Remington Ramps Up Amid Some Flak
Economic development headliner Remington Outdoor Co. hits stride in Alabama, in spite of a national sales slump, owners’ search for a buyer and a shakeup in management.
Trip Ferguson, in charge of the new Huntsville manufacturing facility for Remington Outdoor Co., shows off a rack of semi-automatic sporting rifles.
Trip Ferguson could have been forgiven for being distracted during a recent phone interview with Business Alabama about how things are going at the new plant he runs for Remington Outdoor Co. in Huntsville.
Just 48 hours prior, on June 9, ROC announced that Chief Executive Officer and Chairman of the Board George Kollitides, Chief Financial Officer Ron Kolka, and Directors of the Board Walter McLallen and James J. Pike were all leaving the company.
Kollitides stepped down to “pursue other interests,” the company said, but would serve as a paid senior adviser for one year. ROC co-lead Director Jim Marcotuli replaced Kollitides as chief executive officer and, on an interim basis, as board chairman and company president. Marcotuli has been with Remington since September 2014.
None of that seemed to weigh on Ferguson, 35, who attended the U.S. Naval Academy, served overseas as a Marine and has now been working in Huntsville since March 2014 to make the new $110 million firearms plant operational. His official title is vice president of operations for Remington Arms Co.
Ferguson says that while he was running Remington’s plant in Mayfield, Kentucky, he spent a good bit of time with Marcotuli, the new president. “He’s a very smart person, he has a background in Alabama, which is great, and he’s a very good person who cares about his employees,” Ferguson says.
Marcotuli served as CEO and president of Anniston-based North American Bus Industries Inc. prior to 2010, according to a Bloomberg Business profile. (NABI is now owned by New Flyer; see story on page 35)
As for what’s happening at the Huntsville Remington plant, Ferguson had these updates:
Employment stands at “300-plus,” meaning that Remington has already met its target of hiring 280 employees by the end of this year. Remington’s hiring target for 2016 is 680 employees, to keep the $68.9 million in state and local incentives that lured it to north Alabama. “We’ll make it, barring unforeseen circumstances,” Ferguson says. “We’ve hired a lot of people, and we’re proud of that.”
The factory has two core production areas. The first is modern sporting rifles, the industry term for semi-automatic rifles such as the Bushmaster, described by one industry watcher as “accurate enough for prairie dogs and powerful enough for grizzly bear.” The second production area is Remington 1911 semi-automatic pistols. Other work involving new product lines and rifle components is evolving.
Huntsville has been a “good experience” for Remington. “Our AIDT partnership has been outstanding, they’ve got resources that sit side by side with my hiring team. I can’t say enough about their assistance in helping us communicate with the local community. And the enthusiasm in this area is amazing.”
Huntsville is on the winning side of Remington’s effort to simplify its production plan and model lines. For example, in 2012 ROC acquired Para USA, a company that specialized in competition 1911-style pistols. “That business has moved here, and that brand won’t live on here in Huntsville, but the best of the brand will in the Remington 1911. We’re making those today,” Ferguson says.
While things are good in Huntsville, parent company ROC is weathering some difficult times. Cerberus Capital Management, the private equity company that owns ROC and the 16 companies that fall under the Remington umbrella, has been trying to sell the conglomerate since 2013.
In mid-June, the California State Teachers’ Retirement System successfully divested funds from the conglomerate after a two-year effort, and the company reported a net loss of $13.2 million at the end of March, with net sales down $54 million compared to the same period the previous year.
Remington’s brands include Remington, Remington 1816, Bushmaster, DPMS, Marlin, H&R, Advanced Armament Corp., Dakota, Nesika, Storm Lake and Barnes Bullets.
Bushmaster, one of the most popular brands of high-powered rifles among gun fanciers, nonetheless represents another cloud for the company, with the recent filing of a lawsuit by nine parents of children killed at Sandy Hook Elementary School. Adam Lanza, who took his own life after the school massacre, wielded that particular rifle.
Remington isn’t publicly traded and has no stockholders to please, but it has made moves in the past year to make itself more attractive to debt holders, according to Andrea James, a senior research analyst who follows the firearms industry for investment banker Dougherty & Co.
Specifically, Remington is closing factories in six states: Georgia, Minnesota, Kentucky, Utah, North Carolina and Montana. While the consolidation itself will cost between $25 million and $30 million, it makes sense because ROC rolled up so many brands when it was created, James says.
“I think debt holders will see this favorably,” James says. “Remington used to be a combination of several different companies, which are all now different brands under the same corporate logo, so, with consolation, Remington is moving to operate like one solid company.”
Remington’s new business partners in Huntsville are taking any negative headlines with a grain of salt, given that Alabama beat out more than two-dozen other states to land the 200-year-old company.
“They consolidated. We knew they were going to do that. And we knew that one of their larger investors wanted to exit about the time they were looking for a new location,” says Chip Cherry, president and CEO of the Chamber of Commerce of Huntsville/Madison County.
“They’re the first to admit the cyclical nature of their business, which is subject to the whims of the market. But they’ve remodeled about half their space on the R&D side to facilitate people moving in; they’re doing a lot of interviewing; they’re adding lines every time I go in there,” Cherry says.
“And they’re stamping things, ‘Made In Huntsville.’ It’s running pretty wide open, and they’ve sought out ways to be involved in the community. There have been no big surprises.”
Dave Helms is copy editor for Business Alabama. Dennis Keim is a freelancer for Business Alabama, based in Huntsville.