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Do You Know About the Freedom Group's Major Role in American Gunmaking?

"Quietly taking over the U.S. gun industry."

DPMS Panther 7.62NATO Sportical

The Freedom Group has become one of the most important gun-makers in the United States, but its "quiet takeover of the American gun industry" has spawned rumors and even conspiracy theories.

On Sunday, The New York Times wrote up a profile of the Freedom Group intended to whip-up gun control advocates more than educate the public about the firearms industry. Despite its political bent and subtle swipes at the 2nd Amendment, the piece did provide some historical background and supporting factual data regarding Freedom Group and its operations.

Freedom Group, which is privately held, currently owns many top-selling U.S. gun brands — including the 195-year-old Remington Arms, as well as Bushmaster Firearms and DPMS.

A series of acquisitions have led Freedom Group to become most powerful force in the American commercial gun market, and the single biggest long gun manufacturer. About 20% of all long guns and 1/3 of all ammo in certain major chain stores such as Cabela's are estimated to be products of the Freedom Group.

By its own count, the Freedom Group sold 1.2 million long guns and 2.6 billion rounds of ammunition in the 12 months ended March 2010, the most recent year for which figures are publicly available, according to the Times.

This rapid expansion into the national and international firearms markets appears to be the result of a series of aggressive and strategic acquisitions, which started with buying out Bushmaster, and has since included purchasing the storied Remington brand as well as taking out:

"DPMS; Marlin Firearms, a classic maker that came with two niche shotgun brands, Harrington & Richardson and L. C. Smith; and Dakota Arms. The Freedom Group also bought S&K industries, which supplies wood and laminate for gun stocks, as well as the Advanced Armament Corporation, which makes silencers. It acquired Barnes Bullets, which makes copper-jacketed bullets popular with precision shooters and police departments."

Rumors that George Soros is behind the company and is trying to dismantle the 2nd Amendment are apparently quite false. It's not Soros behind the group, it's actually Cerberus, a major company which is run by CEO Stephen Feinberg. According to the Times, Feinberg's empire is vast on its own account, as his conglomerate rivals:

"some of the mightiest public companies in the land. Cerberus manages more than $20 billion in capital. Together, the companies it owns generate annual revenue of about $40 billion — more than either Amazon or Coca-Cola last year."

The entire U.S. gun market has sales of about $4 billion a year, but the N.R.A. estimates that about 70 million to 80 million Americans collectively own 300 million firearms. It's a market that isn't going away anytime soon, and could be poised to grow in the years ahead, despite the Times' insinuation that the gun market is already saturated.

In fact, not only is the U.S. firearms market in a position to expand (some 220 million Americans don't own guns yet), but Freedom Group has been able to capitalize on the global market for firearms. In recent years this has included the sale of weapons to governments including:

"Afghanistan, Thailand, Mexico and Malaysia, among others, and [it] obtained new business from the United States Army, including a contract worth up to $28.2 million, to upgrade the M24 sniper weapon system."

Many analysts think the next frontier for Freedom Gropup seems to be concealed carry handguns. Freedom Group's Remington corporation has put out a model 1911R handgun to enter the pistol market.

Whether Freedom Group makes an effort to strengthen its position in the concealed-carry market or not, the company appears to be weathering tough times reasonably well.

Despite a difficult economic climate in 2010, gun sales at the Freedom Group were up 5.6 percent during the first nine months of this year, according to the company’s most recent earnings report, though it suffered a loss of about $6 million for the same period.

For more  details on the acquisition of Bushmaster, and Freedom Group growth initiatives , you can read the full NY Times profile here (editor's note: beware of imprecise language such as "military-style" weapons and anti-gun biases).

The Times' account of Freedom Group has raised the ire of gun bloggers, including Nick Leghorn of The Truth About Guns, who wrote of the piece above that:

"The Times views the firearms industry as some sort of cancer. And substitutes stats and quotes for genuine insight. Still, it could have been worse. And no doubt will be, again, soon. Good thing this article was published on Sunday, when the Times’ readership is at its peak."

The TTAG post also took umbrage with the Times mention of the Bushmaster company with the weapon used by the D.C. Sniper in 2003. This New York Times non-sequitur was the most egregiously partisan incident in a piece that held many.

Apart form the political biases, the Times profile of Freedom Group doesn't tackle  other obvious questions raised. For one, what would be a successful strategy for Freedom Group going forward?

Some gun bloggers have suggested that Freedom Group so far is just a roll-up of the fractured American gun manufacturing industry,  without any new direction to it. A better approach to improve sales could involve marketing to younger shooters, for example. Others have noted that buying up gun and ammunition makers during a Democrat presidency could just be attributed to good business sense, and may mean that the largest gun manufacturer in the U.S. in not ideologically driven in any meaningful way.

In any event, the long-term impact of the consolidation of the gun industry into one high-powered conglomerate has yet to be seen. In the mean time, gun enthusiasts will closely watch the craftsmanship and quality of the weapons coming off the Freedom Group line, and competitors like Colt Manufacturing will surely have to sit up and take notice.

One last thing…
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