Remington Leaving NY?

[AverageJoe 95]

Hmmm.....

 

https://www.facebook.com/photo.php?fbid=545908602174982&set=a.109576829141497.13709.101173139981866&type=1

 

Republican Security Council

Gov. Andrew Cuomo (D-NY) Doesn't Want Them
Remington, one of the world’s largest gun manufacturers, will on Monday join Gov. Robert Bentley ® to announce they are bringing over 2,000 jobs to Alabama.
Most of the jobs will be relocated from their Ilion, NY plant, and the initial investment in Alabama will be $87 million.
Founded in 1816 in upstate New York, the company is one of the nation’s oldest continuously operating manufacturers. Remington is the only U.S. manufacturer of both firearms and ammunition products and one of the largest domestic producers of shotguns and rifles.
Remington first began considering new locations after the New York legislature passed the Secure Ammunition and Firearms Enforcement (SAFE) Act in response to the tragic shootings in Newtown, Conn. It broadened the definition of so-called “assault weapons” to include a wide range of guns, including the Bushmaster, which was being manufactured at Remington’s New York plant.
A month ago Gov. Andrew Cuomo (D-NY) said “extreme conservatives” who are “right-to-life, pro-assault-weapon, anti-gay,” have “no place in the state of New York.”
Gov. Bentley responded “In Alabama we strongly support and uphold our great U.S. Constitution on which our nation and our states were founded.
“The Constitution serves to protect individual freedoms. Among them are those guaranteed in the Second Amendment, which protects the right of the people to keep and bear Arms. We will protect the freedoms of individuals and welcome any one or any company to Alabama to discover as so many have, that we are a pro-business state filled with good, hardworking people.
“If Gov. Cuomo doesn’t want hard working pro-life and pro-2nd Amendment people in his state, we will gladly take them here in Alabama.”

[intercooler 41]

well I guess andy's gonna have to be happy

[Polak 3]

I'm glad to hear that companies like remington and magpul move out of communist states.

[BlueLineFish 615]

About time they made the move. F Cuomo

[wooly bugger 1]

When SAFE was passed and Remington was considering leaving, didn't the state pay them 30 pieces of silver to stay? And they stayed. This move would have been much more powerful if they'd done it then and said, screw your blood money.

[71ragtopgoat 23]

I dont buy into this. The lame street media would have reported this. This would be devastating to NY's upstate economy which is all but dead anyway.

The Gov is blocking fracking and just came out with that commercial that if you build a buisness upstate we will give you tax payer money to do it theme.

He would have thrown the kitchen sink at Remington to stay. Being they are a corporation they would have taken it.

Please provide a link that is considered to be a legit news source.

[Pizza Bob 1,488]

All you have to do is Google it and you will find a myriad of sources.

 

The more conservative sources couch this as Remington pulling out of NY. I think the closer to the truth is that they are expanding by building a plant in AL. Yes, it will take some jobs from the Ilion, NY plant, but that is far from NY closing down. I'm just glad that they didn't choose to spend more money in NY.

 

Adios,

 

Pizza Bob

[W2MC 1,699]

When SAFE was passed and Remington was considering leaving, didn't the state pay them 30 pieces of silver to stay? And they stayed. This move would have been much more powerful if they'd done it then and said, screw your blood money.

From a corporate perspective, their best bet is to take the silver, THEN move-out at the earliest opportunity.  Remington has been in NY since its beginning; I suspect they will keep a minor presence to keep their contact with the past, and to ensure they keep the NY State money.  

 

But seriously, who's surprised?

[DbleTrouble 8]

Way to go Cuomo.

[GRIZ 3,369]

Moving your company out of a state that passes oppressive gun legislation is a notable political statement. Its also an expensive one. Another factor to consider if you're in the position to call the shot is loyalty to your employees. Telling 1000 or so people that they need to move 1000 miles if they want to keep their job is not an easy thing to say or to do depending on which end you're on. Even if the employer helps with the moving costs a move to a lower cost area would usually result in those employees that moved into working for lower wages. There is also the company's heritage as someone mentioned.

 

I don't see a lot of people being critical of Colt or Ruger for not moving out of CT or Smith and Wesson for not moving out of MA.

 

Although its a statement to politicians moving your company to do so adversely affects your employees and their families.

[HBecwithFn7 296]

All you have to do is Google it and you will find a myriad of sources.

 

The more conservative sources couch this as Remington pulling out of NY. I think the closer to the truth is that they are expanding by building a plant in AL. Yes, it will take some jobs from the Ilion, NY plant, but that is far from NY closing down. I'm just glad that they didn't choose to spend more money in NY.

 

Adios,

 

Pizza Bob

 

This Syracuse Post Std. article would seem to bear this out, but it is the Cuomo rep. that is touting the "non loss" of jobs.  Although, at the end, the Remmington rep. is quoted as saying,

 

 

Remington will not run or abandon its loyal and hard working 1,300 employees without considerable thought and deliberation,

 

So, we'll see.

[Damjan 73]

Here is some interesting background news on Freedom Group/Remington/Cerberus

 

http://finance.fortune.cnn.com/2013/12/09/cerberus-guns-freedom-group/

 

FORTUNE -- It has been nearly one year since the Sandy Hook massacre, which also means it's been nearly a year since private equity firm Cerberus Capital Management pledged to sell Freedom Group, a firearms and ammo company whose products include the Bushmaster AR-15 rifle used to kill 26 elementary school students and staff on that tragic day. The promise came in response to pressure from Cerberus investors like the California State Teachers Retirement System (CalSTRS), with investment bank Lazard (LAZ) hired to find a buyer. But, to date, Cerberus and its investors still own Freedom Group.

Late last night came news (first reported by The Financial Times) that Cerberus this week plans to offer LPs a voluntary way out of Freedom Group, via a third-party minority investment and new debt facility. Not hearing too many additional details yet, except that the new investment will come from an institutional money manager (i.e., not a family office) and that BoA Merrill Lynch (BAC) is organizing the creditor call.

It also is unclear if Cerberus will try to segregate management fees paid by investors who exit Freedom Group, so that they no longer are indirectly paying to oversee and manage the asset.

In the meantime, and obvious question: Why hasn't Cerberus sold Freedom Group yet? Not surprisingly, it is a complicated answer. Here are five major factors:

1. It's too big.

Cerberus created the single largest gun manufacturer in America, thus making it too expensive for smaller makers – like Smith & Wesson (SWHC) or Sturm Ruger (RGR) – to buy in its entirety (same . Smith & Wesson, for example, has a market cap just barely above Freedom Group's debt, let alone its equity value. Ammo maker Alliant Techsystems Inc. (ATK) is large enough, but its gunmaker acquisitions have mostly been for smaller, niche players. Foreign interest is said to have been muted by possible regulatory objections (particularly given all of Freedom Group's military and homeland security contracts).

2. It's too controversial.

The absence of strategic buyer would typically leave private equity interest, except that the limited universe of firms that can buy such a large asset is the same universe that raises money from public pensions like CalSTRS. In other words, they can't buy for the same reason Cerberus needs to sell. Many of those investors also are large shareholders in investment banks and other lenders, thus making it difficult to find groups to underwrite a leveraged buyout.

3. It's too expensive

Cerberus has effectively returned its principal on Freedom Group via dividend recaps, so the sale question was largely about level of profit. And, in short, Cerberus wanted a lot of it. The firm told prospective buyers that it was looking at multiples of late 2012/early 2013 sales (i.e., post-Obama reelection and post-Sandy Hook, when gun sales and profits went through the roof), rather than of 2011 or early 2012 sales (when business was softer, after a brief boom that followed President Obama's original election). Freedom's EBITDA basically doubled during that time period, and few buyers wanted in at the market top – particularly given the sector's known volatility.

4. It's too integrated

One theory early on was that someone like Smith & Wesson would try to buy one or two pieces of Freedom Group, such as Remington. One problem with that, however, is that Freedom is manufacturing multiple lines out of many the same factories. So to pull out one line would be logistically difficult.

5. Cerberus boss loves the business

When Cerberus decided to sell, it was noted that firm founder Steven Feinberg's father lives in Newtown. Discussed less is that Feinberg is a known gun enthusiast who really loves the business. That's why he proposed buying the company himself over the summer, although such a deal would have been fraught with way too many allegations of self-dealing.

[paulnj088 9]

they are moving to ALabama

[raz-0 1,259]

They aren't moving, they are expanding outside the state. Which will follow by either 1) reducing manuffacturing capacity wih employee attrition in NY, or 2) shutting down NY once sufficient capacity exists elsewhere that having management so geographically separated is no longer sensible for whatever reasons. Option 1 is the decreased sales path, option 2 is the increased sales path. In the meantime they will enjoy the NY tax incentives on what they have there.