Remington's Bad News

[mohavesam]

Who knew we could bankrupt a gun manufacturer? What goals - with potential to ruin the largest arms maker in the USA - cannot be reached once the customer is over-estimated in the Marketing meetings? Apparently all of them.

Gun buyers are a fickle bunch after all. :?:

Don't be small-minded about this - it shatters every gun maker to the core.
This is NOT a political discussion, it is a thread about industry and how marketing destrys American manufacturing - and all the jobs involved. Quite a study on our society and where we are going. Once the gun-buying public reaches saturation, what next?

"S&P as a result has cut the company’s corporate credit rating — already at a junk-bond-level CCC+ — two full notches, to CCC-, a move likely to make the company’s high-yield debt less attractive to investors and lenders, and force Remington to pay more in interest. The company could face a change in control, bankruptcy, or default on its debt by next year.

A backlog of unsold, unwanted firearms will force Remington to operate at a loss and “pressure the company’s sales and profitability at least through early 2018, resulting in insufficient cash flow for debt service and fixed charges,” unless Remington gives up cash to pay for ongoing operations, S&P adds."

 

[powder smoke]

Bad management can ruin any company. I suspect this could be the root
of their woes. The down turn in the market should have been noticed and a cut
in production may have keep them in the black.
Trumps win, came with gun folks feeling comfort, sales slumped!
Boom in gun sales usually come when the lefties get control!
BHO was the best gun sales person in recent times. ps

 

[Quarterbore]

If Ruger sees a sales shortage I wonder if they might finally make what I have referred to as a New Model Redhawks or Super Redhawks without the extended receiver stub (Large Frame GP100) in 44, 45 Colt and possibly 454 and 480 too.

 

[mohavesam]

Ruger is not diversified, unfortunately. They have zero medical, aerospace nor even an ISO-designated management system, and are not certified in those industries. They also have a heavily (1960's based) top-down wesayso organizational structure. Not even close to Remington's org structure. Enough of a real-world difference to ponder realistically. Ask your broker how they think Ruger will fare in the next few fiscal years...

 

[CoolLogic]

The recent downturn in gun sales should not have had such an effect on a company that big. Other companies saw it coming and made adjustments. I suspect years and years of on going law suits over the 700 trigger have taken their toll.
Poor management and law suits.

 

[RSIno1]

The recent downturn in gun sales should not have had such an effect on a company that big. Other companies saw it coming and made adjustments. I suspect years and years of on going law suits over the 700 trigger have taken their toll.
Poor management and law suits.

Bankrupt and sell off the assets - the lawsuits go away.

 

[Rick Courtright]

Hi,

Any documentation for this story?

Rick C

 

[Jeepnik]

Yep following the life span of a company.

Started by visionary. It becomes too large for them so they hire business men to run it. They want to increase profits so they increase production and do so by decreasing quality. Profits drop.

The business men hire accountants to bring profits back up. The eliminate highly qualified workers and replace them with unskilled labor. They mandate lower quality raw materials and lesser quality finished products. Profits drop more (this is where Ruger is now).

Then the businessmen and accountants hire lawyers to handle the bankruptcy and dissolution of the company (this is where Remington is now).

Can both be saved. Yes, but not without a serious commitment to surviving (higher quality products and better customer service) in lieu of short term profits.

The thing is, there are no visionaries in either company. The folks running them really don't care about the survival of the company as long as they get their money. These types of businessmen, accountants and lawyers just move on to the next soon to be dead company. Natures scavengers have more class.

Think about it. Berretta is doing well and has for hundreds of years. Why? Family owned and family operated. And here tell they treat their employees like family. You know the way Winchester, Remington, S&W, Colt, Ruger, etc. used to do

 

[Jimbo357mag]

Remington has been in financial trouble since about 2011. In late 2012, Cerberus tried unsuccessfully to sell off Remington (Freedom Group). I suppose they did OK during 2014 and 2016 but now face some very serious problems going forward.

This is an older article.
https://nypost.com/2014/12/23/gunmaker-staring-down-1b-in-debt-as-gun-sales-slump/

I wonder how this effects Marlin?

 

[Arctos]

Hi,

Any documentation for this story?

Rick C

Here's a recent article: http://www.philly.com/philly/blogs/...as-americans-buy-fewer-firearms-20171117.html

 

[CGDustDevil]

Remington has been in financial trouble since about 2011. In late 2012, Cerberus tried unsuccessfully to sell off Remington (Freedom Group). I suppose they did OK during 2014 and 2016 but now face some very serious problems going forward.

Yep... This isn't anything particularly new. Remington has obviously made some seriously bad corporate decisions. I remember stories 2 or 3 years ago about the gun sales being brisk, but the company was still puking 100+ million a year in losses. If they couldn't square things up in a hot market, then there's no way they're gonna survive a slowdown.

Businesses are obliged to their own survival to foresee market fluctuations and adjust accordingly. Sometimes the decisions are gut wrenching, but the market does not favor sentiment. It seems self-evident that Remington thought they were impervious to market forces.

ANY company can fail with the wrong leadership doing the wrong things.

 

[coach]

Could their I’ll fated 9 mm pistol have a bit to do with it. Sounds like poor management that let something hit the market that wasn’t ready.

 

[Bull Barrel]

Ruger is not diversified, unfortunately.

Ruger does castings for other companies. And not only in firearms.
Ping golf clubs is one.
They also have an aerosol valve casting facility just west of St. Louis.

 

[mohavesam]

Ruger is not diversified, unfortunately.

Ruger does castings for other companies. And not only in firearms.
Ping golf clubs is one.

Not since the 1990s. Even boxcars full of golf heads would not sustain the gun business. They have also refused to pursue TS16949 certification to do business with automakers (incl. BMW, RAM/FIAT, and VW).
And their medical appliances (Prescott castings division closed years ago) was never ISO13485 certified... competitors loved that they never had the vision.
Diversification would mean a large percentage of the company making some product other than FFL-controlled items. Pine Tree is one small division and it has very high burden rates/labor costs & long-term risk.

http://www.philly.com/philly/blogs/inq-phillydeals/gunmaker-remington-faces-default-as-americans-buy-fewer-firearms-20171117.html

Not worth argueing about - Big Green means 3500+ employees making Bushie, Marlin and others.