Friday, January 20, 2006

Belgians kill American legend

There is more to this than you think.
After more than 1½ centuries, the U.S. Repeating Arms Co., manufacturer of the Winchester rifle is closing its money-losing factory in New Haven, Conn., where "the gun that won the West" has been made since 1866.
Sounds like a standard "Can't make money mfg something in the high cost one wants to buy our products..."
"We have been facing a cash drain year after year. It's the only plant in the group that's losing money," complained Robert Sauvage, spokesman for FN Herstal SA, the Belgian arms company that has owned the New Haven factory since 1991 and seen its work force fall from 700 to the current 186, all of whom will lose their jobs when the plant closes on March 31. During the Second World War, the New Haven facility employed as many as 19,000 workers.

When Herstal bought the facility, the plant was making 300,000 rifles a year. Last year, it made fewer than a third of that number.

After the plant closes, the company will continue to make higher-end Winchester rifles at facilities in Belgium and elsewhere in Europe, but it will drop four of its historic models including the Model 94 lever-action rifle made famous by John Wayne and Buffalo Bill.
Buy a jewel. Cut it to nothing. Invest little. Take the best of the brand home. Blame the natives. Belgians have done this before. Here is the kicker.
Herstal, which is owned by Belgium's Wallon (OMC, comment please) regional government, has no intention of moving production to lower-cost locations. "We're not for globalization," he said, noting that the company's 3,000 employees are all in Europe, Japan and the United States. Its only foray into a cheaper location was a plant in Portugal that opened in 1976. At least half of Herstal's sales are to the military.
The company was owned for a foreign government (not known for great business acumen) that had its focus elsewhere. Not bad management, malmanagement. By accident? No. They just didn't care that much. Looking after #1. Classic.

Smith and Wesson was almost killed by a foreign company, until an American stood up and saved it. Sturm Ruger is still family owned and doing fine. Remington...notsomuch.

Sad. Maybe an angel investor will raise it up.

No comments: