Yesterday, SIG SAUER told the world about the details their free “voluntary upgrade” for SIG P320 pistols.
As they say, that’s gonna leave a mark. Yes, but how much will the recall cost the New Hampshire gunmaker? We got out a crayon and an evelope to try to find out. But first, know this . . .
Go back far enough, and yes, even GLOCK (all fanboy protestations to the contrary) has had their problems. More recent ones, too. It’s hard to think of any gun maker of any size that hasn’t had a similar situation.
OK, so what do product recalls cost a manufacturer? Answer: a lot. Here’s our back-of-the-envelope guess at what the P320 fix might cost SIG SAUER.
When Jeremy and Jon were in New Hampshire last week, SIG CEO Ron Cohen told the assembled throng that his employer has sold 500,000 P320’s since its introduction.
A significant percentage of owners of the affected guns won’t take advantage of SIG’s voluntary upgrade. Some will never hear about the offer. Others will simply ignore it.
To be conservative, let’s assume that 40 percent of P320 owners will send their pistols to New Hampshire for the upgrade. That’s 200,000 guns.
SIG’s paying the shipping for owners who opt for the upgrade. Guns are shipped second day air, and that’s not cheap. SIG probably has a good corporate account; let’s say shipping runs them $25 per pistol.
Figuring 200,000 upgraded P320’s, that’s $5 million. Then there’s the process.
Despite the gun’s modular design, installing the upgrades isn’t a pop-open, drop-in affair. SIG will need to machine both the slide and the frame to accommodate the new trigger disconnect parts. Let’s say that’s only a total of one hour of handling per pistol and assume a rock-bottom cost of $15 per hour for the labor involved.
Figuring 200,000 upgraded P320’s, that another $3 million.
Then there’s the cost of the parts. It’s reasonable to assume that changing their processes to crank out the new parts — and producing enough inventory — will be a significant undertaking. Again, being conservative, let’s assume only $10 in upgrade parts cost per gun.
Figuring 200,000 upgraded P320’s, that’s $2 million. Let’s total that up:
Total: $50 per gun
Assuming 200,000 guns received at $50 per gun, the cost of SIG’s voluntary upgrade should be no less than $10 million.
Again, this is a conservative guesstimate. It doesn’t take into account lost sales going forward, or any damage done to the SIG brand. Still, this gives you an idea of the cost gun manufacturers can incur when things go wrong. Which is why companies like SIG work so hard and invest so much money to avoid problems in the first place.
UPDATE: Anonymous sources tell us that SIG is considering reducing its costs by sending armorers into the field to affect the repairs. More info as we get it.