The long-standing US company Remington has been producing rifles for over 200 years and is considered one of the oldest firearms factories in the US. Two years ago they had proudly celebrated their anniversary, but now the debt burden is so overwhelming that the management has had to act and choose the path of bankruptcy filing. Since the election of Donald Trump, the entire US arms industry has suffered from falling home market demand - even though the president is a big fan of the industry.
The drop in demand for weapons is explained by experts as fears of stricter gun laws wane. During the 2016/2017 election campaign and under Barack Obama’s administration, US citizens heavily armed themselves. But with the election of Donald Trump, the Americans currently fear no tightening or changes to gun laws. So the demand for weapons and ammunition is falling sharply.
Other large firearms companies like Ruger or Smith & Wesson are also feeling the decline in sales.
The high debt and declining demand for guns forced Remington Outdoor Company into bankruptcy in February 2018. The company has now announced an application for bankruptcy protection.
A rescue plan for Remington: business will continue
The creditor protection is part of a rescue plan with banks and investors. As the business goes on, debt will be cut by 700 million USD and over 100 million USD in new capital will be raised.
As part of the bankruptcy, creditors are to take over Remington. However, the company assured that ongoing operations will not be disturbed and bills and wages will continue to be paid. The approximately 3,500 employees of the firearms factory in Madison (North Carolina) still look into an uncertain future. At present, Remington is controlled by the investment company Cerberus, but it’s been looking for a new buyer for years. Financial investors are not known for their patience.
Negative headlines hit the US company in 2012. Remington was sued for allegedly defective rifles and, among other things, a massacre in a US school where an assault rifle produced by the company was used.
Like the well-known US firearms manufacturer Colt in 2015, Remington now has to go through the bumpy insolvency proceedings too. We reported back then: Colt Defense files for Chapter 11.
Remington's well-regulated bankruptcy protection is of course bitter to the company and its employees, but it’s a necessary step. And we can assume that the US traditional brand Remington will continue to exist.
More information about Remington can be found directly on the company's website.
02.13.2018
