H & K financial troubles continue

[Adrenaline_6]

Fact.

But Belgian guns and German guns have the same issues to deal with when it comes to getting into the US, and are the answer to the question 'is it possible for Europe to sell the guns we want in the us?'. Yes, it is possible, says Belgium (and Switzerland, and lots of other places).

As to the question about export, we can look to the other guns HK exports to other countries to see what's possible (or even to the US). If they can make a 416 (call it MR556 if you will), and a 417, why not a G36? Call it a 243, call it 'Bob' for all I care. Send a mold to the US for the receiver, and have Wilcox or DD or whoever make a barrel.

Answer: For the MR556, they put in the effort to sell them here (US made bits, required US manufacture, etc). For the other guns, including later generations for the 416, they have chosen not to. Chosen. That's the operative word.

The difference though is the MR556 is not really a 416 and the 243 is not really a G36. HK has even been blasted for that. Why they chose not to sell the 243, I couldn't tell you and don't care to research the real reason why either. But to make a different variant of their military weapons is expensive to do and the juice has to be worth the squeeze. Obviously HK thinks it isn't. They could be wrong, who knows.

[Adrenaline_6]

Seems this is unfounded gossip. Got this from the HK forum. All credit to HK forum user "straightgrain" for getting this direct response from HK:

Recently received from HK:


Dear Valued Partner,

I find it disappointing, but necessary, that I need to clear up the disinformation circulating in the media following our latest financial report. This narrative is the result of a chain reaction of doom and gloom started by a German news source that has been historically antagonistic toward HK. That one article triggered an initial US report on The Firearm Blog that lacked critical context. From there it just got worse, with each subsequent article sounding more bleak than the last. This culminated in a report from the Military Times that only served to remind us that, while HK is still very much alive, American journalism continues to die a slow and painful death.

Rather than argue about the conclusions of the authors, I would like to simply point out some facts:

Of the three US news stories, none contacted HK for comment for their reports.
The first two US articles (The Firearm Blog, The Outdoor Wire) used a foreign news story as their primary source without questioning their accuracy or motivation.
A third US article (Military Times) used the first two US articles s its primary sources, creating a sensationalized third- or fourth-hand account.
Of the three US articles, none referenced a single number from the HK financial report.


To be clear, HK still remains a leveraged company. This places a burden on the business that non-leveraged companies don’t have. However, we have met and continue to meet all covenants associated with this debt. The full story is easy to find in the financial data the news media neglected to report. Here are some key examples:

From 2014 to the end of 2018, HK’s debt was reduced from 290 million Euros to 235 million and the interest rate on that debt was reduced substantially.
Over the course of 2018 and thus far in 2019, HK reported positive EBITDA in every quarter.
Over that same period, HK’s cash position doubled.
Claims of “diminishing sales” and “difficulty securing new large-scale contracts” are patently false. In fact, the last six quarters for HK have shown record order-intake, including a substantial backlog of large-scale contracts.
HK invested a combined 8.3 million Euros toward increased capacity and efficiency in both the Obendorf, Germany and Columbus, GA facilities in 2018.


The full financial report and other key data can be found at https://www.heckler-koch.com/en/ir/annual-accounts.html and https://www.heckler-koch.com/en/ir/key-figures.html.

At HK, we are committed to supplying and servicing our US partners for many profitable years to come. I can assure you that we are in it for the long haul.

Sincerely,
Michael Holley
CSO/COO - Heckler & Koch - US

[kerplode]

Seems this is unfounded gossip. Got this from the HK forum. All credit to HK forum user "straightgrain" for getting this direct response from HK:

Recently received from HK:

We're not going out of business, but we still hate you.

Oh good! Maybe now I can get me some LEM conversion kits...

[elephant]

In Germany as well as a few European countries, its really hard to right size a company. They have laws regulating how you let employees go, and in short, firing or letting go an employee is harder than it sounds. Here in the US, if you having bad economic times, and you need to lay off some employees, you just simply lay them off. Not in Europe.

I think HK and HKUSA need to separate and let HKUSA continue manufacturing products for the US market along with additional civilian products like the G36c, HP7 and MP5 and let HK in Germany restructure. Meanwhile HKUSA can pay a royalty or a license fee for each product sold.

[BoringGuy45]

In Germany as well as a few European countries, its really hard to right size a company. They have laws regulating how you let employees go, and in short, firing or letting go an employee is harder than it sounds. Here in the US, if you having bad economic times, and you need to lay off some employees, you just simply lay them off. Not in Europe.

I think HK and HKUSA need to separate and let HKUSA continue manufacturing products for the US market along with additional civilian products like the G36c, HP7 and MP5 and let HK in Germany restructure. Meanwhile HKUSA can pay a royalty or a license fee for each product sold.

I agree, though I fear it would go the way of Sig. A big name like HKUSA...every investor and publicly traded firearm company will want it. Likely, Sig or Cerberus would end up buying it. To save money, the quality control department will be pretty much abolished, the machined internal parts will all be switched out to MIM parts imported from China and Brazil, heat treating of metal will be a thing of the past, but they'll keep people on the hook by their name and by releasing all their stuff in every color of the rainbow.

[elephant]

. To save money, the quality control department will be pretty much abolished, the machined internal parts will all be switched out to MIM parts imported from China and Brazil, heat treating of metal will be a thing of the past, but they'll keep people on the hook by their name and by releasing all their stuff in every color of the rainbow.

Well, that is the American way! It sucks but no one wants to pay the price for HK without trying to save a few dollars for greater ROI.

[sundance435]

In Germany as well as a few European countries, its really hard to right size a company. They have laws regulating how you let employees go, and in short, firing or letting go an employee is harder than it sounds. Here in the US, if you having bad economic times, and you need to lay off some employees, you just simply lay them off. Not in Europe.

I think HK and HKUSA need to separate and let HKUSA continue manufacturing products for the US market along with additional civilian products like the G36c, HP7 and MP5 and let HK in Germany restructure. Meanwhile HKUSA can pay a royalty or a license fee for each product sold.

Very true. The German economy is a Rubik's cube. The Mittelstand, which are large-small and medium-sized companies have all of the clout. There's almost zero economic incentive for them to grow in size because of the various regulations that would then apply, as well as the corresponding increase in costs. There's also very little upward mobility in the German private sector, at least within Germany, which is why you'll see a lot of Germans working for the American/foreign subsidiaries of German conglomerates. A company like HK will always be about the size it is now, regardless of whether they make firearms or Ebola vaccine.