The enormous expense of moving a factory is probably the overriding issue here. I have no idea what it would take to move the S&W factory, but in the early 90s I was part of refit of the Arlington TX GM factory, not move mind you, but refit to a new line of vehicles, and that was supposedly costing GM 400million. So I'm guessing to pick up and move a factor would expensive enough to make it financial suicide in all but the most dire of circumstances. They are a for profit concern, and only worry about politics as they affect their bottom line. So they aren't going to move because they don't like the local political leanings of their state's legislature right now. They were there when they became leftist, and will probably be there to see the worm turn to the right.
Why did Smith & Wesson pick MA as their home state, considering...
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ArkieVol
Member
S&W and Jack Daniel's
Jack Daniel's distillery, founded 1875, is located in a dry county...BUT, it
doesn't keep them from selling a bunch of good ole Tennessee sippin' whiskey
Same with S&W. If it ain't broke...
Jack Daniel's distillery, founded 1875, is located in a dry county...BUT, it
doesn't keep them from selling a bunch of good ole Tennessee sippin' whiskey
Same with S&W. If it ain't broke...
Zundfolge
Member
Not likely as it would cost them significantly to deal with US import restrictions on firearms.
Honestly considering the high corporate income tax rate in Mass, Romney Care, onerous regulations and heavy union presence I'm surprised S&W are still there. I can't imagine that moving to a state with no corporate income tax wouldn't pay for itself quite quickly (although to be honest only Texas and maybe Nevada have enough potential work force to replace all the skilled workers that don't want to move out of Mass)
EDIT
According to this site S&W had revenue of $406.2 Million in 2010. The corporate income tax rate for Mass is 8.5% so thats $34.527 Million dollars.
Also "Founded here [Mass] in 1852, Smith & Wesson has 909 employees in Springfield [Mass], 152 in Houlton, Maine, and another 322 in Rochester, N.H." So when you add the facilities in Maine and NH it starts to make less financial sense.
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Zundfolge
Member
Well in general the anti gun laws in Mass don't impact the profitability of the company much (if at all) so I imagine they haven't considered it.
TexasBill
Member
I am sure S&W's attorneys and accountants take advantage of every possible loophole: According to their annual report, Smith & Wesson Holdings paid $14,841,000 in income taxes in 2010. That's about 45.7% of the net revenue of $32,510,000 but just 3.6% of total sales of $406,176,000.
Smith & Wesson is non-union at all their facilities so there wouldn't be any benefit to their moving to a right-to-work state.
Smith & Wesson has experienced employees and it's likely a good percentage of them would not or could not move to a different state.
In addition, if Smith & Wesson was to decide to move to another state, I have difficulty seeing them choose Texas. Texas has a lousy record of attracting new manufacturing to the state. Out of all the new auto plants built by Toyota, Honda, Hyundai, Subaru, Mitsubishi, BMW & Mercedes, the only plant that came to Texas was the Toyota truck plant near San Antonio and that selection was primarily driven by Toyota's belief that a new pickup plant should be in Texas.
I think the real question is why S&W would want to move?
Smith & Wesson is non-union at all their facilities so there wouldn't be any benefit to their moving to a right-to-work state.
Smith & Wesson has experienced employees and it's likely a good percentage of them would not or could not move to a different state.
In addition, if Smith & Wesson was to decide to move to another state, I have difficulty seeing them choose Texas. Texas has a lousy record of attracting new manufacturing to the state. Out of all the new auto plants built by Toyota, Honda, Hyundai, Subaru, Mitsubishi, BMW & Mercedes, the only plant that came to Texas was the Toyota truck plant near San Antonio and that selection was primarily driven by Toyota's belief that a new pickup plant should be in Texas.
I think the real question is why S&W would want to move?
CapnMac
Member
Actually, the answer is water.
Two hundred years ago, you needed reliable waterflow to run the water wheels that powered the mills and shops. The new england area has a number of watersheds that suit that work.
In addition, access to water is very convenient for transporting heavy raw materials like pig iron, steel, and the like. Which was a reason not to move the mills when steam replaced running water. The coal for fuel for those steam plants was also cheapest in the heavy bulk size shipments that you can make by river.
Was not just S&W for that matter. Colt, Marlin, Savage, lots of those companies were there in the new england area. That area was also populated first, so that's where the first companies set up. Which also meant they had the first "shot" (NPI) at skilled immigrant labor, too. As the industries matured, and immigration waned, 'gentrification' set in, and the political harvest reaped from that is what we see today.
Two hundred years ago, you needed reliable waterflow to run the water wheels that powered the mills and shops. The new england area has a number of watersheds that suit that work.
In addition, access to water is very convenient for transporting heavy raw materials like pig iron, steel, and the like. Which was a reason not to move the mills when steam replaced running water. The coal for fuel for those steam plants was also cheapest in the heavy bulk size shipments that you can make by river.
Was not just S&W for that matter. Colt, Marlin, Savage, lots of those companies were there in the new england area. That area was also populated first, so that's where the first companies set up. Which also meant they had the first "shot" (NPI) at skilled immigrant labor, too. As the industries matured, and immigration waned, 'gentrification' set in, and the political harvest reaped from that is what we see today.
yeti
Member
Maybe S&W just finds Springfield, Mass. is wicked good as far as places to make guns go...
Gouranga
Member
I would not count on that. NC and SC have a large number of skilled workforce that are sidelined by Freightliner, and many of our furniture, and textile companies slowing down or shutting down altogether. SC has a very competitive tax rate and both NC and SC would bend over backwards to get the business. NC and SC also have major airlines, rail lines, and shipping ports to help S&W get their products anywhere in the world they wan them.
I am sure you could find more than a few states who would also fit the bill. It just costs so much to pick up a company and move it. They route they would likely take if it came to it, would be to open 1 or 2 small manufacturing facilities in prospective states to establish an infrastructure and test the waters then slowly ramp one up while ramping MA down.
I would think they would stay in the US because otherwise they would have to deal with a huge hurdle in our import laws.
leadcounsel
member
Okay, got it they were there long before MA became anti-gun.
But there are several gun companies located in MA, Illinois, California, etc. With their voting base of manufacturing, why weren't they able to lobby against anti-gun laws. You'd think that they would see the laws as a threat to their industry, especially the lawsuits...
But there are several gun companies located in MA, Illinois, California, etc. With their voting base of manufacturing, why weren't they able to lobby against anti-gun laws. You'd think that they would see the laws as a threat to their industry, especially the lawsuits...
THE DARK KNIGHT
Member
Once again, you are failing to realize that gun laws have little to no impact on the manufacturer in this case. Their military and LEO sales are completely untouched - I can't recall a single gun control law in the USA that applies to the military or LE agencies. Their sales to the majority of states without restricted laws are completely untouched.
The only sales they lose, are the sales to residents of states with such laws. Which is business they would lose anyway regardless of where they are located. Whether S&W is in MA or AZ, a resident of MA has the same hoops to jump through to buy a handgun anyway.
...maybe, because they aren't
Owen
Moderator Emeritus
Like farming, manufacturing has been becoming more and more efficient, to the point that very few people actually have anything to with it. We are in an economy where less than 10% of the population produces physical goods, like food or manufactured items. The United States, by most measures is manufacturing more than ever, all while those manufacturing "jobs" are floating overseas.
There's two reason manufacturing jobs are disappearing: 1. The people just aren't needed in the numbers they used to be. 2. People in general don't want what are perceived to be dirty jobs.
The entire manufacturing side of the small arms business in the United States is probably somewhat less than 20,000 in a country of 330,000,000.
Smith and Wesson leaving Springfield would be a tremendous blow to a dying city, but in the greater scheme of Massachusetts? It wouldn't even be noticed.
There's no political power there to speak of.
Owen Sparks
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What would happen if you had to move to another state because of your job? Would you be taking your wife away from her parents or your children away from all their friends? Getting a large group of highly skilled workers to move in mass is very difficult. Sure some will go but others will not.
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leadcounsel
member
Nope, I disagree. First, there are more private consumers than law enforcement by many-fold. And law enforcement is whimsical... sure you may have their contract now, but what about next time? A loyal consumer base is where the real money is. 300 million potentional consumers vs. a few million LEOs... big difference!!!
Also, It is short sighted to believe that a gradually more anti-gun country isn't a threat. Just look at the money gun companies have had to spend fighting after presumably sitting on their butts... they were rather close to losing the battle against indemnification in products liability suits... For every gun law, it's arguable that guns are removed from homes. And every home without a gun is a lost family of shooters and a generational effect.
You cannot sell your widgets if widgets are outlawed... and relying on Gov't contracts is foolish.
Zundfolge
Member
I don't buy #2.
More likely the increasing number of onerous environmental, safety and labor regulations along with higher and higher corporate taxes are what's harming manufacturing.
rscalzo
Member
They are moving Thompson Center out of NH and a portion into MA. Current thinking is the line of BP will be made in China to increase the profits.
ElToro
Member
something id like to see is a bunch of commie MA state legislators stumbling over themselves to explain a S&W corporate move to their constituents. wringing their hands over the job losses and begging them to stay. especially after doing everything in their power to make it hard on gun owners in their state
a tx or az would probly give them a huge tax break incentive to move as well
a tx or az would probly give them a huge tax break incentive to move as well
benEzra
Moderator Emeritus
W.E.G., what model is that revolver, and when was it made?
Owen
Moderator Emeritus
How about people smart enough to do the job don't want to do what's perceived as dirty work. I've tried to hire basic labor for machine shops in the past. Its almost impossible.
THE DARK KNIGHT
Member
This is most definitely a big part of the issue. We're raising a generation that wants to grow up to all be button pushers in a cubicle like on TV and not workers, farmers, etc.
However I would say likely the biggest issue of all, is simply corporate greed. Up top, the bean counters figure "why pay some American $14/hr, sick days, medical, vacation time, etc. when we can pay Chinese $.50/day and they'll migrate across the country and live in giant dormitories for months to work that job?"
With labor costs reduced, it smothers any competition who tries to stay in the USA. The chain reaction is for the competition to also move to nations that exploit their workforce and the cycle continues.
One last time. Let's pretend S&W teleported their facility to AZ tomorrow. How does this change the ability of buyers in MA on Monday?
leadcounsel
member
That's not my argument at all. If I made widgets in my hometown, and employed a lot of folks making widgets, I would not ignore pending regulations in my hometown that would gradually outlaw widgets, even if it didn't directly effect widgets sold elsewhere. I would lobby very hard to stop the laws outlawing widgets in my town, realizing that illegal widgets in 1/50th of the places widgets are sold/bought is bad for my biz...
TexasBill
Member
Actually, moving S&W to China would be self-defeating. Chinese workers aren't making what they used to make: thousands of companies have gone under in the past couple of years because of the rising costs of labor and Chinese government policies.
Second, S&W would want to keep a manufacturing presence in the U.S. because of government contracts. Look at Beretta and FN-Herstal. Why go to all the expense of setting up a supply chain, manufacturing and transportation halfway around the world when you still have to have them here?
Remington is doing what Remington is doing because it's owned by Cerberus Capital Management which is sort of like being a blood-slave to Count Dracula. Cerberus is going to squeeze every penny of cost out of Remington, regardless of product quality, customer satisfaction, or anything else, because that's how they work. They don't care about long-term health; they're going to milk the cow as long as they can and sell it when the cow runs dry.
Second, S&W would want to keep a manufacturing presence in the U.S. because of government contracts. Look at Beretta and FN-Herstal. Why go to all the expense of setting up a supply chain, manufacturing and transportation halfway around the world when you still have to have them here?
Remington is doing what Remington is doing because it's owned by Cerberus Capital Management which is sort of like being a blood-slave to Count Dracula. Cerberus is going to squeeze every penny of cost out of Remington, regardless of product quality, customer satisfaction, or anything else, because that's how they work. They don't care about long-term health; they're going to milk the cow as long as they can and sell it when the cow runs dry.
Mass. is doing what they can to keep them there. Mainly with tax breaks and incentives
http://www.masslive.com/news/index.ssf/2010/12/smith_wesson_to_save_6_million.html
http://www.masslive.com/news/index.ssf/2010/12/smith_wesson_to_save_6_million.html
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