols. That market had an over 19.25% growth in production in 2010. If 2009 was the Year of the AR, then 2010 was the Year of the .380. Production in that category of pistol grew by 70.2% or 274,613 units. The growth in the production of .380 pistols accounted for three-quarters of the total growth for pistols in 2010. If one listened to the stories from last year, you knew that .380 ammo was hard to find. These production figures, while not sales figures, definitely point to the increase in demand for these small pistols.

9mm pistol production also grew in 2010 while the larger pistol calibers – .40 S&W and .45 ACP – contracted just a bit. I imagine that the 2011 numbers will show a growth in that category with 2011 being the centennial year of the Browning-designed 1911.

I think a strong argument can be made that the growth in .380 pistols has come from the concealed carry movement. The Ruger LCP, the Kahr P380, the Sig P238, and the Kel-Tec P-3AT are all easily concealed and have been readily adopted by those who want a small pistol that fits in the pocket. It will be interesting to see the complete production numbers by manufacturer when they are released by BATFE.

In conclusion, while 2010 was a down year for the firearms market overall – 5,107,309 units in 2010 versus 5,417,003 units in 2009 – certain segments grew very strongly. While the Violence Policy Center and other gun prohibitionists will try to spin this as a negative overall for the firearms industry, it really isn’t. It merely illustrates that firearms production has peaks and valleys in demand by segment just like any other industry. I think most industries in America would have been very happy to only have had a 5.7% drop in production for 2010 when compared to the prior year.

Bushmaster President to Retire

From Bushmaster:

Bushmaster Firearms® Announces the Retirement of the Company President

Windham, ME –After over a 40 year career in business and manufacturing, John A. DeSantis, President of Bushmaster Firearms has decided to retire and to pursue other challenges and another exciting phase of his life. John has been a tireless driving force behind the success of Bushmaster. He surrounded himself with a great team of professionals and together they have grown Bushmaster into the largest commercial AR platform rifle manufacturer in the world. John commented that “Bushmaster will always have a warm place in my heart and I have enjoyed my experience with the Freedom Group of Companies. I look forward to spending more time with my family.”

“On a personal note, John is truly a world-class gentlemen and I am proud to call him a personal friend. John has been an invaluable asset to our company and me personally. His wisdom and his high regard for our product, combined with his deep respect for the rich traditions of our industry, have been a great source of counsel and advice to me.” said Ted Torbeck, CEO, Freedom Group, Inc.

John’s retirement will be official on July 31, 2010, but he has graciously agreed to stay on and oversee the day to day business of Bushmaster until his replacement can be found. He also will continue on a consulting arrangement to help grow our modern sporting rifle business.

About Bushmaster Firearms International, LLC

Bushmaster Firearms International, LLC (BFI) is the leading supplier of AR15/M16 type rifles in the United States for Law Enforcement, security and private consumer use. Headquartered in Windham, Maine, with additional facilities in Dallas, Georgia and Lake Havasu, Arizona, BFI supplies aluminum and advanced carbon fiber-based rifle platforms in calibers ranging from 5.56mm/223 to 50BMG. These and associated accessories manufactured by BFI meet the tactical rifle needs of US customers as well as Military, Law Enforcement and Security clients from over 50 countries worldwide. Visit our web site at www.bushmaster.com.

I wonder if this has anything to do with the plans for the Freedom Group to go public.