Colt Defense filed for Chapter 11 Bankruptcy Reorganization

[DR Owl Creek]

Wow!?! Who would have ever guessed?

The Wall Street Journal reported this morning that Colt Defense filed for Chapter 11 Reorganizational Bankruptcy protection from it's creditors. According to the report, Colt has secured what is called a $20 Million "super priority" loan from a group of what will be called "senior creditors" during the bankruptcy proceedings. Management will then be able to possibly keep operating, possibly sell off assets, etc. These "senior creditors" will be basically the new owners of Colt's assets.

The "junior creditors", such as stock/bond holders, other secured creditors, suppliers, labor unions, people who placed deposits for products, etc, could possibly get pennies on the dollar during the "cram down" proceedings, if they're lucky. Unsecured creditors probably won't get such favorable treatment. Just goes to show that sometimes you get the elevator, and sometimes you get the shaft.

These "reorganizations" aren't too unusual in the business world. The once large retailer, K-Mart has done it a couple of times. Wendy's, the fast food hamburger chain, has done it at least twice before. So has Burger King.

For more details, go to: http://www.wsj.com/articles/colt-defense-to-file-for-chapter-11-bankruptcy-protection-by-monday-1434310925

Dave

[garym1a2]

That's what you get when you are a leader in the industry and don't devlop new products and instead reliey on a single big customer (US Military). At one time they lead everyone with the M16/M4, 1911, and a good line of Revolvers.

Nowdays others make better 1911's for a lower price, same with the AR15 line. The Military went to cheaper suppliers.

[Wayne Smith]

That's what you get when you are a leader in the industry and don't devlop new products and instead reliey on a single big customer (US Military). At one time they lead everyone with the M16/M4, 1911, and a good line of Revolvers.

Nowdays others make better 1911's for a lower price, same with the AR15 line. The Military went to cheaper suppliers.

No, that's what you get when twice, at least, the owners have stolen all the money and left the company with few assets and loans.

[FISH4BUGS]

No, that's what you get when twice, at least, the owners have stolen all the money and left the company with few assets and loans.
No, that's what you get when the unions have such a stranglehold on the company that they cannot be competitive any longer.
When those contracts are set aside, and the company can get a better handle on labor costs, they will be a better and stronger company and will come storming back.
I know it may sound blasphemous, but I think unions have outlived their usefulness in many old line companies. Their high labor costs can make a company non-competitive in its marketplace.....and stupid management doesn't help either.

[jlchucker]

Winchester had a long strike that ended in 1969. That, after a series of marketing and engineering disasters that gave birth to the term "pre-64", eventually killed the company. Colt is just another in the long decline of the US firearms industry. Those declines are not necessarily the entire fault of unions. Plenty of union workers at both Winchester and Colt, to name but a few old-time manufacturing companies now long gone, had a great deal of pride in what they made. Pride alone though, is not enough to make a successful company.

[Certaindeaf]

Ruger. Whatever.

[GOPHER SLAYER]

An ex Colt employee opened a gun shop in Brea, Ca. back in the late 1970s. He had worked for the Colt company for twenty five years when he retired. Since he had inside contacts, if you wanted a single action in a reasonable amount of time, he could get it. He told me that the union at Colt had the company in a death grip. They even had to approve any new pistol design before it could be put into production.

[popper]

Location, location, location & everything said above.

[perotter]

Something I noticed years ago is that any business that looked like it would be fun to be in(guns or motorcycles for me) was also a good way to end up bankrupt.

[kens]

No, that's what you get when the unions have such a stranglehold on the company that they cannot be competitive any longer.
When those contracts are set aside, and the company can get a better handle on labor costs, they will be a better and stronger company and will come storming back.
I know it may sound blasphemous, but I think unions have outlived their usefulness in many old line companies. Their high labor costs can make a company non-competitive in its marketplace.....and stupid management doesn't help either.

The Union alone is NOT the reason for the problem. I'll admit there are good unions, and not so good unions. But the union by itself is not the problem. There was an obvious problem with the company, that is why the union got voted in , in the first place. Then after that, I will say that likely the company continued to buck the union at every step along the way. The more the company bucked, the more the union pushed back, into a never ending cycle.
A manager once told me that his job is easier with the union in place, because he knew exactly how far he could push, and knew when to back off. The result was a pretty good place to work, and there was not griping about the union from the company.

[Petrol & Powder]

Unions are parasites that eventually kill off their host.

Unions may have protected workers and served a legitimate need in the past but unless you count getting liberal democrats elected; they have long since outlived their usefulness.

The southeastern states are strongly "right to work" states and have steadily been attracting industry for decades. Some of that industry comes from the northeast and some comes from overseas but one thing is for certain, very few companies are expanding into the northeast & upper mid west.

I don't know if unions, bad management or a combination of both - are killing off Colt. However I'd bet a large sum of money that if Colt production ever resumes, that production will not be in Connecticut.

[bob208]

there are many things that can kill a company. this list in no order. bad management. the old promote the guy up so he can do no harm does not work. companies that are top heavy with management and other nonproductive employees. nonproductive means floor sweepers and window cleaners. this one lays at the unions feet. not paying your venders on time or at all. not having more them one customer.

[blackthorn]

The Union alone is NOT the reason for the problem. I'll admit there are good unions, and not so good unions. But the union by itself is not the problem. There was an obvious problem with the company, that is why the union got voted in , in the first place. Then after that, I will say that likely the company continued to buck the union at every step along the way. The more the company bucked, the more the union pushed back, into a never ending cycle.
A manager once told me that his job is easier with the union in place, because he knew exactly how far he could push, and knew when to back off. The result was a pretty good place to work, and there was not griping about the union from the company.

^^^^^This!

The very basis for any company going Union is the NEGOTIATION of a contract! If your precious (so called) "free enterprise" employer(s) are not intelligent enough to hire a competent negotiator, don't blame the Union when these same idiots run the place into the ground! OR as was suggested above abscond with the profits and leave the share holders (and the Unions) holding the empty bag. There is NO Union in the world that can win a fight to the finish with any employer, if that employer is determined to win! The employer always has the financial high ground over people who (for the most part) live from paycheque to paycheque! One of the main reasons contracts are settled is that the employer really does not want to reopen following a long and bitter strike with a bunch of ticked off workers! When there is a negotiated contract in place both sides know exactly what the rules are and there are dispute settlement procedures in place. Thus (if both sides play by what they agreed to) a better, more productive workplace will come into existence!

[butch2570]

Unions are parasites that eventually kill off their host.

Unions may have protected workers and served a legitimate need in the past but unless you count getting liberal democrats elected; they have long since outlived their usefulness.

The southeastern states are strongly "right to work" states and have steadily been attracting industry for decades. Some of that industry comes from the northeast and some comes from overseas but one thing is for certain, very few companies are expanding into the northeast & upper mid west.

I don't know if unions, bad management or a combination of both - are killing off Colt. However I'd bet a large sum of money that if Colt production ever resumes, that production will not be in Connecticut. What about all of the money that is paid off to all these execs in the multi million dollar companies?? WE see it everyday.... Companies going broke after their CEOs and CFOs and etc. take home these ridiculous salaries. All the while trying to cut the workers throats and lay off every single person they can so they can get more profit - to get more bonuses, and the following year it's more of the same.... That's where alot of these problems begin , corrupt trading ,embezzling ,it happens daily ,ONLY some don't get caught up in it. I'm in the heart of coal country and I've seen this for years... CEO takes home 22 million a year, then gets millions in stock options, Then 2 new houses worth hundreds of thousands, close to the largest jobs he's in charge of. Then the following year lays off 200 -300 workers and that year he takes in 23 million.. AND the UNION is the PARASITE ?

[Firebricker]

"Unions are parasites" Yep you got it always the big evil union never anything to do with corporate greed and bad managment. Yes indeed make it political and go straight for the union. They must be the only reason any company goes under. Maybe Colts union is part of the problem I do not know. What I do know is they shunned the civilian market and put all their eggs in one basket. FB

[Petrol & Powder]

What about all of the money that is paid off to all these execs in the multi million dollar companies?? WE see it everyday.... Companies going broke after their CEOs and CFOs and etc. take home these ridiculous salaries. All the while trying to cut the workers throats and lay off every single person they can so they can get more profit - to get more bonuses, and the following year it's more of the same.... That's where alot of these problems begin , corrupt trading ,embezzling ,it happens daily ,ONLY some don't get caught up in it. I'm in the heart of coal country and I've seen this for years... CEO takes home 22 million a year, then gets millions in stock options, Then 2 new houses worth hundreds of thousands, close to the largest jobs he's in charge of. AND the UNION is the PARASITE ?


WHAT ABOUT IT?

Companies do not exist to make products; they exist to make money.
Labor costs are a part of the formula. If the workers demand more money (and the company agrees to pay it) it comes out of the company's profits. Reduce the profits too much and the company ceases to exist. If the company ceases to exist no one makes money.

By careful what you ask for, Comrade .

[Petrol & Powder]

A 2008 editorial in The Wall Street Journal comparing job growth in Ohio and Texas stated that from 1998 to 2008, Ohio lost 10,400 jobs, while Texas gained 1,615,000.

You can whine about the corporate leaders making money (isn't that what we strive for in a capitalistic system?), stay and watch the Unions destroy opportunities OR you can go where the unions haven't destroyed the host.
IT'S YOUR CALL. Union states aren't like the former communist controlled East Berlin - you can actually leave if you want to.

[butch2570]

Hey, does my name look like Comrade? I didn't call you Jack , Jumbo or Billy Bob , you stated your opinion and I gave mine . Any one can see that these lucrative salaries are a far bigger problem to public traded companies than what you are letting on about.

[Hickory]

A 2008 editorial in The Wall Street Journal comparing job growth in Ohio and Texas stated that from 1998 to 2008, Ohio lost 10,400 jobs, while Texas gained 1,615,000.

You can whine about the corporate leaders making money (isn't that what we strive for in a capitalistic system?), stay and watch the Unions destroy opportunities OR you can go where the unions haven't destroyed the host.
IT'S YOUR CALL. Union states aren't like the former communist controlled East Berlin - you can actually leave if you want to.

There was a company that built airplanes that tried to move it's operations to a right-to-work state a few years ago, and Obama put an ax to their plan. People can leave, companies can't.

[butch2570]

A 2008 editorial in The Wall Street Journal comparing job growth in Ohio and Texas stated that from 1998 to 2008, Ohio lost 10,400 jobs, while Texas gained 1,615,000.

You can whine about the corporate leaders making money (isn't that what we strive for in a capitalistic system?), stay and watch the Unions destroy opportunities OR you can go where the unions haven't destroyed the host.
IT'S YOUR CALL. Union states aren't like the former communist controlled East Berlin - you can actually leave if you want to. So it's ok for the corporate leaders to strive for more money ( YOUR words) , and make more money in a year than all their workers combined. But it's the straw that broke the camels back for the hourly worker to have the same desires?? That's obtuse thinking to me.

[Petrol & Powder]

............... Any one can see that these lucrative salaries are a far bigger problem to public traded companies than what you are letting on about.
"Any one can see..."
I don't see that as a problem at all.
If I ask you how much money you should be allowed to make and you answer anything other than, "as much as I can or as much as I want" - I'm going to label you a communist.

As soon as you agree that YOU might have too much money then you can no longer complain about other people taking some of your money because you have too much. I think you should be allowed to keep what you produce and your share of the public burden should be just enough to accomplish the necessary functions of government.
There's is no difference between a CEO having too much money and YOU having too much money. If you think you are poor I can always find someone that would view you as incredibly rich.

[Petrol & Powder]

There was a company that built airplanes that tried to move it's operations to a right-to-work state a few years ago, and Obama put an ax to their plan. People can leave, companies can't.
Companies need labor. What's your point?

[Certaindeaf]

Isn't that company solely "owned" by a government pension fund (union)?
Hopefully they can rid themselves of that parasite.

[Hickory]

Companies need labor. What's your point?
People can leave, companies can't.

[smokeywolf]

WHAT ABOUT IT?

Companies do not exist to make products; they exist to make money.
Labor costs are a part of the formula. If the workers demand more money (and the company agrees to pay it) it comes out of the company's profits. Reduce the profits too much and the company ceases to exist. If the company ceases to exist no one makes money.

By careful what you ask for, Comrade .

Why are you conveniently forgetting that the tens of millions of dollars (sometimes more) that the CEO, COO, CFO, Chief Counsel and all the rest of the entitled set get each and every year also greatly diminish the company's profits.

[Firebricker]

Petrol, You seem to indicate anyone pro union is a communist. A lot of law enforcement agencies are union so do you consider them communist as well? It is obvious you hate unions and that is your right to hate all you want but why turn a thread about Colt into your personal anti union campaign? You do not like them fine don't join one but there is no need to insult everyone that is union. FB

[Petrol & Powder]

People can leave, companies can't.

Actually companies can leave and they have been leaving the northeast in great numbers.
Where ever the company relocates, it will need a labor force.

[quickdraw66]

A lot of people saw this coming a long time back. Colt made a few mistakes. They focused too much on their military contracts and not enough on their consumers. They have not introduced anything really innovative in some time. The main guns they sell are the SAA, 1911, and the AR-15. Guns that hundreds of other companies also make and sell, many for much less. I think the company will eventually go completely under and the name will be sold. I sincerely hope whoever buys it brings back guns like the Trooper, Python, and the Official Police, along with bringing out several new, innovative firearms. Not rehashes of guns they have been making for over 100 years.

[butch2570]

"Any one can see..."
I don't see that as a problem at all.
If I ask you how much money you should be allowed to make and you answer anything other than, "as much as I can or as much as I want" - I'm going to label you a communist.

As soon as you agree that YOU might have too much money then you can no longer complain about other people taking some of your money because you have too much. I think you should be allowed to keep what you produce and your share of the public burden should be just enough to accomplish the necessary functions of government.
There's is no difference between a CEO having too much money and YOU having too much money. If you think you are poor I can always find someone that would view you as incredibly rich. Maybe when every one here is out of work and we are waist deep in a economic collapse , You will be able to see it.

[Petrol & Powder]

Petrol, You seem to indicate anyone pro union is a communist. A lot of law enforcement agencies are union so do you consider them communist as well? It is obvious you hate unions and that is your right to hate all you want but why turn a thread about Colt into your personal anti union campaign? You do not like them fine don't join one but there is no need to insult everyone that is union. FB
I didn't say Unions equate to communism, I said that companies exist to make money.

Collective bargaining and closed shops severely restrict the property rights of the business. Sometimes that intrusion is so great that the company can no longer be competitive and it ceases to exist. What good has the union done for its members if the policies of the union destroy the enterprise that employed the members?
Huge profits reaped by the company do not automatically get equally spread amongst the labor force. That is a collective and I don't wish to invest in a collective.

[Certaindeaf]

Petrol, You seem to indicate anyone pro union is a communist. A lot of law enforcement agencies are union so do you consider them communist as well? It is obvious you hate unions and that is your right to hate all you want but why turn a thread about Colt into your personal anti union campaign? You do not like them fine don't join one but there is no need to insult everyone that is union. FB

Unions vote lockstep democrat. Teachers, cops, whatever. poor bastids

[Petrol & Powder]

Why are you conveniently forgetting that the tens of millions of dollars (sometimes more) that the CEO, COO, CFO, Chief Counsel and all the rest of the entitled set get each and every year also greatly diminish the company's profits.

They get to do that. If the "company" is one guy he can do what he wants with the profits. If the company is a bunch of stock holders they get to pay their COO's CFO's , Counsel and anyone else what ever they wish to. And those salaries are paid for out of the companies profits.
Just because you don't like what the board of directors or share holders do with the company's money doesn't mean you get to dictate what they do with that money.

[smokeywolf]

I was a union member for 34 years and I think one time in that 34 years in a local election, I voted for a Dem. I didn't even like having to vote for Arnold Schwarzenegger because his wife was a Dem. And of course he turned out to be one of the biggest RINOs of all time.

[smokeywolf]

They get to do that. If the "company" is one guy he can do what he wants with the profits. If the company is a bunch of stock holders they get to pay their COO's CFO's Counsel and anyone else what ever they wish to. And those salaries are paid for out of the companies profits.
Just because you don't like what the board of directors or share holders do with the company's money doesn't mean you get to dictate what they do with that money.

Still not clear on why it's OK to reduce company profits by paying wildly exorbitant and often unjustified salaries to upper echelon management, but it's not OK to give a 3 or 4% raise to the people who actually produce the product that produces the company's profits.

"Just because you don't like what the board of directors or share holders do with the company's money doesn't mean you get to dictate what they do with that money."

Read that one over several times and still can't understand how this statement relates to management salaries vs. union salaries.

[Firebricker]

They can ask you to vote for a candidate and so can groups on the the other side of things. I vote for who I want nobody follows you to the booth. Petrol, You did not say "unions equate to communism" directly instead you used the term commrade. And I agree if you do not want to invest in a union company than don't it is your right. For the record as long as workers get a living wage I could care less how much profit CEOs make. Right up till they rob a company blind and blame it on everything else. A thread union vs. non-union is a subject for the pit. The best we are going to do here is agree to disagree and get back on topic which is Colt. FB

[country gent]

I have seen that line of thinking before in companies with management were here to make money. A company isnt there to make money but to make a wanted or need product and the money follows. when "making money" comes first the downward spiral begins. To many companies are being ran by accountants and managers not the inovative thinking people that created them years ago.

[shoot-n-lead]

Well, I hope they go broke and the equipment is dismantled and sold for scrape.

I am sick of everyone constantly complaining about how a company that they have no investment in, is operated.

IF, you don't like how they run Colt's...buy it and operate it as you see fit...or grin and bear it...cause they ain't nothing all of this moaning will do to change anything.

[Petrol & Powder]

You own some land and decide to cut down trees and turn those trees into lumber. You sell that lumber.

With incredible effort you manage to cut, mill and sell enough trees to make a profit. Most people would say, "good for you, you earned that money". Most people would accept that the profits of your labor belonged to you and they wouldn't dream of dictating how you spent your hard earned profits.

NOW, let's say you decide that you could cut more trees down, mill more lumber and make more money if you had some help and some equipment. You don't have enough money to hire workers and buy equipment so you form a corporation and sell stock to raise the money needed to expand your enterprise. You tell your potential stock holders that when you sell more lumber the stock will be worth more and they can sell the stock for a profit or the company can pay dividends to the stock holders.

You sell a bunch of stock and raise a bunch of money (we call that capital). With that capital you employ workers and purchase skidders, tractors, chainsaws, trucks, saw mills, etc. All of the sudden you are making money and employing people who also make money. But somehow you have also become an Evil Corporation ?

Then the union shows up and tells you that you have to hire 50 more union lumberjacks and pay them all $100/hour, including the 20 that don't show up for work everyday. You say, I don't have enough work for 10 lumberjacks and I can't come close to paying $100/hour. The union says, too bad we will not let non-union lumberjacks to work for you.
So you relent hire the worthless overpaid lumberjacks and pass the costs on to the customers that buy your lumber. Your customers say, why would we pay for this expensive lumber when we can get it from your competitor for much less? You can't really give them a good reason and they stop buying your lumber. Soon you go out of business, lay off all of your workers and your investors lose all of their money.

Tell me again why individuals are permitted to keep what they produce but corporations don't........?

[smokeywolf]

Then the union shows up and tells you that you have to hire 50 more union lumberjacks and pay them all $100/hour, including the 20 that don't show up for work everyday. You say, I don't have enough work for 10 lumberjacks and I can't come close to paying $100/hour. The union says, too bad we will not let non-union lumberjacks to work for you.
So you relent hire the worthless overpaid lumberjacks and pass the costs on to the customers that buy your lumber. Your customers say, why would we pay for this expensive lumber when we can get it from your competitor for much less? You can't really give them a good reason and they stop buying your lumber. Soon you go out of business, lay off all of your workers and your investors lose all of their money.

Tell me again why individuals are permitted to keep what they produce but corporations don't........?

Never heard of a union just showing up at a company and ordering them to hire more people. Not sure I've ever heard of a union employee making $100 dollars/hr unless they exceeded 16 hrs. in a workday on a distant location worksite.

Also, as a union employee I was laid off several times when there was insufficient work to stay productive.

This is also the first I've heard that lumberjacks were worthless and overpaid.

I think someone may have misinformed you about unions.

[MaryB]

Colt is foundering due to bad treatment of the consumer versus sucking up to the military. And yes the union played a role. The union also had a deal preventing Colt from moving to a cheaper state to operate in and that was the straw that broke the camels back! Add in high taxes in the state they are in, government regulation up the wazoo...

[Certaindeaf]

Oh quit your fretting. The Mexicans'll do it and they vote!

[Petrol & Powder]

Never heard of a union just showing up at a company and ordering them to hire more people. Not sure I've ever heard of a union employee making $100 dollars/hr unless they exceeded 16 hrs. in a workday on a distant location worksite.

Also, as a union employee I was laid off several times when there was insufficient work to stay productive.

This is also the first I've heard that lumberjacks were worthless and overpaid.

I think someone may have misinformed you about unions.

It was an example, try to get over the finer points and learn the core theme.

[kens]

Petrol wrote; "Then the union shows up and tells you that you have to hire 50 more union lumberjacks and pay them all $100/hour"

The most important part you are obviously missing is the very REASON why the union showed up in the first place.
You were screwing the laborers in the first place.
If you had paid competitive wage from the beginning, the union cannot get voted in.
And don't get into any kind of discussions about this,
Go ask Delta Airlines how they kept the unions out.
Show me.
Delta merged with Northwest (heavily union airline) and the vote was to dissolve the former union.
What is it you don't understand????

[Petrol & Powder]

"If you had paid competitive wage from the beginning, the union cannot get voted in."

Or the workers could leave......


I'm not opposed to unions, I'm opposed to closed shops (you must belong to the union to work there) and collective bargaining.
The free market will fix itself. I'm not big on surrendering my authority as a worker or an employer to a government or a union.

[dragon813gt]

Talk about an epic thread drift.

Colt's fate was sealed by a few simple actions. They focused heavily on government contracts and bailed on the civilian market. What little products they do sell to civilians are over inflated because they have a prancing pony on the side. They have been severely mismanaged. I say screw em and don't let the door knob hit you on the way out.

I have all the respect in the world when it comes to Colt's history. But they aren't Sam Colt's company. You have to try extremely hard in the current climate to kill a firearm company. I won't shed a tear over this one because they sure don't care about the average American citizen.

[dkf]

What a shocker.......NOT.

Colt deserves to go under, but sadly in about 7-10 years we will hear about them filing bankruptcy yet again.


Petrol wrote; "Then the union shows up and tells you that you have to hire 50 more union lumberjacks and pay them all $100/hour"

The most important part you are obviously missing is the very REASON why the union showed up in the first place.
You were screwing the laborers in the first place.
If you had paid competitive wage from the beginning, the union cannot get voted in.
And don't get into any kind of discussions about this,
Go ask Delta Airlines how they kept the unions out.
Show me.
Delta merged with Northwest (heavily union airline) and the vote was to dissolve the former union.
What is it you don't understand????

Wrong. The unions can be like organized crime. They shows up, try to brainwash with BS laced with false promises and terrorize a business to get in. Happened to several factories in my area over the years.(including the place I used to work) A lot of places told the union to F off, the ones that went union closed up years ago. There is a reason the vast majority of unionized jobs are public sector.

[Petrol & Powder]

dkf - I hope you're not attributing most of that quote in post #46 to me because I think you and I are on the same sheet of music . Most of that highlighted text is from other sources.

And yes, Unions are a lot like organized crime and they make their money the same way.

[winchester85]

unions are not the only reason colt is in trouble.

but unions have been a big reason for many industries. like steel, auto, paper.

the local coal mine shut down in the 80's. union decided they wanted more money, union workers tried to punish the company for not paying more. they left machines in places where the ceiling would settle on them, they damaged machines so they did not have to work until it was fixed.
i did not work there, but know people who did. first hand stories of the company being sabotaged.

company went out of business because of it.

[dkf]

dkf - I hope you're not attributing most of that quote in post #46 to me because I think you and I are on the same sheet of music . Most of that highlighted text is from other sources.

And yes, Unions are a lot like organized crime and they make their money the same way.

No. I quoted kens but the quote came out weird.

[Petrol & Powder]

Still not clear on why it's OK to reduce company profits by paying wildly exorbitant and often unjustified salaries to upper echelon management, but it's not OK to give a 3 or 4% raise to the people who actually produce the product that produces the company's profits.

"Just because you don't like what the board of directors or share holders do with the company's money doesn't mean you get to dictate what they do with that money."

Read that one over several times and still can't understand how this statement relates to management salaries vs. union salaries.

".....Still not clear on why it's OK to reduce company profits by paying wildly exorbitant and often unjustified salaries to upper echelon management......"

Because the workers do not OWN the company!

Paying high salaries' to the upper echelon [you used the term "exorbitant and often unjustified"] doesn't reduce the company's profits; it simply directs where those profits are distributed.
The neighborhood kid that mows your lawn doesn't OWN your lawn. The kid is not entitled to $200/hour to push a lawn mower simply because you live in a mansion and he lives in a shack. If he wants too much money to mow that grass you can mow it yourself, or find some other kid that will do it for less.

Those decisions do not REDUCE the company's profits. As an employee, you are not entitled to a fair share of what a company earns. If you want a share of a company's profits then you should purchase some ownership in that company. If you buy stock in a company and that company makes money then you make money. If the company loses money - you lose money.





McDonalds makes millions of dollars every year. The 5 time convicted felon with an 8th grade education that comes to work stoned every day doesn't get $75/hour to flip hamburgers just because the corporation makes a lot money. The profits of the corporation are spent in accordance with the wishes of the share holders not the registered sex offender with the spatula in his hand.

[smokeywolf]

".....Still not clear on why it's OK to reduce company profits by paying wildly exorbitant and often unjustified salaries to upper echelon management......"

Because the workers do not OWN the company!

Paying high salaries' to the upper echelon [you used the term "exorbitant and often unjustified"] doesn't reduce the company's profits; it simply directs where those profits are distributed.
The neighborhood kid that mows your lawn doesn't OWN your lawn. The kid is not entitled to $200/hour to push a lawn mower simply because you live in a mansion and he lives in a shack. If he wants too much money to mow that grass you can mow it yourself, or find some other kid that will do it for less.

Those decisions do not REDUCE the company's profits. As an employee, you are not entitled to a fair share of what a company earns. If you want a share of a company's profits then you should purchase some ownership in that company. If you buy stock in a company and that company makes money then you make money. If the company loses money - you lose money.



McDonalds makes millions of dollars every year. The 5 time convicted felon with an 8th grade education that comes to work stoned every day doesn't get $75/hour to flip hamburgers just because the corporation makes a lot money. The profits of the corporation are spent in accordance with the wishes of the share holders not the registered sex offender with the spatula in his hand.

"Because the workers do not OWN the company!"
If you are implying that it's OK for tens of millions of dollars to be "distributed" to upper management because they own stock, they own stock simply because the company is paying them with stock. This is done because there are tax advantages to be had by both the company and individual receiving assets of great value.
Any way you slice it, the company loses part of its estimated value from paying ANY employee; in cash or stock options.
Oh, and by the way, lots and lots of workers own shares in the company that employs them.

"Paying high salaries' to the upper echelon [you used the term "exorbitant and often unjustified"] doesn't reduce the company's profits; it simply directs where those profits are distributed."
Allow me to reword my point. Be it the transfer of cash to labor or the transfer of cash and/or stocks or anything else of value to upper management, the book value of the company is still diminished and playing with semantics does not change the facts.

Your entire argument is based on wildly exaggerated analogies and playing with semantics.

I will say this, in spite of being a union member for most of my career, I'm not a fan of unions either. Unfortunately, without collective bargaining, large corporations have much too great an advantage over the determination of what is fair and equitable compensation.

I remember talking with a guy who worked for Procter & Gamble. His job and responsibilities almost mirrored mine and his compensation package was within probably a couple of hundred dollars a month of mine. He also paid no union dues and try as they might the union couldn't get their foot in the door. Every time the unions wanted to organize P & G, the company said sure, come on in and the employees promptly told them to take a hike.

I take this as proof that if companies deal fairly with employees, there would be no unions.

[kens]

I will say this, in spite of being a union member for most of my career, I'm not a fan of unions either. Unfortunately, without collective bargaining, large corporations have much too great an advantage over the determination of what is fair and equitable compensation.

I remember talking with a guy who worked for Procter & Gamble. His job and responsibilities almost mirrored mine and his compensation package was within probably a couple of hundred dollars a month of mine. He also paid no union dues and try as they might the union couldn't get their foot in the door. Every time the unions wanted to organize P & G, the company said sure, come on in and the employees promptly told them to take a hike.

I take this as proof that if companies deal fairly with employees, there would be no unions.

Too many times the upper management takes on the looks of organized crime themselves, then they cry when a union gets VOTED in.
BTW, you do know that a union can only get in with the employees vote, correct? What this means is the a union cannot force a company to enter into a Collective Bargaining Agreement, the union has to be voted on by the employees, meaning that the invitation for union comes from the INSIDE. It is the employees asking of help from a union because the management has taken on the attitude of organized crime themselves, by not paying competitive wages/benefits/safety in their industry sector.

I am glad the P&G example was posted. P&G and Delta are on about the same page, paying competitive compensation and keeping the unions out.
Delta went through negotiations every few years. Delta paid up about $.02 more wages than the average union competitor, then that prevented a union from saying that Delta' wages are too low. In turn the union dues was a bigger amount than the $.02, so a union never could get a hold on Delta. Without a union, the company had control over the employees that were always late, drunk, lazy, or otherwise acting like a freeloader, they could control layoffs, and especially, who they rehire after a layoff. By having control of the freeloaders and layoffs, the company was way ahead of finances compared to a union shop, because they didn't have to pay all the freeloaders.

This concept is something that Colt evidently never got a grasp on. It is not a unions fault. The fault sits squarely on management, it is the companies own employees who invite the union to come in.

[pmer]

I hope Colt comes out of their troubles with success. Maybe they'll be more in tune with the consumer, I'd like to see them come out again with double action revolvers and maybe something striker fired with a lower price point.
I try not to get worried over what others have or get paid because of tenth commandment. It works. Things usually work out like they are here, you can chose to not be upset about what others have. With out this and propaganda the dems don't have much. 8-)

[smokeywolf]

Too many times the upper management takes on the looks of organized crime themselves, then they cry when a union gets VOTED in.
BTW, you do know that a union can only get in with the employees vote, correct? What this means is the a union cannot force a company to enter into a Collective Bargaining Agreement, the union has to be voted on by the employees, meaning that the invitation for union comes from the INSIDE. It is the employees asking of help from a union because the management has taken on the attitude of organized crime themselves, by not paying competitive wages/benefits/safety in their industry sector.

I am glad the P&G example was posted. P&G and Delta are on about the same page, paying competitive compensation and keeping the unions out.
Delta went through negotiations every few years. Delta paid up about $.02 more wages than the average union competitor, then that prevented a union from saying that Delta' wages are too low. In turn the union dues was a bigger amount than the $.02, so a union never could get a hold on Delta. Without a union, the company had control over the employees that were always late, drunk, lazy, or otherwise acting like a freeloader, they could control layoffs, and especially, who they rehire after a layoff. By having control of the freeloaders and layoffs, the company was way ahead of finances compared to a union shop, because they didn't have to pay all the freeloaders.

This concept is something that Colt evidently never got a grasp on. It is not a unions fault. The fault sits squarely on management, it is the companies own employees who invite the union to come in.

You're preaching to the choir kens. The excerpt you quoted from my post ("Every time the unions wanted to organize P & G, the company said sure, come on in and the employees promptly told them (the unions) to take a hike.") shows that I know that employees have to vote the unions in.

The statement was made that the union at Colt is preventing the company from moving out of the anti-Constitution, business unfriendly State of Connecticut. Apparently the union that I was in was much more interested in the overall success of the industry than are many other unions. So, although I am critical of the childish union brother/union sister (sounds like kids in a treehouse) attitude. I have obviously not been exposed to these unions that are described by some on the forum as criminal, cutthroat and seemingly completely detached from reality.

Like most problems encountered in business, engineering and most facets of everyday life; Colt's failure is being caused by several factors. In Colts case, poor management, a State that is hostile to business (and the Constitution) and a over-reaching, overly intrusive union are all contributing to failure.

[wills]

We hate to read Bloomberg about Colt but it blamesmanagement. When a gun company is owned by people who aren't gun makers this iswhat happens. Remember '64 when all the business school Geniuses tookcontrol of Winchester



http://www.bloomberg.com/news/articles/2015-06-15/behind-colt-s-bankruptcy-financial-engineering-that-backfired


The gun company founded by Samuel Colt has flirted with financial disaster for much of its 179-year history. Now the storied West Hartford (Conn.) maker of rifles and pistols is heading into Chapter 11, in large part because of more than a decade of dubious financial engineering and accumulating debt.
Colt Defense, as the main part of the company is now known, filed for bankruptcy protection on Sunday while listing as much as $500 million in debt. Cooling demand for its civilian semiautomatic rifles and handguns, as well as delays in certain large U.S. government and foreign military orders, have exacerbated the company's finances. But the main reason the company hasn't weathered rocky market conditions since the winding down of the wars in Iraq and Afghanistan is that the New York financiers who control the company borrowed too much and paid themselves lavishly.
As I reported in a feature story last year (http://www.bloomberg.com/bw/articles/2014-05-29/colts-curse-gunmakers-owners-have-led-it-to-crisis-after-crisis#p1), the private equity firm Sciens Capital and its affiliates loaded Colt with debt since the mid-2000s while taking cash out in the form of "distributions" and "advisory fees." Sciens remains the controlling owner of Colt Defense, according to a regulatory filing (http://www.wsj.com/articles/colt-defense-to-file-for-chapter-11-bankruptcy-protection-by-monday-1434310925). An executive with Sciens did not immediately return a message seeking comment.


In 2009 and 2010, meanwhile, Colt somehow missed out on the "Obama surge," a run of strong civilian gun sales prompted by fears whipped up by the National Rifle Association that the Democratic president would stiffen federal gun control. The panic-based buying that lifted the small arms industry has now eased, making it even more difficult for Colt to move the military-style semiautomatic rifles it had hoped would be its salvation. "The industry's recent rapid growth is expected to slow over the next five years, increasing at a more modest average annual rate of 4.1 percent," according to the research firm Ibisworld.
Here's how Bloomberg News is reporting (http://www.bloomberg.com/news/articles/2015-06-15/colt-defense-179-year-old-gunmaker-files-for-bankruptcy) on the bankruptcy protection filing:

Colt’s current sponsor Sciens Capital Management LLC has agreed to act as a stalking horse bidder for all of its assets and liabilities related to existing agreements, according to a statement from the gunmaker. Existing secured lenders have agreed, subject to court approval, to provide a $20 million debtor-in-possession credit facility, Colt said. The current management team will remain in place.
“Colt remains open for business,” Chief Restructuring Officer Keith Maib said in the statement.
Open for business, perhaps, but vulnerable now to being sold off in pieces with little remaining behind the brand associated with such iconic firearms as the 1873 Single Action Army, known as "the gun that won the West," and the Colt 1911, the official sidearm of U.S. Army soldiers from WWI through Vietnam.

[butch2570]

Wasn't wrongful death and liability lawsuits in the past , one of the contributing factors of Colt deciding to turn to defense contracts and not service individual consumers ?

[TXGunNut]

Colt as we remember it was gone long ago but there are still some good folks working there. I needed some small parts awhile back and was impressed with the service I received. I had no idea they were so good to deal with. I have a Colt Defender and it seems to do best with factory parts in most cases. The catalog was easy to use, prices were reasonable, order was filled correctly and shipped at a reasonable cost. I've had more than a few Colts over the years, I hope to buy a few more.

[MaryB]

Federal legislation blocked that years ago, gun has to be found defective to sue.


Wasn't wrongful death and liability lawsuits in the past , one of the contributing factors of Colt deciding to turn to defense contracts and not service individual consumers ?

[Tackleberry41]

I really doubt that the downfall of Colt was due only to unions strangling them. I know many are so anti union they can't see straight. Most seem to forget why unions came about in the first place, the general abuse companies heaped upon workers long ago. When a company would hire thugs to beat up people, seems a pretty good reason to demand to be treated as a human.

Colts biggest problem is they pretty much ignored the civilian market for a long time. What did colt make, AR15s and 1911s. The same exact products that pretty much every other company makes. Was a time when a Colt 1911 was really the only game in town, yea a few minor players, but for the most part Colt was it. Under such conditions yea you can ignore what people want, and charge higher prices. But once the market expands and dozens of companies are making exactly the same product, with the same or maybe even better quality, you can't keep overcharging. But colt kept thinking its a colt people will keep buying them, but guess they were wrong.

AR15s again at one time they were the only game in town. And had a nice juicy military contract, who cares about the civilian market. But EVERYBODY makes AR15s now. Why pay over a grand for one with a pony on the side, when you can buy a Ruger for under $700, or a S&W, or Bushmaster, or..etc. etc. etc. Is the colt that much better, doubtful. And they lost the military contract. Right then they should have went out and made alot of effort to appeal to the civilian market. Maybe some lower priced models. Nope its a colt, people will pay.

You can pretty much guarantee that the only people who will get screwed in this process are investors and employees. Those at the top will walk away with a big chunk of money. The company will either reorganize, then stumble along for a while until it finally collapses. Or be sold off in pieces, the freedom group will buy up the name and equipment, fire everybody. And soon lower quality 'colt' rifles made in a remington plant will hit the shelves. The name will be milked as long as possible, then that will be the end just like H&R.

[osteodoc08]

It's not the first time IIRC for Colt. Or at least being in financial distress.

All the above are salient points on why.

I don't recall ever recall purchasing a NEW Colt anything.

[dkf]

I really doubt that the downfall of Colt was due only to unions strangling them. I know many are so anti union they can't see straight. Most seem to forget why unions came about in the first place, the general abuse companies heaped upon workers long ago. When a company would hire thugs to beat up people, seems a pretty good reason to demand to be treated as a human.


Was not the main contributor, however it sure did not help.

[garym1a2]

People that say Unions caused this are only guessing. With out knowing the numbers no-one knows what happens. Last I heard the big competitors like Remington/Bushmaster are also Union shops.

I really doubt that the downfall of Colt was due only to unions strangling them. I know many are so anti union they can't see straight. Most seem to forget why unions came about in the first place, the general abuse companies heaped upon workers long ago. When a company would hire thugs to beat up people, seems a pretty good reason to demand to be treated as a human.

Colts biggest problem is they pretty much ignored the civilian market for a long time. What did colt make, AR15s and 1911s. The same exact products that pretty much every other company makes. Was a time when a Colt 1911 was really the only game in town, yea a few minor players, but for the most part Colt was it. Under such conditions yea you can ignore what people want, and charge higher prices. But once the market expands and dozens of companies are making exactly the same product, with the same or maybe even better quality, you can't keep overcharging. But colt kept thinking its a colt people will keep buying them, but guess they were wrong.

AR15s again at one time they were the only game in town. And had a nice juicy military contract, who cares about the civilian market. But EVERYBODY makes AR15s now. Why pay over a grand for one with a pony on the side, when you can buy a Ruger for under $700, or a S&W, or Bushmaster, or..etc. etc. etc. Is the colt that much better, doubtful. And they lost the military contract. Right then they should have went out and made alot of effort to appeal to the civilian market. Maybe some lower priced models. Nope its a colt, people will pay.

You can pretty much guarantee that the only people who will get screwed in this process are investors and employees. Those at the top will walk away with a big chunk of money. The company will either reorganize, then stumble along for a while until it finally collapses. Or be sold off in pieces, the freedom group will buy up the name and equipment, fire everybody. And soon lower quality 'colt' rifles made in a remington plant will hit the shelves. The name will be milked as long as possible, then that will be the end just like H&R.

[jonp]

Not at the Alabama plant i think.

[Petrol & Powder]

I don't think FN set up a plant in South Carolina because they like high humidity!
And by the way, they aren't the only company to choose Columbia S.C. to set up shop There are over 70 foreign affiliated companies and fourteen Fortune 500 companies in the region. The gross domestic product (GDP) of the Columbia metropolitan statistical area as of 2010 was $31.97 billion.



As I said earlier, I don't know if unions, bad management or a combination of unions & bad management is killing off Colt but no one is flocking to union states to set up facilities.

[smokeywolf]

I think you're absolutely right P & P. By and large, most companies will avoid setting up shop where there is a stronger possibility that they might have to pay something that approaches a fair day's wage for a fair day's work. Also, wisely, most companies will avoid setting up shop in a Democrat controlled State; taxes are always higher.

[Petrol & Powder]

I'm glad you agree that the function of a business is to make money. I'm also glad you agree that labor costs and taxes are expenses that interfere with the goal of making money.

[Cmm_3940]

I think you're absolutely right P & P. By and large, most companies will avoid setting up shop where there is a stronger possibility that they might have to pay something that approaches a fair day's wage for a fair day's work. Also, wisely, most companies will avoid setting up shop in a Democrat controlled State; taxes are always higher.

Careful there... Who decides what is fair? The person getting paid? The person cutting the checks? Neither side is exactly unbiased.

I don't think we really like what the unbiased free market has to say about it either, although 20 bajillion Chinese are learning to think it's pretty cool...

[MBTcustom]

I don't know about Union issues, or loans etc etc etc. I do know that I have talked to the top man at the Colt manufacturing company (took a few weeks to work my way up the chain). After talking to, and being handed off and/or ignored by about six employees of that establishment, I came to the conclusion that the Colt I grew up knowing and loving was entirely taken over by a bunch of money grubbing schmucks that could care less what they make or what the legendary raring pony used to stand for. Bureaucrats the lot of them. They destroyed the image I had of Colt firearms, and they worked aweful darn hard at it.

To date, the gentlman I talked to who assured me that he had no boss over him at the Colt company, was the recipient of the harshest tongue lashing I have ever personally administered to another human being.
Colt died a long time ago, and has been peddling junk assembled from parts bought from the lowest bidder for years. Its high time the owners started stampin "Heinz 57" on the side of their guns and quit sullying the Colt name. Let it die with some semblance of honor instead of dragging it to its knees in total disgrace.
The current owners are just using the name as a cash cow, and I say good bye and good riddance.

[wills]

I don't know about Union issues, or loans etc etc etc. I do know that I have talked to the top man at the Colt manufacturing company (took a few weeks to work my way up the chain). After talking to, and being handed off and/or ignored by about six employees of that establishment, I came to the conclusion that the Colt I grew up knowing and loving was entirely taken over by a bunch of money grubbing schmucks that could care less what they make or what the legendary raring pony used to stand for. Bureaucrats the lot of them. They destroyed the image I had of Colt firearms, and they worked aweful darn hard at it.


The current owners are just using the name as a cash cow, and I say good bye and good riddance.

Does anyone remember Winchester back in '64? Money grubbers took over from gunmakers.

[MtGun44]

All the folks working in BMW, Mercedes, Nissan, Honda (many) factories
are getting a good wage for good pay and have many times rejected the
union parasite thugs asking to "represent them".

Companies will pay what they have to pay to attract good employees, and
not more.

Colt mgmt. is probably pretty clueless but being saddled with the huge
costs of union workers, and lowered productivity of stupid union rules
is crippling. If they can drop the union and move to a right-to-work state,
they have a CHANCE, if the mgmt. can figure out it's butt from 3rd base,
which is questionable.

[DCP]

"

McDonalds makes millions of dollars every year. The 5 time convicted felon with an 8th grade education that comes to work stoned every day doesn't get $75/hour to flip hamburgers just because the corporation makes a lot money. The profits of the corporation are spent in accordance with the wishes of the share holders not the registered sex offender with the spatula in his hand.

http://castboolits.gunloads.com/showthread.php?133082-Discussions-about-specific-Professions

I will add, these area's are open because it has been our practice to allow civil discussion only.
If folks cannot maintain the standards laid out in the member agreement their privileges to post here can and will be removed and further actions to remove them from the board can and will be on the table.
Civil discussion is hard, I know being human myself, but it can be done and must be the standard.

Discussion to limit these threads to gun politics only has been brought up and may be implemented in the future if the current streams continue. If you value the ability to share your thoughts about things, think before you post and look carefully for the value within that post.