BREAKING: Remington Filing for Bankruptcy, Cerberus Surrenders Ownership to Creditors

Remington Outdoor Company logo

Press release: Remington Outdoor Company Announces Restructuring Support Agreement with Creditors for a Comprehensive Financial Restructuring and $145 million of New Capital

Normal Operations Will Continue During Restructuring Period Remington’s Liquidity and Competitiveness Enhanced

All Claims including Trade Payables to be Honored

Madison, NC – February 12, 2018 – Remington Outdoor Company (“Remington” or “the Company”) today announced that it has reached a Restructuring Support Agreement (“RSA”) with creditors holding a majority of the FGI Operating Company, LLC (“FGI OpCo”) Term Loans due in 2019 and 7.875% Senior Secured Notes due in 2020 (the “Third Lien Notes”) (collectively, the “Consenting Creditors”).

The RSA provides for the reduction of approximately $700 million of Remington’s consolidated outstanding indebtedness and the contribution of $145 million of new capital into Remington’s operating subsidiaries, markedly strengthening the Company’s consolidated liquidity, balance sheet, and long-term competitiveness.

The RSA, subject to certain conditions, represents the commitment of the Company and Consenting Creditors to support a comprehensive restructuring of Remington’s existing funded indebtedness.

The balance sheet restructuring will be effectuated through a pre-packaged joint plan of reorganization to be filed in the United States Bankruptcy Court for the District of Delaware in connection with the Company’s filing of voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code.

Remington’s business operations will continue to operate in the normal course and will not be disrupted by the restructuring process. Payments to trade partners, employee wages and other benefits, support for customers, and an ongoing high level of service to consumers will continue without interruption.

Executive Chairman of Remington, Jim Geisler, commented, “Since its founding over 200 years ago, Remington has been a uniquely American company and brand. Our longevity is owed to generations of loyal customers and hard-working employees who met challenges and delivered results. Difficult industry conditions make today’s agreement prudent. I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage.”

Anthony Acitelli, Remington’s Chief Executive Officer, stated, “Importantly, the fundamentals of our core business remain strong. We have an outstanding collection of brands and products, the unqualified support of a vibrant community across the industry, and a deep and powerful culture. We will emerge from this process with a deleveraged balance sheet and ample liquidity, positioning Remington to compete more aggressively and to seize future growth opportunities. We look forward to serving our customers, our partners throughout the industry, and our many fine employees, now and long into the future.”

Key elements of the RSA and balance sheet restructuring are outlined below:

  • All existing unsecured and priority claims of Remington Outdoor Company and each of its subsidiaries (other than funded debt claims) will be unimpaired, including trade payables.
  • With the consent of a majority of the holders of the Term Loans (the “Term Loan Lenders”) and the Third Lien Notes (the “Third Lien Noteholders”), Remington Outdoor Company will provide a $45 million delayed draw first-out first lien term loan (the “First- Out Term Loan”) to FGI OpCo. This facility will roll into a debtor-in-possession term loan upon the Chapter 11 filing (the “ROC DIP Term Loan”).
  • The Consenting Creditors will provide a $100 million debtor-in-possession term loan (the “DIP Term Loan”) to fund the Company’s Chapter 11 Cases. Upon exiting bankruptcy, the DIP Term Loan will be converted into an Exit Term Loan.
  • The Company will arrange a new asset-based loan (ABL) facility at emergence, the proceeds of which will refinance the existing ABL facility in full.
  • The Term Loan Lenders will equitize their claims and receive 82.5% of the equity in Reorganized Remington. These lenders will also receive their Pro Rata share of $2.67 million in cash at emergence.
  • The Third Lien Noteholders will receive (i) 17.5% of the equity in Reorganized Remington through the equitization of the ROC DIP Term Loan, and (ii) 4-year warrants for 15% of the equity in Reorganized Remington at a strike price to be derived at emergence based on a $700 million enterprise value. The Third Lien Noteholders will also receive their pro rata share of the remaining cash at Remington Outdoor Company.The RSA may be terminated upon the occurrence of certain events, including the failure to meet specified milestones relating to the filing, confirmation, and consummation of the restructuring. There can be no assurances that the restructuring will be consummated upon the terms described above.Remington’s legal counsel is Milbank, Tweed, Hadley & McCloy LLP, its investment banker is Lazard, and its financial advisor is Alvarez & Marsal Capital Partners. The Term Loan Lenders’ legal counsel is O’Melveny & Myers LLP, and their investment banker is Ducera Partners LLC. The Third Lien Noteholders’ counsel is Willkie Farr & Gallagher LLP, and their investment banker is Perella Weinberg Partners L.P.

About Remington Outdoor Company

Remington Outdoor Company, headquartered in Madison, N.C., is one of the world’s leading innovator, designer, manufacturer, and marketer of firearms, ammunition, and related products for the hunting, shooting sports, law enforcement, and military markets. As one of the largest manufacturers in the world of firearms and ammunition, we have some of the most globally recognized brands including Remington, Bushmaster, DPMS/Panther Arms, Marlin, H&R, Dakota Arms, Parker, AAC, Barnes Bullets, Storm Lake and Tapco. For more information download the Remington Outdoor Company Brochure, located on www.remingtonoutdoorcompany.com.

comments

  1. avatar BLoving says:

    Well, I feel much better knowing they’ll continue to pay their executives during this restructuring…
    No word on if the end result will be them finally doing proper respect to the name “Marlin”.
    🤠

    1. avatar TruthTellers says:

      I have a feeling that they’re either going to sell off Marlin or Marlin is going to find some investors who are willing to pay for a buyout.

      1. avatar Extractor says:

        “Remington’s business operations will continue to operate in the normal course and will not be disrupted by the restructuring process. ”

        Guess that means Biggly Green will continue to not innovate, skip out on quality control, fight wrongful death lawsuits, cheat their customers, infringe on patents, and oversell their products.

        No tears from me. Glad their on their way out. Maybe lessons will be learned. But probably not.

  2. avatar Removed_californian says:

    I hope with this business failure Remington can salvage some semblance of its former self. Maybe they’ll innovate or bring products to market that people want to buy at a price people can swallow.

    1. avatar Big E says:

      Agree completely. Hopefully, the geniuses that hatched the “RP9” abomination will get punched in the stomach as a part of the process as well.

      1. avatar Ranger Rick says:

        Just the “guy” who approved the final product. Way late and way out of date (20 years at least). So many other product opportunities were missed because of the RP9.

      2. avatar Lurch says:

        Before we bumrap the Rp9, I have one and 5-600 rounds later have had no problems. Price was right, and while those with small hands may have concerns, I have not. Not one hangup, failure to load or fire or stovepipe. I would buy again in a heartbeat.

  3. avatar Special Ed says:

    I think we are all breathing a sigh of relief for the executives. They are the real victims, here.

    1. avatar Stereodude says:

      I know I slept soundly last night knowing the executives were being taken care of. Otherwise I probably wouldn’t have gotten any sleep.

  4. avatar ChainsawWieldingManiac says:

    Huh, this is not a bad outcome compared to, say, liquidation. Do we know who owns them now?

    1. avatar ColdNorth says:

      According to Reuters: “Cerberus Capital Management LP, the private equity firm that controls Remington, will lose ownership of the company as a result of the bankruptcy. The company’s creditors, which include Franklin Templeton Investments and JPMorgan Asset Management, will exchange their debt holdings for equity in the company. ”

      We’ll have to see what their plans are.

      1. avatar Anon in Ct says:

        Basically a steering committee made up of the major were-debt-now-equity holders for now.

        It’s unlikely that JPM and Franklin plan to be in the gun biz long-term, so they will try to shop it to potential investors, either as a going concern or as parts, depending what will fetch the most $$.

      2. avatar TheUnspoken says:

        I think Cerberus is all to happy to finally be rid of it, they tried to dump it and didn’t have a buyer so better to cut the loses I guess.

        Not sure the creditors will run it well either but perhaps they will at least want to get their money back.

  5. avatar TruthTellers says:

    Well, what an unexpected surprise this is? I’m surprised to hear that the company behind the R51 and it’s recall, the 700 and it’s trigger recall, and the other low quality stuff they’ve been producing if filing for bankruptcy.

    I honestly don’t see any money in the brand when it comes to firearms. For everything else… ammunition, clothes, merch… I can see money in that stuff.

  6. avatar Bob says:

    Please OH please let Henry buy up the Marlin name and give it some honor again!

    1. avatar BLoving says:

      Appreciate the Henry love, Bob… but it wouldn’t make sense for a superior company with a superior product to buy up an inferior one.
      Once was a time I had nothing but respect for Marlin – I would often recommend them over Winchester to customers – not anymore. I’ve actually suggested to folks to shop around for a lightly used Marlin made back in the 90s rather than buy a new one.
      🤠

      1. avatar bob says:

        Well, all my Marlin stuff is old so I’ve only known of the quality Marlin arms.
        As for the quality, I would hope Henry would be able to buy cheap and just use the name as a line of classic arms.
        Perhaps a Winchester absorption.

      2. avatar anonymoose says:

        Maybe S&W, Colt, Mossberg, Ithaca, or Savage will buy Marlin then. Colt needs to expand their horizons beyond basic AR15s and 1911s if they ever want to stop going into bankruptcy every couple years. I still think Henry buying Marlin would be a good idea, though.

        1. avatar Mark N. says:

          Colt has no money for acquisitions, and its credit is abysmal. Mossberg maybe. S&W isn’t a rifle company. SAvage isn’t going to pay to relocate all of Marlin from wherever it went to back to where it came from, or to try to buy all the machines and build a new plant. Maybe FN…which owns the rights to the Winchester Arms name.

        2. avatar Dyspeptic Gunsmith says:

          Colt is one little ripple away from sinking beneath the waves themselves. They have no financial strength to take on an acquisition.

        3. avatar Aaron says:

          Colt can’t keep their own asses out of bankruptcy. Colt and Remington share a common problem: non-gun guys were hired by investers to run the companies, and sent them into nosedives that no amount of “new, better” management could even possibly recover from.

          jeez, colt is STILL recovering from their most recent bankruptcy themselves.

      3. avatar Ing says:

        Henry is already making high-quality firearms based on the Marlin action (their entire Big Boy line). If they bought the name, they could start producing Marlins that are as good as any Marlin ever was, in nothing flat. It’d be a perfect fit with their “made in America or not made at all,” and would instantly restore trust in the Marlin brand. Let’s hope it happens.

        1. avatar El Duderino says:

          I’ve taken both apart, and can say that the Henry is not based on the Marlin. Other than being lever actions that side eject, there’s not much in common.

          I agree that Henry produces a superior rifle, though I’m not in any hurry to sell my Marlin SBL for a Henry .45/70. Henry’s pistol caliber guns are, IMO, much better buys than the 1894.

        2. avatar John in AK says:

          Henry’s big-bore rifles’ design is closer to the Browning BLR with its rack-and-pinion bolt-moving mechanism combined with a rotating multi-lug bolt-head lock–which in turn combines the rack-and-pinion mechanism of the old Bullard (not Ballard) rifles with a rotating multi-lug bolt-head lock that’s been used since the 1880s on various guns.
          Marlin rifles of the 1895 type use a forward extension of the finger lever to move the bolt back and forth, and to cam up a locking block towards the rear, more like a Winchester/Browning 1886.
          There STILL is little new under the Sun when it comes to guns.

  7. avatar AutismOverTexas says:

    Don’t make crap. That is ALL they had to do; everything else would’ve worked themselves out. But nope. Now this is the result.

  8. avatar Tim says:

    Newest form of gun control. And it actually works. Sort of.

    1. avatar Chris says:

      Remington has ZERO models on the california roster. They never gave a rats ass about us, I have no sympathy for them.

      1. avatar Steeeven says:

        I wouldn’t either. Fuck California.

      2. avatar BlazinTheAmazin says:

        Oh boo hoo. Gun companies shouldn’t be forced to bend to the wills of the insane politicians that run your state. Maybe consider moving or getting the voters in your state to use more than 2 brain cells electing their leaders. Just because a company decides it is not financially beneficial to create CA compliant firearms does not mean they don’t care.

        That being said, I care not for Remington and won’t in the future unless they are purchased by a reputable company.

  9. avatar FedUpinNY says:

    QC took a nose dive, they chased a dud with the R51 and they incurred huge expenses relocating down south.
    Mismanagement and incompetence deserve equal credit here but NY Governor Andy (FUAC) Cuomo also deserves his due. Under Prince Andrew we have been circling the drain on all things guns in NY. Cuomo has created such an impossibly anti environment it’s a wonder they didn’t crash and burn before relocating.
    Ilion, NY will never recover from this. Jobs, residents running for the door and the collapse of home values there are 100% on Andy.

    Please, please, please remember that mutts name if it shows up on a primary or ballot for POTUS in the next election.
    Google is your friend, he is the same guy who brought us the collapse of the housing market nationally thanks to his handling of HUD as Secretary under Clinton.

    1. avatar Hannibal says:

      Most of us probably can’t vote in the primary he would be playing in.

    2. avatar neiowa says:

      So moving South was dumb. Leaving NY was bad. Make up your mind.

      There is no way any firearms (or other mfg) business can stay in the Peoples Republic of NY and stay profitable.

  10. avatar former water walker says:

    Anthony Acitelli huh…formerly of Taurus if I recall. Do these guys have a circuit of ruin tour?!?😧😩😖

  11. avatar Dan Fisher says:

    Anthony Acitelli took over as Remington CEO in Oct 2017…….he inherited all the problems of his predecessors. No one can right a ship in that amount of time………maybe in a couple of years………maybe.

    Here’s the announcement.

    Remington Outdoor announced in August that their Chief Executive Officer, James Marcotuli, had stepped down. After an extensive search, Big Green has named Anthony Acitelli as their new CEO. Acitelli has an extensive background in the firearms industry working at ATK (now Vista Outdoor), Colt Defense and most recently as President and CEO of Taurus Holdings.

  12. avatar former water walker says:

    Thanks for making my point Dan!Take a gander at those companies…😄😎😏

  13. avatar Rimfire says:

    Chapter 11 is a method of recovery that fails in most cases, based upon my observations. My heart goes out to the rank and file workers, not the people who got them in this mess (the bean counters and failed leadership)
    I hope that Marlin will come out of this hell they have been thru since the Remington Steal. I hope the ammo side nothing but the best as well.
    My hope is that the Marlin line is absorbed by Savage, aka Vista Outdoors. That is the only company where they fit well and where quality is still job 1 {to steal a line}. Possibly the 870 and such as well, if they feel generous.

    1. avatar RazorbackGunner says:

      I work on the ammo side here in Arkansas. We are all holding our breath right now for what is coming next. We are told that there is no plan to close and that there will be no layoffs. We’ll see.

      1. avatar TX_Lawyer says:

        Remember, that’s what they always say. Even when they know layoffs are coming.

      2. avatar Jeff K says:

        I like Remington ammo, hope it survives OK.

        1. avatar Old Fart says:

          Heard this morning Google is laying off 500 at headquarters! I’m not wishing you a layoff, RazorbackG, its just Google seems to own everything and is doing this. At least the layoffs were at the headquarters, not out in real world. What am I saying, no one at Google EVER gets there hands dirty.
          And JPMorgan part owner of Remington? No problem there. Someone on here the other day saying the liberals could get rid of guns by taking over companies and closing them. We need to keep our mouths shut.

  14. avatar Slow Joe Crow says:

    It says a great deal about the lack of talent at Remington that they managed to lose money during the Obama gun sales boom. Then again the brilliant minds at Cerberus managed to run Chrysler into bankruptcy so they are running true to form.
    Marlin would be best served by spinning off from Remington like Harley Davidson from AMF in the 80s, or acquisition by a competent parent company with no lever action rifles like Vista (Savage, CCI etc.), Ruger, American Outdoors (S&W), or possibly CZ or Beretta.

    1. avatar Ralph says:

      “Marlin would be best served by spinning off from Remington”

      The problem is that there is no Marlin anymore. Manufacturing was shifted from Marlin’s North Haven facility to Remington’s Ilion factory, all the equipment was moved and none of Marlin’s manufacturing people were relocated. Marlin is just a name now, and a very sullied one at that.

      1. avatar TX_Lawyer says:

        Just a name and other IP. The designs are sound. People love their old Marlins. I don’t know if any of their old stuff is covered by any current patents.

      2. avatar Ing says:

        Henry is making great rifles based on the Marlin action. I don’t know if they’d be interested in taking on another (potentially competing) brand, but they certainly could produce authentic Marlin-style Marlin leverguns if they wanted.

        1. avatar bobinmi says:

          why do you keep saying that? The henry and marlin actions are very different other than the fact that they side eject and have levers.

        2. avatar John in AK says:

          Well, not only do they both side eject and have levers, the levers are on the bottom, too. That MUST mean that they’re the same, right? I mean, the GAU-8 30mm rotary cannon is based upon the Puckle Gun, isn’t it?

          Sorry, couldn’t resist.

    2. avatar BLoving says:

      Ironically, Savage did make a very nice lever-action once upon a time. Ugly as all get-out, but no Savage has ever been made that would win a beauty contest…
      Acquiring a decent line of lever guns that aren’t hideous might do them some good.
      🤠

      1. avatar michael says:

        the 99 is an awesome rifle….and it isn’t ugly, just different…LOL

      2. avatar Rimfire says:

        Another ironic thing is that the first Marlin Rifle, the 1881 lever action, was actually produced by Savage for Marlin, wow!

      3. avatar Dyspeptic Gunsmith says:

        I don’t think the 99 is ‘ugly’ – it’s just different.

        Internally, the 99 is smoother, faster, better finished in most cases, and many of the competing lever guns. It can also fire cartridges with spitzer bullets.

        If Marlin goes under forever as a result of this, it might be in Savage’s interest to resurrect the 99. I think it could be made profitably for (my SWAG) a bit under $1K. Put nice wood on it, a nice blue job, make it as smooth as the old 99’s used to be – and there will be a market for them.

        1. avatar tiger says:

          Savage is happy to let the BLR hold that Market niche. They have had years to to bring back the 99.

  15. avatar Ralph says:

    Sorry to put on my lawyer hat, but this isn’t a Chapter 7 “bankruptcy,” which involves the liquidation of the company and its assets. This is a Chapter 11 reorganization, which allows the company to have breathing space to continue the business and turn it around.

    The fly in the ointment might be obtaining the consent of creditors. The creditors will analyze the company’s balance sheet and determine whether or not they would be paid more or faster in a liquidation or a reorganization. And that question might hinge on whether there’s a buyer out there for all or part of Remington Outdoors.

    In any case, the bondholders are now equity owners in Remington Outdoors, and I guaranty that they do NOT want to be. They will desire to be relieved of equity ownership as soon as possible.

    Meanwhile, retailers have been expecting this. In my store, we don’t have a lot of Remington or Marlin stuff on hand and what we do have is marked down. I don’t expect a fire sale, but you never know.

    As for us POTG who actually buy the guns, we didn’t trust Big Green before this debacle, and we fer sure ain’t gonna trust it now.

    1. avatar Gerbs says:

      Yeah I don’t see JP Morgan (Chase bank) wanting to be associated with the AR-15 manufacturers it now owns.

    2. avatar TX_Lawyer says:

      “As for us POTG who actually buy the guns, we didn’t trust Big Green before this debacle, and we fer sure ain’t gonna trust it now.”

      If anything, this makes me think the brand(s) will have a chance at improvement. “I’d suggest taking a prayerful watch-and-wait stance.”

  16. avatar Ahil925 says:

    I’m just hoping that nothing drastic happens before I get my rebate money back for the RM380 I got in January. I actually like the gun, would love it if it would feed steel cased ammo better.

    1. avatar Chris says:

      Friends don’t let friends use steel cased ammo. Seriously, one of them got lodged 2” in the barrel during the first box I tried out. Scary, scary stuff.

      1. avatar Dave M says:

        I recently tried Winchester USA Forged steel cased ammo in my Rugers and it ran faultlessly while being very accurate. I was quite surprised and bought more. (Honestly though, I can’t find anything that does not run thru a Ruger, but have not tried Tula).

        1. avatar M60E3 says:

          Avoid TulAmmo. Have a GP100 6” in .357, and the the Tula stuff tried to lock up the cylinder a few times, in addition to being hell to eject. Measured cases afterward and compared to brass, the steel ended up belling out to about .381 or so after ejecting. Nearly had to take a rod and hammer to them.

    2. avatar tiger says:

      Want to save a buck? Buy Blazers. Otherwise use brass. It is what it designed for & works best.

    3. avatar Red Clay Halo says:

      I also got RM380s and took an anxious look at the rebate tracking page after hearing the news. It sounds like there is a fair chance they will pay out, and honestly I’m fairly impressed with the guns – for $99, a metal frame 380 with two magazines that goes bang every time is pretty good. The trigger takes a bit of training, but its far easier to shoot well than other DAO guns i’ve tried.

      I have run Monarch (Academy Sports ) steel cased and Lawman FMJs through mine with only one problem – I had a hard primer on the first round of Monarch in one gun, but i pulled the trigger again and the round went off fine on the second strike.

  17. avatar Michaek says:

    Improperly managed and loaded with massive debt. What these banksters have done to Big Green is criminal. Has Remy made some missteps? Yes. But they’ve also hit it out of the park with products like the V3. Let’s hope they can return to their prior glory, and keep many American workers employed.

  18. avatar Hank says:

    Oh well.

  19. avatar Bob in IN says:

    Is my rebate toast? I do like my RM380.

  20. avatar jeff says:

    They’ll probably get broken up and sold off piecemeal for the value of the individual brands, their intellectual property, and those firearm lines (i.e. the 870, 700, etc.) that have a following. Sadly, I can only see the investment bankers breaking them up.

  21. avatar Jeff says:

    In many industries, the company either has a constant pipeline of new products that excites the consumers, or they’re dying. It appears the firearms industry is not an exception.
    Improving an existing shotgun design is a ‘line extension’, not ‘innovation’. It generates little excitement. Developing a reliable, affordable bullpup shotgun would be an example of true innovation and would bring consumers to their local gun retailers.

    1. avatar tiger says:

      Jeff, when your $700 million in the red, nothing short of a working Light Saber Is going to help.

  22. avatar GS650G says:

    Cerebus blew up Chrysler too.
    They live up to their mythological namesake.

  23. avatar James69 says:

    Excuse us while we move the deck chairs around. – Crew HMS Titanic

  24. avatar Southern Cross says:

    The three phases of business reorganization:

    Downsizing

    Rightsizing

    Capsizing

  25. avatar Green Mtn. Boy says:

    Well Bye !

  26. avatar Wood says:

    Thanks Cerberus! Now please go invest in the DNC…

    1. avatar Old coot says:

      @Wood,

      Steve Feinberg the CEO / founder of Cerberus is heading up the presidents intelligence advisory board…, don’t think he plays on the dnc team.

  27. avatar Kendahl says:

    I looked up Remington’s history on Wikipedia. Remington was bought by Dupont, the chemical company, during the Great Depression and operated by them for decades. Dupont sold the company to a private investment firm in 1993. No mention of Remington’s financial state then. Cerberus bought Remington in 2007. By then, it was over $250 million in debt. In other words, it was already a basket case when Cerberus took over. The Wikipedia article did not mention whether Cerberus invested much in Remington, in an attempt to turn the company around, beyond the initial purchase price. It looks like they simply handed Remington to the creditors in return for being allowed to walk away.

    Three questions:
    (1) Is Remington salvageable?
    (2) Does the current management know how to run a gun company?
    (3) Will the new owners give management enough time and money to turn it around? (If not, why did they put up another $145 million instead of going Chapter 7? At least, they must believe it’s worth sprucing up the company for future sale.)

    1. avatar tiger says:

      Well first off this is the entire Remington Outdoor group. Not just Remington. That means Barnes , Marlin, Bushmaster, DPMS, etc.
      2. Nope. They are bankers.
      3. Time? What magical change in gun sales Is going to happen in the next 5 years? Sprucing up? Yeah, ok tell that to SEARS or JC Penny.

    2. avatar Dyspeptic Gunsmith says:

      1. Some of the smaller named in the “Remington Group” (eg, Barnes) would do well on their own or sold off to someone else. Specialty outfits like Dakota Arms might be purchased by another high-end gun company. The AR-15 companies should be reduced to one marque and run for a profit or closed down. There’s nothing to be won by making AR’s cheaper than anyone else in the market. If they can’t make an AR profitably, then get out of that market. There’s a reason why I don’t do AR work – because it doesn’t pay. Everyone in the AR market wants it cheaper, cheaper, cheapest.

      2. The current management (Cerebus) don’t know jack about guns. They really don’t. They’re finance types, and finance types often don’t know jack about companies that make actual stuff.

      One of the big reasons why Warren Buffett is so successful at buying companies and integrating them into Berkshire Hathaway is that Buffett makes it a point to retain the current management. All Buffett is doing is buying the company (or a controlling interest) and occasionally giving these companies access to BRK’s back office, financial strength, etc. Buffett expects the management of his purchased companies to keep doing what made them so attractive to him in the first place.

      Cerebus has changed the senior management of the Freedom Group and Remington so many times in the last 10 years, the rank and file probably have little idea of what the “grand plan” is – because they hear so many different men spout their version of a “grand plan.” There’s no continuity.

      It would take focus and determination on the part of the entire company, and smart divestment of some of their assets to raise cash, to get out of this hole.

      The biggest problem is that Remington has had an attitude of “let’s make it cheaper!” since, oh, the 1950’s. The problem with the idea of “let’s make it cheaper!” as the sole plan to making a profit is that there’s a lower bound to this idea: zero. The second problem with “let’s make it cheaper!” is that it has led to some highly dubious design issues that have cost Remington some major liability settlements (eg, the Walker Fire Control System – ie, the Remington 700 rifle trigger). The ultimate reason why the Rem700 trigger had the problems it did was that it was made to be cheaper to manufacture.

      3. Time? That’s a good question. As I see it, Remington is almost out of time. They’ve suffered some huge reputation hits, most all of them self-inflicted. They need to turn their reputation and marketing around, pronto, and they need to do it by fessin’ up to their QC issues, their management issues and telling the gun buying public “We’re sorry, we screwed up, we’re going to turn this around.”

  28. avatar JohnnyMontana says:

    I lost my job in this industry just about a year ago. I’m never going back. These companies will forever be feast or famine. The financial security of my family is more important than the good I can do at these places. the cycle seems unbreakable too. The few small startups who change something for the good are gobbled up by the behemoths and destroyed (AAC). I will still wave the flag and support the cause, but I will never again place my future in this market place.

  29. avatar J Wilson says:

    I’m dumbstruck. Any company that charges $3195.00 for a Marlin 39A is filing for bankruptcy protection? THIS is how far this whole thing has run off the rails into the ditch. Unbelievable !

  30. avatar GS650G says:

    I wanted a lever action rifle and looked at Marlins then I bought a Henry. Enough said.

  31. avatar John in AK says:

    Considering how cavalier Remington has been with its customers for several decades over the Walker Trigger scandal, and how poor their quality control overall has been for at least the past ten years, it would be best for the firearm customer if Remington was completely destroyed, and its salvageable components parceled out to firms that want to be in the business of making reliable, dependable, quality-built firearms and not in business solely to generate ‘consumer products,’ made down to a price instead of up to a standard, for the ultimate benefit of a piratical board of directors and hordes of ravenous Wall Street shareholders who don’t care whether the companies that they own build guns, or helicopters, microwave ovens, or tea cozies, so long as they pay dividends.
    Remington’s 1911 copies are first-rate; They could survive in someone else’s hands. Marlin, if whoever bought it used proper manufacturing methods and quality, could also survive as a niche company. Remington Law Enforcement, with its strict QC, tough finishes, serious options, hand fitting, test-firing, and careful attention to detail could thrive as an independent with their ‘far-better-than-consumer-grade’ 700s, 870s, and 11-87s; The LE guns are built the way Remington used to build everything–and that means something.
    At the current level of quality, I doubt that anything else in Remington’s ‘consumer’ lines would be worth continuing, as there are far better guns available now for the same price or less.
    Also, those other, better guns won’t fire without a trigger pull, unlike Remingtons’s most popular products.

  32. avatar Timmy T. Bone says:

    Here is the reality – these Wall Street guys are all about strip mining the company. Thats what they do. Why should Remington be any different. They did it to Colt and tons of other companies. They dont care about the business, the employees, nothing. Its about extracting all the $$ they can out of the business and than moving on.

    The basic MO goes like this:

    1. Take over a company thats supposedly undervalued.
    2. Strip all the cash on the books out of the company via investment banking consulting fees/services, executive compensation, dividends and whatever else they dream up.
    3. Reduce all the costs to as low as possible – that means layoffs, offshoring, lower quality – whatever it takes.
    4. Once they have done all of the above they the company is essentially finished – they will shop around whatever is left and than sell it off.

    Eventually because of all the things they have done the company is done. It cant survive. Remington has entered #4.

    Cerberus has gotten all that they could get out of the company. Thats why they dont care that the creditors took it. The creditors are just going to sell off whatever scraps that are left.

    As I said this is normal with these guys. I have seen them do it over and over. Mitt Romney was one of them. Its not unusual. Notice one thing – no matter what happens to the business the executives, wall street and others get their compensation no matter what.

  33. avatar JS says:

    Typical operations when an equity company buys you. They buy the company, take out loans or load up debt then try to either sell it off or restructure under bankruptcy. The only people getting hurt are employees or others who bought their stock.

    Cerberus and others like it have done more to destroy the mid sized company in America than the Chinese. Plus the owners that want to cash out, take the equity firm’s money and run instead of just making good stuff.

  34. avatar Tom Moscone says:

    I wonder what will become of the “lifetime warranty” that came with my Remington gun. LOL what a joke. Why shouldn’t it be criminal for a company that knows it is in financial trouble to promise “lifetime warranties”?

  35. avatar John Hope says:

    Wow. Total mind blower. Didnt see this coming at all. Remington seems to be doing so well and putting out innovative designs that look great and are super reliable. I mean none of their guns ever get poor reviews. And they never have to recall a gun to start over because of terrible flaws in the gun. Everything they make is of the utmost quality.

    I am obviously being sarcastic. Its time to put Remington out to pasture. Especially when the company is being taken over by people who have ZERO intention of putting out a quality firearm. Instead it has been taken over by people who do everything they can to cut corners, ignore quality control and who’s sole purpose is to make a gun as cheap as humanly possible to increase margins on a spread sheet. Remington hasnt put a good design or firearm out in years. And dont say the 1911 lineup. All they did was take a design that simply had to be copied and make one and slap the Remington name on it. Its pretty hard to butcher a 1911 in all honesty. So i give them zero credit for that. The 870’s are rickety piles of shit with loose and poor fitting parts. The 700 series now looks like the stocks have been glued together and the wood is about as piss poor as you can get. And their venture into the semi auto pistol world has been one that has been so BAD, that it has actually made them the butt of jokes in the gun community. I dont think anyone with any knowledge of firearms would even buy anything from Remington. how many recalls and god awful reviews do you need to see to realize that buying anything with the big R on it is like playing russian roulet.

    If this doesnt end Remington, it should. Because in reality, they died many many years ago

  36. avatar Kenneth says:

    All of the big multi-nationals are on the way out. Enough people have finally awoken. Their business plan of screwing over their customers, and making it up with an increased volume of new suckers, is no longer a viable strategy.
    “Octopus Inc. business plan is to buy out their competition, crap up the product to make enough to buy out more of their competitors, and repeat infinitum.” a slight misquote from John Cleese in “Fierce Creatures”. Beauty of a pretty unknown movie.

  37. avatar james says:

    The Three headed dog wanted to sell it off years ago due to pressure from CALPERS and other big money pension funds. No takers.

    So, leverage this puppy to the hilt, then walk away from it.

    No doubt the employees will try to take it private via an ESOP and turn it around,
    no thanks to the Three headed Dog.

  38. avatar NYC Ranger says:

    The quality of their rifles went to shit after Cerebus took over.

Write a Comment

Your email address will not be published. Required fields are marked *

button to share on facebook
button to tweet
button to share via email