Colt going-ons...Co is changing

**30 cal slut** · 02-12-18, 07:43

Originally Posted by Iraqgunz

Colt already gets most of their parts from outside sources (vendors).

It's accelerating, it seems.

Poor Colt. It's been suffering from a myriad of problems.

Before it filed its last Ch11 bankruptcy, Colt was owned by Sciens Capital Management and Blackstone, the latter being a NYC-based private equity/investment bank.

Blackstone is antigun. It has a clause in its social responsibility charter that discourages the sale of arms to civilians.

Secondly, there were two Colt entities. Colt Defense LLC and Colt's manufacturing. Colt Defense made M4 rifles for military and law enforcement customers.

Colt's Manufacturing made handguns (1911's) and owned the Colt trademark. The also sold rifles made by Colt Defense to the "law enforcement market" with a wink wink nod nod for commercial sales. To assuage Blackstone's conscience.

Officially, Colt marketed its M4 as the "law enforcement" LE6920. IIRC, Colt Defense had to pay a royalty to Colt's Manufacturing for each rifle sold to the winkwinknodnod "law enforcement" market.

The result was that Colt didn't sell as many rifles as it could have because 1) its owners discouarged it and 2) Colt's Manufacturing didn't have a heck of a lot of economic incentive to sell the rifles.

But the problems stem from more than bad timing.

-Colt Defense was too reliant on U.S. and foreign military contracts. We saw what happened when Colt Defense lost the big contract.

-Their costs are high (you saw that reflected in the price of rifles). The workforce is older (over 55 IIRC) and they are union (UAW IIRC). The union wages and benefits aren't too out of whack for the region ... but the real cost to Colt has been in restrictive nonsensical union work rules that hamper productivity for manufacturing new guns, as well as customer service for guns already sold. I've heard horror stories.

-They're probably getting raped on rent. An affiliate of one of their owners (Sciens) owns the factory building. In high-cost CT mind you.

-The product line is dated and not diversified. The 1911 design is over 100 years old. The M4's (AR15 back then) basic design was introduced in the 60's.

-Remember when the M4 TDP was accidentally released to the public by the government? Now there are over ~150 manufacturers of AR-style rifles and pistols, and ironically most customers aren't aware of or don't give a $hit about TDP compliance. AR's are a commodity.

-In today's gun market, handguns are the money makers, especially in the CCW category and polymer-framed, striker-fired (cheap and easy to produce). This is the big gap in the product line. Even if Colt comes out with one now (rumblings were that they were)... is it too late?

-1911's are costly to make. The market is also competitive, as you know. Revolvers like the python? Even more labor intensive. Ain't coming back. Not like the old ones.

-Colt is perennially pinched for cash. I think internal R&D has come to a standstill so they rely on outside sources for ideas.

I wish them nothing but the best but I am worried.

Interesting tidbit. Shortly before they filed their last Ch11 bankruptcy (June 15, 2015), they had an issue with M240's that were out of spec. The gov't didn't want to pay the money to buy the M240 TDP from FN, so the gov't tried to reverse engineer the design and tasked Colt with making machine guns from those specs.

It was a disaster and I heard they had to fire ~20 people over that snafu. I think that's what led them into the last Ch11 filing - they had to write down a $hit ton of inventory.

The company raised some money from 2 NYC hedge funds (who shall remain anonymous ... the firm I was working for at the time arranged the financing) ... that loan was collateralized by the Colt trademark.

Can you imagine that? Two NYC hedge funds briefly owning the freaking trademark.

**ramairthree** · 02-12-18, 10:22

Sad,
But what else could happen.

They shit on the civilian market for much of their history.

Many of us like building our own stuff, getting more boutique stuff, etc.

I only own two Colts.

A 1980ish used SP1 I bought.
And a ban era HBAR.

I bought a BM CAR 15 the year before the ban.
I picked up a VTaC S&W.
The other dozen ARs were all built.

Companies heavily reliant on .gov funding often end up not being all that competitive.
An expensive, highly taxed location with a high cost of living and unfriendly politics does not help things.

Pile on that the Amercian consumer 99 times out of a hundred will buy cheap.
How many American firearms manufacturers would be in business if 350$ Chinese ARs were available?

**1168** · 02-12-18, 11:09

Originally Posted by ramairthree

They shit on the civilian market for much of their history.

Companies heavily reliant on .gov funding often end up not being all that competitive.

Snipped for brevity

Everybody seems to forget this. For much of my life, Colt has been more like HK than BCM. I don’t know much about business, but in my uneducated eyes, Colt has always looked like a bad business selling a pretty good rifle, and would go under if we adopted new weapons.

**lowprone** · 02-12-18, 13:24

Would not want to go to that funeral.

**Doc Safari** · 02-12-18, 13:41

My only worry would be if they decide one day that making an inferior product is more profitable. Will the day come when 6920's are a rarity and the Expanse is their main offering?

**SteyrAUG** · 02-12-18, 15:36

Originally Posted by 1168

Snipped for brevity

Everybody seems to forget this. For much of my life, Colt has been more like HK than BCM. I don’t know much about business, but in my uneducated eyes, Colt has always looked like a bad business selling a pretty good rifle, and would go under if we adopted new weapons.

Yep, only unlike HK they can't cite US import laws as the source of the problem. We should remember Colt voluntarily began neutering their rifles (no bayo lugs, sporter models) even before the Clinton ban existed. One could even argue the contributed to the Clinton ban.

They thought they would ALWAYS be the big military supplier, but Springfield used to think that too.

**khc3** · 02-12-18, 16:07

Originally Posted by SteyrAUG

Yep, only unlike HK they can't cite US import laws as the source of the problem. We should remember Colt voluntarily began neutering their rifles (no bayo lugs, sporter models) even before the Clinton ban existed. One could even argue the contributed to the Clinton ban.

They thought they would ALWAYS be the big military supplier, but Springfield used to think that too.

Those choices weren't exactly "voluntary."

**mack7.62** · 02-12-18, 16:30

Colt started their "FU civilian trash" attitude with the SP1, big hole screwed uppers, sear blocks, oversized FCG pins, none of that was required by anyone. During those years I would rather run a Colt upper on a Bushie lower than put up with the Colt lower BS.