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The problems, as laid out in WSJ are:
The "Winchester" name and logo are owned by Olin Corp, leased to Herstal. The contract runs out next year.
The plant was highly modernized several years ago, with help from the city. Under that agreement (and union contracts) Winchesters cannot be made anywhere but in that city.
After doing the modernization, it has been determined that it would be cost prohibitive to make rifles there. They'd never sell at a price that would pay beck the cost of the factory upgrade.
On the other side of the ledger, if Herstal does cease making Winchesters, they'd owe the city almost a million dollars to repay the tax incentives given for the modernization.
If they can resurrect the name and manufacture, they'd probably make rifles that are being "replica-ed" by Italian and Brazilian firms: Mod 73s, Mod 92s, and such. They'd likely drop production of low-end guns like Wal-Mart specials. Any new Winchesters would be pricey.
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