Directing Rapid Gun Growth
The CEO of Remington Outdoor details the sales growth that led to the company’s Alabama expansion — a 24 percent increase in manufacturing capacity.
Having “gun guys” at every level and in every division of Remington Outdoor Co. starts with George Kollitides, the company’ chairman and CEO. He started shooting at age 4, he says.
George Kollitides is chairman and CEO of Remington Outdoor Co. Inc., the world’s largest firearms and ammunition manufacturer and Alabama’s most recent big coup in industrial recruitment.
On February 17, Remington Outdoor announced plans to locate a factory in Huntsville that will eventually employ 1,868 workers. The plant is scheduled to open in 2015 with 280 full-time workers and will reach peak employment by 2021.
Remington, which built its first plant in Ilion, N.Y., in 1828, has been moving operations to the South in recent years. The company moved its headquarters from New York to Madison, N.C., in 1996. In 1997, it opened a firearms plant near Mayfield, Ky., to supplement the Ilion plant.
In this interview we asked Kollitides to talk about overall company operations rather than site location, which we’ve covered earlier.
Since this interview in May, Remington has pinpointed two product lines that will be moving to Huntsville from the company’s plant in New York — the Bushmaster semi-automatic rifle and R1 handgun lines. In 2013, New York State enacted a law banning sales of semi-automatic rifles, such as Bushmaster. Bushmaster, Remington, DPMS and Marlin are Remington Outdoor’s leading brands.
What accounts for the 75 percent growth at Remington in the last five years?
Over the last decade, the number of gun owners in the United States, the world’s largest commercial firearms market, has grown from approximately 50 million to approximately 100 million people, who own over 300 million firearms. Increased interest in the outdoors, self-reliance, personal defense and competitions has driven participation in shooting to an all-time high; interest in hunting has increased over the last two years for the first time in 15 years. Further, the sport is diversifying significantly into a substantial growth area: women, who account for a third of all firearm purchases and nearly half of all handgun purchases. Lastly, the nature of the shooting sports has changed. With new types of competitions, such as three-gun, survival and target matches gaining popularity, there is greater emphasis on competition, which results in a significantly higher consumption of our ammunition.
Remington, America’s oldest firearms maker, along with its 17 other brands, offers the widest variety of firearms and ammunition, fulfilling all shooting needs from hunting to personal protection. Furthermore, Remington and its sister brands have category-defining products such as the legendary Remington 700, 1100 and 870; the Marlin 336, 1894, 1895 and 39A, among many others with strong market positions. As such, we have been, and remain, well positioned to capitalize on overall growth and our numbers reflect that. We have also tripled our R&D budget over the last two years and believe new product introductions keep the consumer coming back for our products. This brand loyalty allows us to enter new, large and growing markets such as the pistol market.
Elaborate on how ROC modernized its production facilities last year.
ROC operates approximately 2 million square feet of factory space to produce its world-class firearms and ammunition. To optimize production and improve quality on this scale, we recruited an operations team from precision industries, such as aerospace, automotive and healthcare, with a heavy emphasis on personnel who served in the military and are passionate hunters and shooters. Operations know-how without a commitment to our country, sport and way of life is useless to building world-class products; our team lives and breathes shooting, just like our customers. This new team has been leading a charge to increase efficiency and improve quality and while we have made improvements, we have a long way to go and will never tire in our pursuit of perfection. One of the tools we implemented was Layered Process Audits, which examine safety, quality and delivery on a daily basis. Further, we shifted quality metrics to be customer-centric, which helped improve quality, production and efficiency. We have also moved away from gut decision-making to instituting real-time data collection and analytics and using this information to identify best practices.
In addition to people and processes, we have been investing significantly in machinery, equipment and plants. One such example is our $32 million investment to expand our ammunition facility — an important investment considering we had already increased ammunition output by 30 percent in the last five years. Another example is the acquisition of our new Huntsville, Alabama facility, which increases our manufacturing space by 24 percent. This facility will create 2,000 jobs over the next decade. The end result is that ROC has grown dramatically in the last five years.
Elaborate on how ROC re-focused its research and development on customer requirements.
When you are the leader for a long time, it’s easy to get complacent, which we did. Quality and new products were not emphasized. That has all changed. In the last three years, we have tripled our research and development budget and as a result, over the next few years we will introduce more new products than at any other time in the company’s 200-year history. The Versamax is a great example of our efforts to meet our customer’s evolving needs. Our team successfully designed a new leading-edge technology to deliver a category-changing product that has long been dominated by the Italians and Belgians; we are changing that. Another example is our implementation of an entire new process and a brand new production line for Marlin, and now, once again, we are creating world-class lever action rifles with the quality our customer demands.
The bottom line is that we are taking a 200-year-old company in a 600-year-old industry and bringing it into the 21st century. To do that, we needed to invest in people, processes and equipment, but we can never lose sight of the fact that we have a fiduciary responsibility to America, our military, police and loyal customers. That means we have “gun guys” at every level of this company and in every division, from customer service to senior management — I, for example, started shooting at age 4. The entire organization is passionate about shooting and proud of our heritage and the role we have played in American history. We want to ensure that every customer has an exceptional experience with our products.
Chris McFadyen is the editorial director of Business Alabama.