Remington Arms is part of the “Freedom Group.” The conglomerate includes Bushmaster, DPMS/Panther Arms, Marlin, H&R, NEF, LC Smith, Parker, EOTAC, AAC, Dakota, INTC and Barnes Bullets. It was assembled by the secretive Steven A. Feinberg and his financial minions at Cerberus Capital Group. You may remember Cerberus as the money men behind the ill-fated takeover over Chrysler; where Feinberg’s exit strategy relied entirely upon the largess of the U.S. taxpayer. (In other words, they broke it, you bought it.) Bottom line: Cerberus knows a thing or two about manipulating government for fun and profit. Mostly profit. In this case, Cerberus has arranged to transfer 100 manufacturing jobs from Marlin’s factory in North Haven Connecticut to Remington Arms’ facility in Ilion, New York. Guess how much that cost New York taxpayers? Here’s the press release [via Ammoland]. . .
The project will be supported with $1.5 million in grants from the Empire State Development Corporation, $200,000 in 2010 electricity cost subsidies, and the New York State Office of Community Renewal has earmarked a $750,000 New York State Community Development Block Grant for the project.
If that’s all they’re getting, I make that $2.45 million in tax breaks, subsidies and grants. Or $245,00 per job. Note: these are not “new” jobs per se. They’re being removed from Connecticut’s taxpayer rolls., leaving ripple effect economic devastation in their wake.
Meanwhile, Remington’s new owners are flexing their political muscle to try and recoup their $370 million initial investment in the company ($118 million in cash and $252 million of accumulated debt). The recently introduced “Small Arms and Innovation Act” is Cerberus’ attempt to open up the military business to their boyz. Sound like free market common sense? A little background . . .
Back when the current exclusive small arms procurement process was created, cutbacks threatened to kill domestic firearms production capacity. Once given up, it’s not easy to restart some key small arms production. What’s more, the large firms that had full capability could be pecked to death by smaller firms that took small but lucrative parts of government needs.
For example, Colt makes carrier groups and barrels for the U.S. military. If the contract had been opened up to fierce competition, other suppliers would have undercut them. Colt spends a lot of money on research and government outreach (hypothetically); if they lost the gig, we could have lost our small arms base for M16s.
Today the small arms procurement picture is different. There are a lot of M16 type rifle manufacturers (actually most just buy parts from the same suppliers.) FN makes M240 machine guns. Now Colt has got a contract for them. Which sort of reduces the claim that other manufacturers can’t—or shouldn’t—build them.
Even so, opening small arms military contracts to all and sundry still presents the danger that the U.S. supply chain could be “piecemealed to death.” But we know someone who would be happy about it . . .
