Remington to file for Chapter 11 (reorganization) Bankruptcy

Solomonson said:

I hope Remington makes it.


https://www.bloomberg.com/news/arti...on-will-cede-control-to-lenders-in-bankruptcy

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Me too.

Interestingly enough, Chapter 11 is not “going under”, as posted elsewhere. They can still operate and do business, but it’s gonna be hard for people who had unfulfilled orders with them, or warranty work in the shop.

Tons of challenges, and terrible product rollouts have plagued them, but I hope they pull their stuff together and get it wired tight.

Better get a synopsis in your post otherwise the mods will close this as a drive-by.

Hopefully, they reorganize themselves with new management and good manufacturing foremen.

I'd hate to see them close Ilion. It would crush the local community and surrounding towns. I've been going by there when I'm in the area for work 35 years. One of the sites I have terminals in is literally right next to the factory. If you took down the chainlink fence it would look like it was in Remingtons parking lot. Employees are in there all the time between shifts. Everytime I stop out there I alway stand and look at the factory and think wow that place has been making firearms for 200 years. Pretty impressive even with their problems. I wish them well.

First did anyone notice the anti gun and anti Trump slant of this article? Leave it to anti gun Bloomberg to spin it that way.

I’m pretty sure Newton didn’t have that much impact on Remington’s long term bottom line. My guess is an investment firm leveraged the company too much, they ramped up production beyond what they could handle resulting in quality control issues. That in turn hurt added to the drop in sales when the market softened.

So Trump wasn’t at fault. Newton wasn’t at fault. Poor management and bad timing were. Hopefully new management will come in, debt will be stripped and the company can focus on making quality products again.

Sorry to see them struggle through this and the last few years of troubles. Seems before the M700 trigger issues they were doing good, and then that and the mergers and plant moves really soured things for them. Sounds to me like the old plants had worn out machinery and high cost locations and needed to be moved. But they cut over to the new equipment and people before they had the new CNC parts fully proved out. Having one of your own hunting gun writers poop on the AR15 just as you about to announce your own hunting AR15 was not helpful either. They even sullied the pristine image of Marlin lever actions! Just as Winchester was pricing themselves out of the hunting market, Remlin trashes the best remaining hunters' lever action!

I don't know the relationship with UMC, but some ammo offerings also detract from the brand. I really like the Core-Lokt line for economy accuracy and performance. But I think they underplayed the bonded bullet tsunami, and they are not known for match grade bullets. And while the rimfire ammo and rifle industry has surged, Remington is almost laughable with offerings such as Thunderbolts and Golden Bullets with the wiggly bullets, and no real modern competitors in guns compared to what they did in the 50s and 60s.

Just too many changes and missteps all in a few years, and having an investment holding company burden them with crushing debt may be too much to recover from even with Ch 11 (which will breed more ill will with unpaid debts, canceled orders and restricted customer service likely).

I really would like to see them survive and re-establish the Remington AND Marlin names as symbols of dependable quality. And get competitive in ammo and components again. I don't know if Remington can ever compete in the top tier of tactical firearms, but they had the chance to totally own the hunting market and let it slip to Savage, Ruger, Mossberg, and even Tikka and CZ. Lots of companies owe their rightful pop to the top of this market to Remington screw ups giving them the opportunity to rise with solid quality and service.

Bergara is building what Remington should have developed. Others are building knock-off Remington actions for the custom-build segment. Remington let others "steal a march" on them. However, the Remington brand still has value. If they can modernize operations and marketing, I believe they can once again do well. I sure hope they do.

When smart companies are limiting caliber choices to only the most popular, and focusing on only their best models, Remington made the common mistake of trying to be everything to everyone, and not focusing on quality.
If they had focused on just making a couple quality 700's instead of many models and calibers of shoddy 700's they would be doing better. You just can't float ten thousand loose chambered rough 700's in a world full of modern, smart sub moa $400 Americans, Compasses, and Axes.

BTW. If you want a model that is special to illion like a 552, might think about getting it.

Hokie_PhD said:

First did anyone notice the anti gun and anti Trump slant of this article? Leave it to anti gun Bloomberg to spin it that way.

I’m pretty sure Newton didn’t have that much impact on Remington’s long term bottom line. My guess is an investment firm leveraged the company too much, they ramped up production beyond what they could handle resulting in quality control issues. That in turn hurt added to the drop in sales when the market softened.

So Trump wasn’t at fault. Newton wasn’t at fault. Poor management and bad timing were. Hopefully new management will come in, debt will be stripped and the company can focus on making quality products again.

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Who's Newton?

Relax, Solomonson. My comments had nothing to do with you. They had to do with another separate post on this same subject, titled “remington’s going under”.

Re: warranty, yes, they have certain obligations to address existing business that was in-house prior to filing. However, I can say that priority will not be given to warranty repair. It will be given to whoever is owed the most $$, because that is how the courts will mandate it. As stated elsewhere, service will NOT be timely, and it will be difficult to get people to pay attention to an individual warranty claim. Priority will be wholly governed by the court. And re-ordering means getting in the back of a very long line. That will be very painful.

I am currently dealing with an unrelated business who filed chapter 11 recently. I have $20k worth of work in that shop and am having to cancel it all and re-buy it from another supplier because I have zero influence in getting my stuff shipped, and I’m likely never to see it come out of their shop and be able to meet my project schedule at the same time. They have people with many more zeroes behind their deliverables who are first in line for whatever can be meted out. To make changes to whatever the court decrees is priority means they have to back to court, and they aren’t gonna do that for a measly $20k.

I’ve also dealt with a company where I had several million dollars locked up behind their doors when they filed for chapter 7. I never saw my stuff again...

FWIW One time a bunch of corn farmers shipped grain to a feeding operation where it was piled. The feeder went under before paying the farmers. The farmers got wind and went down to the pile of corn with their trucks to take back the corn. They were met by the Feds at the gate who said nuh uh, this corn belongs to the bank.

mshootnit said:

FWIW One time a bunch of corn farmers shipped grain to a feeding operation where it was piled. The feeder went under before paying the farmers. The farmers got wind and went down to the pile of corn with their trucks to take back the corn. They were met by the Feds at the gate who said nuh uh, this corn belongs to the bank.

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So Remington's problem is with the corn farmers??? What century is this?

Remington will never again be what it once was.

My contact at Remington/Marlin is a senior product manager who says word from the top is stay calm, no plants will close, no layoffs.

Hopefully that's true.
Denis

mshootnit said:

Who's Newton?

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Sorry sorry Typo that should have been NEWTOWN aka Sandy Hook

CNN reports that Cerberus Capital Management will give up control of the company after restructuring.

If true, and if new management comes in that cares about the company and knows the gun industry, and is willing to do the right things, this could be a good thing in the long run for Remington.

Again only time will tell.

“Mature” companies such as Remington (and Colt) usually develop into a culture of institutionalization; the rank-and-file and management become comfortable and self serving over time - the co. then dies a boring death. Revitalizing a co. that is in the mature stage is a daunting task; you have to clean house and then replenish the culture with enthusiasm - very long and difficult transition.

It's a shame. Remington has created some very influential designs and some of the best-selling firearms in history, but I guess it just goes to show that all the engineering in the world can't save a product from poor QC.

Maybe some of the Freedom Group brands will get sold to different buyers.

If a gun company managed to go under or remain unprofitable in the Obama years, then there is a serious leadership failure. If they couldn't make it then, they aren't going to make it now.

I feel bad for the employees only, as they undoubtedly have kids to feed. But I only own one Remington firearm, which I inherited, and I don't see any reason to own another given the issues their guns have had over the years.

It's a bummer but Colt strikes me the same way. Really? You're struggling? Guns were flying off shelves for the last eight years, and you are struggling?

Companies, like people, rarely make drastic changes unless forced to by events.

Colt, for example, staked its fortune on military contracts and 1911's after the civilian police market for revolvers and semi-automatics increasingly went with S&W starting with the 1960's. Now, the military contract is split with FN getting a piece of the action and 1911's sprinkled with a few SAA's are made by everyone--cheaper on one end, and better on the other. Colt, for awhile, sold AR's to police to make up the difference but ultimately even the police are driven by lowest cost bidder. The concentration on the military market and coasting on their 1911 business gave Colt just enough to make a little money at times, but not enough to invest into new products. Colt tried with the All American Semi Auto but it was an expensive flop. In a business sense, the firearms market is a boom and bust since the 1990's with people rushing to buy based on fear. It can be hard to rationalize spending a lot on investing in new products to outside investors who either want their money back (bonds and loans) or stockholders who want increasing stock prices and/or dividends. Mature companies, in particular, especially in a conglomerate can be viewed as "cash cows" that are to be milked and then sold. Companies that rely on just a few buyers are always at risk if the market changes direction and they lost those buyers.

Now, Remington's problems are not Colt's. But there is a reason that DuPont and Olin dispensed with Remington and Winchester decades ago. Corporate managers hate boom and bust markets and generally seek a steady profit. That is understandable as a lot of individuals don't like jobs in industries that are boom and bust prone either. Firearms are a mature market, so to speak, and the increasing urbanization and suburbanization has meant selling additional firearms to either new customers in the growing self defense market or to the mature hunting market where most hunters already have firearms. Remington's concentration on the hunting market left it at risk when the market growth occurred in AR's and self defense pistols. So, the hedge fund that owned them sought to go into those markets by buying Bushmaster first to enter the AR market and then Marlin to add lever actions to shore up their hunting sales. Both of those acquisitions did not go well--for a variety of reasons. Anytime production is shifted and you lose skilled production workers, transition problems can happen. The time-bomb of the trigger litigation exploded. Then Remington's entry to the crowded self defense market for self defense semi auto pistols was hurt by their recalls. Concentration has apparently slipped from reports on their core hunting market products in quality during this time, debt was incurred to finance these transactions, and then production quality ran the risk of the internal budget cutters trying to service the debt. Too fast and too much expansion drove Remington's problems from 2000-present while Colt's market woes have existed since the 1960's.

If Remington gets someone strong at the helm as a manager, I think that they can reverse it--they possess good product designs which are easier to correct than starting new ones--a few years ago, Savage was in bad shape and was turned around. Remington has good distribution and marketing for dealers and has market presence in stores. Colt, is in a much more precarious situation and unless someone with a lot of cash buys them to turn it around, they may only exist like FN's Winchester as a brand name.

Remington is owned by Cerberus Capital management and Colt is owned by Sciens Capital Management. These companies have a lot in common. Hedge funds, venture capital or private equity, they're all the same. Here's how they work.



Once a company is sold to one of these blood suckers it's done. Some go on life support for no other reason than to provide the 20% profit and management fees to their owners (private investors) who have zero interest in a single holding in the management company.

I have a feeling that both companies are being used as pawns to offset the overall tax liabilities of the companies that own them. They don't really exist anymore to show a profit. If you own 10 companies it's fine if one or two are losers. Profits are determined after your corporate taxes are paid. Remington and Colt could be on life support for a long time and people will still buy their product because of the name.