The Great Ammo Shortage of 2021 and Remington Ammunition
Mark Oliva, director of public affairs at NSSF, says that the 8.4 million new gun owners in 2020 created an “incredible influx” of demand. If each of those 8.4 million new gun owners bought just one box of 50 cartridges, Oliva notes, that would equate to 420 million extra cartridges to meet that new demand.
Right now, in April 2021, there is an estimated 10 – 11 million first time gun owners in the last year alone. It should surprise no one that the cost of producing ammunition has jumped. A quick look at gasoline and transportation costs as well as copper, steel, tin, zinc, and nickel prices make it a certainty that ammunition costs far more to produce today than a year ago. Prices must go up for that reason, even setting aside the 10 million new gun owners and their new consumer demand. Ammunition prices have to go up as incoming freight and distribution costs have skyrocketed, as well as the cost of raw materials. The cost of lumber has tripled, overall construction costs have risen spectacularly. Anyone that seeks to upgrade and expand a manufacturing plant is going to spend a lot more money today than what was foreseeable six months ago. If the ammunition shortage was so easily foreseeable, no one with a working brain would be running out of it, for everyone would have stocked up on ammunition long, long ago.
Remington Ammunition has never been a stand alone company, nor did Remington originally make ammunition. It was back in 1912 when the Union Metallic Cartridge Company of Bridgeport, Conn., which developed the first paper shotshells and first cartridges for automatic pistols, merged with Remington Arms. The company was renamed Remington U.M.C. at that time.
It was 1933 when Remington management offered a 60 percent controlling interest to E.I. DuPont de Nemours & Co. In 1934, Remington bought Peters Cartridge Company, which made ammunition at a factory in Kings Mill, Ohio.
In 1980: DuPont purchased the remaining shares of stock of Remington; company becoming a wholly-owned DuPont subsidiary. In 1993, DuPont sells the assets of Remington to RACI Acquisitions, a company organized by the New York investment firm of Clayton, Dubilier and Rice. The Remington Outdoor / Freedom Group conglomerate was formed by Cerberus, Remington Arms Co. Inc. had agreed to be acquired by private equity firm Cerberus Capital Management LP in 2007. Cerberus had already acquired Bushmaster in 2006. Cerberus bailed on the Freedom Group they had assembled in 2018.
Cerberus-owned military facilities provider IAP Worldwide Services in 2014 defaulted on its debt and creditors took over the business. The private equity powerhouse still owns DynCorp International that it bought in a $1.7 billion buyout — but it has been struggling.
In March, 2018, DynCorp, which provides aviation logistics for the US military, said it was laying off 229 workers after losing a $10 billion contract with the State Department’s International Narcotics and Law Enforcement Affairs unit.
As for Remington, the oldest gunmaker in the US, it was done in by lackluster sales, heavy debt tied to a 2007 leveraged buyout and lawsuits filed in the wake of the Sandy Hook school shooting: a Remington-made Bushmaster rifle was used in that Newtown, Conn., assault.
With the 2008 Chapter 11 filing, Remington handed the keys over to creditors, including Franklin Resources and JP Morgan Chase. These unexpected owners of the company found it impossible to attract a buyer. As a result, Remington was blown up into seven parcels and went to a bankruptcy-court managed auction.
Remington Ammunition never went bankrupt, for Remington Ammunition was not an independent company. Rather, it was the entire organization owned by Franklin, JP Morgan Chase, and other former creditors that went to auction. Vista got nothing for free, for Vista bid more for Remington Ammunition, the Remington brand, and the Remington trademarks than any other company in the world did.
Vista, an American company that it publicly held, is the parent of Federal, Bushnell, and several other brands. See https://vistaoutdoor.com/brands/. Vista does not currently manufacture firearms and they have no intention to in the future, having exited the firearms business with the sale of Savage Arms back to Savage in July of 2019. You'll note that Vista recently expanded their ammunition portfolio with the purchase of Hevi-Shot for $16 million in February, 2021. Vista recognized Remington Ammunition and the Remington brand as being far more valuable, paying $81.4 million at auction.
Remington Ammunition was hobbled by management in recent years, and employment had dipped to 400 people around the time of the auction disruption. Vista has now more than doubled that number, bringing back all the furloughed Remington Ammuntion staff and hiring more folks on top of that.
It seems that Remington Ammunition, Remington accessories, the Remington brand, and the Remington trademarks are in very experienced and capable hands at last.
