There’s news from Gear Scout that Freedom Group has fired Lynsey Thompson, AAC’s plant manager. This comes on the heels of Kevin Brittingham, the founder of AAC, getting the same treatment last month.
Lynsey Thompson ran AAC’s Atlanta, GA based plant where they made all of their equipment and put a lot of time and effort into making their own before being purchased by Remington. She was recruited by Kevin after college to work for him at AAC and has been there ever since. From our interview with Kevin Brittingham:
The best thing I’ve ever done was – there’s 20 or whatever 26 people or something like that – and I’m probably smarter than three of them. It’s really the best thing that I did. Lynsey started washing my cars when she was like fifteen and she runs our company. It’s always worked for me… When she got out of college I couldn’t wait for her to get here and that’s really when we turned shit around too. There’s three people who work here that were self-made millionaires before they were 30. You have to want to dominate, and to me our management style is very open minded – I have smart people, I recognize it, I make mistakes with them every day, I give people too much latitude and it bites me in the ass – but at the end I get a lot of stuff done. It’s one problem that I have with Remington that they want to micromanage a lot of shit and I understand that’s their money now and they’re a big company and it’s compliance or HR or whatever, all these other things that we don’t have complete control over.
Gear Scout is indicating that this may signal that Remington is consolidating their production of AAC’s products at their Ilion, New York plant. This may turn out to be a false rumor (the moving, not the firing) as one of our readers got in contact with Mers at AAC who reportedly said of the reportedly impending move “don’t believe everything you read on the internet.”
This is distressing news, especially since Kevin and his hand picked team, combined with the environment of their Atlanta plant, created the special sauce that has resulted in numerous breakout designs including the increasingly popular .300 AAC Blackout cartridge and the Honey Badger. There’s unfortunately no longer any doubt that a shake-up of this size will have an effect on their productivity, quality and innovation going forward.
Why does TFG feel the need to ruin good things?
Look at what Cerberus Capital Management does: they ‘flip’ companies. They take a company, gut it (AKA streamline it, make it Lean, whatever), then they sell it. Not good for an industry that is defined by quality.
Don’t forget “Load it up with debt first and use that debt to pay a ‘dividend’ to Cerberus” before selling and/or Chapter 11-ing the remaining pieces.
Why did they agree to the sale in the first place? Things like this always happen, this is why Mark Zuckerberg never sold facebook. Why give up complete control if things are going well for you?
This is going to wind up just like the Magpul/Bushmaster/Remington SNAFU with the ACR/Masada.
Who says they agreed to the sale?? From what I understand, Cerberus is notorious for gathering investors for hostile takeovers. Not sure if that is the case here, but it sure seems like that may have been what happened with AAC.
Read paragraphs 6-10 of the original interview (http://www.thetruthaboutguns.com/2011/08/foghorn/an-interview-with-kevin-founder-of-aac/) that starts with, “I started this company as a hobby.”
It sure doesn’t sound like a hostile takeover to me. It sounds to me like he sold to a company that he believed would be a good match and a benevolent dictator, and made himself some money in the process.
The sale was definitely agreed upon. there was nothing hostile about it.
I just called Mers at AAC. In regards to moving AAC to NY he said “don’t believe everything you read on the internet.”
It would be silly for AAC to move, they have one of the best silencer production facilities in the country if not the world. Remington would have to spend millions to move them and that’s just a waste of money.
As someone pointed out, the primary question should be; “Why did he sell his company to them in the first place?”
I find it hard to believe he was not aware of how they operate things. There is always the chance he was duped I suppose. Told one thing, but did another.
I just can’t imagine someone who built this company is dense enough not to see something like this coming. Something is missing from the puzzle.
Maybe he thought it would be different for AAC. From Foghorn’s interview with him:
I’m thinking he basically didn’t see any reason why they would mess with things, beyond the basic HR integration stuff he mentioned in that interview.
Yes, it’s called, “Money”. He got his. He might protest now, but he knew what was going to happen, and decided it was worth it. Of course, it’s his company, to do with as he pleases. For all I know, he wanted to retire to care for his sick mother. I’m not going to judge.
But if he starts another company, his customers should wonder: will he be there to service and develop whatever product lines that company comes up with, or is he just in it to flip it to the asset-strippers once it gets big enough?
Learned nothing from Marlin, I see.
For the record I am not opposed to one selling off their assets for the proper dollar value.
What strikes me as odd is someone who would sell off their assets to someone else and then dislike the rules of the new owner, butt heads with the new owner, or any other choice of words to convey that there is a conflict of interest.
You basically (unless written into a contract) opted to sell off your role as the head-hancho for X amount of dollars. If you are not prepared for change or to be told what to do – why would you go from being the boss to being an employee.
Me, I kept my mouth shut. And learned my lesson.
Well Shit.
Oh and during shot show you missed Gear scout’s RUMINT that the freedom group was looking to snap up Para-Ordnance.
Heh. RUMINT. I like that.
Plenty have sold companies to big companies thinking nothing changes but the name on the building. It never turns out that way. Never. They own it and can do what they want. You, the former owner, are tolerated for a while but ultimately they want you gone.
It does turn out that way… If you sell out to Warren Buffett.
Berkshire Hathaway is the perfect company to buy out your mid sized (few million to 100-million a year) business because they specifically don’t F with you. See’s Candies is a perfect example: it got bought out by Berkshire Hathaway in 1972, and is still headquartered, and still manufactures their candy in California.
Nobody else, however, qualifies, and I don’t see Warren Buffett wanting to own a small-arms manufacturer: its too trendy and fickle a business to buy.
Resistance is futile, you will be assimilated. FG is the Borg of the firearms industry; everyone uses and understands the reference (even a few folks inside FG use the Borg joke). ATK and BAE Systems are quite similar in the ammo & accessory side of the industry. Private equity firms moved into the industry about a decade ago and have been consolidating it ever since.
Pull quote from Nick’s interview:
“We were growing 50 to 100 percent a year, the future looked huge for us, there’s not an established market…”
50 to 100% growth is expensive. If you’re a private company, raising the capital to expand is difficult, especially these days. In fact, AAC may have lost access to the capital they needed in order to expand and service their market.
If you’re in a position where you need capital and can’t borrow it, you have two options, taking the company public or selling the company to someone who has the deep pockets necessary for growth.
I wrote the above then found this in the original interview: (yeah, it’s an internet blog comment end zone dance)
“I never took on financial debt, I always financed it myself. So if we made a million dollars in a year that’s how much shit we’ve got to buy with next year. Because I was afraid of having a lot of debt and overhead, and it’s hard to get a lot of financing when you’re in the gun industry.”
Look for Lynsey and Kevin to buy the company back cheap after Freedom Group just about destroys the brand.
Look for Lynsey and Kevin to buy the company back cheap after Freedom Group just about destroys the brand.
Haaaaaa. I did a deal like that about twenty years ago, both on the sell and later on the reacquisition. My client sold his business for top dollar, the new owners fired him a little while later and proceeded to run the business into the ground. When it hit bottom, the regulators called and asked my client if he would please take the business back — for nothing — just so the company’s clients wouldn’t lose their shirts. Being a civic-minded guy, my client complied.
6 Months ago I went there and applied for a welding position. I met both of them and it was a cool place, nice people. But, they did not hire me and I said to myself it just was not meant to be. I guess I have a guardian angle looking out for me because I would have been fired now and stuck with an apartment lease. God forbid if I had to move to New York State, Anti Gun capital after California.
God Must Love Me.
Yes she does.
She?
Is the Skinny Mike Mervs going to move to New York State or is he out of a job?
One has to wonder how much longer the FG overlords will tolerate R.Silvers. He’s pretty smart and they can’t possibly like that. Mindless drones are all large corporations are interested in.
Maybe now its a good time to sit at home and think why in the hell did I sell my very profitable company just cause I felt like the money I was making was not enough.
I know this guys made great producs but coporate greed is the end of all good things.
Guess its time to invest our hopes, dreams and, cash into a new company, like Silencerco. They got their stuff locked down tight this year at Shot Show with the Saker 5.56 can.
Yeah… this is sad. Hopefully a new company crops up…
We should start it 🙂
I had better get off my a$$ and order that 7.62-SDN-6 ASAP!
That window looks a lot like a tie fighter windshield. /dork:
I believe their front office is designed to look like the bridge of the death star.
I was thinking the Millennium Falcon.
http://www.theforce.net/swtc/Pix/dvd/ep5/escape12.jpg
I don’t feel bad for Kevin because he got greedy and sold his baby, and now he turns into a little cry baby when the big boys won’t let him have his way. If you don’t want other people to tell you what to do, you should quit and start a new company.
Kind of makes me glad (this might be a first) I am the ‘OLD FWG’, at least I won’t be around for the final demise of this country. Only thing good is that eventually, she will be renewed, UP THE CONSTITUTION! LONG LIVE THE REPUBLIC!
What did they expect? Their office is the Death Star.