Crony-Capitalism is A Great Way to Kill a Gun Company (Colt)

[ShooterInPA1]

The iconic manufacturer’s business was booming…. Right up until the moment that Unions decided to do what they do best: Go on strike. By 1988, the company had lost a number of high-dollar contracts, and the end of their beginning was clearly at hand.

In the decade to follow, their competitors warmly embraced America’s newfound fascination with the civilian market, concealed carry, and home defense. Colt, on the other hand, decided to take a more pragmatic approach. And, by “pragmatic”, I mean “liberal” approach:

A wealthy industrialist, from the heart of a non-gun-owning Manhattan family, decided he could steer the company to better times. With a man who knew nothing about guns at the helm, Colt embarked on their reimagined path to prosperity by introducing (and supporting) the idea of smart guns and federal gun permits. Yeah… As strange as it might seem, telling your most ardent customers that they should ask a fickle and hostile Federal government for permission to handle your product, isn’t a great business practice.

The new CEO (yeah… the last one was fired pretty quickly) still decided to put civilian ownership on the back-burner as he focused on appealing to the same Pentagon cronies that nearly drove the company into the trash-bin of history. There are only a handful of industries that relish the advent of war… And they all have something in common: They work (in effect) for the Pentagon. With their sudden boom in government contracts, as the Iraq war picked up, it looked like good times might finally be on the horizon.

Good times, in fact, seemed like it couldn’t be avoided. Well, at least in theory. But if Colt had proven anything in its 178 years of existence, it’s that turning a profit is kinda tough sometimes. The company’s decision to whittle their civilian division down to a few obligatory 1911s wasn’t really doing them any favors, given that their competitors were rushing to fill the demand of a gun-hungry republic. While Joe Biden, Barack Obama, and Harry Reid rambled on about gun control, Colt casually dismissed the idea of focusing on the civilian market. Heck, it was only within the last few years that Colt finally got around to deciding that a pocket pistol (the .380 Mustang) might be a good idea.

Today, the industry is seeing a decline from the last year’s boom in sales. Colt’s civilian offerings are proving to be “too little, too late” for a market that is currently saturated with high-quality alternatives. And so, with a very specialized degree of failure, Colt has managed to paint itself into near bankruptcy. Their corporate bonds are rated as junk, and they’re continuing to pile on millions of dollars worth of debt.

The company might still survive. After all, they represent a history, a quality, and a heritage that is rare in today’s world. Their guns are quality products (even if you do pay a premium for those ponies on the slide) and their reputation is strong. But the company embraced too many values of the left to survive long in a world that has proven to be hostile to their industry.

In the end, there are really only three things that are responsible for killing Colt: cronyism, support for gun control, and labor Unions… You would think a gun manufacturer would know better than to sleep with government. But, I guess nobody shared that lesson with Colt’s management.

http://finance.townhall.com/columnis...mpany-n1863635

[Rblakely]

First, welcome back. Been a while since I've seen a post from you.

This is a sad state of affairs for what was once a great company.

[gummy jones]

I think it is an example of resting on you laurels while others are innovating and branching out. This problem faces many once great companies.

Maybe obama will bail them out?

[raxar]

Somewhere on arfcom a fanboy is crying himself to sleep.

[raxar]

I think it is an example of resting on you laurels while others are innovating and branching out. This problem faces many once great companies.

Maybe obama will bail them out?

Awesome point. Look at S&W, they introduced a double stack full size polymer framed service pistol series into an already full market and manged to carve out a pretty respectable place in it. What has colt done in the past 20 years like that? An abysmal lawyer designed alloy turd that nobody remembers.

[TaePo]

My understanding is that Colt is licensing the production of their products through other manufacturers. One of the biggest happens to be Walther but I think there are others as well.

There are all sorts of odd connections anymore. I think there is even a Smith & Wesson connection with Walther to allow them to be imported/sold here. Not sure on that, though.

Then there is Stoeger who bought out Uberti. Stoeger is currently a part of Benelli (when bought or merged, I have no idea).

The list can go on with others as well.

It's damned hard to keep track anymore.

For example, I originally thought Walther bought out Colt or parts of it. Later I saw somewhere they were just licensed by Colt to make certain products.

For now, it's starting to look like the gun bubble is over or we are at least in the eye of the storm. Sig is laying off and I heard some rumor (I forget what, now) about S&W, too.

So either we will see a market correction or it's just a lull.

[done]

if hilary wins in 2016, you'll see a gun bubble like no other! In fact, if we don't really SWEEP the elections in November (and repeal obamacare and end these wars) the USA is a dead letter, for certain, and soon, too.

[JenniferG]

Smith could help bring themselves out of trouble by ridding themselves of the hole in their revolver frames.

I've read the story about Colt many times and doesn't make it any better.

The left has to make another run at freedom, they need to constantly chip away at it to continue to keep their power. Bloomberg, Psycho Moms, Every Nut for Gun Safety, you name it, this is how they chip away one word at a time.

[39flathead]

Colt has gone old and stale, they left behind their customers in favor of the huge gov't contracts.
The article is correct.

When a company refuses to keep up with the times, it is going to eventually fail (unless the taxpayer keeps propping it up), just ask the United Buggy Whip company...

[Totez]

Am I the only one who read this OP in the style of R Lee Ermy?