What would you like to see happen to Colt?

They need to restructure under bankruptcy, using that to get out from under Union contracts and existing debts. Complete the move to FL and get out from under high state taxes. With their investment a few years ago in CAD/CAM technology, they are now building the best pistols they ever have. Yeah, they still use some of the 30s era milling machines for certain operations they are better suited for, but their new processes are better than ever. They are easily the equal or better than their mainstream competition like Kimber, Springfield et al. If they fired up their Custom Shop, they could easily compete with Wilson, NHC, Baer.
There's currently something like 180 companies making ARs. If the current slow down in sales continues, I'm hearing there will probably be 20 left in 2-3 years. Colt should be one of those based on their quality. I hope they come out with a DA revolver again, as Snubbies are really popular for carry. Give up the pipe dream, the Python is never coming back.

What I would like to happen to Colt: ever person in the USA of legal age and etc. to buy a Colt gun. Two purposes would be served immediately: an influx of money into Colt (hope they'd handle it wisely) and gun ownership and usage (responsible only) would increase.

Of course that would hopefully also increase sales of ammunition, components, range and club memberships, hunting, shooting accessories and etc.

As a sidelight:

Colt's problem is too much dept and not enough income to service it. On the other hand a competitor, Sturm-Ruger has zero corporate dept - and this has been true since the company was founded. It wasn't easy but they funded operations and expansion with income, not borrowed capital.

This is unusual in the firearms industry as well as most others. Bill Ruger Sr. and his successors accomplished it by constantly introducing new products that the market found attractive.

Unfortunately Colt has been burdened with brain-dead management since the end of World War Two. Very few (maybe none) of the top decision makers knew or really know zip about handguns or handgun manufacturing and marketing. They bet that the name would insure large sales. It didn't, and this present situation is the result.

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It would be interisting to know if the upper management got huge bonuses while running the Colt company into the ground . Blame those lazy, filthy ,overpaid, union thugs, if you feel you have to,BUT the werent the ones that blew it, management counted on fat govt. contracts and that alone is not enough to keep the doors open.

The first and most important thing is to leave Connecticut. They are anti-gun and need to learn that such stances have a cost.

The second is to go belly up. Rid themselves of the costly upper management and excessive union contracts and start over with a clean slate. The Colt name and product are good enough that they can rebuild if they keep the quality as it should be.

Just leaving Connecticut and those greedy hanger-ons should be enough to see that once fine product be successful again.

C.R. said:

It would be interisting to know if the upper management got huge bonuses while running the Colt company into the ground . Blame those lazy, filthy ,overpaid, union thugs, if you feel you have to,BUT the werent the ones that blew it, management counted on fat govt. contracts and that alone is not enough to keep the doors open.

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I find that union blaming is still very easy for most non union employees. Unions, UAW in particular (and for the life of me I don't understand why the UAW was involved with Colt) has restructured their policies to be more favorable to corporations. There was a long time where unions were pretty useless, and got lazy, fat and bored, which turned them corrupt. Them being the union management, not the rank and file worker (although they do exists, too). Long gone are the days of the 50 year old janitor making $40 an hour because he started at the company at 15 years old. Wage caps exist, although still a bit high for unskilled labor.

In my own company, a UAW shop, management is horrendous and I sometimes wonder how they keep the doors open. Management loses contracts, not the union. Management squanders capitol on frivolous nonsense to impress corporate, not the union. The union exists to protect the workers from heartless corporatists who would still walk away with fat bonuses after running the company into the ground. If the union somehow lost a contract worth 30% of their annual revenue changes would be made immediately. Management does it, they get a slap on the wrist from corporate and infused with gobs of cash to keep the doors open (and lay off a few dozen union employees to boot). Tough trade off, I know.

Anyway, yeah, blame the union if you must, and be thankful you live in a state and work for a company where you can be fired at will for idiotic reasons like 'personality differences.'

I've worked for companies run by idiots as a non union labor, and there was always the shadow looming over. Now that I'm working for a union shop, that fear isn't there, and I actually look forward to going to work. Still work for a company run by idiots, though.

But anyhow, I doubt the union had much, if anything, to due with the latest down fall of Colt.

Colt has been on a downhill slide for decades. Colt has been very poorly managed, too dependent on government contracts and living on their legend alone. From what I can tell, changes made in the last several years have vastly improved their handguns. Their SAA's and 1911's are as good as they've been in a long time. Or better. So they have something to build on. The brand still has value. I would be shocked if they were not bought by somebody and Ruger is a good example of a properly run business that 'may' take an interest.

Colt has to move. Union guys can say what they want but unions are mostly unnecessary and potentially harmful. The union IS part of Colt's problem. All of Hartford is in decline. We took a trip through their last month and much of their historical areas are turning to ghetto. I was afraid to get out of the car to take pictures of the historic home that Sam Colt built, Armsmear, as well as the old factory. They need to start fresh somewhere else.

They have to be innovative. There's too much competition for any company to sit back and ride the coat tails of their history.

They have to maintain a high level of quality. Nobody wants to see budget priced guns with the Colt name.

They have to remain "Colt". Their products have to remain distinctive and not look like something that's been rebadged.

If no American company buys them out, then European and Chinese investors are just waiting to scoop them up. They are on a string ready to break. It could be before the year ends . Now 2015 looks bleak as well.

Colt had been mismanaged for decades.

Presently Colt is worth a minus 300 million dollars. The company has about 10 million dollars in working capital and few firm contracts.

Corporate owners and managers took hundreds of millions in "distributions" and "advisory fees" while simultaneously borrowing money to keep the company afloat. Now its crashing down around their heads.

Over the next several years, Colt Defense went through the private equity leverage wringer. Sciens Capital and its affiliates loaded the company with debt while taking out cash in the form of “distributions” and “advisory fees.” The 2005 SEC filing shows payouts totaling $40 million over the two prior years—a significant amount for a company in such fragile financial health. In 2006, another SEC filing shows, the company redeemed “members’ equity” worth $41 million. In 2007, Colt Defense agreed to borrow $150 million in a “leveraged recapitalization” that featured distributions to “members” of $131 million. In 2009 it borrowed an additional $250 million, while multimillion-dollar payouts continued. For 2010, Colt Defense had sales of $176 million—more than double what they were in 2004—but registered an $11 million loss. “You didn’t have to work at Colt Defense to know it had put itself in a dire situation,” says Merrick Alpert, a Connecticut businessman who began advising the shriveled remains of Colt’s Manufacturing in late 2010 and later became its senior vice president.

Among other failings, the severed halves of Colt somehow missed the post-2008 “Obama surge” as much as other U.S. gun manufacturers. Whipped up by NRA warnings that the Democratic president intended to toughen gun control, consumers cleared gun store shelves of ammunition and weapons. Better-prepared manufacturers such as Glock saw sales rise sharply. Under the terms of the Colt split, however, Colt Defense could reach the booming civilian market only by first selling its rifles to Colt’s Manufacturing, a debilitated company with sclerotic lines of distribution. Colt’s Manufacturing, for its part, offered only a limited selection of the handguns so much in demand.

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http://www.businessweek.com/article...ers-owners-have-led-it-to-crisis-after-crisis

The fact that Colt was in dire financial straits did not inhibit their award of huge bonuses to corporate officers:

In the first quarter of 2014, the Governing Board granted cash bonus incentive awards for fiscal year 2013 in the amount of $120,000 to the Chief Executive Officer, $225,000 to the Chief Financial Officer, $50,000 to the Chief Operating Officer and $150,000 to the General Counsel.

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http://www.last10k.com/sec-filings/ticker/0001508677/0001104659-14-066180.htm

Its always the top few who knows and handles the budget that gets the cake. Just like the saying, the top 1 % takes it all. If only theres a benevolent savior to all of this, then Colt can keep its head above water .

Colt; Kissimmee Florida....

Colt should severe all ties to the site in central Florida, Osceola County.
It sounds like they either won't use or don't need the new plant so they should just pay the fines/fees then let the state of Florida/local governments get it back.

Rusty

They are in deep, deep trouble down under. NO way to save this crash...

i would like to see Colt survive but with new owners. IMO that is unlikely to happen. Colt will probably join other once great companies in the dust bin of history.

Colt has been mis-managed for decades. Don't blame the union, they get nothing management doesn't agree to one way or another.

Decades ago when 'combat' shooting become popular, Colt was in a unique position to both provide for their customers and benefit their company.

Instead they ignored a large, highly profitable market. Entire companies formed to fill the voids demanding updated guns, custom parts, services and accessories that Colt management couldn't bother about. When they finally did come around it was half-hearted, poorly executed, and highly overpriced.

Same story somewhat later with AR-16 and deviants. They ignored hugely profitable markets begging for products and services which they were perfectly positioned to provide.

I don't know anything about their military operations but I'd suspect, given their poor overall management, the story is probably similar.

They will probably fail. Based on the managers and their decisions over the past 40 years, deservedly so.

This is a perfect scenario for a Warren Buffett. But any good old American Company like my uncle's beloved Eastern Airlines,, "he was Operations manager, can't compete with the Legacy costs from 30-50 years of mounting debt in the form of employee benefits, pensions, IRA's tax problems , and an ever increasing amount of company's who can put out a similar product with none of these costs, thus offering a cheaper gun that does a similar job. The unions are good and bad. Once they gat past the realistic point of paying out so much money in retirement benefits, pensions etc, they can't produce a product cheap enough to compete with Chinese or Korean wage earners, or even American company's , similar to what "Jet Blue, did to the airline industry". That's what happens to us since this NAPTHA, and other restrictions were lifted allowing free trade and corrupt patent stealing Chinese and others to come in and rape our country of our creative ideas, and build them for half the price.

They should split the company - let Tony Galazan at Ct Shotgun Mfg take the SA market
Let Beretta or FN take the military rifle part
The rest can just go away

Kynoch said:

Ruger never had access to cheap capital back in the day. Today, gun makers are looked upon by lending institutions as risky.

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bill ruger never borrowed a penny . I read all about the company when he died

A nail in the coffin....

When the DoD/US armed forces went looking for a new rifle, none of the contract entries would meet all the T&E requirements.
This included Colt.
Colt & Colt Defense really messed up since the 1980/early 1990s. They cut the Python .357 & .44/.38spl lines of premium DA revolvers then fell face first with the pathetic Colt All American 2000 9mm(a modular DAO pistol that wasn't polymer or well made).
The line of 1911s sold well but the glut of clones/copies really made Colt suffer.

I doubt Colt will remain & if it does get sold it will be a has-been, sad firm no one really buys. Like how Kahr Arms got Thompson & Auto-Ordinance.

Ruger never had access to cheap capital back in the day.

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True, but later when they did they continued to avoid dept and borrowed capital. There was never a day when a business reverse would kill the company and put them under because of excessive borrowing. In short, Bill Ruger Sr. and his management team, and those that continued afterwards, were and are the exact opposite from those at Colt.

Now look at the situation and differences between management styles between these two companies.

If Warren Buffet comes to the rescue, they can move the whole manufacturing in Omaha, NE. New Colt s will have the Omaha, NE on the side frame.