# Weapon manufacturer Colt files for bankruptcy protection



## PanaEng (15 Jun 2015)

Wonder what will emerge after this. 
Shared article:
http://www.cbc.ca/news/canada/kitchener-waterloo/gun-maker-colt-defense-files-for-bankruptcy-protection-in-u-s-1.3113541


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## dapaterson (15 Jun 2015)

It will be interesting to see the impacts of this on the Munitions Supply Program.


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## Colin Parkinson (15 Jun 2015)

Well a time honoured tradition for them, is this the 2nd or 3rd time for Colt?


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## Old Sweat (15 Jun 2015)

One suspects the US government will not allow a major small arms manufacturer to close its doors.


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## OldSolduer (15 Jun 2015)

Old Sweat said:
			
		

> One suspects the US government will not allow a major small arms manufacturer to close its doors.



Not all men were born equal, but Sam Colt made em equal.


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## jollyjacktar (15 Jun 2015)

That was a news report that made me think "WTF".  One of the few things I would never have guessed at hearing.


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## George Wallace (15 Jun 2015)

jollyjacktar said:
			
		

> That was a news report that made me think "WTF".  One of the few things I would never have guessed at hearing.



Indeed.  I guess all those Lefties who keep on pointing at the Western Military Industrial Complex have it all wrong......Or have just been proven wrong.   >

Rather hard to believe that Colt with its American, NATO and international markets could go bankrupt.  They must have some serious problems in their top echelons to be so, as I doubt it is a problem with their products. I am sure that their Research and Development  is keeping up with the times.


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## acen (15 Jun 2015)

Did Colt not lose the M4 contract to FNH a few years ago? That certainly wouldn't help their bottom line.


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## Fishbone Jones (15 Jun 2015)

Old Sweat said:
			
		

> One suspects the US government will not allow a major small arms manufacturer to close its doors.



Even the US gov't stopped using Colt for their small arms for a time. Fabrique National supplied their M16\ M4 stuff. I have some surplus US stuff for the M16 family and everything is marked FN.


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## Ostrozac (15 Jun 2015)

George Wallace said:
			
		

> Rather hard to believe that Colt with its American, NATO and international markets could go bankrupt.  They must have some serious problems in their top echelons to be so, as I doubt it is a problem with their products. I am sure that their Research and Development  is keeping up with the times.



Word in the financial media is that Colt's military and civilian arms weren't cooperating at all -- and were spending more time on internal bickering instead of bottom line issues. Bottom line issues like that the military arm was getting smoked by FN and the civilian arm was getting smoked by Ruger, Glock and Sig.

Seriously, the world has been at war for 15 years solid, and US domestic firearms sales have been steadily rising for the last decade. If Colt couldn't make money in that environment, you have to put that down to mismanagement. All the R&D dollars in the world won't help if you can't get a product to market that people actually want to buy.


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## CombatDoc (15 Jun 2015)

Ostrozac said:
			
		

> Word in the financial media is that Colt's military and civilian arms weren't cooperating at all -- and were spending more time on internal bickering instead of bottom line issues. Bottom line issues like that the military arm was getting smoked by FN and the civilian arm was getting smoked by Ruger, Glock and Sig.
> 
> Seriously, the world has been at war for 15 years solid, and US domestic firearms sales have been steadily rising for the last decade. If Colt couldn't make money in that environment, you have to put that down to mismanagement. All the R&D dollars in the world won't help if you can't get a product to market that people actually want to buy.


Not to mention that their civilian firearms were over-priced for their quality, while resting on their Single Action Army/1911/AR15 laurels and failing to innovate. 

The Cowboy Action Shooting market was lost to Ruger Vaquero (worked fine out of the box and were durable)and Uberti (needed an action job but were much cheaper) clones of the 1873 Peacemaker. The 1911 market was lost to companies such as SIG, Kimber and S&W on the "custom but stock" end and on the high end suppliers such as Ed Brown. Finally, Armalite, Bushmaster and others provided a better and more affordable AR15 rifle. The police market was sewn up by SIG, Glock and Beretta. 

What else did Colt have in the inventory?  Very little.


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## RedcapCrusader (15 Jun 2015)

PWGSC take note... time to look to HK 416 and the SIG556  >

I am really not surprised by this though. Other than Colt-Diemaco Canada, I don't see how they made any money.


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## cupper (15 Jun 2015)

Ostrozac said:
			
		

> Word in the financial media is that Colt's military and civilian arms weren't cooperating at all -- and were spending more time on internal bickering instead of bottom line issues. Bottom line issues like that the military arm was getting smoked by FN and the civilian arm was getting smoked by Ruger, Glock and Sig.
> 
> Seriously, the world has been at war for 15 years solid, and US domestic firearms sales have been steadily rising for the last decade. If Colt couldn't make money in that environment, you have to put that down to mismanagement. All the R&D dollars in the world won't help if you can't get a product to market that people actually want to buy.





			
				ArmyDoc said:
			
		

> Not to mention that their civilian firearms were over-priced for their quality, while resting on their Single Action Army/1911/AR15 laurels and failing to innovate.
> 
> The Cowboy Action Shooting market was lost to Ruger Vaquero (worked fine out of the box and were durable)and Uberti (needed an action job but were much cheaper) clones of the 1873 Peacemaker. The 1911 market was lost to companies such as SIG, Kimber and S&W on the "custom but stock" end and on the high end suppliers such as Ed Brown. Finally, Armalite, Bushmaster and others provided a better and more affordable AR15 rifle. The police market was sewn up by SIG, Glock and Beretta.
> 
> What else did Colt have in the inventory?  Very little.





			
				Ostrozac said:
			
		

> Word in the financial media is that Colt's military and civilian arms weren't cooperating at all -- and were spending more time on internal bickering instead of bottom line issues. Bottom line issues like that the military arm was getting smoked by FN and the civilian arm was getting smoked by Ruger, Glock and Sig.
> 
> Seriously, the world has been at war for 15 years solid, and US domestic firearms sales have been steadily rising for the last decade. If Colt couldn't make money in that environment, you have to put that down to mismanagement. All the R&D dollars in the world won't help if you can't get a product to market that people actually want to buy.



This jives with what I heard tonight on the way home. It seems that they borrowed more than they should have in order to maintain dividend payouts, and didn't reinvest enough to allow the business to grow. And also the high price for the civilian models lost sales, and the loss of the US Military contract, especially the pistol contract to Beretta hurt them significantly.

I'll post up a link to the NPR story when it becomes available later tonight.

http://www.npr.org/2015/06/15/414689862/american-gun-manufacturer-colt-files-for-bankruptcy

One other point they mention, there was a lot of stock spread through a lot of people, so it was very difficult for stockholders to come to a consensus when they needed to on restructuring.


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## jollyjacktar (15 Jun 2015)

cupper said:
			
		

> This jives with what I heard tonight on the way home. It seems that they borrowed more than they should have in order to maintain dividend payouts, and didn't reinvest enough to allow the business to grow. And also the high price for the civilian models lost sales, and the loss of the US Military contract, especially the pistol contract to Beretta hurt them significantly.
> 
> I'll post up a link to the NPR story when it becomes available later tonight.



If they want to run the company like it was Eatons, then they can expect to suffer the same fate as Eatons.


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## Tibbson (15 Jun 2015)

jollyjacktar said:
			
		

> If they want to run the company like it was Eatons, then they can expect to suffer the same fate as Eatons.



Perhaps Target Canada is a better comparison.  

Pun intended.   :


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## OldSolduer (16 Jun 2015)

LunchMeat said:
			
		

> PWGSC take note... time to look to HK 416 and the SIG556  >



They won't. Too many jobs at stake.


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## Ostrozac (16 Jun 2015)

Hamish Seggie said:
			
		

> They won't. Too many jobs at stake.



There are very few jobs at stake. According to its Industry Canada profile, Colt Canada only has 100 employees. In contrast, the General Dynamics ammo factory outside Montreal has over a thousand employees. Colt Canada isn't Ford or GM. It's not really about jobs. 

And even if Colt completely death-spirals, someone else will likely purchase the facility in Kitchener because Colt Canada (unlike the parent US company) is still getting decent amounts of government contract work. So Colt Canada could easily become FN Canada or Sig Canada, with no loss of jobs, and since the core product of Colt Canada (the M16 family) isn't completely propriety to Colt, such a transition could end up very transparent to the customers (Canadian and European police and militaries).


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## The Bread Guy (23 Jun 2015)

Ostrozac said:
			
		

> .... And even if Colt completely death-spirals, someone else will likely purchase the facility in Kitchener because Colt Canada (unlike the parent US company) is still getting decent amounts of government contract work ....


Speaking of which ....


> .... The Honourable Julian Fantino, Associate Minister of National Defence, will make an announcement at Colt Canada on June 23, 2015, to benefit the Canadian Armed Forces and northern sovereignty.
> 
> WHAT: Ministerial announcement on equipping Canada’s military.
> 
> ...


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## Underway (23 Jun 2015)

This doesn't suprise me.  Colt canada is one of four "protected" industries in the country.  The govt will not allow them to die.  It's against the national interest.


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## cupper (23 Jun 2015)

Underway said:
			
		

> This doesn't suprise me.  Colt canada is one of four "protected" industries in the country.  The govt will not allow them to die.  It's against the national interest.



Don't want to send this into a tangent, but can you clarify what you mean by four "protected" industries?


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## Underway (23 Jun 2015)

IIRC they are Canadian National Bank(which used to include the mint), Colt Canada, Canada Post, and I think Petro Canada but am not sure about that one since it's no longer crown.  Finance, energy, security, communications.   Things have changed over the years but there are specific industries in Canada that if they were to die would have significantly negative impacts on the country.  Colt Canada the supplier of all CAF and RCMP small arms is one of them.  As such they have very special relationships with the government and are considered protected...  It's in policy somewhere but my google fun is weak today.


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## Retired AF Guy (23 Jun 2015)

Ostrozac said:
			
		

> There are very few jobs at stake. According to its Industry Canada profile, Colt Canada only has 100
> employees. In contrast, the General Dynamics ammo factory outside Montreal has over a thousand
> employees. Colt Canada isn't Ford or GM. It's not really about jobs.



My understanding from various media sources is that the bankruptcy proceedings in the U.S. has no 
impact on Colt Canada because its independent from the mother corp. in the U.S..


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