They'll go lower -- the slide is just now really starting, that's for certain. Let's see what the discounters sell the AR-556 for in a year (unless politics/panic get in the way.)
I'll say it again: It ain't gonna happen with decent quality parts unless a maker/builder liquidates, which will make it a limited time "blow out" sale.
A $130K piece of capital gear dedicated to a project that has the potential run-rate of the AR-556 is trivial.
That would be the cost of a single small scale machine, and doesn't even take into consideration consumables, maintenance, electricity usage and operator wages. It would seem that you're not far removed from those folks who have no concept of manufacturing overhead and feel they should only have to pay for cost of materials for a finished prduct. Let me try to explain using an example:
A good friend of mine runs a plastic injection molding business. He got an order to make 15,000 lotion containers, which he is selling to the lotion company at $0.52/ea. Each one has about $0.10 worth of plastic in it. Boy, he must really be screwing the lotion company, huh? I mean, 520% profit! Wow! Unless, of course, 1/3 of the product line has defects or flashing that make them unsaleable, meaning they get put in the grinder to (maybe) be used for something else that can have similar composition and color. So now these things are costing him $0.15/ea in materials alone. Now, he had to incorporate the mold into that cost, too. $600 for two hunks of 7075-T6, a full day of CAD/CAM design and tweaking, a couple hours of that thing being roughed out on an $80,000 Fadal 4020 VMC, then another 1-1/2, 2 days of hand polishing. So there's 3 days and a spendy hunk of metal that become part of that $7,800 total bid. His $160,000 8 ounce injection molding machine can punch out about 12 containers per minute from the 4 cavity mold, so long as nothing jams up or gets stuck. So at that rate, he can produce a maximum of 7,680 containers in an 8 hour non-stop day. Of course, the reality of the situation is that between stoppages and unacceptable product, he winds up putting in a 12 hour day to produce about 3,000 containers. So that would be 5 full 12 hour days to meet the contract. Each and every one of the containers also has to have flashing hand-trimmed, which is another 6 or 7 12 hour days. Then they have to be invoiced, packed and shipped.
So, finally, after about 3 weeks, the order is filled. Costs are:
Materials: $2,850
Electricity: ~$200
3 weeks facility rent: $1,200
Machine lease payment: $500/mo, so ~$375 for 3 weeks.
That leaves him just $3,175 to do machine maintenance and pay himself for close to 200 hours. Would be less if he didn't own that Fadal VMC outright.
Think he can afford to sell those things for any less?
A $130K piece of capital gear dedicated to a project that has the potential run-rate of the AR-556 is trivial.
Even if their net profit were $50/rifle, that'd be 2,600 units just to cover initial equipment investment. Probably another 500 units to cover tooling costs. A high speed 5 axis VMC with ATC could finish one upper and lower forging in about 10 minutes, not counting the time it takes the technician to swap out the pieces. So, one machine would take 2-1/2 to 3 months to produce those 3,100 receivers if it were running 12 hours per day with
zero stoppages. Then there's maintenance. Does it seem trivial now?
You don't have any idea what Ruger's costs or profits are on the AR-224. I suspect they are still earning a good margin -- although nothing like the raping that has went on in the gun industry for the last several years.
See above. I don't know what you think their per unit profit is after all expenses are paid, but I'm betting your assumed figure is considerably higher than the actual number.
It's happening right before our eyes.
Care to clarify?