Colt: The Continued Soap Opera.

[wojownik]

No. Taurus USA is a subsidiary of Forjas Taurus (Brazil). Neither subsidiary nor parent are in a financial position to attempt such a deal at any realistic price. And that's setting aside personal opinion of Taurus' inability to ever approach what had been Colt quality with revolvers.

 

[wojownik]

There apparently been some kind of interim deal between Colt and its bondholders. The bond holders are going to lend cash to keep the company operating for a while during the bankruptcy proceeding. It looks like this is going to take a slightly different direction now.

http://www.businessinsider.com/r-bankrupt-gun-maker-colt-gets-revised-loan-eases-rush-to-sale-2015-6

 

[Iggy]

I can't wait to see a Takagawa Python.

The Italians are already making a replica.

 

[Old Fuff]

"We are now in a free-fall Chapter 11," McDermott said, adding he is concerned Colt's case could rattle the U.S. government and allied governments that buy the company's firearms.

Seems highly unlikely, given the number of firms (including FNH, Smith & Wesson, Ruger, Bushmaster .... ) that are producing AR15/M16/M4 clones.

 

[Aragon]

Old Stuff

Speaking of South America, do you think a company like Taurus would be interested in Colt if the price and financial conditions were right?

I don't think Taurus would be a good fit -- and it's not because of the quality of Taurus goods.

I think people buy Colts because they're Colts. It Colt was owned by another company -- even a prestigious one like Beretta, I think they would soon be known as something like "Colettas" and lose a lot of their allure.

I think even Winchester and possibly Browning would sell more guns today if they made more of them in the US and if they were truly standalone companies.

 

[Aragon]

There apparently been some kind of interim deal between Colt and its bondholders. The bond holders are going to lend cash to keep the company operating for a while during the bankruptcy proceeding. It looks like this is going to take a slightly different direction now.

http://www.businessinsider.com/r-bankrupt-gun-maker-colt-gets-revised-loan-eases-rush-to-sale-2015-6

Could the courts reduce/eliminate the debt Colt owes to Sciens if it is demonstrated that Sciens looted (either legally or illegally) Colt, forcing it into its current situation?

 

[Old Fuff]

I can't wait to see a Takagawa Python.

The Italians are already making a replica.

Pietta, who is well known for their replica/ reproductions of frontier-era cap & ball revolver is supposed to have a Colt Python in the works that will retail for $800. This of course has the fanboys excited.

They should keep in mind that while this company's basic models retail for around $300 to $400, a top-of-the-line target grade one will set a buyer back more then $1,000.

That they might be able to produce a gun that looks like a Python for $800 is quite possible, but producing one that meets all Python standards for that kind of money is unlikely.

A company, now long gone, used to produce Colt-style Single Action's, using the latest in modern CNC machinery and other tooling. While the product was unquestionably of the highest quality and favorably compared to Colt's, they also cost about the same amount of money, all other things being equal.

 

[wojownik]

Could the courts reduce/eliminate the debt Colt owes to Sciens if it is demonstrated that Sciens looted (either legally or illegally) Colt, forcing it into its current situation?

This raises a number of key questions that - if it goes down this road - could really get the Colt bankruptcy may spiral out of control.

First, as to the question of whether a court could reduce or eiiminate debt. Bankruptcy by its very definition an entity seeking to reduce or eliminate debt, because it is demonstrably unable to repay its debts. In a textbook process (and this Colt proceeding is not quite textbook already), all of the debtor's (Colt's) assets are measured and evaluated, and the assets are used to repay a portion of outstanding debt. BUT, for the sake of argument, if it was shown that the owners and or managers had badly misbehaved, the court would not see that as a reason to forgive debt (blank slate to start again). Rather, the court may be less inclined to reduce or forgive debt.

So, as for an allegation of "looting." The question of whether the bondholders can argue that they have been defrauded has been in my mind for quite a while now. Colt has not produced audited financials since 2013, and the pressuring of the bondholders over the past year raises a question in my mind as to whether there may have been a violation of the Trust Indenture Act (at least three bondholders in other high profile bankruptcies have had some success if pressing their case citing breaches of the TIA).

So, I'll stop there, but you can see where this could escalate into a series of suits and countersuits, against companies and individuals.

This is why I am so reluctant to say "the name Colt will always survive." I can see this going south (even more than it is now) for any number of reasons.

The only light at the end that we've seen lately is the offer of the bondholders to jump back in and extend a loan to keep the company operating. The bondholders don't seem to want to blow up Colt, even though it is pretty unlikely they'll get their money back (at least not all of it). The secured creditors don't seem to want to blow up Colt.

But this case is like a hand grenade with a half dozen fingers holding the pin. All it takes is one to spasm ...

 

[MAKster]

The is no doubt that Colt will continue to exist. It might have different shareholders, different executives, different products, and different factory but there will be a company named Colt. When you get down to it all a corporation is a name and maybe some trademarks and patents. Publicly-traded corporations have new shareholders daily. CEOs come and go every couple years. While a financial crisis like Colts is a more abrupt change, every company goes through similar turnovers but just more gradually.

 

[Old Fuff]

The is no doubt that Colt will continue to exist.

Which is probably a given. The more important issue - at least to most of its fans and supporters - is what kind of products will carry on the name? On the part of many they're is a presumption that their favorite model(s) will be reintroduced as they were, and be produced by some fantasy technology that will create a lower price point with no sacrifice in quality or workmanship.

While this may (or may not) be impossible, it is highly improbable. The reality is the reason the company disposed of everything they had that might have supported reintroduction.

At the other end of the spectrum the "new" Colt Company may not manufacture anything, but simply license the name and trademark to any and all who have the bucks to pay required royalties and other fees.

In between these are bunches of options, some good and some bad.

Only time will tell.

 

[Aragon]

The is no doubt that Colt will continue to exist. It might have different shareholders, different executives, different products, and different factory but there will be a company named Colt. When you get down to it all a corporation is a name and maybe some trademarks and patents. Publicly-traded corporations have new shareholders daily. CEOs come and go every couple years. While a financial crisis like Colts is a more abrupt change, every company goes through similar turnovers but just more gradually.

I agree that the Colt name will never be shelved -- it's too valuable. I do think there could be some prolonged fights over it, like there was with Indian Motorcycles.

Thankfully they have the drawings, dimensions, process specifications, master gauging, etc. to build just about anything they have in the past.

 

[JRH6856]

I agree that the Colt name will never be shelved -- it's too valuable.

Never forget that the Gerber baby now sells life insurance instead of baby food.

 

[Aragon]

Never forget that the Gerber baby now sells life insurance instead of baby food.

You mean it's also used to sell life insurance...

http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias=aps&field-keywords=gerber+baby+food

Names like Harley Davidson have been used to hawk everything from cigarettes to pocket knives...

 

[Ash]

Schrade is Chinese-made now, and Volvo automobile is a Chinese-owned company. Dewalts are made in China as are Craftsman wrenches. Snap-On pocket knifes made in China can be bought through Alltrade tools (sort of like Colt pistols made by Lorcin). While all of those examples seemed to point to China that was not my purpose beyond examples of the way things change.

Whether or not Colt survives - and this talk has for more than a decade been rather popular - times change and sometimes things go away and don't come back.

Pontiac is obviously not valuable enough to keep running (though I suppose it is valuable enough not to sell and become competition - Hummer was obviously not that valuable).

 

[Aragon]

Schrade is Chinese-made now, and Volvo automobile is a Chinese-owned company. Dewalts are made in China as are Craftsman wrenches. Snap-On pocket knifes made in China can be bought through Alltrade tools (sort of like Colt pistols made by Lorcin). While all of those examples seemed to point to China that was not my purpose beyond examples of the way things change.

Whether or not Colt survives - and this talk has for more than a decade been rather popular - times change and sometimes things go away and don't come back.

Pontiac is obviously not valuable enough to keep running (though I suppose it is valuable enough not to sell and become competition - Hummer was obviously not that valuable).

Colt's not going anywhere. The contents of the company is worth something at auction. In simplest terms, others can make money producing/selling goods under the Colt name.

Were that true for Pontiac/Oldsmobile/Saturn/Hummer/etc., those names would also have been sold/licensed. Maybe they will one day?

 

[Ash]

Hummer did get sold. Pontiac and Oldsmobile did not. Why? Because Hummer is not a significant competitor to GM. It might compete against Jeep, but not GM in any meaningful way. Pontiac and Oldsmobile on the other hand, would directly compete with GM. Selling them on the open market would only have given GM direct competitors.

Colt may or may not survive. Packard, DeSoto, Star, Astra, AMC Sunbeam, etc did not. Schrade did, as did Remington Bushmaster & Winchester. In the former, the products are not very good (even if Schrade was a lower-end US manufacturer). In the latter, well, things can vary but the companies have survived with relative product models intact. How does Bushmaster today compare with Bushmaster of old?

What kind of Colt would you want? I have some Colt revolvers. I like them. They are superb firearms. Would you want a Hi Point Colt? A Kahr Colt? An FN Colt? Would you accept a Japanese-made Colt? What if Colt were bought out by S&W?

 

[wojownik]

The brand "Colt" will in all likelihood continue. "Twinkies" continued, after Hostess went under, a hiatus and new ownership. But, the product has changed, even though they are using the same basic designs, processes, equipment, and some of the same staff.

Whether Colt continues under a reorganized Colt Manufacturing, or an outside acquiror, or a NewCo. remains to be seen. And whether the products are impacted in any way... It's still just too early to make definitive assertions.

There are tons of scenarios how this could play out. Sciens, secured creditors and bondholders could come together in a great kumbaya. And high quality Colt product could continue. Or cost cutting /corner cutting could set in (a LA the 1990s).

Colt is going somewhere. We just don't know the specific direction yet.

 

[Aragon]

Hummer did get sold. Pontiac and Oldsmobile did not. Why? Because Hummer is not a significant competitor to GM. It might compete against Jeep, but not GM in any meaningful way. Pontiac and Oldsmobile on the other hand, would directly compete with GM. Selling them on the open market would only have given GM direct competitors.

The fact is GM would have sold both divisions had there been a buyer. I would suggest they would have been obligated to sell had there been a bona-fide buyer given the infusion of taxpayer $$$ to keep GM from augering-in. They tried to sell Saturn but Roger Penske backed out of the deal. Hummer sold because there was a buyer.

Colt may or may not survive. Packard, DeSoto, Star, Astra, AMC Sunbeam, etc did not. Schrade did, as did Remington Bushmaster & Winchester. In the former, the products are not very good (even if Schrade was a lower-end US manufacturer). In the latter, well, things can vary but the companies have survived with relative product models intact. How does Bushmaster today compare with Bushmaster of old?

Colt will survive -- there is no question there. I own two firearms I built based upon Bushmaster lower AR receivers. Once circa 1990, one circa 2012. The latter receiver is of higher product quality in my opinion.

What kind of Colt would you want? I have some Colt revolvers. I like them. They are superb firearms. Would you want a Hi Point Colt? A Kahr Colt? An FN Colt? Would you accept a Japanese-made Colt? What if Colt were bought out by S&W?

S&W wouldn't buy Colt -- too much product overlap. I'm sure Hi-Point/Kahr/FN would all be capable of continuing to run (and even improving) Colt's existing operations. Whether or not people would want to buy such Colts would be analogous to people buying "AMF Harley Davidsons" back in the day.

 

[Aragon]

Throw-back Sunday:

"...The bankruptcy petition, filed Wednesday, listed total assets of $91.5 million and liabilities of $82.5 million.

Colt's, a high-profile business with 925 jobs, is a company that state politicians say they want very much to save. While Republicans criticized the state's original investment in 1990, critics of yesterday's plan were scarce.

'This is one crown jewel that doesn't leave the state of Connecticut,' said Gov. Lowell P. Weicker Jr. at a news conference held at the company's office in Hartford. 'We think it's a hell of a good investment.'"

-- Adam Bryant, NYT, March 20, 1992

www.nytimes.com/1992/03/20/business/colt-s-in-bankruptcy-court-filing.html

 

[Old Fuff]

Thankfully they have the drawings, dimensions, process specifications, master gauging, etc. to build just about anything they have in the past.

You seem to be the only one that thinks so...

Recently at the 2015 SHOT Show, Colt announced that the 1903/.32 Pocket Model pistol was going to come back. In truth they weren't going to make it, but license another company to do it. Both Colt and the prospective manufacturer admitted that the project was going to have to start from scratch because Colt had absolutely nothing related to their production of the pistol.

Incidentally, this pistol, projected to be made using the latest technologies, is supposed to have a suggested retail price set at $1,300+.

It wasn't the first time. In 1945 the U.S. Navy requested a full set of blueprints, and Colt declined. It wasn't because the were being stubborn or contrary, but rather that they themselves didn't have the requested prints, even though the pistol was still in production.

For that matter, at about the same time they ask S&W for a full set of drawing of the .38 Military & Police revolver, and got turned down for the same reasons.

Drawings didn't become critical until automated machine technology was adopted during the latter 1960's/early 1970's.

And even if they did exist they would be out-of-date for the manufacturing technologies and machinery currently used today.

 

[Old Fuff]

'This is one crown jewel that doesn't leave the state of Connecticut,' said Gov. Lowell P. Weicker Jr. at a news conference held at the company's office in Hartford. 'We think it's a hell of a good investment.'"

But at the same time they won't let residents purchase a Colt AR15 rifle nor large (but standard) capacity magazines.

 

[2ifbyC]

It’s sad when a company with an American heritage, long history, and industry leader becomes a shell of itself and is facing death in the capital market. Look at the Dow 30 from the early 1900’s and you will find it is not an aberration.

Brand name loyalty and recognition are strong assets. But time will erode that image if product quality suffers. The clock has been ticking and the results have not been stellar.

Only the market knows.

 

[CoalTrain49]

Actually, I don't think the company, as we know it, will exist at all. Colt doesn't even own the building they operate in. Most smart business people own the real estate where their business is located so they won't be displaced by higher leases or the sale of the property for other purposes.

You have to look at what Colt produces. Mostly they build AR-15/16's and 1911's. How many other companies build those firearms? A conservative estimate of companies that build AR-15/16's is about 100. The number of 1911 mfg's is about 80. Most of those companies are glad that Colt is on the rocks for no other reason than they have less competition. The only reason a company like S&W would buy the Colt name is to make sure that nobody builds another one.

So now we are down to a bunch of companies doing the same thing Colt is. They buy components from various mfg's and assemble a gun. I know they make some of their own parts but how many? They aren't going to tell you because then you would realize that they are building guns the same way everyone else builds them. If you look at the creditors that Colt owes money to you would realize they have a lot of suppliers.

So what does Colt own that anyone would want except the name? I keep seeing engineering drawings, specifications, master gauging, etc. mentioned as assets. A few days ago I shot a Norinco 1911 clone. The Chinese figured out how to build a very good 1911 many years ago. They built it to the exact Colt specs. I've been told all parts are interchangeable with a Colt. I won't know that until I buy it but I do know Colt mags are a good fit. It went through 25 rounds of my FMJ handloads without a problem. Can anyone build a good 1911 gov't clone by reverse engineering? I think the Chinese proved it already.

 

[wojownik]

But at the same time they won't let residents purchase a Colt AR15 rifle nor large (but standard) capacity magazines.

The quoted article is from 23 years ago. ! Historically interesting, but that was another time ...

 

[Aragon]

You seem to be the only one that thinks so...

Recently at the 2015 SHOT Show, Colt announced that the 1903/.32 Pocket Model pistol was going to come back. In truth they weren't going to make it, but license another company to do it. Both Colt and the prospective manufacturer admitted that the project was going to have to start from scratch because Colt had absolutely nothing related to their production of the pistol.

Incidentally, this pistol, projected to be made using the latest technologies, is supposed to have a suggested retail price set at $1,300+.

It wasn't the first time. In 1945 the U.S. Navy requested a full set of blueprints, and Colt declined. It wasn't because the were being stubborn or contrary, but rather that they themselves didn't have the requested prints, even though the pistol was still in production.

For that matter, at about the same time they ask S&W for a full set of drawing of the .38 Military & Police revolver, and got turned down for the same reasons.

Drawings didn't become critical until automated machine technology was adopted during the latter 1960's/early 1970's.

And even if they did exist they would be out-of-date for the manufacturing technologies and machinery currently used today.

Common sense suggests they do, compared to a story you believe you once heard which you cannot substantiate.

Your comment "Drawings didn't become critical until automated machine technology was adopted during the latter 1960's/early 1970's" is simply absurd. The first thing Winchester did when they bought Browning's designs (which were transferred in the form of working models) was to create engineering drawings so that the rifles could be produced.

Engineering drawings/dimensions don't become "out of date" as production methods change.