Almost years later, the internationally-recognized company is poised to open a new firearms production and research and development facility in Huntsville. Sources told AL. Robert Bentley is expected to join local leaders for an official announcement today at 2 p. Here are some other notable moments in Remington's history:. That firearms plant is still in use today. The partnership and succeeding corporation goes on the develop the first hammerless solid breech repeating shotgun, first hammerless auto-loading shotgun, first successful high-power slide action repeating rifle and first lock breach auto-loading rifle.
Company is reorganized as Remington Arms. Company is renamed Remington U. He left the company to his three sons, who became major suppliers to the Union Army. After the war, the company shifted its client base to hunters and western frontier settlers. It returned to its role as military arms supplier during the two World Wars. Remington is now headquartered in North Carolina and has seven factories in different states.
It says it will keep making guns through the bankruptcy process. Its owner, the private equity firm Cerberus Capital Management, has said it will give up that ownership once restructuring is complete. Related: Remington files for Chapter 11 bankruptcy. Remington representatives did not return messages from CNNMoney, and the National Shooting Sports Foundation, the gun industry group, declined to comment on the bankruptcy.
But it's a significant setback for an industry that has hit a financial slump during President Donald Trump's time in office. The industry experienced record sales during President Barack Obama's tenure, when gun advocates feared restrictive gun control measures. Those fears dissipated after the election of Trump, a Republican who was endorsed by the National Rifle Association.
Most worrying, Cerberus, which was trying to integrate disparate brands — the father-son pastoralism of Remington with the urban-militia aesthetic of AAC, for instance — seemed to him miserly when it came to marketing. Despite all this frenzy, he was certain that Cerberus had somehow made a great deal of money on Remington even before opening the Huntsville factory.
It was obvious when the debt appeared, in I showed the filings to a professor of finance. He said it looked as if Cerberus had wound up in debt to itself. I asked Gustavo Schwed, a professor of private equity at New York University who spent 24 years in the industry, to help me review the documents. Schwed pored over the many years of financial data and located two separate debt transactions, one of which was so esoteric I would never even have known to look for it. Together, these transactions explained not just the mysterious loan but, indirectly, the way the deal finally unraveled.
In order to buy Remington, Cerberus, as most private-equity firms would, created a new entity, a holding company. Instead of Cerberus buying a gun company, Cerberus put money into the holding company, and the holding company bought Remington.
The entities were related but — and this was crucial — each could borrow money independently. Because this loan was risky — the lenders would be paid only if Remington made a lot of money or was sold — the holding company offered a generous interest rate of around 11 percent, much higher than a typical corporate loan.
When the interest payments were due, the holding company paid them not in cash but with paid-in-kind notes, that is, with more debt.
These are known as PIK notes. Cerberus would keep that money no matter what. These were garden-variety maneuvers in a private-equity buyout. In April , Cerberus did something fateful, which probably seemed smart at the time. There were plenty of sensible reasons to do this. Gun sales were high, and the debt that Remington took out was cheaper to service than the paid-in-kind debt.
But there was a catch. Because the operating company borrowed the money with a normal loan — and not with PIK notes — interest payments were required in cash. Suddenly Remington was carrying hundreds of millions of dollars in debt that, if it could not be paid, would cause the business to go bankrupt. By the time the factory opened in Huntsville, the various players stood in vastly different positions.
The private-equity firm had made back its initial investment and was playing with house money. And its workers, urgently, had to make a lot of guns. Huntsville is a de facto segregated city. Pastor T. Johnson, of St. He was unaware South Huntsville existed until some of his Army subordinates, who were white, bought homes there.
Unlike Birmingham and Mobile, there has never been a black mayor in Huntsville. Though blacks, like all Huntsvillians, paid the taxes that supported lucrative incentive packages, they seldom reaped the rewards of the best-paying jobs. This reality was of course not felt by whites, Johnson said. The Remington factory was housed in a gray building the size of 14 football fields set back behind fencing topped with razor wire.
Inside, the building was divided in half, the production line on the left and the administrative and engineering offices on the right, along with a classroom set up by the state agency that provides free worker training for private businesses. Classes for new hires were held three days a week, every week. Johnson was disappointed but not surprised to learn from his parishioners that on the Remington line, the usual racial divisions manifested.
Most of the line workers were black, whereas most of the managers and engineers were white. Though the company was supposed to be hiring hundreds of people, workers said that the line appeared suspiciously sparse. Johnson, along with the president of the Huntsville N. The organizer arrived in Huntsville in He was born in Birmingham and spent most of his career organizing throughout the South.
But another obstacle surprised him. It seemed to Shanklin that in order to prevent unionization, the factory was exchanging its full-time workers for temps, who came and went rapidly, never sticking around long enough to have a stake. Remington declined to comment for this article. The presence of the temp workers, who were exempt from the minimum average hourly wage in the development agreement, also served as a cautionary tale, a reminder of how much lower you could sink if you raised trouble.
Full-time workers, for their part, were often unaware that the tax-incentive package might entitle them to higher wages than they were receiving. And when they did realize, they were unsure what to do. While I was in Huntsville, Remington employees told me that if they spoke to me for this article, they would be fired. It makes us feel they have something to hide. But we keep our mouths shut. Clock in, clock out.
I eventually met a former employee, who asked to be identified by her first initial, D. She was 43 and divorced and moved to Alabama more than a decade earlier from Michigan, along with her year-old son. After taking her two-week course at A. She was assigned to a boxing station, which was not on an assembly line but at a static counter where the workers stood side by side.
The job was boring. She received the guns — they were long guns, for hunting — placed them in boxes, then weighed the boxes on a digital scale. If the scale displayed a red light, that meant D. After two years, according to paystubs that D. She decided to move into a better apartment in North Huntsville, a two-bedroom with a linoleum square cut out of gray carpeting for a welcome mat.
She bought a Dodge Avenger and a Ruger. Then, in , D. After missing several days for a second surgery, she says she was called into the office of her supervisor, told that she had missed too much work and fired, three years to the day after she started.
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