I like guns. I admit, I like guns even more than I like most of my tools. (Except my Clifton planes…those are nice). But I don’t go to the SHOT Show because I like guns. I go because I am hunting there. I’m hunting on behalf of the state of Texas, and I’m hunting for firearms businesses, especially manufacturers. And I’m hunting big game and small game alike. I’ve worked in economic development for most of my career, and for the Office of the Governor of Texas for the last decade or so. I went to SHOT Show as the Executive Director of Economic Development and Tourism for the State of Texas. So although I have a keen interest in guns, I’m really a lot more interested in gun companies. It is actually the law in Texas that firearms manufacturers are provided a priority for economic development activities in the state. So I don’t just go to the SHOT Show because I can, I go because it’s the law. God bless the Lone Star State . . .
Lots of states — most, actually — are actively trying to recruit firearms businesses. And that includes states that are decidedly anti-gun. Think New York hates Kimber? As someone who has visited with them and tried repeatedly to recruit them to the state of Texas, think again. The state house in New York may not want anyone to actually own Kimber’s products, but they are willing to put a lot on the table to keep them there if need be.
The same can be said for most of the New England states where so many of the big names exist. And they want them for the same reasons I do. Skilled machinists at every level. Firearms companies make a product, and manufacturing is still the number one priority of any quality economic development program.
But firearms companies include a particular type of manufacturing. They make products in steel and high impact/high temp polymers. And to do that they need CNC machinists, programmers and repair people. They need engineers of every type. They need skilled and to-be-skilled labor. And they generally have a pretty high initial capital investment in those machines.
That level of expertise spills out into many other areas of manufacturing. If you can pack an area with these people and create, in my business’s terms, “a center of gravity”, we generally find that a whole host of other types of manufacturing in the area increases as well. In Texas in particular, we see them cross over into aerospace as well as petrochemical manufacturing, two areas well represented in the Texas economy.
So these firearms companies are of special interest to us. But they are prime targets for everyone. In fact, this year at SHOT, I saw that several other state economic development offices had set up booths on the main floor, and that was money well spent for them.
Oddly enough, the upturn in petro and petrochem was one of the impediments to recruiting firearms companies to Texas, since so many engineers and skilled workers were employed by them. If you are a 19-year-old welder making $100k in South Texas, the odds of you taking a $40k job for a gun company outside of Austin aren’t very good. With the price of oil so low, and some of the smaller companies letting workers go, they are likely to be snatched up by other manufacturers who have long complained of their absence. I hope some of those are firearms manufacturers.
What surprised me the most about the SHOT Show this year (other than some idiot actually repeatedly using the word “recce” while pronouncing it like more like a brand of peanut butter cup, and the even dumber people who listened to him) was the number of small AR manufacturers that were still there, and still in business. Those of us watching these businesses over the last few years often quietly predicted the demise of most of them. I saw so many small companies created, indebted up to their eyeballs with demand waning, bit by bit. I didn’t expect all of them to go out of business, but I did expect a lot more mergers, partnerships, and buyouts.
Not to say that we haven’t seen some of those, and some to great benefit to the consumer (others, not so much – *cough* Freedom Group *cough*). I just expected more. So I talked to quite a few of them and got back some consistent answers.
Those making bottom-of-the-market cheap ARs were either the subject of the buyouts described above, or weren’t there at all. Just about everyone who wanted a budget has AR bought one. Or nine of them. The high-end crowd, folks like LaRue Tactical, never saw a dip. They only saw their waiting lists increase while they tried to keep up. These companies didn’t go out and leverage themselves to double their machining capacity, they just kept people waiting longer, and wait they did. They’re not ARs, but Freedom Arms (oh, oh how I love thee) had their wait list stretch close to five years at one point. It’s thankfully down to about 18 months now. If I put in my order in for a .500WE now, it will be here in time for whatever there is on the planet that I need to kill with it.
It’s the mid market AR that’s doing well. Makers of $1000 to $2000 ARs with lots of bells and whistles and customizations seemed to have weathered the storm and are going along nicely. Driving this is the fact that their quality has gotten markedly better, so much so that a rock-solid reliable gas gun pushing sub-MOA groups is really nothing too spectacular anymore. Those of you who are in your 20’s don’t understand that this was considered impossible not too long ago. Now it’s the standard. Heck, Shaolin Rifleworks guarantees half that.
Some of these companies were hurting — badly — for a while, but the successful ones found new niches. So many of the AR makers I spoke with make more of their money on parts for other people’s guns than they did in their own complete gun sales. And they do it for harder-to-find calibers and they sell directly to the public. Those are two of the biggest keys to their success. Rapid customization and rapid customer-direct, sales and delivery. Need a top-of-the-line 6.5 Grendel bolt? You can find it. Need a top-of-the-line 6.5 Grendel left handed bolt? Underground Tactical will overnight it to your door. For the consumer, that’s awesome. For the industry, it’s a life saver.
What I also saw was a good number of gun companies making non-firearms related parts for other companies. Some smart CEOs looked around and saw they had machines still owned by the bank and employees sitting idle at work, and put them to use any way they could. There are quite a few examples of this going both ways, with aerospace companies getting into the gun business and gun manufacturers making parts for aerospace companies. For someone in my line of business, that’s a huge win-win.
Another reason for the success of so many of these mid-market ARs is simply that not too many people really care if it says Colt, or Bushmaster, or whatever on the side of it anymore. For those who didn’t serve in the military, not having your rifle say Colt or Bushmaster on the side means very little. For those of us who did serve, having those names on the side says your rifle isn’t going to shoot as well as a dozen other smaller manufacturers that will build you exactly what you want. The big guys didn’t respond fast enough to consumer demand, depending instead on the hope of military and law enforcement contracts. And that didn’t always go so well for them. And it left a huge gap for small companies to enter the market and make names for themselves, which they did.
All in all, just about everyone I talked to said that things have leveled out for them, or even that business was slowly picking up steam. I took a look at reported inventories and employment in the state of Texas (because that’s what I have access to) and the math works out to verify their cautiously rosy outlook. Good news for the industry, good news for the consumer, good news for America.
Very interesting read. Nobody’s coming to Illinois LOL
I came. 😀
Hey if you live near South of Chicago I’d do business with you…BTW Springfield mainly imports from Croatia and Rock Island is only a selling agent. Springfield could make 1911’s anywhere and Rock Island could move across the river. And all the others in that Quad cluster would do better in Iowa or Missouri. Illinois is horrible for business. I know because I have one. But good luck Hello World.
Chicagoland area! Hoping to do well enough(or investment) to move into the city though and give the middle finger to the gov’t. Or move somehwere else if I get investment. Ahem, Texas.
There is an awesome ecosystem already in the IL Quad Cities area. It is the home of Rock River Arms, Springfield Armory, Les Baer, Lewis Machine and Tool, Armalite, and mega-dealers like Rock Island Auctions. (The historic Rock Island Arsenal probably has a lot to do with it.)
It’s a great cluster of skilled gun trades with much cheaper living than Mass., NY, and CT.
I have a firearms business, no one is recruiting me. Seriously. Maybe it’s because I am a dinky start-up.
Who are you, what do you do?… Maybe it’s something TTAG needs to check out and review.
^^^ yes, you are supposed to sing that aloud.
Pimping the business in the comment section probably isn’t wise, but I am an importer of ammunition for the moment.
A successful manufacturing business relies upon an “ecosystem” of supporting businesses. It isn’t any accident that Boeing is in the Pacific Northwest, or that Detroit and the area surrounding the Great Lakes spawned so many heavy industries. Boeing located from Kansas to the northwest because the huge hydro projects on the Columbia River put cheap electrical power into the area, which then attracted aluminum smelting plants. The Iron Range of Minnesota provided good raw materials, coal mined in other states surrounding provided the fuel. Iron foundries in Wisconsin supplied forgings and a large number of smaller businesses supplied tooling, machines, etc required by the auto industry. And then there were the resources of the Great Lakes themselves for shipping of some of these heavy loads.
For the gun makers of New England, the machine tool industry grew up along side them from the post-Revolutionary days. Power in the pre-electrical days was supplied by the hundreds of little streams and water wheels powering line shafts running the length of the shop.
Those support issues have lots of merit when you’re seeing to locate a company to do lots of manufacturing. You need to keep your costs low, suppliers nearby and your overhead to effect changes/improvements as low as possible. One of the reasons why so much electronic manufacturing has moved to China is that the PRC, being a command economy, has located a great deal of infrastructure for electronics companies in small, dense areas. If you want to get everything together to make a hand-held electronic widget, there are ares of China where everything you need will be available within a two to five mile radius.
I felt a tingle in my belly at the mention of the Iron Range. I grew up there, and only left some 6 months ago. And to reinforce you point; Back home on the Range (something about antelope and deer) There are several iron mining outfits. All but one of them are doing very very well for themselves. Heck, US Steel supposedly pulls $1m per cargo train that leaves their plant, and they send out 3 trains per day. Pay is great, benefits are great. The one company that is doing poorly however is the one that doea not own it’s own iron processing plant, and thus has to go through shipping off to other states and even countries to have their oron processed, and thus have to compete with cheaper iron ore being sold from South America. All the companies excavate the ore and also own the plants that process it into steel across Lake Superior, so they never have to fight the demand of iron ore, only processed steel.
You saved me a bunch of writing, well done
I often give a simple econ lesson by asking, “why is the NBA team in Seattle called the Supersonics?” I give them your explaination.
That is why it is very discouraging to hear most “Govt Economic Development” teams are recruting companies to move away from natural advantage areas and subsidising the natural disadtvantages with tax payer dollars. All for smoke and mirrors “JOBS” stats for which the politicions try to claim credit. Other than reducing governmentally created red tape and regulation drag, govt should just get the F*CK out of the way. Pay a reasonable price for a subsidized product, look at you tax bill and add that on for the real cost.
Before you know it, your state is filled with Cronies not companies.
BS Economics Univ Wisconsin Class of 81
(BS=Bachelor of Science not the other one, although it has been said )
Other than I believe we use a different definition of “center of gravity”, excellent article. I would argue that engineers and skilled machinists are a “critical requirement”, but that is a doctrinal argument.
Very interesting perspective. This was a great read.
Thank you.
On of the best posts on TTAG I’ve seen in quite some time.
Great read JWT, I enjoyed that funny little Kimber tidbit in there, keep up the good work and boost that state economy!
“If you are a 19-year-old welder making $100k in South Texas …”
What in the Hell was I thinking wasting 5 years and thousands of dollars on college? Had I started welding at age 18 and banked that money for 5 years all the while investing it, I could have retired quite comfortably at the ripe old age of, oh, maybe 30 years old. Boy, did I screw up.
If the welders are making that much, there’s probably a high risk factor in the job.
But the college education still pays better, for the people who can comprehend, retain, and apply the knowledge. A 21-year-old with a four year degree ($50k at a good state school) can start at $100k a year, plus bonus, stock, 401k matching, and great benefits, writing software here in Seattle.
And the pay is a bit higher than that in Silicon Valley, but the cost of living there is so screwed up (plus they have income tax and restrictive gun laws), that it’s probably not worth it.
Or for those who prefer heat stroke and fire ants to skiing, boating, and hiking, the pay in Austin is pretty close to Seattle, but I don’t know about the cost of living.
Yeah, but in all honesty, you’d have just blown it on meth/booze, a lifted 4×4 dually, and whatever else pseudo-rich teenage pipe liners do. 😉
But “everyone” the high school “guidance gal” with he Masters in diddlysquat preached everyone had to borrow $100k and go to a 4yr (or +) univ to get a BA in didn’t matter want. These “advisors” who typically haven’t done anything in life productive. Just work for the government school, after borrowing $50k for a degree in diddlysquat. (see a circle). Ms Counseler thinks ANYTHING that gets hands dirty is yuckie, better a $8/hr telemarking job to payoff that debt. No way SHE is going to suggest welding to anyone with an ounce of “potential”.
Yeah! America! Whoo! I am hoping to land one of those sweet manufacturing jobs post school. So if anyone in NC wants to bag a sweet intern before then let me know, haha.
Happy hunting!
Very interesting article.
If you’re going to insult people for their mistaken usage of an uncommon word:
some idiot actually repeatedly using the word “recce” while pronouncing it like more like a brand of peanut butter cup, and the even dumber people who listened to him,
It’s probably a good idea not to misuse a common word two sentences later:
with demand waining
Unless of course that demand is riding away on wagons…but I assume you meant shrinking.
1.Becoming weaker or smaller (Waning) correct term wrong spelling
Thank-you for the informative article- linking together the various aspects of manufacturing, and why it has to be considered as a whole.
Your next job is to start lobbying your Congress to make it easier to export firearms components and other accessories to Canada. Up here we see lots of great stuff that you folks have been making, but getting it is not quite so easy. Unfortunately, the issue appears to be an export rather than an import issue, so there isn’t much we can do about it.
You want to sell, we want to buy!
(Ps. please keep making non AR platform semi-autos in .308. We need some more that we can take innawoods, rather than just to the designated range).
Informative, well written, and a nice view of the firearms industry from a different perspective. As a Texan, I wish you great success. (And point out to my friends at Kimber that I’d buy a second one if I could brag it was “Made in Texas”!)
Wow, thanks for the honorable mention. It was great to meet and chat at SHOT, I’d like to talk more when time allows.
Funny enough though, we are one of those little companies. We made it to production on a dollar amount most business people would consider laughable and a huge part of the reason is environment. New Hampshire has a huge gun culture, a long history of manufacturing and a very business friendly climate. We have been surrounded from day one by folks with many of the technical skills needed to succeed and a passion for the industry. Are we a huge powerhouse? No, but we build a damn fine product, are growing and have a lot to owe to our roots.
All that said, I do envy y’all’s weather(and TX was on the short list for the wife and I).
Time spent on recce is seldom wasted.
Time spent on Reeces Peanutbutter Cups, not so much.
Clifton planes, Nice!!!
“Jon Wayne” Taylor…just sayin’ this reads very similarly to a Tyler Kee article, with a bit of Nick tossed in.
Seriously, Mr Wayne, thanks for that intel, and keep up the good work.
Dallas the city of beautiful women. Austin- best bbq and german beer. San Antonio- the Alamo and the River Walk. Corpus Christi- the beach, Kings Ranch. Kicker bars with chicken wire protecting the stage, and horse watering troughs to pee in, in the mens room – well, that was thirty years ago. El Paso…down in the west texas town of el paso… Houston- xxx…oh wait, this is a family site…
but ya gotta love texas.
Keep building the infrastructure, and getting the biz for jobs there at same time. That works.
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