Remington Arms Company has been sold!

[6.5s4ever]

I just heard that Remington Arms has been sold to an affiliate of Cerberus Capital Management as a part of a definitive agreement between Cerberus and RACI Holdings Inc. Remington was sold for an estimated value of 370 million dollars with a debt of over 200 million . Here we go another capitalist take over everybody gets laid off and the company gets trashed. Its really sad but it's all about money! Will Remington survive? Only time will tell, why cant we make guns in the USA and show a profit????:(

[fabsroman]

Better question is why can't we make anything in the USA and make a profit. Remington had some serious issues with its retirement funding from defined benefit plans that it had in place for quite some time. American workers are not willing to work without benefits such as retirement and health care. Those are two of the issues that have Ford, GM, and Chrysler in hot water.

Health care, retirement, and regulation are some of the reasons why manufacturing businesses go overseas for their labor. Americans don't look at where things are made before they buy them, they only look at how much something costs and whether the extra cost is warranted by extra features/reliability. Almost no Americans are willing to pay extra just because something is made in America.

[Gaven1030]

remington is done.

[Rocky Raab]

Fabs is right. No company can make a profit (which is what keeps them alive) as long as Americans won't buy anything unless it's free with a cash rebate - BUT demand $30 an hour with full benefits, health care, retirement and paid vacations to MAKE the stuff.

[denton]

This is actually probably very good news for us, and for Remington.

Cerberus buys companies that are in financial difficulty, and brings in fresh capital, and a management turn-around team. At the moment, they own about 70 such companies, including Bushmaster, which they bought last December.

They will get Remington into a position where it is producing at a profit, and then they will either keep it as a producing investment, or they will sell it for more than they paid for it. In either case, Remington's long-term viability is much better than it used to be.

It is not unreasonable for us to expect that quality will improve. Prices may or may not go up.

Some industries "get" the quality thing. Those that do have very low defect rates, and have year over year price reductions. Look how much better cars are now than they were 30 years ago, and how much less we pay for them in constant dollars. The auto industry "gets it". In the firearms industry, quality is relatively poor, and prices go up every year. Clearly, the firearms industry doesn't "get it", though Savage seems to be doing better than the others. When the whole industry is down to 50 defective parts per million, and it is rare to buy a firearm that isn't flawless, and when prices hold steady or go down slightly each year, we'll know that the firearms industry finally gets it. Cerberus is likely to move Remington in that direction, and to put pressure on other companies to do the same.

[MN Tonester]

Denton,
thanks for the post about the buyer. Hope they do get Remington turned around and brought back to health. Would be a dirty shame to lose yet another American arms maker.

I see the price of a Ruger Gold Label has gone up $400 (assuming one could even get their hands on one). But it's still in the Ruger catalog.

[Classicvette63]

Have to disagree with the points about the american workers demanding too much. The multi million dollar salaries stolen (not earned) by the execs is what's ruining this country. If the company goes under Joe Bluecollar is out of a job while the fatcats get big $$$ severance packages. It takes a heck of a lot of regular employees earning $30,000- $40,000 a year to equal what 1 or 2 of the top leeches make.

And don't tell me the big wheels get to make all the money becuse they went out on a limb starting a company, put the money into it etc. I didn't realize Mr. Harley or Mr Davidson were still alive, yet after having the most profitable year in the companys 100+ year history, the company wanted the employees to give back. Bullsquash. I doubt Mr Remington is alive either.;)

No workers, no product. No execs, no way to unload said product. Sounds like a team effort to me. Some where along the line the team concept has been replaced with "F" the other guy and grab as much as you can for yourself, by hook or by crook.

Sure if I don't like working for someone else I can always go start my own business. :rolleyes: We'd get far with 250 million one man companies.:rolleyes:

[fabsroman]

Classic,

I'll agree with you that CEO salaries are an issue, but that still isn't the main issue with manufacturing companies.

The high salary CEO issues have mainly been with companies that are not manufacturing companies. One example is E-Trade about 6 years ago. The stock had done terribly during this CEO's tenure, yet he still got an $80 million bonus. That is insane. However, these CEO matters still do not stack up to the health care and retirement issues that companies are going through.

Here is a webpage from Ford:

http://www.ford.com/en/company/about/publicPolicy/healthCare.htm

Ford spent $3.1 BILLION in health care in 2004 and I am sure that number only went up for 2005 and 2006.

Ford also employs 300,000 employees. Let's assume an average salary of $30,000 per employee. That comes out to $9 BILLION in salary. Now, if Ford merely matched these employee's contributions to a 401(k) plan in the amount of 5% of salary, that would cost Ford an additional $450 Million per year and I think these numbers are on the low side. Ford and the other car makers got into trouble with the use of defined benefit plans where they promised to pay retirees a certain amount when they retired and the plans were under-funded.

Do CEO's make more than they should when they make $10 Million a year? I would say so, but those are the extreme cases that you hear about and they aren't the norm.

The thing is that the CEO's are just like the rest of Americans. Would you expect anything less? They are the what can you do for me right now type. There is no loyalty in American workplaces anymore. Who is to blame? Who knows. Was it caused by companies getting rid of older employees to bring in new blood? Was it caused by younger employees that were hungry for money and power, and who were willing to jump from one company to another to get it? I know very few people that have stayed with the same employer for more than 5 years and it is extremely tough to find people that earn their 30 year watch for 30 years of service with a company.

Corporate America is all screwed up, but it is all of America to blame. Everybody wants to make a quick buck. Stock brokers only care about making money off of you right now. Mutual funds charge a bunch of fees to make money off of you right now. In the end, it is a disaster because Americans want too much, and I find myself guilty of it every once in a while.

[Rocky Raab]

Well said, Fabs.

[Lilred]

Well done Fabs.

That's a shame bout Remington tho...America's greed is makin sombody rich tho....we'll start with China and end with Taiwan.

[fabsroman]

There are plenty of far east countries that are making money off of us. Sure, there are some billionaires in these cultures, but most of them are still poor. They are working to merely put food on the table. Americans are working for their 3rd car, vacation home, 5th TV, etc. If most people in this country had less wants, we would all be doing a lot better as a whole. The norm in America 40 years ago was a 2,000 sf house, a car, and a TV. Now, the 2,000 sf house is considered a shack by most, to have a single car in a family is unheard of, and to only have a single TV is unheard of. Between my wife and I, we have 4 cars, 3 TV's, and a 1,800 sf townhouse. I am not going to buy another car until one of these is beyond repair or they will not fit the kids in them. We are not going to buy another house until we have too many children to fit them in this house. Funny thing is that I am getting pressure from my parents, her parents, and friends of mine to buy a bigger house. Then I stop and think about it. Right now, I pay $15,000 a year in mortgage interest on a $300,000 loan, and while we could afford a $600,000 loan for the bigger single family house built in the 70's but located closer to my wife's work, we would be paying north of $30,000 a year in mortgage interest. No thanks. We'll just save money over the next several years so that we don't need as large a loan.

On top of all this, I am lookng at a carbon fiber bike frame on e-bay for around $2,000. Problem is that I already have 5 bikes and there really is no need for this new one except for that I want it. Hence, I have decided that I am not going to buy it and I am going to keep the $2,000 in savings.

In today's day and age, there will always be something else to buy. There will always be a new gun, a new car, a new bike, a new motorcycle, a new gizmo. Companies make these new things because they need to keep sales going. I almost broke down and bought a Benelli SBE2 a couple of years ago because it had a larger trigger guard for gloved hands and a new recoil reduction system. Before pulling the trigger on that purchase, pun intended, I came to my senses and figured out that I never had a problem in 8+ years with pulling the trigger on my current SBE and I coul put a recoil reducer in the stock for $40. Sad thing is my wife gave me the green light on that purchase and I passed on it anyway.

[jl1966]

I work for a major railroad, they rake in money by the boatload, and pay their management accordingly. All of this by their own admission, I constantly recieve material from the company touting the massive profits and gains in bussiness achieved. I also expect to be compensated accordingly, however, employee salary and benefits always seem to be the first place the cost cutters look. The recent loss of jobs at Circuit City is a case in point, employees that were judged to be too highly paid, some by as little as .50 cents an hour were fired and replaced with lower paid workers. Again, that was fired, unemployed, S.O.L., buddy, not "downsized", or "subjected to work force reduction" or some other corporate euphimism. There is why there is little loyalty anymore. Profit to the upper management and shareholders is key. The fact that a person has given 20 yrs of his life to a company means little. The next time you go to by a T.V. and are met by a sloppy looking kid in tennis shoes and wrinkled pants, who knows absolutely nothing about the merchandise he is selling, think about that. It was not too many years ago you would have been met by an appliance salesman who knew his merchandise, and approached you in a proffesional way, and dressed accordingly. This bunch that has taken over Remington will manage it for profit, no doubt. A little plastic where metal used to be, a kid off the street fitting barrels where a guy with experience used to be, but who cares, management is getting rich, and the stockholders are getting rich, only the working man gets the shaft.

[fabsroman]

I'll agree with that post. Obviously, management doesn't want to cut their own salaries. When told they need to cut something by the Board or the shareholders, they will look everywhere else other than their salary. Just like we want raises, they want them too. Ultimately, poor management and the use of people that don't know jack as salesmen lead to the downfall of companies. The Board and the stockholders should do something about it, but they usually don't. There is a lot of politics involved in this stuff.

[skeet]

I know quite a few people who were or are with Remington. The people who bought the company from Dupont was a holding company. They came in ad things were turned around in some ways and other things just went to pot. The people who bought it immediately sold stuff off and didn't reinvest anything back into the company so that is one of the reasons they got into trouble with the retirement thing. The owners just didn't fund those things like they should have. They also changed the direction of their marketing strategy...and not to the good side of business either..I know one of the vice presidents who got fired because he didn't agree with the new strategy. Now a new compay comes along. Well see in a short period of time what is gonna happen. Hope it turns out better than the last time.. I gave Remington 5 yrs about 3 yrs ago. Maybe well see if I was right