"HE WHO LOVES PRACTICE WITHOUT THEORY IS LIKE THE SAILOR WHO BOARDS SHIP WITHOUT A RUDDER AND COMPASS AND NEVER KNOWS WHERE HE MAY CAST".
Leonardo Da Vinci
Thursday, February 20, 2014
Gun Makers Find Greener Pastures Down South
ByMatthew Rocco Photo: Reuters
In the wake of new regulations in their northern home states, gun makers
are going to the Carolinas, Alabama and other areas in the South for a place to
open up shop.
Legislators in some states pushed for bans on the type of rifle used in
the Newtown, Conn., school shooting in December 2012. New York and Maryland
each passed laws that prohibit certain types of semi-automatic rifles and
capped the size of magazines, while Connecticut also restricted the number of
rounds for a single magazine.
All three of those states are home to familiar names in the gun
industry, some of which threatened to seek out expansion opportunities in other
states or move their operations entirely.
Remington Outdoor, the parent company of Marlin, Bushmaster and other
brands, is the latest to announce an expansion down South. Its flagship brand,
Remington, is the oldest gun maker in the U.S. and has a manufacturing base in
Earlier this week, the company formerly known as Freedom Group detailed
plans to open a plant in Huntsville, Ala. Remington Outdoor expects to create
more than 2,000 jobs in Huntsville over the next decade to meet growing demand
for its products.
Chairman and chief executive George Kollitides said demand for Remington
Outdoor’s products is at a “historic high.” The Madison, N.C.,-based company,
which has 19 locations in the U.S., plans to be up and running in Alabama
within 18 months. Its total workforce had grown to 4,200 employees by the end
of 2013, compared to 2,400 in 2008.
Based on data from the National Shooting Sports Foundation, adjusted
NICS background checks last month declined 45.8% from a record 1.79 million
checks in January 2013. However, a figure of 970,510 was still good enough to
mark the second highest January ever.
Late last year, Ruger began manufacturing at a third facility located in
Mayodan, N.C. The company is headquartered in Southport, Conn., but does all of
its manufacturing outside of the state.
Ruger’s two other plants in Prescott, Ariz., and Newport, N.H., employ a
combined total of roughly 2,000 workers. The new North Carolina location
created around 450 jobs, according to Ruger’s vice president and general
counsel Kevin Reid.
Reid said the company had “a whole list” of criteria when considering
where to expand operations. Ruger wanted a modern facility that needed little
rehab, was close to an airport and had access to a skilled workforce.
And of course the plant had to be in a gun-friendly state. Connecticut
wasn’t on the list of possibilities, Reid noted. He also said moving its 30 or
so workers out of Southport is unlikely.
“We don’t have many folks there,” Reid said. “For us to supplant those
people, it doesn’t make much sense.”
Goodbye to Gun Valley
A long history of gun making in Connecticut and Massachusetts has earned
them the nickname of Gun Valley. With companies increasingly looking further
west and south to make firearms, those states have the most to lose.
According to a NSSF report last year, Connecticut alone would lose 1,768
jobs, $13.5 million in business tax revenue and $450 million in economic
activity if Colt, O.F. Mossberg & Sons and Stag Arms were to move all
manufacturing out of state.
Smith & Wesson (SWHC) and
Springfield are two of the most prominent rifle and handgun makers in
Massachusetts. Savage Arms, which was acquired by Alliant Techsystems (ATK) last year, also calls the state home.
North Haven, Conn.-based O.F. Mossberg & Sons, is in the midst of
adding manufacturing capacity at its existing factory in Eagle Pass, Texas,
said spokesperson Linda Powell.
Another Connecticut gun maker, Stag Arms, is searching for a second home
to expand. Stag Arms was ready to add a fourth factory building in New Britain,
but the company put those plans on hold once the state began debating further
restrictions on its specialty, modern sporting rifles.
“With the way the laws went in Connecticut, we decided to do expansion
out of the state,” Stag Arms President and CEO Mark Malkowski said. The company
has new products being developed and is already nearing capacity at its current
Texas and South Carolina have been the most aggressive in pursuing Stag
Arms, which is keeping in touch with states and economic development groups.
“An expansion of this size doesn’t happen overnight,” Malkowski added.
Wherever Stag Arms moves it will likely create around 450 jobs. “We know we
want to expand out of state.”
Demand for the AR-15 rifles made by Stag Arms has risen sharply in
recent years, and Malkowski said a New York-compliant rifle is boosting the
company’s sales in the Empire State. The new rifle was made without features
specifically prohibited by the law New York passed last year.
A union official blamed that law for driving Remington to open a new
plant in Alabama. Fran Madore, president of United Mine Workers union that
represents most Remington employees in Ilion, N.Y., told The Post-Standard that New York’s SAFE Act “has
been a terrible thing from the beginning.”
“You’d think New York would be doing everything to keep us. Instead, it
passes a law that cripples us,” he said.
Beretta, which makes the U.S. military’s standard-issue sidearm, the M9,
has its U.S. headquarters in Maryland. As a bill making the company’s 13-round
9mm pistol magazines illegal neared passage, Beretta warned lawmakers that any
additional regulations would play a role in where Beretta operates.
Last month, the Italian company added itself to the list of gun makers
seeking greener pastures, unveiling plans to build a new plant in Tennessee
this year. In 1990, Beretta moved one of its factories to Virginia when
Maryland passed a round of gun laws.
Colorado-based Magpul, known for its magazines and gun accessories,
recently made good on a promise to leave the state if a limit on magazine
capacities passed. Magpul said early this year it will relocate to Texas and
Kahr Arms purchased 620 acres in Pike County, Penn., to move its
corporate offices from Pearl River, N.Y. It also anticipates adding
manufacturing operations in Pike County.
Putting down roots in another state can pay dividends in more ways than
one, as many firearm owners actively look to support companies in gun-friendly
“There are people who are very passionate about where companies are
located,” Malkowski explained. “At the same time, picking up and moving
multiple factories is a very difficult task.”
Malkowski said Stag Arms will choose a location based on the available
workforce, in addition to local gun laws.
“We want to be in a state where they won’t pass a law in the middle of
the night that puts us out of business,” he added. “With an expansion, it gives
us an opportunity to see what it’s like to operate in another state. It
definitely could lead to a headquarters move.”