Iconic gunmaker Colt is on the brink of bankruptcy

[katmandu]

http://www.clickorlando.com/news/money/ ... y/33503588" onclick="window.open(this.href);return false;

[Beiruty]

http://www.clickorlando.com/news/money/ ... y/33503588

Sad news. Maybe Barreta will buy them all. Or Caracal might buy them.

[WildBill]

It would be nice if some one bought them.

I wish they would start making DA revolvers again.

[SA_Steve]

Gotta wonder how this can be. Too much borrowing over the years ? Executives bleeding all the cash flow ?

[WildBill]

Gotta wonder how this can be. Too much borrowing over the years? Executives bleeding all the cash flow ?

Colt has been in poor financial shape for many years.

[jmra]

Poor leadership that failed to keep up with changes in the market. What a shame.

[G.A. Heath]

For many years Colt has relied on licensed merchandise to keep it's non-government customers, few if any, firearms were sold to the civilian market with the intention that they be sold to non-government parties. Colt recently re-entered the civilian market, in a sense, however many products that wear the Colt brand and logo are not actually made by them. Their government and non government production businesses were, and to my knowledge are still, completely separate entities. Colt still doesn't like the non-government market as they have not tried to develop a new handgun product for civilian sales nor do they listen to the demand for products like their legendary Double Action revolvers. Instead they concentrate on building Single action revolvers and 1911s that they sell for a premium. Many of these premium priced 1911s do not include features that their competitors include on 1911s which sell for significantly less, often leading customers who would buy the Colt 1911 to look to custom 1911s from major tuners that command that premium price.

While I really love the History and many products Colt manufactures, I just can not find it in me to feel sorry for their financial troubles that they have brought onto themselves. If Colt wanted to survive, they would have concentrated on keeping their civilian market and giving customers a reason to pay those premium prices other than a slogan of "If it's not a Colt then it's a copy". Alternatively they could have lowered their prices to be competitive, increased production and remained profitable while not putting that silly government use only type language on their products which are perfectly legal for non-government ownership and use.

[Dave2]

Gotta wonder how this can be. Too much borrowing over the years ? Executives bleeding all the cash flow ?

I blame being based in a state whose leadership would like to make your product illegal.

Ok, so that may or may not have a lot to do with it, but I wonder if this is why they didn't follow in the great exodus of gun manufacturers a year or so ago?

[Jumping Frog]

When you consider that S&W, Ruger, and every other publicly traded firearms manufacturer has been making money hand over fist in this firearm sales go-go era, the obvious blame for Colt boils down to poor management. The other factor is the union (however, the failure to solve the union problem still boils down to a management problem).

[ELB]

Weaponsman.com has a series of posts that go into detail on Colt's problems, you may be interested in them: http://weaponsman.com/?s=colt" onclick="window.open(this.href);return false;

[rentz]

H&k has been in similar shape for a while too, teetering on the edge of bankruptcy.

[gljjt]

The only thing premium about Colt is the name. They have missed the mark in recent years in every area. A name will only take you so far.

[drjoker]

Yup, Colt is run by an idiot Donald Zilkha who has never owned a gun before running Colt. He wanted to concentrate on the UNPROFITABLE government market. He failed to realize that 300 million Americans own 300 million guns. The world's top 20 biggest armies only owned 20 million guns. It doesn't take a rocket scientist to figure out where the bacon is. He hired CEO Ron Stewart who said on TV that he favored licensing and registering all gun owners. This caused a boycott of Colt. Then, Zilka replaced Stewart with another imbecile, Sliwa. What little civilian customers Colt had, Sliwa turned away with anti-2nd A activities like the "smart gun" project. Any business school grad knows that the bigger the company is, the cheaper the production cost due to economies of scale. Zilkha canned Sliwa and hired a CEO William M. Keys that divided the company by rolling up a fence in the middle of the factory. Colt was divided into a government division and a civilian division. This made their guns more expensive than all their competitors. For years, Zilkha and his CEOs have been giving themselves fat bonuses while they cut salaries and cut jobs claiming the company was in financial trouble. This antagonistic relationship of management with the workers persisted for years before Zilkha got there and continues today. There was that union strike that lasted 5 years, causing production quality to fall and therefore the US government dropped their contracts to produce guns for the army. This great tradition of abusing workers continues today as their top engineers are now suing Colt for racist business practices, alleging that CEO Keys called them racial slurs such as, "the little yellow scourge," etc. Leave it up to a Yankee anti-2A dumbass to ruin a great American icon.

Ok, so Zilkha isn't in the gun business to make money. Why did he buy Colt and attempt to buy Fabrique Nationale? Why did he publicly state he wanted to control 85 percent of the gun market? He is friends with infamous anti-gun Senator Charles Schumer and anti-2nd A financier Soros. Need I say more?

For many years Colt has relied on licensed merchandise to keep it's non-government customers, few if any, firearms were sold to the civilian market with the intention that they be sold to non-government parties. Colt recently re-entered the civilian market, in a sense, however many products that wear the Colt brand and logo are not actually made by them. Their government and non government production businesses were, and to my knowledge are still, completely separate entities. Colt still doesn't like the non-government market as they have not tried to develop a new handgun product for civilian sales nor do they listen to the demand for products like their legendary Double Action revolvers. Instead they concentrate on building Single action revolvers and 1911s that they sell for a premium. Many of these premium priced 1911s do not include features that their competitors include on 1911s which sell for significantly less, often leading customers who would buy the Colt 1911 to look to custom 1911s from major tuners that command that premium price.

While I really love the History and many products Colt manufactures, I just can not find it in me to feel sorry for their financial troubles that they have brought onto themselves. If Colt wanted to survive, they would have concentrated on keeping their civilian market and giving customers a reason to pay those premium prices other than a slogan of "If it's not a Colt then it's a copy". Alternatively they could have lowered their prices to be competitive, increased production and remained profitable while not putting that silly government use only type language on their products which are perfectly legal for non-government ownership and use.

[C-dub]

Gotta wonder how this can be. Too much borrowing over the years ? Executives bleeding all the cash flow ?

I blame being based in a state whose leadership would like to make your product illegal.

Ok, so that may or may not have a lot to do with it, but I wonder if this is why they didn't follow in the great exodus of gun manufacturers a year or so ago?

If they had better cash flow in recent years they might have moved to a friendlier state. Being so far in debt makes it difficult to build or borrow money to build.

[Glockster]

In the news tonight is that they will file Chapter 11 tomorrow, but have secured a capital line to continue operations.