I like guns. I admit, I like guns even more than I like most of my tools. (Except my Clifton planes…those are nice). But I don’t go to the SHOT Show because I like guns. I go because I am hunting there. I’m hunting on behalf of the state of Texas, and I’m hunting for firearms businesses, especially manufacturers. And I’m hunting big game and small game alike. I’ve worked in economic development for most of my career, and for the Office of the Governor of Texas for the last decade or so. I went to SHOT Show as the Executive Director of Economic Development and Tourism for the State of Texas. So although I have a keen interest in guns, I’m really a lot more interested in gun companies. It is actually the law in Texas that firearms manufacturers are provided a priority for economic development activities in the state. So I don’t just go to the SHOT Show because I can, I go because it’s the law. God bless the Lone Star State . . .
Lots of states — most, actually — are actively trying to recruit firearms businesses. And that includes states that are decidedly anti-gun. Think New York hates Kimber? As someone who has visited with them and tried repeatedly to recruit them to the state of Texas, think again. The state house in New York may not want anyone to actually own Kimber’s products, but they are willing to put a lot on the table to keep them there if need be.
The same can be said for most of the New England states where so many of the big names exist. And they want them for the same reasons I do. Skilled machinists at every level. Firearms companies make a product, and manufacturing is still the number one priority of any quality economic development program.
But firearms companies include a particular type of manufacturing. They make products in steel and high impact/high temp polymers. And to do that they need CNC machinists, programmers and repair people. They need engineers of every type. They need skilled and to-be-skilled labor. And they generally have a pretty high initial capital investment in those machines.
That level of expertise spills out into many other areas of manufacturing. If you can pack an area with these people and create, in my business’s terms, “a center of gravity”, we generally find that a whole host of other types of manufacturing in the area increases as well. In Texas in particular, we see them cross over into aerospace as well as petrochemical manufacturing, two areas well represented in the Texas economy.
So these firearms companies are of special interest to us. But they are prime targets for everyone. In fact, this year at SHOT, I saw that several other state economic development offices had set up booths on the main floor, and that was money well spent for them.
Oddly enough, the upturn in petro and petrochem was one of the impediments to recruiting firearms companies to Texas, since so many engineers and skilled workers were employed by them. If you are a 19-year-old welder making $100k in South Texas, the odds of you taking a $40k job for a gun company outside of Austin aren’t very good. With the price of oil so low, and some of the smaller companies letting workers go, they are likely to be snatched up by other manufacturers who have long complained of their absence. I hope some of those are firearms manufacturers.
What surprised me the most about the SHOT Show this year (other than some idiot actually repeatedly using the word “recce” while pronouncing it like more like a brand of peanut butter cup, and the even dumber people who listened to him) was the number of small AR manufacturers that were still there, and still in business. Those of us watching these businesses over the last few years often quietly predicted the demise of most of them. I saw so many small companies created, indebted up to their eyeballs with demand waning, bit by bit. I didn’t expect all of them to go out of business, but I did expect a lot more mergers, partnerships, and buyouts.
Not to say that we haven’t seen some of those, and some to great benefit to the consumer (others, not so much – *cough* Freedom Group *cough*). I just expected more. So I talked to quite a few of them and got back some consistent answers.
Those making bottom-of-the-market cheap ARs were either the subject of the buyouts described above, or weren’t there at all. Just about everyone who wanted a budget has AR bought one. Or nine of them. The high-end crowd, folks like LaRue Tactical, never saw a dip. They only saw their waiting lists increase while they tried to keep up. These companies didn’t go out and leverage themselves to double their machining capacity, they just kept people waiting longer, and wait they did. They’re not ARs, but Freedom Arms (oh, oh how I love thee) had their wait list stretch close to five years at one point. It’s thankfully down to about 18 months now. If I put in my order in for a .500WE now, it will be here in time for whatever there is on the planet that I need to kill with it.
It’s the mid market AR that’s doing well. Makers of $1000 to $2000 ARs with lots of bells and whistles and customizations seemed to have weathered the storm and are going along nicely. Driving this is the fact that their quality has gotten markedly better, so much so that a rock-solid reliable gas gun pushing sub-MOA groups is really nothing too spectacular anymore. Those of you who are in your 20’s don’t understand that this was considered impossible not too long ago. Now it’s the standard. Heck, Shaolin Rifleworks guarantees half that.
Some of these companies were hurting — badly — for a while, but the successful ones found new niches. So many of the AR makers I spoke with make more of their money on parts for other people’s guns than they did in their own complete gun sales. And they do it for harder-to-find calibers and they sell directly to the public. Those are two of the biggest keys to their success. Rapid customization and rapid customer-direct, sales and delivery. Need a top-of-the-line 6.5 Grendel bolt? You can find it. Need a top-of-the-line 6.5 Grendel left handed bolt? Underground Tactical will overnight it to your door. For the consumer, that’s awesome. For the industry, it’s a life saver.
What I also saw was a good number of gun companies making non-firearms related parts for other companies. Some smart CEOs looked around and saw they had machines still owned by the bank and employees sitting idle at work, and put them to use any way they could. There are quite a few examples of this going both ways, with aerospace companies getting into the gun business and gun manufacturers making parts for aerospace companies. For someone in my line of business, that’s a huge win-win.
Another reason for the success of so many of these mid-market ARs is simply that not too many people really care if it says Colt, or Bushmaster, or whatever on the side of it anymore. For those who didn’t serve in the military, not having your rifle say Colt or Bushmaster on the side means very little. For those of us who did serve, having those names on the side says your rifle isn’t going to shoot as well as a dozen other smaller manufacturers that will build you exactly what you want. The big guys didn’t respond fast enough to consumer demand, depending instead on the hope of military and law enforcement contracts. And that didn’t always go so well for them. And it left a huge gap for small companies to enter the market and make names for themselves, which they did.
All in all, just about everyone I talked to said that things have leveled out for them, or even that business was slowly picking up steam. I took a look at reported inventories and employment in the state of Texas (because that’s what I have access to) and the math works out to verify their cautiously rosy outlook. Good news for the industry, good news for the consumer, good news for America.