Sunday, April 7, 2013

Who Will Be The First To Leave?

Now that both Maryland and Connecticut have passed their draconian gun control acts, the question becomes who among the gun manufacturers in those two states will be the first to relocate.

On Thursday, there was an article in Opposing Views suggesting that Beretta USA had announced their departure from Maryland. However, if you read the article closely, this is incorrect. What Beretta actually said was that they would have to leave if the gun control legislation was passed. They have not yet made a formal announcement that they were moving their operations out of Maryland. I'm sure that probably will happen but it hasn't happened yet.

So that leaves the question who will be first. Moreover, where will they move.

Both states have a number of well-known firearms manufacturers: Beretta, Colt, Ruger, and Mossberg. However, to get a better feel for the companies involved in firearms manufacturing in both states, I went to the ATF list of Federal Firearms Licensees. I pulled the 07 FFLs - manufacturers of firearms other than destructive devices - and 10 FFLs - manufacturers of destructive devices for each state. It should be noted that some of the firearms "manufacturers" in each state either make components or are actually gunsmiths doing custom work.

Maryland and Connecticut each have five manufacturers of destructive devices including big companies such as Beretta, Colt Defense, Colt's Manufacturing, and  defense contractor Mistral Group. Under the listing for ordinary firearms manufacturers, Connecticut has 121 companies listed while Maryland has 105 companies listed. Below is a list by state of some of the true manufacturers as opposed to either gunsmiths or those providing ancillary services such as CNC milling or specialty coatings.


When discussing who will leave and who won't, we need to keep a number of things in mind. First, you don't just relocate a plant of any kind at the drop of a hat. Second, the companies involved have ties to their community and region going back generations. Third, very few, if any, of the manufacturers do everything and must depend upon local subcontractors to perform certain operations. Fourth, the companies would be losing a well trained workforce if they moved and their employees did not also relocate. Finally, with the firearm industry being heavily regulated, there would be immense amounts of red-tape involved in moving to a new state.

Dan Haar of the Hartford Courant looks at the issue in an article published yesterday entitled, "Gun Industry Dilemma: Should I Stay Or Should I Go Now?" He notes the issue for some of these companies is not just having to move family but the consumer backlash on their companies if they don't.
Scalise (of ASC) badly wants to stay in Connecticut, where he and his wife have four children ages 5 to 12. So does Mark Malkowski, owner of Stag Arms a few hundred yards away in New Britain, and the executives at O.F. Mossberg & Sons and Colt's Manufacturing Co. — all of them makers of the now banned military-style rifles at the heart of the law.

The trouble is not the direct effects of the ban — they're allowed to continue manufacturing, and each firm will lose a few percentage points of their sales — but rather, the companies' standing in an industry where customers famously punish certain brands.
The companies have been receiving thousands of emails from both current and future customers urging them to move. Some have indicated they will purchase from other companies if, for example, Stag Arms, stays in Connecticut. Moreover, industrial recruiters from more gun friendly states have been offering incentives to the companies to move. Whether they will move lock, stock, and barrel or move some of the production to plants in other states is the question.

Haar believes that the majority will attempt to grow production at plants outside of the state while still having some operations in Connecticut. He notes that Mossberg has a plant in Texas. It should also be remembered that Colt opened a new factory in Osceola County, Florida in 2011. Likewise, in Maryland, Beretta has some operations in Virginia.

Having established metal fabricating and finishing companies in a state would be a definite plus in attracting any firearm company to relocate. You would tend to find many of these co-located with the automotive and aircraft industries. Thus, you could see companies moving to the Upstate of South Carolina due to BMW, to Alabama due to Mercedes, to Tennessee due to Nissan, or Kentucky due to Toyota. Likewise, you could see a company relocating to the Wichita, KS area with its aircraft industry. All of these locations are in gun friendly states with strong industrial development recruiting departments.

So who would be first to go? In terms of ease of relocating, Ruger would be at the top of the list. Their manufacturing operations are in New Hampshire and Arizona. The only operations they have in Connecticut are their corporate offices.

The next on my list would be either ASC or Stag Arms. ASC is actively considering it.
Scalise, his accountant, lawyer and a few industry colleagues are looking into a move to a friendlier state. And it's not just ASC, a New Britain business with 100 employees, that might pull up stakes. Scalise's other company in New Britain, Marsam Metal Finishing, and at least one other firm in the firearms industry are part of the joint plan.

In all, more than 300 people would lose their jobs or be forced to move to a locale like Arkansas, South Dakota, Kansas or Texas, to name just four states that are wooing Scalise with tax breaks, cheap labor and a government that has open arms for arms-makers.

"We're doing a due diligence analysis state-by-state," Scalise said.
Mark Malkowski of Stag is also considering moving.
Mark Malkowski, the 34-year-old founder of Stag Arms, said he grew up in New Britain, where the company is based, and had never before considered leaving the state. But he said he would consider it now.

“If our product is so bad, so dangerous, why would the state of Connecticut want us to produce it here, create jobs here, manufacture it here and ship it to all the other states?” he said.
You would also have to put Beretta up high on the list given their past statements.

As to the others, I foresee that they will move more and more operations out of state as time goes by.  While they all can "export" their products for now, you have to wonder how long the state will even allow that.

This all leaves one more entity to consider - the National Shooting Sports Foundation. It is hard for me to see just how long they can remain in Connecticut and not be considered to be tacitly endorsing the Connecticut gun control laws by staying.



    1. @Gary - The vote on the CT gun control bill had a number of Republicans voting for it. MD was a different story.

  2. Thanks for posting this comprehensive list, John. I intend to continue pushing these companies to relocate. I cannot, in good conscience, purchase any of their products if there is even the slightest chance that doing so would generate revenue for these states. In addition, the NSSF should take a stand and move operations from Connecticut. There should be no chance of the industry's revenues lining the coffers of states that would malign these companies, or their customers. - @Circa1911

    1. @JK: To get the most comprehensive list, follow the link to the ATF's list of FFLs.

  3. Thanks for the list, I know now who I will not buy from until the are actually MOVED not just giving lip service. I hope that they leave all the employees behind so as they loose the tax revenue from the companies, the income tax from the employees AND have to pay out unemployment and bennies to the unemployed.

  4. The other side of the coin is to contact your state legislators and governor, esp if you are in a pro-gun state, and ENCOURAGE them to contact these companies and help them re-locate. Recognize that there will be tax incentives offered, and this costs $$$. These local politicians need to know they won't catch hell from their constituents if they offer up bennies to move companies here, and tax revenues take a short-term hit. Give them political cover to make that call.

    -Dirk Diggler

    1. @Dirk: Excellent point! This reminds me that I forgot to add Missouri to this list. The St. Louis area has substantial aerospace subcontractors and other metal fabricating companies. I don't know KC as well but it may have similar resources.

    2. Born and raised in SW Missouri, and I have to say that the state is too narrowly Purple for it to be a good bet. Better to go somewhere solidly Red and pro-gun vs. sort of trending Red as we are, e.g. while fairly pro-gun Republicans control the legislature, our re-elected governor is quite anti-gun, was NRA F or thereabouts and has only raised to a C- or so by keeping his mouth shut and signing some pro-gun bills.

      This happened before I moved back, but we were very late to the shall issue game, 2004, and before then it lost in a referendum, one of the very few times the RKBA has lost when put on a ballot. Since then the law has mostly improved, but not entirely, e.g. now you must not only demonstrate that you can safely load and unload a revolver and semi-auto pistol (a not unreasonable safety requirement), you must now quality with both.

      St. Louis is also very Blue and rather violent, at least the city proper and notoriously East St. Louis across the river in Illinois. It's an area my family avoids.

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  7. If these companies leave both states then a significant portion of the populace can lose their jobs. A bad idea of Democraps.

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