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America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

nytimes.com

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Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#11

Post by Blackthorn »

Simulacra wrote: post #3
vorpalhex wrote: post #2

This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

All the pro gun people I know, self included, have more than that. There are more guns than people in America, but not nearly everyone is a gun owner.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#12

Post by throwayEngineer »

vorpalhex wrote: post #2

This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.

Not uncommon for most businesses.

>You build something, people want it, pay money.

>Competition happens and you need to change or die

Don't change quick enough, you are dead. Big companies can't change quickly, but they can throw money at problems. Death of a company is inevitable.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#13

Post by howard941 »

Simulacra wrote: post #3
vorpalhex wrote: post #2

This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

This sounds reasonable but the article indicates sales were good and gross profits high but what killed the company was aptly-named Cerberus' extraction of assets. It's a story we've seen before at Toys 'R Us, Sears, and others. A modern day Heracles is needed to deal with this beast.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#14

Post by sparrish »

Blackthorn wrote: post #8

There's a certain amount of poetic justice here for Remington, seeing as how they acquired Marlin and then fired all their expertise, completely ruining the brand. Good riddance.

Agreed. This isn't a unique tale for a firearms manufacturer. This is a common tale for nearly any type of manufacturer that is bought out by private equity firms. They reduce costs and quality, load it with debt, suck it dry, and then dump it on their creditors.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#15

Post by ummwhat »

Blackthorn wrote: post #11
Simulacra wrote: post #3

Earlier quoted context omitted.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

All the pro gun people I know, self included, have more than that. There are more guns than people in America, but not nearly everyone is a gun owner.

iirc the number of guns in America is almost exactly equal to the population but the distribution is skewed a lot. About 2/3rds of Americans don't own a gun. The ones who do on average own 3, with a lot of them having 1 and a few of them having dozens.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#16

Post by kevin_b_er »

Not a mystery: Private equity firm bought them out with borrowed money, raided their resources to enrich themselves, then left Remington to rot. It is a common story now. The private equity firm makes a bunch of money and people are jobless.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#17

Post by jcranmer »

Simulacra wrote: post #3
vorpalhex wrote: post #2

This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

There is an intriguing trend in the United States where, for the past several decades, the number of gun owners has gone down but the number of guns has gone up.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#18

Post by claydavisss »

Simulacra wrote: post #3
vorpalhex wrote: post #2

This is not an uncommon story for firearm manufacturers unfortunately. Tooling costs are high, sales hard to predict, and designs can fail easily. Ian McCollum of Forgotten Weapons has done a lot of videos on this topic.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

That isn't the case here. The products were of low quality. Firearms sales ebb and flow but there is no sign of a fundamental trough.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#19

Post by turk73 »

dsfyu404ed wrote: post #6
Simulacra wrote: post #3

Earlier quoted context omitted.

There's also the issue - perhaps - of market saturation. How many guns does one need? My pro-gun friends typically seem to have 2-3 but shy away from any more than that.

>How many guns does one need? Need or want? Like any other hobby your limit is your budget. There are guns that exist for no other reason than the lulz ("hundred dolla problem solva" I'm looking at you). Historically inclined individuals could spend a fortune just collecting variants of one specific niche of firearms from a particular nation and time period.

The Boomer aged guys seem to have a hoarding problem--I've seen photos of collections of 200 M1 Garands, 25-50 M1 Carbines, etc. Nobody cares that the cartouche on a stock is a little bit different. There's unhealthy obsession there. Not that I care. It's none of my business how someone spends their money.

Re: America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery

#20

Post by bluejekyll »

sparrish wrote: post #14
Blackthorn wrote: post #8

There's a certain amount of poetic justice here for Remington, seeing as how they acquired Marlin and then fired all their expertise, completely ruining the brand. Good riddance.

Agreed. This isn't a unique tale for a firearms manufacturer. This is a common tale for nearly any type of manufacturer that is bought out by private equity firms. They reduce costs and quality, load it with debt, suck it dry, and then dump it on their creditors.

I’ve read about this scenario many times, but I’m curious about why any creditor would lend money to a company that’s poised to do this.

Wouldn’t these private equity firms lose the ability to borrow money based on past practices like this?

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