The Down Range Forum
Member Section => Down Range Cafe => Topic started by: Rastus on February 13, 2018, 06:11:50 AM
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Dang. Must everything change? Remington is filing for Chapter 11 bankruptcy.
http://www.foxbusiness.com/markets/2018/02/13/gunmaker-remington-to-file-for-bankruptcy.html (http://www.foxbusiness.com/markets/2018/02/13/gunmaker-remington-to-file-for-bankruptcy.html)
I guess it was bound to happen after the boom years of Obama and the Cerberus Captial Management purchase. The article blames it on a company gun being used at Sandy Hook which is hooey. This type of thing is often from management taking too short term a view of business.
I suspect the underlying cause was too much debt and growth to meet demand when guns were flying off the shelf everywhere. That and they had Bushmaster which probably cost them a ton more than what should have been paid...and we all know how black rifle sales are going these days. Not unlike the oil business when oil price shoots up to "the stratosphere" and too much is paid for an oil company or an oil company tries to develop based on high prices....I've seen that over the last 40 years or so.
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Remington can still pull out of this. But it will take Cerberus Capitol Management being willing to sell at a loss to their investors. That's hard to do without people dumping Freedom Group stock all together. Which will drive them into an even deeper hole. Remington's problem is not it's products, but rather it's baggage. Both financial and legal. Law suits and payouts over the Walker and X-Pro Trigger systems have drained them financially over the years. And all the while most all of the owners including DuPont, took from the company, and added nothing to it in regards to modernization of equipment. All the while that was taking place overpaid union employees were milking them dry.
Add it all up and the old gal has nothing left to give. If they get sold cheap enough to a company with enough venture capital to invest in it, and at the same time be willing to be patient enough before seeing a return on their investment, they could turn the company around. But they also need better marketing. In that they need to stick with proven products that have sold well over the years. And stop with the cheap, non 1911 pistols, and other loser products that no one is currently buying, or is ever going to buy. And of course the, "Trump gun glut" isn't helping anyone in the firearms business. Sales of all the major gun manufacturers is way off, compared to what it's been for the last 8 years living under fear of increased legislation that no longer exists.
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All the while that was taking place overpaid union employees were milking them dry.
How much were they making?
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Report I heard on radio combined drop in sales last fiscal year and costs associated with the lawsuit concerning Sandy Hook and potential payout in that case.