Some Thoughts About Remington, Jobs, And Its Union

I will be the first to admit I don’t know much about the inner workings of unions. I was born and bred in North Carolina which is both a right-to-work state and the least unionized state in the nation. While I have and have had relatives who were union members in the North, I’ve never worked in a job that lent itself to unionization.

Yesterday I received a very perceptive and enlightening email regarding Remington, jobs, and unions. The person who sent it to me is very well versed in the inner workings of unions but prefers no attribution and to remain anonymous.

The first point he made is that Remington Outdoor Company will say nothing about moving jobs from Ilion to Huntsville for a couple of reasons. First, anything that Remington says that could be interpreted as coercion or related to bargaining would likely lead to serious charges brought by the National Labor Relations Board. The second reason is that Remington’s contract with UMW Local 717 could very well contain language or clauses that would lead to automatic unionization of the Huntsville facility. This is referred to as successor language.

The second point he made is that without successor language, it doesn’t look good for union representation in the South especially given the loss at the Volkswagen plant in Chattanooga. Interestingly enough, Alabama has the highest unionization rate of any Southern state.

Remington has a large operation in Ilion and it won’t be easy to move. But given time, you will start to see operations begin to move South. It is my understanding that R&D is already slated to move to Huntsville. The city, by the way, is also home to the Redstone Arsenal which has as one of its component organizations that Army Material Command as well as a number of Ordnance Corps units. If the Republicans take control of the US Senate, Sen. Jeff Sessions (R-AL) is the 3rd ranking Republican on the Senate Armed Services Committee and could easily get the ear of the DoD for Remington.

I was able to look at an earlier collective bargaining agreement between Local 717 and Remington. While I did not find successor language in it, I did see language that mandated certain models produced by Remington must be made in Ilion. Article II- Scope and Coverage, Section g – Job Security says that products such as the Remington Model 7, 700, 7400, and 7600 rifles and the Remington Model 870, 1100, and 1187 shotguns “will continued to be produced only at the Ilion plant”. It did allow for Remington to procure component parts elsewhere. This contract expired in 2007 and I can’t imagine succeeding contracts not containing similar language.

The current contract was ratified in December 2012. The highlights of the contract as publicized by the United Mine Workers of America HQ include:

The new pact includes a provision extending Local 717 jurisdiction to any new plant that Remington builds, as the company is presently considering, within a 100-mile radius of the main plant in Ilion, N.Y. In addition to a $500 signing bonus, the contract features 3 percent wage increases in each of the first four years, and 3.5 percent in the final year. It also maintains the current level of medical benefits, improves the language governing overtime and creates a new position, Utility Specialist, aimed at reducing the reassignment of regular workers.

This contract was ratified two days before the shootings in Newtown, Connecticut. They could not have imagined the NY SAFE Act when the collective bargaining agreement was ratified. If this contract contained the same earlier language as to what models would be produced at the Ilion plant, you have to wonder if it extended to the Bushmaster AR-15s whose production had been shifted from Windham, Maine to Ilion. It is hard to conceive that a company would want to take the chance of producing a firearm in a state where it couldn’t be sold.

To sum it all up, while Remington’s current contract with Local 717 may preclude the rapid transfer of existing production lines from Ilion to Huntsville, production will start shifting South over time.

The Official Announcement From Remington And Alabama

Remington, the Governor’s Office, and the local governments involved sent out a joint press release yesterday announcing the expansion of Remington Outdoor Company in Huntsville, Alabama.

The release is below:

OFFICE OF GOVERNOR ROBERT BENTLEY

FOR IMMEDIATE RELEASE: MONDAY, FEBRUARY 17, 2014

Remington Outdoor Company Announces Expansion to Alabama

HUNTSVILLE AND MONTGOMERY, AL — Governor Robert Bentley on Monday announced Alabama has recruited the country’s oldest firearms manufacturer to Alabama.

Remington Outdoor Company (ROC) will expand to the old Chrysler building in Huntsville, and create more than 2,000 new jobs within the next ten years. Governor Bentley joined Remington Chairman and CEO George Kollitides and other state and local leaders for the official announcement.

“I am honored to welcome Remington to Alabama,” Governor Robert Bentley said.

“The Alabama workforce, our business climate and our quality of life continue to make Alabama extremely attractive to companies. Remington will soon experience the same type of success that other companies in Alabama have already experienced. Today’s announcement will create more than 2,000 jobs in Huntsville, and reflects a statewide capital investment of $110 million. Our relationship with Remington is just beginning, and I look forward to a continued partnership with the company.”

“With the acquisition of this facility, we plan to create more than 2,000 jobs in Huntsville over the next decade,” said George Kollitides, Chairman and CEO, Remington Outdoor Company. “This additional capacity is essential to fulfill demand and introduce new products. Having watched our Company grow from 2,400 employees in 2008 to 4,200 employees by the end of 2013, a five year, 75 percent increase, it is easy to see why we’re investing now.”

In 2013, ROC made significant strides including its ammunition facility expansion, firearm capacity growth, winning a multitude of highly competitive military and law enforcement contracts, launching its 1816 lifestyle brand, and introducing a series of exciting new products such as Ultimate Defense Handgun Ammunition and the 783 bolt action rifle. Bolstered by record sales, the company chose to expand operations to Alabama.

“2013 was an outstanding year during which we grew by every key measure,” continued Kollitides. “We are capitalizing on this momentum by strengthening our positions across the board. With demand for our products at an historic high and more new product launches planned for 2014 than ever before in our 200-year history, we are investing in the future.”

Last year, ROC modernized its production facilities, re-focused its research and development on customer requirements, and ensured consistent, high-quality manufacturing. Together, these advancements demonstrate a commitment to meeting customer demand. The Huntsville expansion provides for future needed capacity to support existing product demand and a robust new product pipeline.

ROC has 19 locations in the United States, and Huntsville and Madison County officials praised the company’s decision to expand to Huntsville.

“With news of this Remington facility expansion, we have yet another example of Huntsville fulfilling its economic development promise,” Huntsville Mayor Tommy Battle said. “Our workforce is among the best and brightest in the nation, and they deserve challenging career opportunities, along with the high quality of life Huntsville provides. We are thrilled to welcome Remington to our city and region.”

“Our pro-business environment, along with the region’s extensive manufacturing experience, helped us outmaneuver two dozen other states looking to attract Remington,” Madison County Commission Chairman Dale Strong said. “This announcement represents new diversity to our local economy, and will provide an array of opportunities for skilled tradesmen, engineers and support personnel.”

Following facility upgrades, ROC is expected to begin operations in Alabama within the next 18 months.

Cuomo Spokesman: “No Remington Jobs Are Leaving NY”

Rich Azzopardi, who some describe as “Ewok-like”, has been the spokesman for Gov. Andrew Cuomo (D-NY) since 2012. Yesterday he went on Twitter to try and deflect from some of the attention the Remington expansion in Alabama is getting.

In the strictest sense of the word, New York may not be losing any jobs – for now. In the short-term, it will take some time before Huntsville is up and running. However, as the production lines begin to come online in Huntsville and the cost per unit of production starts to decrease compared to Ilion, just how long do you realistically think Remington Outdoor Company will wait before shifting production lines south?

The Ilion, New York plant will become for Remington what the East Alton, Illinois plant has become for Winchester: an aging albatross of a building with a highly unionized workforce in a state whose politics is dominated by the gun prohibitionists. While you may leave some production there because of specialty machines and craftsmen, the bulk of it is eventually going to shift to the newer plant.

First Official Confirmation On Remington Expansion

The first official confirmation that Remington plans to expand to Huntsville, Alabama comes from Sen. Jeff Sessions (R-AL). Prior to this, all reports have had to say that “an announcement is expected” because “high level sources” “have confirmed it”.  I sincerely doubt a senator would make such a release unless it was a done deal.

From Sessions’ Senate homepage:

WASHINGTON—U.S. Sen. Jeff Sessions (R-AL) issued the following statement today after Remington Arms announced plans to open a plant in Huntsville:

“Remington’s decision is great news and a further testament to the world class workforce in Huntsville. This plant will create good-paying manufacturing jobs for thousands of workers. We warmly welcome Remington Arms and look forward to their success and presence for years to come.”

While Gov. Robert Bentley (R-AL) did allude to it when asked, all he said was “I think Monday you’ll see something very special in the state.” That is a lot more nebulous than Sessions’ comment.

Is Remington Going To Alabama (With A Banjo On Its Knee)? (Updated)

Rob Curtis at the Military Times’ GearScout blog is reporting this afternoon that Remington Outdoor Company aka Freedom Group will be building a new plant in Huntsville, Alabama. This new plant is reported to be equivalent in production capacity to their Ilion, NY plant. However, this new plant will supplement but not replace the Ilion plant.

Remington Outdoor Co., previously known as the Freedom Group, expects to announce a major expansion to a new facility in Huntsville, Ala., as early as next week. According to two sources with knowledge of the property sale, the deal has been in the works for months and ROC executives plan to sign the papers Monday finalizing the sale of a 500,000-square-foot facility that will add approximately 25 percent more space to Remington’s existing 2.1 million square feet of existing manufacturing real estate.

Sources say the expansion was undertaken to help the company meet unprecedented demand for its products. Space in the facility is not currently earmarked for any one of the company’s 18 individual brands, but to facilitate flexibility and growth of the Remington Outdoor Company.

Before settling on Hunstville, the company was courted by no less than 24 states and various localities hoping to add hundreds of new jobs to their economies. State and local entities in Alabama made economic concessions to attract the company, sources say. The selection of the Huntsville area makes sense, with a skilled and technical workforce already in place. The area is home to the Army’s Redstone Arsenal, which has 35,000 military and civilian employees.

Other major technical employers in the area, such as NASA’s Marshall Space Flight Center, and Toyota, ensure ROC will have a large pool of talent to draw upon for its engineering, technical manufacturing and product development efforts. The fact that Alabama is regarded as a strong supporter of Second Amendment rights also played a role in the selection of the area.

More on this move by Remington at the GearScout blog found here. 

UPDATE: According to the Alabama-oriented website and blog Yellowhammer, the announcement will be made on Monday about the move by Alabama Gov. Robert Bentley (R-AL).

High level sources have informed Yellowhammer News that Remington, one of the world’s largest gun manufacturers, will on Monday join Alabama Gov. Robert Bentley in announcing that they are bringing over 2,000 jobs to Alabama.

The company is viewing the move into Alabama as an expansion, but it will likely impact their Ilion, NY plant as well. The New York facility currently employees around 1,200 people. It is expected to stay open, but with a reduced workforce.

“The company is making the move as an expansion of capacity, production and research,” a source told Yellowhammer on condition of anonymity because they were not authorized to speak publicly. “The demand for Remington products has skyrocketed recently, for obvious reasons, so they need to increase their production capacity. They will be expanding their research capabilities with the Alabama plant, too.”

The initial estimated impact on Alabama’s economy will be roughly $87 million.

 The name of the website with the above information combined with the loss for New York reminds me of that famous University of Alabama cheer which I’ll paraphrase:

Hey Tigers   New York
Hey Tigers   Cuomo
We just beat the hell outta you!
Rammer Jammer Yellowhammer
Give ’em hell Alabama

H/T Bitter on the Yellowhammer story. 

UPDATE II: Phil White, in comments to a post regarding the probable move to Huntsville, says that Remington will occupy the former Chrysler Acustar/Siemens/Continental plant adjacent to the Huntsville International Airport. The property has a 570,000 sq. ft.  manufacturing facility and a 200,000+ sq. ft. research facility. The video below is a sales promo for the property. It looks like Remington is getting a facility upon which they can build a future unlike their Ilion, NY plant.

Cerberus Moves To Ditch The Freedom Group

The Wall Street Journal is reporting that Cerberus Capital Management plans to sell their firearms manufacturing arm in the wake of the Newtown tragedy. Their statement below says that they don’t want to be pulled into a national political debate concerning firearms.

Cerberus Capital Management Statement Regarding Freedom Group, Inc.


NEW YORK, Dec. 18, 2012 /PRNewswire/ — We were shocked and deeply
saddened by the events that took place at the Sandy Hook Elementary
School in Newtown, CT on December 14, 2012.  We cannot comprehend the
losses suffered by the families and friends of those killed by the
unthinkable crimes committed that day.  No words or actions can lessen
the enormity of this event or make a dent in the pain that was inflicted
on so many.


In 2006 affiliates of Cerberus Capital Management, L.P. made a
financial investment in Freedom Group.  Freedom Group does not sell
weapons or ammunition directly to consumers, through gun shows or
otherwise.  Sales are made only to federally licensed firearms dealers
and distributors in accordance with applicable laws and regulations.  We
do not believe that Freedom Group or any single company or individual
can prevent senseless violence or the illegal use or procurement of
firearms and ammunition. 


It is apparent that the Sandy Hook tragedy was a watershed event that
has raised the national debate on gun control to an unprecedented
level.  The debate essentially focuses on the balance between public
safety and the scope of the Constitutional rights under the Second
Amendment. As a Firm, we are investors, not statesmen or policy makers. 
Our role is to make investments on behalf of our clients who are
comprised of the pension plans of firemen, teachers, policemen and other
municipal workers and unions, endowments, and other institutions and
individuals.  It is not our role to take positions, or attempt to shape
or influence the gun control policy debate. That is the job of our
federal and state legislators.


There are, however, actions that we as a firm can take.  Accordingly,
we have determined to immediately engage in a formal process to sell our
investment in Freedom Group.  We will retain a financial advisor to
design and execute a process to sell our interests in Freedom Group, and
we will then return that capital to our investors.  We believe that
this decision allows us to meet our obligations to the investors whose
interests we are entrusted to protect without being drawn into the
national debate that is more properly pursued by those with the formal
charter and public responsibility to do so.

Our thoughts and prayers are with the families and communities impacted by this tragic and devastating event.

The Freedom Group which has been renamed Remington Outdoor Company, Inc. consists of Remington, Bushmaster, DPMS/Panther Arms, Remington Military, Remington LE, Parker Gunmakers, Barnes Bullets, Advanced Armament, Tapco, Dakota Arms, Marlin, Para-USA, H&R, Mountain Khakis, and Remington PMPD.

Among the upper management of Cerberus are such political figures as former VP Dan Quayle and former Treasury Secretary John Snow. Steve Feinberg, CEO of Cerberus, is reportedly an avid hunter and shooter. According to the Journal, Cerberus came under pressure from certain investors to sell the unit.

Cerberus’s statement comes shortly after it faced pressure Monday from
former New York Governor Eliot Spitzer as well as the California State
Teachers Retirement System, which said it is reviewing a $500 million
investment commitment to the New York-based private-equity firm.

 I find the move by Cerberus to sell Freedom Group aka Remington Outdoor Company much more disturbing than the nonsense coming from the gun prohibitionists and their politician allies. To me it seem a great harbinger of the difficulties that lie ahead for us with regards to gun rights. Investment capital companies such as Cerberus are known to make decisions on numbers and fact without dealing in emotion. They obviously feel that the business environment for them will be difficult in the days ahead due to political forces. The Freedom Group companies manufacture a lot of AR-15s and these are the focus of the gun prohibitionists.

For the firearms industry, this move by Cerberus may actually be beneficial. If the new owners of Remington Outdoor Company are not beholden to public employee/union pension funds and other institutional investors, it will be a good thing. The unity of the firearms industry in the face of the threat of legislation is paramount. They don’t need the management of one of the major players to go wobbly such as is evident in the response of Cerberus.