U.S. gun maker Remington reportedly taking steps toward bankruptcy filing

One of the biggest U.S. gun manufacturers is taking steps toward filing for bankruptcy, according to Reuters news service.

Remington Outdoor Company Inc. has “reached out to banks and credit investment funds in search of financing that will allow it to file for bankruptcy,” Reuters reported Thursday evening, citing “people familiar with the matter.”

According to those sources, the debt-ridden company missed a payment on its debt this week and is seeking “debtor-in-possession financing” that would let the company continue operations once it went bankrupt.

“Profit is actually the smallest percentage of the price of a contract weapon.”

Yes, however, it is surely the intent of the manufacturer to realize a substantial profit, year after year. It’s a steady drain.

“Sure, the amount put back into the US economy is smaller”

It’s better than buying products manufactured off shore, no argument there. But why not strive for a better arrangement?

“Corporate boot camp is sadly not an option.”

I guess we don’t want to say, “If FDR did it, it must be all right.” I don’t know if I could even say that with a straight face, but desperate times call for adequate measures.

https://buzzbrown.blogspot.com/2009/04/history-matters-montgomery-ward.html

“The only option for anything even close to that is for the company to go bankrupt and someone else picking them up from receivership.”

The Safe-T-Hammer story would seem to be an example of that. The key, however, is that “Safe-T-Hammer has pointed out that they had to fire pretty much the entire management staff.” Maybe I’m drawing conclusions on the basis of too little information, but it seems to me that there is a relatively small group of people, almost a clique, from whom officers of large companies are selected. It also seems to me that a not insignificant number of the people in that clique are completely incompetent, perhaps even stupid.

How we got here I do not know. Privilege of wealth, perhaps, but we need a shakeup.

As an emergency measure, I wouldn’t mind if President Trump were telling courts whom to appoint to the receivership of these companies. Wouldn’t even bother me if he appointed entire boards of directors and told them who to hire to run the companies. I am aware that this is sounding dangerously reminiscent of national socialism, but I am proposing it not as a workable system, but as a one-time emergency measure.

“The name and IP won’t go away, someone will pick it up.”

Perhaps I spent too much time in Japan. I’m not one of these “everything Japanese is wonderful” people, but they do have some things going. Last time I was there, I bought a hand-forged chef’s knife made by the last scion of the Masamune line, which dates back to the 14th century.

http://www.sword-masamune.com/en/info.html

IMV, tradition, institutional knowledge, and a sense of belonging to something significant are very important to a company and its employees. Just because new people buy the Remington trademark and start making guns doesn’t mean that Remington didn’t die.

“The fact that they can’t survive without government contracts is their own damn fault and they deserve to reap the rewards thereof.”

Okay, but who is this “they?” Is it not whatever members of this “top management clique” are making these short-sighted, lazy, stupid decisions?

Yes, I know that nothing is as simple as that. The rank and file might contribute to the problem through poor motivation or a gibs-me-dat attitude, but leadership devolves from the top. OSHA, labor unions, taxes, etc. etc. also play a role, but Safe-T-Hammer apparently showed that good management—dare I say leadership?—can overcome these other factors.

“As for US industry being able to make US military small arms - it’s possible, but right now it’s unlikely to happen in the near future. Maybe in a decade or so”

Unlikely things are accomplished all the time. The right men in leadership positions could probably amaze us.

“the potential successors to the M4/M16 keep getting shut down by political BS (often instigated by Colt, but now self-sustaining)”

IMO, leadership is needed to put a stop to the political BS.

“and the only thing that’s actually getting any sort of traction is the Marines’ impending expansion of the H&K made M27 IAR to all Marines in place of the M16 and some M4s.”

The Marines do need better weapons. I was talking to a young fellow who lost a leg over in Iraq. He said that the dust kicked up by a firefight in a “city” street over there was enough to cause a formerly clean M4 to jam. I consider it a national disgrace that the Marines were forced to look outside our borders for better rifles.

“Oh, and FN of Belgium is currently making our M16s in a plant in South Carolina.”

If FN management are patriots, surely they are Belgian patriots. I want American patriots developing and manufacturing our weapons. And I want the profits to stay here.

“Nobody else has the free volume capability; Colt is bankrupt and ineligible. Ruger is booked up for years. Everyone else never had it or sold it off. Going to be a while to spin up those capabilities.”

Well, it won’t ever be fixed unless we take action. I’ll bet men of President Trump’s caliber could make it happen PDQ.

“Even with part of the M4 contract and the $80 million Obama bribe contract, Remington couldn’t survive.”

Is that the “top management clique” at work again? Bet it is.

When something like this happens at a Japanese company, top management (top management!) call a press conference at which they apologize to their employees, stockholders, customers, and to the nation. Those who don’t resign in contrition take a big pay cut.

As I said, I’m not a lover of all things Japanese, but when it comes to this and bathrooms, I think they’ve stumbled onto something.

Actually, per multiple manufacturers, there is far more profit in the US civilian market than in US military small arms contracting. Military contracts for small arms often don’t have much profit. The M4A1 made by FN for the US Army costs $642. A civilian version sold by Palmetto State Armory with FN made parts of Army contract quality is more expensive. (Source: http://www.guns.com/2013/02/26/fn-lands-army-m4-contract-underbids-colt-remington/ )

It would be nice to strive for a better arrangement. But we need rifles that aren’t garbage NOW, not in five or ten years.

The only reason FDR was even vaguely able to do what he did was because that guy **broke the laws,** especially in wartime. Plain old mismanagement or incompetence is not illegal. Nor should it be. There is no legal grounds to do something to, say, the Freedom Group management. So, again, corporate boot camp is not a legal option.

You are indeed drawing conclusions based on too little observation. Companies whose management consists exclusively or almost exclusively of persons who came up through the ranks at the company and not from a ‘corporate officer clique’ make the same mistakes and run their companies into the ground. Harley-Davidson is a classic example in progress. Their management is mostly people who came up from the ranks of HD or direct old time friends of Willie G - and their strategy that saved the company in the 80s (”appeal to heritage and nostalgia to cover the fact that our product is overpriced, ancient and not actually competitive in an objective comparison”) isn’t working any more. The company is on paper still making money but they know they’re in trouble and have been making some really pathetic attempts to catch up. The market has been unamused. Sound familiar?

What you describe in Japan is the result of their society, not their business training. This would never happen in the US because our culture is different. Remember, there are ‘suicide forests’ in Japan because their culture requires figurative or sometimes literal suicide upon certain failures.

Your “right men” theory is interesting, but it’s too much like “with the right men in charge, socialism can work.” The “right men” are never available in the required quantities and they’re usually busy doing something else, not wanting to be appointed to try to resurrect some failure for little pay. Hence why the preferred solution is for someone to *buy* the wreckage of a company instead of “work as an appointee of a court.”

“The M4A1 made by FN for the US Army costs $642. A civilian version sold by Palmetto State Armory with FN made parts of Army contract quality is more expensive.”

That doesn’t mean that the manufacturer is getting that premium. Much more likely that it goes to middle men and retailers.

“It would be nice to strive for a better arrangement. But we need rifles that aren’t garbage NOW, not in five or ten years.”

Those things are not mutually exclusive. Buy the best we can get now, while gearing up to produce better weapons than are now available.

“Plain old mismanagement or incompetence is not illegal.”

It doesn’t have to be illegal before we can do anything about it. A bit of arm-twisting can go a long way. Persuasion can work. Look at what President Trump did with Boing.

http://www.foxnews.com/politics/2016/12/06/trump-rips-boeing-for-cost-overruns-on-new-air-force-one-says-cancel-order.html

“So, again, corporate boot camp is not a legal option.”

You give up too easily. Motivate the board to hire the right guy as CEO, let him hire the rest of the officers, and they can put the company through boot camp quite legally.

“Companies whose management consists exclusively or almost exclusively of persons who came up through the ranks at the company and not from a ‘corporate officer clique’ make the same mistakes and run their companies into the ground.”

You have rebutted an argument I didn’t make. I agree that people up from the ranks **can** be the wrong people, and my argument is not predicated on using them. It is based on people with good judgment, like President Trump, choosing people who are up to the task.

“Harley-Davidson is a classic example in progress…their strategy…isn’t working any more…”

I hate to use this example, because I hate two-wheeled vehicles. Still, it is a case in point, so…

Harley could be saved, even now, if someone were willing to put in the money and make the right decisions. Agreed? So why would anybody put in the cash? I mean, if you want one, the Japanese make great bikes. The only reasons I can think of are patriotism and nostalgia. If you can turn a profit while acting patriotically, it seems like something a patriot might do.

To save the company the board and/or major stockholders could probably be persuaded to bring in an effective CEO and make necessary changes. If they couldn’t be persuaded, then the changes could be made to pull it out of bankruptcy,

“Remember, there are ‘suicide forests’ in Japan because their culture requires figurative or sometimes literal suicide upon certain failures.”

Not so much. That cultural artifact was suppressed as an unwelcome element of “militarism” following the war. It hasn’t been completely eradicated, of course, but the last big-time seppuku was back in the 1960s. Those people kill themselves because they are weak and depressed, not because honor requires it. BTW, it’s not like there are ‘suicide forests’ all over the place. I only know of one, and it sees about a hundred suicides per year.

“Your “right men” theory is interesting, but it’s too much like “with the right men in charge, socialism can work.”

It would be if I were proposing it as a system of government. I am not. I am thinking of it only as a one-time emergency measure, to be discontinued as soon as companies are back on their feet. It doesn’t differ that much from what we do now.

“The “right men” are never available in the required quantities”

I’m not sure that’s entirely true. Sounds like an argument the “top management clique” would make.

“and they’re usually busy doing something else, not wanting to be appointed to try to resurrect some failure for little pay.”

Wild Bill Donovan ran the OSS for $1 a year. His staff were also “dollar-a-year men.”

“Hence why the preferred solution is for someone to *buy* the wreckage of a company instead of “work as an appointee of a court.”

I haven’t said anything to oppose that. However, it would be better if such a company were run by the right men, whoever owns it. Then, too, there are times when nobody buys a failing firm, and it goes into bankruptcy.

Suppose, when that happens, that the judge is a leftard who picks George Stephanopoulos to restore Remington to health.

A different outcome, I think, than we’d see if someone like President Trump picked someone suitable.

You seem to think I am proposing draconian, tyrannical measures. I don’t think I am. These decisions and choices are already being made. I’m just saying that we have been choosing poorly, and it is possible to choose more wisely.

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