Colt Firearms Files for Chapter 11 Bankruptcy Protection

From: breitbart.com,  by AWR Hawkins,  on June 15, 2015,  see the article HERE.

Colt Firearms Company sign

On Sunday, Colt Defense LLC announced it is filing for Chapter 11 Bankruptcy protection and looking to sell operations, or portions of operations, in the U.S. and Canada to pay off $355 million in debts.

In November 2014 Breitbart News reported that Colt was then in trouble and could face default by year’s end. They made it through the year, but would not give any comment on their finances when approached by Breitbart News at the 2015 SHOT Show in Las Vegas.

According to The Wall Street Journal, Colt barely survived last year by “[borrowing] $70 million from Morgan Stanley… to pay interest on its bonds, and in February it warned it might not have enough cash to make an interest payment by a June 15, 2015, deadline.”

Colt has faced opposition from its bond holders who do not want to agree to any deals that “slash the amount of money” the gun maker owes them.

Colt began making firearms in the 19th century and boasts two of the most iconic guns of American history: the Colt revolver and the Colt 1911. The company also made a strong name for itself with the M4 — a fully automatic military rifle on the AR-15 platform.

In 2013, Colt lost the contract to supply the Army with the M4.

Those looking from the outside in have speculated that Colt depended on its military contracts and failed to keep up with the times regarding the civilian market.

For example, CNN Money notes that the burgeoning popularity of concealed carry has made “compact and light handguns” the craze in America. But Colt has not exactly been the tip of the spear for compact and light. Instead, they have watched concealed carriers move to Glock and other manufacturers.

As a result, Colt’s de jure loss of military contracts was compounded by a de facto loss of civilian interest.

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I think that I qualify as an avid gun nut, but I’ve never owned a Colt of any flavor. Through the years, I’ve owned one or more of all of the household names in firearms, but never a Colt. That wasn’t by design, I had nothing against Colt, in fact they had an esteemed name in the history of American firearms. As it turned out, they just never had anything that fit my needs in the way of platform and/or price range. I guess that’s evidence that they didn’t appreciate the emerging markets for reasonably priced home defense, sporting, or concealed carry guns – and apparently, it bit them in the ass.

I would hate to see the iconic Colt name disappear from the scene and in fact, I’ve been considering one of the new smaller compact 9mm as another choice for everyday carry, but they just don’t have a dog in the hunt. The fault is with their management. They apparently thought that their military products would live forever and when they lost the M4 Army contract, they didn’t have a plan B. I hope that they can reorganize or sell to someone who will keep the Colt brand alive, there’s so much history associated with it, I’d hate to see it disappear.

Garnet92

 

 

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14 Responses to Colt Firearms Files for Chapter 11 Bankruptcy Protection

  1. Uriel says:

    I can see Many more going this way as well. If O has his way his buddies will then buy for pennies and there goes All US rights

    • Uriel says:

      And. More to the point if O has his way firearms manufactures of ALL citizens preferred brands will be destroyed as well.

      • Garnet92 says:

        That’s true that Obammy would like to see all U.S. handgun manufacturers go out of business, but he has been responsible for increased sales since he’s been in office.

  2. CW says:

    Business graveyards are full of companies whose managers refused to see the writing on the wall and keep up with the times. I guess anyone who owns a Colt better take good care of it. They probably just went up in value.

    • Garnet92 says:

      That’s right CW. My company almost fell victim to the status quo. Particularly in the world of computers and software, if you aren’t invested heavily in R&D, you’re dying. We were deeply into mainframes and almost missed the minicomputer age (which later became the PC age, laptops, etc.). That’s apparently something like what happened at Colt. They didn’t recognize where the market was headed and it passed them by.

  3. Kathy says:

    I hate to see them go away too, but Colt relied too heavily on the government, and like many other industries and individuals, that’s a bad business plan.

    They have only themselves to blame, especially when you consider that O’s been the best gun salesman the US has seen in many years.

    • Garnet92 says:

      You’re right Kathy. Someone at Colt thought that their marriage would last forever and missed it when the government began seeing someone else. Apparently the divorce was a surprise and now Colt will pay the price for taking the government for granted. It is sad that they almost completely missed the rush on guns caused by Odumbass.

  4. Crawfish says:

    So who gets the new military contracts? If the M-16/M-4 is being replaced, that will require a completely new supply of magazines, other accessories, and replacement parts. That will necessarily be a HUGE contract. What Democrat-owned company gets the deal?
    Follow the money.

    • Garnet92 says:

      FN Manufacturing (FNH USA) won the contract over Remington and Colt in 2013. FN is a Belgium company so I don’t know their political leanings.

  5. Buck says:

    Hey, Colt! I have an idea. Instead of filing bankruptcy proceedings how about this:
    Take your 104 year old design (Colt 1911) and your 132 year old design (Colt 1873 SA revolver) and lower the price on them. There are not enough moving parts in either gun to require the lofty price tag you command just because they are the most popular weapons.
    C’mon. The 1911 has a tad more than the 5 of the 1873 so why the exorbitant price tag?

    • Garnet92 says:

      Good idea Buck – you’d think that with all development costs and tooling costs already absorbed (long ago), they could be profitable even at a much reduced retail price. Why didn’t they think of that?

  6. Hardnox says:

    Colt has stayed in CT for far too long. They should have f left their respective anti-business state like Beretta did in MD. Add the union labor to the mix and lower sales volume and the results are predictable.

    Before my boating accident I had several Colt firearms that were first rate. Too expensive in the grand scheme of things. Other manufacturers like Sig Sauer are better with better machining etc.

    • Garnet92 says:

      Right ‘Nox, FN Manufacturing, the company that won the M4 contract has a plant in Columbia, South Carolina. That probably had a lot to do with a winning bid. A SC plant would have a much lower cost of operations than one in Connecticut. Yeah, it’s really a shame that so many fine firearms are lost to those pesky boating incidents.

  7. vonmesser says:

    My suggestions. Bring back the “original” AR-15. I bought mine in 1967 for $125.00 new in box. Bet you could rerun the original (without that stupid ram-assist) for $500 or so. Maybe also bring back some of your “old” stuff, like the 1858 Navy revolver (mine still shoots) and make a few bucks on stuff like that.