Remington’s CNBC model 700 expose isn’t bound to please its [relatively] new owners. Sherman, set the way back machine for 2007. That’s when the ultra-super secretive Cerberus Group bought Remington for $118 million, assuming $252 million in debt. You may remember this particular three-headed dog as the cur that wolfed-down $4 billion in taxpayer bailout bucks (and plenty more for GMAC and Chrysler Financial)—and then walked away scott free. In this case, Cerberus had a master plan: cobble-together an amalgam of American firearms manufacturers, use their inside-the-beltway clout to land lucrative military contracts, sell some stuff abroad, launch an IPO, bank the money and get the hell out of Dodge . . .
To that end, the Freedom Group currently includes Advance Armament Corp. (AAC), a silencer manufacturer that hoovered company cash to Go Large. And Bushmaster, makers of the ACR modern home defense sporting rifle—recently recalled for its inadvertent ability to switch from semi to fully-automatic mode without really trying.
The central problem with this blended family of ballistic accessorizers and armorers: there is no appreciable synergy between them. You can’t bundle Barnes’ Bullets with Marlin Rifles, or share Remington’s overheads or marketing with AAC. If anything, the Freedom Groupies are all fiercely independent companies with their own way of doing things. It would take a dab hand to make this firearms farrago fly.
The Freedom Group was probably the brainchild of George Kollitides. The Senior Veep with the three-headed dog folk landed his gig via his turnaround expertise at Tenex Capital Management. As is the way of angle-seeking Cerberus, Kollitides’ firearms play was accompanied by a personal headlong rush for the locus of political power in the gun industry. He joined every gun group going and made an unsuccessful run at becoming a member of the NRA’s Board of Directors.
Meanwhile, in March 2009, Cerberus’ installed Theodore Torbeck as the Freedom Group’s Chief Executive. Torbeck resigned last month, ahead of Remingtongate. And no wonder; he had no prior firearms experience. Before crying freedom, Torbeck spent 31 years at General Electric. And here’s the kicker, the man who’s replacing him also cut his teeth at GE, another disciple of Jack Welsh and his “all the world’s a data stream” Six Sigma system.
As the New York Times reported a month ago, Cerberus replaced Torbeck with Bob Nardelli. The man who knew nothing about the hardware business—and ran Home Depot into the ground—and knew nothing about cars—and drove Chrysler into the dirt—is now helming the Freedom Group. Guess how often “Boot ’em Bob” goes shooting? Guess what happens next. Here’s a clue:
For the first three months of this year, [the Freedom Group] reported a 9 percent decline in sales from the same time last year, to $174.2 million, and a steep 58 percent drop in profits, to $5.6 million.
And if you want to know why Remington is stonewalling and attacking on the model 700’s trigger problems, ’tis the nature of the three-headed beast. Cerberus and transparency don’t mix, and playing fair is not their style. As the Brits are wont to say, this will end in tears.