Interesting moves at Remington. Strategic or Desperate?

[pudly]

I'm not sure if the following items mean that Remington is in really bad shape and is strictly trimming/consolidating to save money or if this is a more strategic plan to move production to more gun/business friendly state or some combination of both. I'm sure the flaming failure of the R51 hasn't helped anything. I've seen three articles in the last 24 hours of subsidiaries that are mass-firing workers:

• Advanced Armament (silencers and other accessories)- Rumor of the Day: Remington Has Fired All AAC Personnel
• DPMS (AR15s)- Follow-On Rumor of the Day: DPMS Also on Remington Chopping Block
• Para USA (1911s)- Para Gets the Short Haircut from Remington, Too

Edit: This appears to be part of a major consolidation by Remington. TAPCO is included in the consolidation as well. They are moving a lot of functions to their Huntsville, Alabama location. Makes sense, but wouldn't that typically involve offering people the option to relocate to the new site instead of mass firing?

 

[Kirk Freeman]

It means that they have a CFO and COO that are not out golfing all day and then in the bar.

Big Green is way too fat to make the moves they need to get done.

 

[throttletony]

It means that they have a CFO and COO that are not out golfing all day and then in the bar.

Big Green is way too fat to make the moves they need to get done.

I think I have to agree with Kirk, from a business perspective... Either way, I am not a big fan and I think their QC is crap over the last 5 or so yrs. that's my 2 cents anyways

 

[M67]

I thought this was going to be a thread at their new stupid $1300 muzzle loader

 

[D-Bo]

I just read somewhere on Facebook that they're giving them the option to re apply at another facility. I tried going back to find the article but cannot find it.

 

[gregkl]

Not to thread drift, but I need a few upper parts for an AR build; Forward assist, ejection port cover, gas tube. Is DPMS okay for parts like that or should I buy another brand?

 

[aaron580]

Does this mean para is going to go way up in value like 22?

 

[Classic]

Companies usually only pay to relocate the higher compensated/special skill employees, others are sometimes offered jobs at the new location but no relo package.

Likely the business units being divested have one of two things: very poor financial return on investment or really high cash value.

Sounds like ordinary downsizing in an effort to right a struggling ship.

 

[saberstar]

At the NRA convention had about a 5min talk about Remington with the rep. He admitted that there were problems but those have been cleared up for more then 2 years. From what I have heard I don't think that is the case. Then again you really only hear about bad things and no one really praises a product unless it goes far beyond what it is purposed for. (The discussion I had with him was over the marlin line of products) I am still going to just wait and see I think. I really don't see anyone wanting to buy Marlin products in forums and such after the Remington ownership.

 

[billt]

You must remember, Remington was in very serious financial trouble long before they were taken over by Cerberus Capital Management. In fact they were on the verge of bankruptcy. Without the Cerberus buy out a few years back, they would not even be here today. They tried to merge them with more profitable operations at the time, like Bushmaster and DPMS, (Panther Arms), that were doing very well, and consolidate production and floor space. They did much the same with Marlin and NEF, (New England Firearms).

Remington is a very old company with very old equipment. It has been through many owners. Many of them took from the company over the years, but reinvested little to nothing back in it. Much the same could be said of Marlin as well. Look on You Tube at the Remington Factory Assembly tours. The machinery is all ancient. Older employees, many of them baby boomers, who worked their entire lives there are retiring. They are taking the skill and knowledge of these old, hand operations with them. Many have been replaced with less skilled individuals, who work for less. You only get what you pay for applies to people as well as machinery and other goods.

It may be too late and costly to turn Remington around. It costs millions of dollars to replace ageing, worn out machines and tooling. It takes many years to recover that. It will be hard, especially with todays anti gun political climate, for someone to take that large of a financial gamble. Then have it pay off. If it ever will. Replacing current workers with less skilled tradesmen, who want more money won't be an easy task to solve either. Then there is the health care issue, along with it's escalating costs under Obama Care. Sadly, Remington finds itself in a current situation where it's best days are behind it.

 

[billt]

Another thing is that the old Bushmaster, (Windham Weaponry), is giving the current rebadged Bushmaster a lot of competition. Dick Dyke who owned the old Bushmaster, and currently owns Windham, had to stay out of the firearms business for 5 years I believe. This was per agreement of his sales contract to Cerberus. When that time past he bought the old Bushmaster plant back from Cerberus, (they couldn't find a buyer and needed the capital), hired his old people back, and went to work. Today, most AR-15 people will tell you Windham makes a better quality gun than the current Bushmaster does. It doesn't matter if that's true or not. That is the perception. And in business perception is everything. All this effects Remington who's R-15 line of AR-15 rifles really never caught on much, if at all.

 

[EricG]

It means that they have a CFO and COO that are not out golfing all day and then in the bar.

Big Green is way too fat to make the moves they need to get done.

Ive been saying this for years. They have resources spread too thin. Time to trim the fat and re-focus on what made the brand.

 

[snapping turtle]

Lucky myself to have purchased mine when they still had good stuff and QC. Don't see me getting any of the new ones.

maybe that's what the problem is.

 

[gregkl]

You must remember, Remington was in very serious financial trouble long before they were taken over by Cerberus Capital Management. In fact they were on the verge of bankruptcy. Without the Cerberus buy out a few years back, they would not even be here today. They tried to merge them with more profitable operations at the time, like Bushmaster and DPMS, (Panther Arms), that were doing very well, and consolidate production and floor space. They did much the same with Marlin and NEF, (New England Firearms).

Remington is a very old company with very old equipment. It has been through many owners. Many of them took from the company over the years, but reinvested little to nothing back in it. Much the same could be said of Marlin as well. Look on You Tube at the Remington Factory Assembly tours. The machinery is all ancient. Older employees, many of them baby boomers, who worked their entire lives there are retiring. They are taking the skill and knowledge of these old, hand operations with them. Many have been replaced with less skilled individuals, who work for less. You only get what you pay for applies to people as well as machinery and other goods.

It may be too late and costly to turn Remington around. It costs millions of dollars to replace ageing, worn out machines and tooling. It takes many years to recover that. It will be hard, especially with todays anti gun political climate, for someone to take that large of a financial gamble. Then have it pay off. If it ever will. Replacing current workers with less skilled tradesmen, who want more money won't be an easy task to solve either. Then there is the health care issue, along with it's escalating costs under Obama Care. Sadly, Remington finds itself in a current situation where it's best days are behind it.

I am living this right now with the company I work for.

Is Remington still owned by a PE group? If so, it will continue to be about taking cost out to make the books look better for a sale. The problem with PE firms owning companies is that is how it works. They buy a company, try to right side it financially in the short term, then sell it. After about 3 sales, there is nothing left to make money on so it becomes unattractive for future PE buy outs.

Like the company I work for, Remington may be at the point that it needs a strategic buyer.

I am a little down on PE groups I'll admit so take with a grain of salt when I say IMO, Cerberus does not do any favors for the companies they buy and own. Chrysler is doing much better being owned by the Italians.

 

[Kirk Freeman]

Get the heck out of New York.

Update: BREAKING NEWS: The FACTS about the Remington Consolidation - The Firearm Blog

 

[Bravo-4-2]

Remington will be just fine. No, they are not desperate.

 

[billt]

I am living this right now with the company I work for.

Is Remington still owned by a PE group? If so, it will continue to be about taking cost out to make the books look better for a sale. The problem with PE firms owning companies is that is how it works. They buy a company, try to right side it financially in the short term, then sell it. After about 3 sales, there is nothing left to make money on so it becomes unattractive for future PE buy outs.

Like the company I work for, Remington may be at the point that it needs a strategic buyer.

I am a little down on PE groups I'll admit so take with a grain of salt when I say IMO, Cerberus does not do any favors for the companies they buy and own. Chrysler is doing much better being owned by the Italians.

I went through this as well, back in the late 90's with McCulloch Corporation in Lake Havasu City, Arizona. They were once the leaders in the lawn and garden industry. Chain saws, power blowers, weed eaters, etc. After NAFTA was passed in the 90's, they invested millions in a brand new plant in Hermosillo, Mexico. They were going to exploit Mexico's cheap labor costs, and lack of any environmental controls, in order to make product for pennies on the dollar compared to what it was costing them here.

We were sold to Donaldson Lufkin & Jenrette, a large New York Investment Banking firm. Within 2 years they were bankrupt, with $55,000.00 in assets, and $58,000,000.00, (read $58 MILLION), dollars in liabilities. The $55K came from a Chinese businessman who paid that for the rights to the name and logo. Which is why you still see products with the McCulloch name on them. They're all made in China. The story is much the same as the predicament Remington now finds itself in. An ageing company fighting to stay in business. A company that is worth almost nothing dead, and quickly becoming even worth less alive. Not a good position to be in. Sadly, this happens with a lot of good gun companies. How many owners has Ithaca Gun been through in recent years?

 

[billt]

Is Remington still owned by a PE group?

As far as I know, Remington Arms is still owned by the Freedom Group, which is controlled by Cerberus Capital Management. The rumor that has been circulating that Cerberus is in some way, shape, or form controlled by George Soros is completely false.

 

[WebSnyper]

I went through this as well, back in the late 90's with McCulloch Corporation in Lake Havasu City, Arizona. They were once the leaders in the lawn and garden industry. Chain saws, power blowers, weed eaters, etc. After NAFTA was passed in the 90's, they invested millions in a brand new plant in Hermosillo, Mexico. They were going to exploit Mexico's cheap labor costs, and lack of any environmental controls, in order to make product for pennies on the dollar compared to what it was costing them here.

We were sold to Donaldson Lufkin & Jenrette, a large New York Investment Banking firm. Within 2 years they were bankrupt, with $55,000.00 in assets, and $58,000,000.00, (read $58 MILLION), dollars in liabilities. The $55K came from a Chinese businessman who paid that for the rights to the name and logo. Which is why you still see products with the McCulloch name on them. They're all made in China. The story is much the same as the predicament Remington now finds itself in. An ageing company fighting to stay in business. A company that is worth almost nothing dead, and quickly becoming even worth less alive. Not a good position to be in. Sadly, this happens with a lot of good gun companies. How many owners has Ithaca Gun been through in recent years?

This is what I was figuring... someone will buy the name and possibly any intellectual property that is still under patent, if any, and just start turning out product, without needing to take on the debt, liabilities, machinery, etc.

 

[Win52C]

Remington USED to stand for American made Quality, Workmanship and Pride. Sadly. That has been lost too the Ages....