Explanation of Remington Woes

[44 AMP]

My Father taught Hunter Safety for close to 40 years. I was involved with him in that for about 15 years. One of the IMPORTANT things he taught was to NEVER TRUST a mechanical safety.

Don't they teach that anymore?? Or do they still teach it, and almost no one listens??

Whether or not you consider a particular design of mechanism to be defective, or just less than the best possible design, NOTHING removes the responsibility of the person holding the gun when it discharges. NOTHING.

I won't pretend to understand the accounting games that are played in business today, Logic tells me that Remington shouldn't owe any debt for anything they didn't buy but it seems legal that they can, and do...

Over the last half century or so, Remington has famously, drastically misread the market demand a LOT of times. They have also produced a handful of truly excellent designs, along with a boatload of less successful ones.

Sad to see short term greed destroy a couple centuries of reputation for quality but that seems to be the way of the modern world. I hope Remington can survive and make a quality product and prosper, but I don't think its likely until/unless the people in charge focus on making good guns and ammo for a profit rather than just making a profit.

 

[MTT TL]

I won't pretend to understand the accounting games that are played in business today, Logic tells me that Remington shouldn't owe any debt for anything they didn't buy but it seems legal that they can, and do...

They did buy something. It is pretty simple really. The company take on debt and the money they get from the loan they give to the stockholders by purchasing their stock. Done right this can help the company by trading non tax deductible dividends paid to stockbrokers for interest payments made to the lending agency. This lowers their non-tax deductible expenses.

Done wrong the company has debt it can't pay.

Remington was performing poorly before it was bought out. Saddled with debt that prevented them from bringing new products to the market at the expiration of the AWB Remington was poorly positioned to enter a new and rapidly growing market. Cerebus then came along and bought them out. The debt continued to balloon with the building of new facilities, lawsuits and lack of sales until by 2017 it was nearly a billion dollars.

 

[thallub]

How Cerebus manipulated Remington and how Huntsville got took:

1. The new Huntsville plant cost Remington nothing.

2. Remington was not bought directly by Cerebus. Remington was bought by a holding company owned by Cerebus.

3. In 2010 the holding company borrowed 225 million in cash. That cash was used to buy back holding company stock. Most of the 225 million went to Cerebus.

4. In 2012 Cerebus had Remington borrow hundreds of millions. Remington used that money to buy the holding company's debt. That transferred the responsibility for payment to Remington.

5. When Remington could not meet interest payments the company went under.

6. Tax payers in Huntsville got took.

http://www.captainsjournal.com/2019/05/05/how-cerberus-drove-remington-out-of-business/