Wall Street Journal
19 January 2000
Swiss Gun Maker SIG Plans to Sell Handgun Unit, Leaving U.S. Market
By Paul M. Barrett
LAS VEGAS-
Another well-known firearms manufacturer said it hopes to leave the U.S.
handgun market.
Switzerland's SIG Swiss Industrial Co. Holding Ltd. said at the industry's
annual trade show here that as part of a larger restructuring, it will seek
to sell its firearms businesses in Europe and the U.S.
Asked if the costs and risks related to pending municipal litigation against
the gun industry in the U.S. played a role in the decision to exit from the
American firearms market, SIG executive Dieter Strich said "a lot of factors"
were considered. SIG's American unit has been named as a defendant in some of
the municipal lawsuits.
Gun executives at the trade show said if the Swiss company can find a buyer,
it would probably be another firearms company and the sale would add momentum
to the consolidation of the U.S. handgun market. SIG, which says it has an
11% share of the U.S. commercial pistol market, declined to discuss potential
buyers.
In a separate development, gun manufacturer H&R 1871 Inc. said it would cease
to produce handguns because of the litigation-driven increases in the cost of
product-liability insurance and shipping. H&R, Gardner, Mass., had made a
relatively small number of handguns and is primarily known for shotguns and
rifles.
The SIG and H&R announcements follow a move in the fall by Colt's
Manufacturing Co., one of the oldest and best-known gun companies in the
world, to sharply reduce its production of handguns and transform itself
almost entirely into a maker of military small arms. The New York investor
group, headed by Donald Zilkha, that owns Colt's also is trying to finalize
the acquisition of Heckler & Koch GmbH, a German manufacturer of military,
law-enforcement and civilian weapons. If that deal comes through, the owners
of Colt's say, they plan to reduce or phase out Heckler & Koch's sales of
civilian pistols in the U.S.
In addition, during the past year, three small makers of inexpensive handguns
went out of business or sought bankruptcy-court protection in California, at
least partly because of the financial pressure of lawsuits filed against the
industry by 28 cities and counties. The suits seek to recover the public
costs of gun violence but are being used as leverage to try to force the
industry to add safety features to handguns and to exercise more
self-regulation in distribution and marketing.
The trade show under way here offers a snapshot of an industry both fired up
and under fire. Gun executives said 1999 produced excellent sales, although
most of their companies are closely held and don't release results. Beyond
the healthy overall economy and some buying based on fears of year-2000
computer havoc, handgun sales were driven by consumer concern that the
lawsuits and legislative gun control might limit supplies in the future,
industry executives said.
Robert Delfay, head of the industry's main trade group, the National Shooting
Sports Foundation, said in his "state of the industry" speech Monday that
despite strong sales, the industry faced "unprecedented" legal and political
threats. In response, he announced it has formed its own political action
committee to make contributions to candidates in this year' s elections.
Traditionally, that sort of political activity has been left to the National
Rifle Association, whose primary mission is representing gun owners.
The industry has agreed to meet here Friday for another round of preliminary
settlement talks with representatives of some of the municipalities that have
sued, as well as officials from the Clinton administration, which has
threatened to sue on behalf of violence-ridden public-housing authorities.
But in his speech, Mr. Delfay attacked the White House as "the most antigun
administration in history," and some executives raised the possibility that
the meeting would be canceled.
The SIG announcement that it would try to sell its American firearms unit is
notable because the company attracted attention just last month, when it said
that it would be the first manufacturer to market "personalized" handguns.
These weapons include an electronic locking system designed to allow only
authorized users to fire.
The municipalities have made development and marketing of personalized, or
"smart," guns one of their demands to settle the suits. SIG said it will go
ahead with "limited shipments" of its personalized pistols later this year.
------------------
"Quis custodiet ipsos custodes" RKBA!
19 January 2000
Swiss Gun Maker SIG Plans to Sell Handgun Unit, Leaving U.S. Market
By Paul M. Barrett
LAS VEGAS-
Another well-known firearms manufacturer said it hopes to leave the U.S.
handgun market.
Switzerland's SIG Swiss Industrial Co. Holding Ltd. said at the industry's
annual trade show here that as part of a larger restructuring, it will seek
to sell its firearms businesses in Europe and the U.S.
Asked if the costs and risks related to pending municipal litigation against
the gun industry in the U.S. played a role in the decision to exit from the
American firearms market, SIG executive Dieter Strich said "a lot of factors"
were considered. SIG's American unit has been named as a defendant in some of
the municipal lawsuits.
Gun executives at the trade show said if the Swiss company can find a buyer,
it would probably be another firearms company and the sale would add momentum
to the consolidation of the U.S. handgun market. SIG, which says it has an
11% share of the U.S. commercial pistol market, declined to discuss potential
buyers.
In a separate development, gun manufacturer H&R 1871 Inc. said it would cease
to produce handguns because of the litigation-driven increases in the cost of
product-liability insurance and shipping. H&R, Gardner, Mass., had made a
relatively small number of handguns and is primarily known for shotguns and
rifles.
The SIG and H&R announcements follow a move in the fall by Colt's
Manufacturing Co., one of the oldest and best-known gun companies in the
world, to sharply reduce its production of handguns and transform itself
almost entirely into a maker of military small arms. The New York investor
group, headed by Donald Zilkha, that owns Colt's also is trying to finalize
the acquisition of Heckler & Koch GmbH, a German manufacturer of military,
law-enforcement and civilian weapons. If that deal comes through, the owners
of Colt's say, they plan to reduce or phase out Heckler & Koch's sales of
civilian pistols in the U.S.
In addition, during the past year, three small makers of inexpensive handguns
went out of business or sought bankruptcy-court protection in California, at
least partly because of the financial pressure of lawsuits filed against the
industry by 28 cities and counties. The suits seek to recover the public
costs of gun violence but are being used as leverage to try to force the
industry to add safety features to handguns and to exercise more
self-regulation in distribution and marketing.
The trade show under way here offers a snapshot of an industry both fired up
and under fire. Gun executives said 1999 produced excellent sales, although
most of their companies are closely held and don't release results. Beyond
the healthy overall economy and some buying based on fears of year-2000
computer havoc, handgun sales were driven by consumer concern that the
lawsuits and legislative gun control might limit supplies in the future,
industry executives said.
Robert Delfay, head of the industry's main trade group, the National Shooting
Sports Foundation, said in his "state of the industry" speech Monday that
despite strong sales, the industry faced "unprecedented" legal and political
threats. In response, he announced it has formed its own political action
committee to make contributions to candidates in this year' s elections.
Traditionally, that sort of political activity has been left to the National
Rifle Association, whose primary mission is representing gun owners.
The industry has agreed to meet here Friday for another round of preliminary
settlement talks with representatives of some of the municipalities that have
sued, as well as officials from the Clinton administration, which has
threatened to sue on behalf of violence-ridden public-housing authorities.
But in his speech, Mr. Delfay attacked the White House as "the most antigun
administration in history," and some executives raised the possibility that
the meeting would be canceled.
The SIG announcement that it would try to sell its American firearms unit is
notable because the company attracted attention just last month, when it said
that it would be the first manufacturer to market "personalized" handguns.
These weapons include an electronic locking system designed to allow only
authorized users to fire.
The municipalities have made development and marketing of personalized, or
"smart," guns one of their demands to settle the suits. SIG said it will go
ahead with "limited shipments" of its personalized pistols later this year.
------------------
"Quis custodiet ipsos custodes" RKBA!