Christmas has come early in Ilion, New York, site of America’s oldest factory still making its original product—guns. George Kollitides, chairman and CEO of Remington Outdoor Company, Inc., (ROC), a group formerly known as Freedom Group, Inc., sent his employees a memo to let them know they’re buying out unhappy stockholders instead of selling ROC under political duress. No more making guns under the threat of an imminent sale, no more wondering what might happen any moment to this little town living around the beating brick heart of a gun factory since 1816.
Cerberus Capital Management, L.P., ROC’s owner, has been looking for a buyer for the firearm group since December 2012, after a sociopath used a semiautomatic rifle made by Bushmaster, one of ROC’s subsidiaries, to murder students and others at Sandy Hook Elementary in Newtown, Conn. The California State Teachers’ Retirement System, which then held 2.4 percent of Freedom Group, threatened Cerberus to sell its gun makers or they’d pull their funds.
ROC, whose many products have been in high demand, hasn’t found a buyer. To end the uncertainty, a group of investors, including Kollitides, decided to buy out the discontented investors. The memo from Kollitides said, “The $175 million loan proceeds will be used to repurchase $150 million of shares from exiting investors, with the remaining $25 million in cash being placed on ROC’s balance sheet, which will be used to grow our business with capital equipment, facility and acquisition investments.”
Of course, this move does not mean ROC still can’t still be sold; it just makes the sale seem less likely.
Teddy Novin, ROC’s public affairs director, confirmed that the memo sent from Kollitides to employees is legit. Kollitides memo also explained that his investment group intends to follow the initial equity move with more transactions to grow and solidify the ROC.
ROC is a diverse company with facilities spread across the U.S., including an ammunition manufacturer in Arkansas—a facility ROC is currently investing $32 million in—and many other facilities. The plant in Ilion, however, has been a focal point for speculation and rumors because of its iconic history and meaning to America’s 100 million gun owners. In the past two years, as gun sales have continued to surge, the Remington Arms factory in Ilion has doubled its workforce from 700 employees to about 1,400 and ROC has invested $20 million in the factory.
The men and women making guns in America’s oldest gun factory in Ilion are members of United Mine Workers of America (UMWA) Local Union 717. They’re mostly blue collar. They wear jeans and work boots to the factory. Many of their fathers and mothers, grandfathers and grandmothers and generations more before them worked in this factory.
I visited this facility again in October 2013. Located near Utica in Upstate New York, the old brick factory is the beating heart of Ilion and nearby Mohawk.