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Gun Manufacturer Remington Files for Bankruptcy Protection

Gun Manufacturer Remington Files for Bankruptcy Protection

Dwindling sales, mounting debt.

https://www.youtube.com/watch?v=UdRIveblcOI

Remington, America’s oldest gun manufacturer, has filed for bankruptcy protection due to declining sales and mounting debt from Sandy Hook lawsuits.

From The New York Times:

The gun maker had said last month it was nearing a bankruptcy filing, which it made on Sunday in federal bankruptcy court in Delaware. In its Chapter 11 filing, Remington said it had between $100 million and $500 million in debt and would continue to operate while under bankruptcy protection. It estimated that its assets were between $100 million and $500 million.

Remington did not immediately respond to a request for comment on Sunday evening.

The company, which was founded in upstate New York in 1816 but is now based in North Carolina, was acquired in 2007 by the private equity firm Cerberus Capital Management for $118 million. The firm rolled it up with other gun manufacturers, including the maker of the Bushmaster rifle, into a conglomerate called Freedom Group.

Under that management, gun sales expanded as Remington almost tripled its production.

But after Adam Lanza killed 20 children at Sandy Hook Elementary School, the public put its attention on Remington when it was disclosed that Lanza used a Remington AR-15.

The families affected by the massacre sued Remington claiming the manufacturer bore some responsibility for Lanza’s actions.

The debt has been a problem since 2010. CNBC reported:

Adding to Remington’s problems are heavy debt, as well as product liability concerns involving its signature product, the Model 700 bolt-action rifle, which CNBC first investigated in 2010.

While Remington maintains that the guns are safe, the company has agreed to replace the triggers on millions of guns in a class action settlement. The company has refused to say whether the bankruptcy filing — which it first signaled last month — will affect the settlement.

Remington and other gun manufacturers expected a bump in sales if failed Democrat presidential candidate Hillary Clinton won in November 2016. But with President Donald Trump’s win, sales have gone down across the board.

From USA Today:

He [Remington CFO Stephen Jackson] said the “overall business and industry environments continue to cause significant financial hardship,” a situation that could be partly attributed to the perception that President Trump, a National Rifle Association supporter, won’t impose new restrictions on gun sales.

There are no official federal statistics covering gun sales nationwide.

However, statistics from the FBI’s National Instant Background Check System (NICS) show that the total of all types of background checks fell nearly 8.4%, to roughly 25.2 million, in 2017, the year of Trump’s presidential inauguration.

Firearms background checks increased steadily during much of President Barack Obama’s two-term White House tenure, as well as during President George W. Bush’s second White House term, the data show.

The company will continue operations as it pursues the bankruptcy protection.

Remington explained the bankruptcy plans “would be pre-packaged under an agreement with its lenders.”

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“Remington and other gun manufacturers expected a bump in sales if failed Democrat presidential candidate Hillary Clinton won in November 2016. But with President Donald Trump’s win, sales have gone down across the board.”

Wait – Legal Insurrection blames Trump??? 😮

(Before you go hitting the thumbs-down, just kidding!)

OleDirtyBarrister | March 26, 2018 at 3:28 pm

1. Lousy quality. The company used to make good guns, but its quality and its choices in offerings have been in decline for more than 25 years. Other makers have surpassed Remington, and I can think of multiple gun brands that would interest me before looking at a Remmy.

2. It is a victim of Leveraged Buy Out (LBO) firm piracy. LBO firms changed their name to private equity for a better spin and PR, but their bloodsucking, destructive ways have not changed. They bleed the companies for fees and pile up the debt.

3. Unions And Bad Geography. Remington employees were members of the United Mine Workers among others, and it remained in New York far too long. These factors aggravated the others.

Remington has had increasing problems for the last decade, or more. One of the firm’s biggest problems was not product liability or reliability but the dwindling hunting arms and changing LE long gun markets and higher production costs.

A Remington bolt action rifle will last several generations and the basic weapon differs only cosmetically from those introduced 50 years ago. Add to that the fact that the hunting of game is dwindling around the world and the market for the Remington company’s bread winners is greatly reduced. The LE switch from shotguns to patrol rifles also undermined a significant portion of the company’s business. The attempt to enter the AR and 1911 markets came too late and the products were too highly priced to make Remington competitive.

Remington is a classic example of the results of depending upon name recognition over innovation.

    alaskabob in reply to Mac45. | March 26, 2018 at 4:29 pm

    Other very good firearms in the market have constrained Remington sales. It is an international market plus several smaller quality US are in the mix. Most Remingtons have been variations on the theme of just three designs 700, 870 and 1100.

    Add to that the lawfare by the anti’s over the AR and the safety on the 700 .. and problematic. As for the safety, if one always follows the rules of firearms, nothing adverse happens.

    Years ago a guy was FOOLING around with his newly bought Ruger six gun and it went off. Not a design error, but a judge ruled Ruger liable for not making the gun more idiot proof. Same with Remington and a poorly controlled rifle that wound up pointed at someone when the safety was switched off. (Hint: remember Audi?)

      murkyv in reply to alaskabob. | March 26, 2018 at 9:42 pm

      I stupidly bought a 770 in 30.06. Composite stock piece of crap.

      The scope on the damn thing has drawn blood on the eyebrow of 3 of the 5 people who have shot it.

      Not mine, fortunately

        alaskabob in reply to murkyv. | March 27, 2018 at 2:19 am

        I have had good luck with Remingtons, but after a different stock or trigger…but accuracy was not an issue. Winchester prior to being picked up by FN had terrible quality control with union employees.

notamemberofanyorganizedpolicital | March 26, 2018 at 3:53 pm

On an interesting side note…..

“When Will We Have the Guts to Link Fatherlessness to School Shootings?”

https://pjmedia.com/lifestyle/will-guts-link-fatherlessness-school-shootings/?

statistics from the FBI’s National Instant Background Check System (NICS) show that the total of all types of background checks fell nearly 8.4%, to roughly 25.2 million, in 2017

Which is twice what it was a decade ago. Missing “Hillary boom” or not, anybody in the gun biz who isn’t raking in the bucks is doing something very wrong.

Not that I’ve been of much help to Remington myself. My newest Remington has a barrel date of October 1918. I’m not a very good consumer.

    OleDirtyBarrister in reply to tom_swift. | March 26, 2018 at 4:18 pm

    If you want to help, I have a Remington 11-87 12 gauge originally sold in black synthetic but with a nice rattle can camo job on it.

    It has never shot where I look, and the point of impact deviates more from point of aim the heavier the load you use. So it is totally useless for turkey hunting or card shooting, but would work for home defense in which you only need to be within 12 inches of center of intruder.

    This gun was a replacement gun that Remington provided after the prior gun rusted profusely after I hunted with it in the rain in Louisiana. And the gun is sold in black synthetic as a “special purpose shotgun”. Remmy’s synthetic coating is like a sponge. Ironically, I knew a guy that owned a slightly older syth 870 pump that never rusted despite the fact he never cleaned it.

As they own Marlin, I will assist them. I am looking at a fine lever action.

    alaskabob in reply to puhiawa. | March 26, 2018 at 4:33 pm

    A BIG favorite up here is the 45/70 guide gun series. Handy and exceptionally good accuracy. Good bear medicine… Up here it isn’t what you hunt, it’s what can hunt you that makes the difference.

      Sanddog in reply to alaskabob. | March 26, 2018 at 6:17 pm

      I bought my husband a guide gun several years ago as an anniversary present. I’ve shot it several times but I’m more comfortable with my 336. Since he has a bad knee, I figure I can outrun him and leave him to deal with any predators.

      puhiawa in reply to alaskabob. | March 28, 2018 at 3:11 am

      I am looking at the Texas Delux Marlin 30-30. Ans I also have my eye on a .243 Henry with iron sights. I got enough guns useless when it rains or the gun gets jostled. Pieces of crap when you are down.

I’m not sure this story is correct, no matter how bad the NYT wants it to be.

It has been widely reported that Remington Outdoors…the Parent/Holding Company of Remington Arms Co. (along with numerous other arms makers and other outdoor brands)…was coordinating a bankruptcy with lenders to restructure debt.

Under the plan, operations of the individual companies under the Parent/Holding Company – Remington Arms, Bushmaster, DPMS, Marlin, et al – would not be affected by the debt restructuring and will continue full production and support of all existing and new products.

Trying to scare purchasers of products of the subsidiaries of Remington Outdoors is likely one of the goals of the NYT misinformation. Spreading it here, and incorrectly amplifying it as some here seem to be seem to be attempting, is a disservice to the truth.

The private equity people stripped out the cash for themselves and mismanaged the company and now they are stiffing the companies creditors.

    YellowGrifterInChief in reply to dunce1239. | March 26, 2018 at 5:40 pm

    Exactly as Trump did with his casino business.

    Are you indignant about that? He stiffed his creditors and even managed to take the tax losses. During a presidential debate he claimed that it showed he was smart.

    He was. Not so for the people who trusted him.

      Oh yellow-troll, you have no shame. How silly you are.

      Actually, YES, it DOES show that a business man is smart to take advantage of the potential for discharging debt, while maintaining the structure of the company and the ongoing operations so that the company can become profitable again (Bankruptcy is the relief mechanism for the honest, but unfortunate, debtor).

      Fortunately, ~MY~ company is going to fully be made whole (full disclosure, my company makes components for Remington Arms). Actually, we BOUGHT Remington’s screw-machine department when we started producing components for them in the early 1990s, because we were better and more efficient at it than their in-house production department.

      Cerberus Capital Management did botch the purchase of Remington. They tried to immediately purchase a whole bunch of smaller arms manufacturers, with the intention of consolidating a whole bunch of firearms lines under one name with recognition (Remington). Unfortunately they tried to do too many things at once, without completing any one of the individual tasks (moving, consolidation, or building new facilities). Firearms as a business is hard enough to be in. Grabbing a whole bunch of the smaller businesses and trying to scale-up quickly was too ambitious.

      Basically they got into something they shouldn’t have gotten into, because they didn’t truly understand the market or the market forces that were at work.

        YellowGrifterInChief in reply to Chuck Skinner. | March 26, 2018 at 10:21 pm

        Trump’s creditors were not so lucky. He is the one without shame and you are silly if you support him.

        I am happy for you that your own livelihood was salvaged. Trump’s small contractors did not do so well.

          I am happy for you that your own livelihood was salvaged.

          Oh, it’s not ~my~ livelihood that is being salvaged. I’m an attorney in private practice. Perhaps I should have been more specific. ONE of the companies I own makes components for Remington Arms. While I have the ~capability~ to run that business personally, and did work in the business for 10 years prior to going to law school, I’m far more effective at what I’m doing separate from the business and letting the management team there run day-to-day operations.

          If it were more painful, it would be the livelihood of the 180-ish direct employees, and the roughly 600 people they support directly, and the economic impact from those 600 around the local community.

          Fortunately, all things considered, Remington is a small part of our business. The Cerberus bankruptcy filing will merely be an unpleasant bump this quarter. Other bankruptcies of some of our customers in the past have been FAR more painful.

          Even if Remington entirely went AWAY as a customer, it would represent less than 3% share of annual sales. I spent a LOT of time pushing my company to diversify (mostly out of Automotive) prior to moving on to what I’m doing now.

      “He” didn’t do anything. A corporation he held stock in did.

      Ignoramus.

        YellowGrifterInChief in reply to TheFineReport.com. | March 26, 2018 at 10:25 pm

        He held a controlling interest and was the management through 4 (count ’em) bankruptcies. What do you actually know, Mr. FauxReport?

        Do you actually know anything about capitalism or is it just a cult to you?

I bought a Remington 700 about five years ago and tuned my load to the rifle. Now I can consistently put a .308 round through a quarter at 100 yards. I am quite leased with their product.

Remington’s main problem is Cerebrus that owns them, and bad management by the MBAs, lawyers, accountants, etc. who think they know business, but don’t. They borrowed a great deal of money and bought up numerous smaller gun manufacturers and outdoor companies, and made a mess of it. Quality dropped on many of their products in the efforts to cut costs, consolidate manufacturing, introduce new products, etc. — demand slowed down, and they were very much financially overextended.

Their problem is totally due to bad management. They tried to do too much, too fast, and with an unmanageable level of debt and people at the top who don’t understand the firearms business. They sunk enterprises that would have survived with a little adjustment, through ignorance of the business, and trying to expand at a rate the market wouldn’t support, and they couldn’t afford.

Remington built this by themselves,when you do not produce what consumers want and then time after time produce Flops that have to be recalled,that’s a recipe for success, NOT.
Good Riddance !

Sad day. Two of my uncles and both grandfathers retired from Remington’s Ilion NY plant after long service.

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