Covering the details of the bankruptcy auction and breakup of the assets of the entity formerly known as Remington Outdoor, you tend to get caught up in the dollars and lose sight of one thing: the bankruptcy is unfortunate for the industry, but it has the potential to have a cataclysmic impact on the people who work-or worked (depending on how things shake out) at Remington.
In acquisitions, facilities change ownership, but the people, largely, remain. In the short-term there are seldom any changes. As the new owners learn the nuances, redundancies may be eliminated and economies-of-scale realized by consolidation, but the majority of the people survive.
A bankruptcy is different. In a Chapter 7 liquidation, the company, essentially ceases to exist.
Most Remington manufacturing workers have either already been furloughed. For others, their final day of employment is today.
But not every company’s fate is the same in this liquidation. Some have already ceased to exist as anything other than brands. And we know that Vista Outdoor intends to continue operations in the ammunition manufacturing facility in Lonoke, so those workers seem to be OK.
But what about the two “other” key assets: Remington firearms and Marlin? Those are two decidedly different situations.
Yesterday, I spoke with Roundhill Group partner Jeff Edwards about that group’s plans for Remington firearms, and Ruger CEO Chris Killoy about his company’s plans for their acquisition, Marlin.
They’re both bullish about their acquisitions in the long-term. Their situations in the short-term, are definitely different.
For Killoy and Ruger, Marlin’s a straight-asset acquisition. For Edwards and Roundhill, it’s an opportunity to restore a gun company to its former glory.
Edwards was straightforward in his group’s intent: keep Remington operating -in Ilion, New York- and to have guns being manufactured there again as soon as possible.
“We’re intent to keep Remington in Ilion, and operating again as quickly as possible,” he told me, “and it’s not altruism. We’re optimistic about the town, working with the union, and the highly-skilled workforce there.”
The Roundhill Group, he told me, doesn’t expect this to be simple, but “It’ll be interesting and we’re going to tackle it with good intent.”
The decision to keep that portion of Remington in its longtime home makes sense, especially since Roundhill will be going into the situation without a crushing debt service or past liabilities. “That,” he explained, “doesn’t mean we expect to just turn on the machines and start making stuff.”
So what will Roundhill’s role be? “We’ve done our job. Now we put good people in place and give them the tools to be successful again. We (the owners) got the easy part- we can afford this.”
Apparently his enthusiasm is reflected in Ilion as well. Yesterday, local news outlets there quoted New York State Senator James Seward as saying that “the new owners were staying in Ilion” and that he expected an initial recall of 200 workers “within 30 to 60 days.”
Should that prove true, Remington firearms would join the ammunition workers in getting back to their longtime business -although under new ownership and unfettered by old debt loads.
In the long-term, there’s also reason to be optimistic about the future for Marlin Firearms.
But, as Ruger CEO Chris Killoy reminded me, “this isn’t like an acquisition where we’re assuming a working operation.”
“We’ve got a lot of work still ahead of us,” Killoy told me, “but we’re delighted to add Marlin. And we’re not going to absorb Marlin into Ruger’s lines. It’s a great brand and products, but it will take some time to get the results and quality it deserves.”
It’s not like Marlin hasn’t been on Ruger’s radar for some time. Ruger considered acquiring Marlin in 2007, but that didn’t work out.
This time, however, there’s no option to combine facilities. This is a bankruptcy auction, and Ruger’s acquiring assets, not facilities. That means the future’s not quite so bright for Marlin’s factory workers, but engineers and other technical staff could bring a world of expertise and experience with the intricacies of building lever-guns.
Lever actions, Killoy reminded me, aren’t uncomplicated pieces of equipment. Neither are some of the pieces of equipment acquired in the purchase.
And relocation of those pieces to Ruger facilities, wherever they’re located, will mean they’ll need to be reassembled, wrung out and brought back into tolerance before they can consider making products.
Right now, Killoy says, “we couldn’t build a Marlin if we had too. But give us some time, and the results will be quality.”
This week has focused almost exclusively on how a legendary brand got into dire straits. Going forward, it seems the story will focus on how the various parts and pieces reemerge.
As always, we’ll keep you posted.
— Jim Shepherd