Remington: A Cautionary Tale
Jeff Williamson 04.17.18
With the announcement of Remington filing for bankruptcy this spring, the fate of one of America’s oldest firearms makers, and American gunmakers in general, appear at a crossroads. While the effects of the “Trump Slump” continue for a second year, Remington is not the first to experience a financial slide, nor is it likely to be the last.
Remington gun production began in 1816 when a young Eliphalet Remington chose to design and build his own rifle for a shooting competition, rather than accept what was available. His craftmanship was such that though he went home with only second prize, he also won several orders for custom rifles like his own. By 1828 he was receiving enough orders to move to an enlarged facility at Ilion, New York, the site of Remington headquarters for almost 200 years.
During the Civil War any and every arms manufacturer was contracted by the Federal government to produce guns for the Union. Remington was no different, producing both Zouave rifles and their model 1858 New Model Army/Navy revolver: a design that was later easily adapted to metallic cartridges as a hybrid conversion. After the war, Remington continued making firearms, such as the Derringer for civilian use, as well as military rifles: Remington’s Rolling Block rifles and carbines were used by numerous nations at the end of the 19th century.
The dawn of the 20th century saw Remington being awarded further contracts for rifles from several nations, especially with the start of World War I. When US entry into the fray necessitated US arms production, Remington manufactured tens of thousands of 1903 Springfields and 1911 Colt pistols, both under license. The war was not all boon, however: when the Russian government fell to the Bolsheviks a large order for Remington made 1891 Nagant rifles destined for the Eastern Front was cancelled, leaving Remington with the stock but no customer. Fortunately, the US government purchased the rifles, destined for use in Russia’s Civil War, and kept Remington solvent. Yet when the Germans suddenly surrendered the next year thus ending the war, many US arms makers found a surplus of material that had to be sold at a loss.
As US military doctrine at the time was to turn swords to plowshares at the end of every war, Remington was quick to turn from military manufacture to capitalizing on the commercial market, promoting the shooting sports, especially though their expanding ammunition manufacturing. Having already acquired Union Metallic Cartridge Company, Remington was then itself purchased by chemical giant DuPont. In 1940, as the US military became concerned over insufficient ammunition supplies for the inevitable conflict, Remington was tapped to help lead the development process for a radically expanded manufacturing program.
After World War II, Remington branched into other products besides firearms, but continued producing new rifles and shotguns for hunting and target shooting, and even still dabbled in the personal defense handgun market, such as with the original R51 model. Their reputation for quality continued to be secured by such products as well as the military surplus that bore their name.
The mainstays of Remington through the end of the 20th century included the Model 870 shotgun and the 700 bolt action rifle. The former remains popular with law enforcement and sportsmen and the latter with both as well as the military as the basis of a very capable sniper rifle, the M24. Remington also capitalized on ammunition sales during the shortages that came with greater frequency at the start of the 21st century that created massive runs on the market.
In 2007 Remington was acquired by Cerberus Capital Management which put Remington in Freedom Group, also known as the Remington Outdoor Company, along with other firearms manufacturers including Marlin, Bushmaster, H&R and Para. In 2010 they began making 1911 pistols again and in 2012 won an US Army bid for 24,000 M4A1 carbines. The profit margins, however, remained somewhat thin.
From 2008-2016, the greatest firearms salesman ever, President Barak Obama, occupied the Whitehouse and inspired massive buying sprees with every mention of the words “gun control.” This coupled with several high-profile mass shootings, the most horrifying being in Sandy Hook, Connecticut kept firearms and ammunition sales high. Meanwhile, Bushmaster, and Remington by extension, have weathered ongoing civil suits because the Sandy Hook shooter used a Bushmaster rifle, and were therefor – through feats of “logic” – responsible for the actions of that criminal Further, Cerberus holds several pension funds that objected to Bushmaster being under their collective financial umbrella, causing further fiscal stress.
Then there was the commercial release of the new R51 pistol. Unfortunately, while the pistol was a highly anticipated addition to the growing concealed carry market, the production models had a great many teething problems that failed to impress, causing a deeply rooted controversy leading the company to fall quickly from the shooting public’s favor: due to the novelty of a small frame +p capable 9mm, Remington rushed an undertested product to market and a couple thousand were deemed faulty. Eventually Remington opened a vein to make things right with purchasers: offering full exchanges or refunds, but the slowness to respond to the reports of failed quality control tainted the company’s reputation. Then there were reports of the R1 1911 having quality issues: while a 1911 is highly customizable, few people felt comfortable paying loaded prices for a gun that would then have to be stripped and possibly rebuilt to work as expected. As with the R51, many individual R1 1911 units were fine, but enough problem units made it out to damage the company’s long held reputation for dependability.
Then Donald Trump won the Whitehouse. Record gun salesman, and prime example of irony, Obama left office only to be replaced by a president who was enthusiastically endorsed by the NRA. Before 2016 ended, gun sales virtually collapsed. Many retailers and manufacturers anticipated another surge in panic buying had the presidential election gone the other way. In preparation of that, virtually the entire industry stocked up only to find they had lots of product and no one interested in buying. Prices for AR style rifles alone, the most popular firearm during the preceding presidency, fell to almost 1/3 of the pre-election list prices.
In February of 2018, Remington announced plans to file Chapter 11 Bankruptcy. The company’s unsecured debt is estimated to be over $620 million, if not more. The current political landscape, even after the recent Parkland School shooting and the wave of activism that has followed, is that the firearms industry will continue to face withering sales in the absence of political pressure for new laws. At least on the federal level. Recent DNC wins in states, such as New Jersey for example, herald even stricter laws on local levels where, interestingly (or depressingly depending on your residency) laws are already stiff. Yet, this is not enough to give the industry the much sought after shot in the arm.
Every firearms manufacturer is facing the same situation: the proverbial seven years of famine after the seven years of feast. As to the fate of Remington: while not something to be proud of, bankruptcy filings do not always mean the end of a company. Colt declared Chapter 11 in 1992 and again in 2015 yet they still are around. The Freedom Group has enough manufacturing capabilities to carry Remington through while the filing, set to be finalized in May, states that Remington will continue manufacturing during the bankruptcy proceedings. There is every reason to assume that with already identified corrections to the R51 and improved quality control Remington will weather this storm. The question is whether or not what emerges on the other side will be a Remington worthy of the name. In any case, the winds of change on the market will keep both producers and consumers on their toes.