Colt Files for Chapter 11 Bankruptcy Protection - Not surprised.

[dcmdon]

Sad.

Hopefully someone with sound financial management will buy them. Like Sturm Ruger.

http://www.wsj.com/articles/colt-de...11-bankruptcy-protection-by-monday-1434310925

 

[stinger35]

Can't say we didn't see that coming

 

[peterthefish]

I hope RIA buys them and starts making "Colts" in the Phillipines. When I pointed out the inevitability of this on the Colt 1911 forum last year the butt hurt was incredible. I'd like to see it taken to the next level.

 

[Fixxah]

Can't say we didn't see that coming

Yeah, yesterday.

 

[exo]

Any domestic firearms manufacturer that ignores the civilian market (or is only dimly aware of it) could find themselves in a similar situation.

Also Colt has had a run of shitty management from what I've read.

 

[jason19711971]

sad

 

[slap shot]

I'm sure the moms are taking credit for the failings of senior management.

 

[matt9112]

over priced product...over reliance on government.

two cents.

 

[dcmdon]

Any domestic firearms manufacturer that ignores the civilian market (or is only dimly aware of it) could find themselves in a similar situation.

Also Colt has had a run of shitty management from what I've read.

Management essentially emptied the company of cash for their own benefit. Then when the new Government contracts didn't materialize, lost to FN, they were screwed.

Don

p.s. The new government contract pays FN something like $750 for a M4 with what was once an option package with a quad rail and some other things. Five years ago Colt was fleecing us for something like $1300/rifle. When you figure in what they charged for the package that included the quad rail.

 

[stinger35]

Yeah, yesterday.

Another one bites the dust.

 

[strangenh]

Management essentially emptied the company of cash for their own benefit. Then when the new Government contracts didn't materialize, lost to FN, they were screwed.

Don

p.s. The new government contract pays FN something like $750 for a M4 with what was once an option package with a quad rail and some other things. Five years ago Colt was fleecing us for something like $1300/rifle. When you figure in what they charged for the package that included the quad rail.

Yes, sounds like it was a leveraged cash-out (as opposed to buyout). Banks got the short end of the stick (and we all shed a tear, I know). Had Colt's market stayed up, they could have rode the razor's edge like the Nabisco LBO. Oh, well, they'll reorganize and clear the debt or else get sold to one of the hungry wolfpacks of the firearms market (like Cerberus).

 

[RHJJ]

Every Colt I shot was great, obviously a management problem. I own 2 Colts and they are keepers.

 

[dcmdon]

Yes, sounds like it was a leveraged cash-out (as opposed to buyout). Banks got the short end of the stick (and we all shed a tear, I know). Had Colt's market stayed up, they could have rode the razor's edge like the Nabisco LBO. Oh, well, they'll reorganize and clear the debt or else get sold to one of the hungry wolfpacks of the firearms market (like Cerberus).

Whats crazy is that when the Obama gun panic happened in 09 and the Sandy Hook panic happened in 13, Colt didn't have enough cash to ramp up production. So the guns were scarce. Despite the inflated retail prices, the wholesale prices for most guns and ammo stayed the same. So Colt was actually hurt by the panics, since their components became more difficult to get and more expensive.

Contrast that with S&W and Sturm Ruger, who both had record revenues and profits during the panics.

Don

p.s. I spoke to my dad tonight. Years ago he was an audit accountant with Earnst and Earnst. Sturm Ruger was his account. He got to be good friends with Bill Jr and ctually did a lot of the cost analysis on the Ruger car. He explained why Ruger wouldn't buy colt this way: Ruger does not have any debt. NONE. They have always funded expansion and acquisition through their own cash reserves. Colt is too big for Ruger to swallow without taking on debt, or at least without pushing their cash reserves down lower than is comfortable. So they will pass.

Besides, what would it get them? A civilian product line that is difficult to produce. Another old factory in CT? A unionized work force?

 

[Rob Boudrie]

Colt apparently already has one bidder lined up, so they know the floor price before the auction starts.

 

[dcmdon]

Maybe we should form a partnership LLC and buy just the name. Then we could put it on a cheap beer and see how it sells. . . what?? . . its been done? oh crap.

 

[Spanz]

Whats crazy is that when the Obama gun panic happened in 09 and the Sandy Hook panic happened in 13, Colt didn't have enough cash to ramp up production. So the guns were scarce. Despite the inflated retail prices, the wholesale prices for most guns and ammo stayed the same. So Colt was actually hurt by the panics, since their components became more difficult to get and more expensive.

Contrast that with S&W and Sturm Ruger, who both had record revenues and profits during the panics.

Don

p.s. I spoke to my dad tonight. Years ago he was an audit accountant with Earnst and Earnst. Sturm Ruger was his account. He got to be good friends with Bill Jr and ctually did a lot of the cost analysis on the Ruger car. He explained why Ruger wouldn't buy colt this way: Ruger does not have any debt. NONE. They have always funded expansion and acquisition through their own cash reserves. Colt is too big for Ruger to swallow without taking on debt, or at least without pushing their cash reserves down lower than is comfortable. So they will pass.

Besides, what would it get them? A civilian product line that is difficult to produce. Another old factory in CT? A unionized work force?

at a bankruptcy auction, it might work out better. they get the patents and rights to all the designs, the support to the government for past weapons, a new marketing force. They can take that IP, a few key employees, and move production out of the peoples republic of CT to whatever non-union shop they would like. I hear Texas is gun friendly....

 

[noddaduma]

I hope RIA buys them and starts making "Colts" in the Phillipines. When I pointed out the inevitability of this on the Colt 1911 forum last year the butt hurt was incredible. I'd like to see it taken to the next level.

If any foreign country deserves to manufacture Colt 1911s, it's the Philippines. And they do a good job too.

 

[dcmdon]

at a bankruptcy auction, it might work out better. they get the patents and rights to all the designs, the support to the government for past weapons, a new marketing force. They can take that IP, a few key employees, and move production out of the peoples republic of CT to whatever non-union shop they would like. I hear Texas is gun friendly....

Thats interesting. I had not thought of that. Ruger's already got plants in New Hampshire, Prescott AZ, and a new one somewhere south I can't remember.

My only fear with a Sturm Ruger acquisition would be that they'd start using investment cast frames for everything. Ha. Not that it matters, its just a matter of history.

Don

p.s. A friend of mine is a guy named George Spring. He's one of the two master engravers in the custom shop. I haven't heard from him. I did talk to someone who worked in accounting until recently. He said that its been a long slide and was totally inevitable. Treating a company like your personal ATM is not exactly sound management.