Colt Bankruptcy

[photocosmo]

I suppose that this is old news to the "cognoscenti" but I have to admit that I was shocked to read that this iconic "legacy" company is serious trouble.

(Not so shocked to discover that it may be due to hedge-fund created financial malfeasance however!)

I know that this is probably the wrong forum but I almost feel like we should take up a collection or something!

[federali]

While there could certainly be some financial mis-dealings involved with one company swallowing another, Colt totally missed the boat regarding the wholesale police transition to autoloaders starting in the 70s. They had nothing to compete with and what they had was garbage.

That they made a well respected Model 1911 is not in dispute but you can't sell enough 1911s to support a major gun manufacturer, considering how many others were also offering 1911s.

The Python was probably one of the finest 357s every offered but they were priced through the roof.

Things were nice and cozy when Colt and S&W pretty much had the mainstream handgun market to themselves. Then, Ruger muscled in and bit off a substantial piece of the market, then Glock, Beretta, SIG, Kahr, Springfield, Kimber, etc. Colt's piece of the pie got ever smaller.

[sheepdawg]

They relied too much on a government contract and we all know what happens when you rely on the government.

[Bat Guano]

It's one of life's mysteries as to what has propped them up for all the years of mismanagement.

[LostintheOzone]

Practically everything of value, including the trademark has been signed over to secure loans. They are so deep in debt that they can't continue without bankruptcy. It's possible that they may rise from the ashes but current bond holders are going to lose everything when the company's with secured loans take all the tangible assets.

Here's the latest;

Gun maker Colt heads toward bankruptcy showdown with bondholders By Reuters

Looks like tomorrow may be the last dance with the bond holders.

[photocosmo]

Originally Posted by federali

... Colt totally missed the boat regarding the wholesale police transition to autoloaders starting in the 70's.

That they made a well respected Model 1911 is not in dispute...

The Python was probably one of the finest 357s ever...

Yup, I guess so.
And I think they had an AR-15 that was (correct me if I'm wrong) "competitive". I'm glad that I "lucked into" a cool Python snubbie with stag grips and a dedicated holster and I'm as nice as can be to my dad just in case he wants someone respectful to care for his 4" version and that swell Colt Model 70 (or that matched pair of tastefully engraved Browning "Super-Imposed" 12 and 16 gauge shotguns!)

Hi Dad!
Love,
coz'

[Coldshooter]

I have not heard very many complaints about quality that is usually one of the first things to go when a company is in trouble. I have seen some attractive prices on Colt AR but there is so much competition it becomes hard to decide.

[pharmer]

I bought a 6920 for a little over $800 about a month ago. Same quality as one I bought for $1150 in 2004 when the AWB sunset, and probably better than the MagPul version I bought from the Walmart right after the Newtown cluster for $1250. Colt ain't getting any more of my money unless they generate a "corporate popping sound." Joe

[Comrad]

No wonder they are bankrupt, look at the condition of their factory in Paterson,NJ.

[James&theGiant1911]

Yeah, well consider the source Reuters

they could not be happier if Colt did go bankrupt.

[DWalt]

No idea of the various factors involved here, but Colt might well be much better off reorganizing under Chapter 11 bankruptcy. That's the whole idea - it wipes out its liabilities and allows restructuring under court approval. Most of the creditors will suck wind.

[Big Cholla]

I was in Hartford, CT in 1985 on business. I had an afternoon free and went to the Colt Factory Complex. The only part open in the 'old' factory was the Custom Shop. I stopped in and got to visiting with a maintenance supervisor. I asked if I could look into the old now unused building wings. I told the man that I was a Construction Engineer and at that time an amateur gunsmith and would really like to look at the construction of those buildings from the inside. He pulled a ring of keys out and took one off and told me that this key would open the personnel door on the end of each wing. I was to 'be careful' and to return the key to the receptionist in the Custom Shop. I spent 3 hours exploring those old production floors. I could tell where the metal working machines had been placed by the position of the overhead belt and pulley power transmission system. The smell of a machine shop was still very evident. I had such a sense of nostalgia and awe for the activities that went on there in past times. When I returned the key the supervisor was there. He asked if I wanted to come back the next day and tour the new factory on the hill where the AR-15s and the M-16s were being made. I told him that I would skip that after the impact of seeing the historic factory had upon me. Instead I went to the Colt Museum of Firearms and again lucked out and got a personal tour by the Assistant Chief Curator. It was fascinating and very moving to have the history of Colt laid out right in front of me.

There are many business case studies on the aging of dominate corporations. The rise and fall of Colt will be studied for years in Graduate Business Schools.

[chief38]

Probably the best thing that could happen to them is that they do go Bankrupt, move down to Florida or other gun friendly right to work State (as they had planned to a year ago) have investors start up a new Colt Co. with no debt, no UAW Union, and no financial anchors to put them behind the 8 Ball. The shape they are in now reminds me of our Country's debt, - unsustainable! They should keep an office in Hartford CT so they can legally mark their guns Colt - Hartford CT USA as other Company's do now. It's really a shame too because the small amount of guns that do dribble out of their Plant now are about the best quality that I've seen in decades. In a best case scenario they should take some of their best employees to start up the new Company and train others who are new. Yes it will take time and money but with the RIGHT person in charge they can make great products in a profitable manner. They certainly seem to have a demand for their 1911's, .380 Mustangs, SAA's, and other guns that are not currently made such as the Python, Dick Special, etc. Their trouble is they are cash poor and the interest payments alone are way too high for them to reinvest any cash from sales back into their product line.

Colt has had the worst leadership for many many years and they only seemed to care about Military contracts. Now that they don't have any large ones anymore, civilian sales are what they must rely on. They DESPERATELY NEED a "GUN GUY" at the helm and NOT accountants, pencil pushers or Generals. Seems like the ONLY decisions they have made over the last 40 years have been bad ones!

[Faulkner]

Originally Posted by chief38

Colt has had the worst leadership for many many years and they only seemed to care about Military contracts. Now that they don't have any large ones anymore, civilian sales are what they must rely on. They DESPERATELY NEED a "GUN GUY" at the helm and NOT accountants, pencil pushers or Generals. Seems like the ONLY decisions they have made over the last 40 years have been bad ones!

As with any business they need leadership with business and market savy who is pationate about the industry. A "gun guy" alone can't do it, neither can a "business guy" with no knowledge of the specific industry.

[Donn]

Originally Posted by sheepdawg

They relied too much on a government contract and we all know what happens when you rely on the government.

Wasn't just that, quality control started to slide. When FN got the contract, the down slide started in earnest. Regardless of reputation, the 1911 and AR market is flooded these days, as is the pocket pistol market, (Mustang 380). Their only revolver is the Single-Action Army, a very small piece of the consumer pie and very expensive. The Cowboy Action community uses either Ruger Vaqueros or off-shore replicas. I love my Colts, but I fear the writing's on the wall. In all likelihood, they'll get bought out, and be Colt in name only.

[rwsmith]

Government contracts....now THAT'S where the big money is.

[DWalt]

S&W recovered from being a brain-dead pariah while under Tompkins PLC to achieve much of its former status. Colt could easily do the same by development and execution of an intelligent reorganization plan under the protection of the bankruptcy court. It would take awhile.

[olcop]

Originally Posted by federali

While there could certainly be some financial mis-dealings involved with one company swallowing another, Colt totally missed the boat regarding the wholesale police transition to autoloaders starting in the 70s. They had nothing to compete with and what they had was garbage.

That they made a well respected Model 1911 is not in dispute but you can't sell enough 1911s to support a major gun manufacturer, considering how many others were also offering 1911s.

The Python was probably one of the finest 357s every offered but they were priced through the roof.

Things were nice and cozy when Colt and S&W pretty much had the mainstream handgun market to themselves. Then, Ruger muscled in and bit off a substantial piece of the market, then Glock, Beretta, SIG, Kahr, Springfield, Kimber, etc. Colt's piece of the pie got ever smaller.

I agree, yet their management just sat there and watch it happen---
You can only live on your reputation for so long, and they failed to keep up with the times-----seen it happen hundreds of times.
You are either going forward or backward, no such thing as sitting still.
They went from being the world's standard to being a joke.
olcop

[357-RevolverGuy]

Originally Posted by chief38

The shape they are in now reminds me of our Country's debt, - unsustainable!

So true. Great analogy there.

[M29since14]

I'm not much of a businessman but I do know one thing: you have to be prepared to "earn your reputation every day" and when called to do so, to do it - preferably with class and style. In my lifetime, I have never seen evidence of Colt taking that approach. S&W at least tries to do that and a lot of people here don't like what they come up with in the process. That's OK, but I would bet if S&W stood around taking our advice they'd end up in the same boat with Colt. JMHO.

GA1911... ONLY $500/hour?

[Onomea]

Originally Posted by federali

.... The Python was probably one of the finest 357s every offered but they were priced through the roof...

Hey, if you think they were priced through the roof -- and I agree with you -- check out their prices now!

[Bell Charter Oak Holsters]

The Colt Company has failed miserably through absent leadership, successive incompetent management and reliance upon government contracts. This downward spiral has been a very long time event, it's not something new or recent news (except if your under 60, perhaps) or not a Colt enthusiast. I collected and have owned all of their double action revolvers produced from about the early 1900's to the 1970's and most all of their autos. I began to lose interest when their quality control became remarkably poor in the late 70's. I think that was the beginning of their end really. It is truly lamentable that such an American icon has been abused like an old horse, no longer capable of work, not worthy of food nor shelter. Ironically, the "Rampant Stallion" is their trademark.

Colt as an enterprise helped win many of our wars, save American lives, secure our freedom, defeat our enemies, no small contribution to America, indeed. Along with talented inventors, designers and dedicated craftsmen pioneered innovative improvements in the firearms industry.

My guess is that it has now been around 35 years the company has been in trouble, and I am astounded that they remain a pawn in the chess board of finance. There is only one explanation....the name COLT. Believe it!

Cheers;
Lefty

[rwsmith]

They made so much money from government contracts, that their momentum has carried them this far. If they re-organize they can move down here and start making and selling guns to consumers.

[DWalt]

Many may not be aware that Colt was in deep financial trouble even during WWII. Management was also poor back then, and much of their production equipment was obsolete and inefficient. They were not making that much profit on government contracts, as their production costs were high, and there was much doubt if they would survive the postwar period. But they did, due to strong consumer demand after the war. And somewhat later, the M16 contracts.

[venomballistics]

Originally Posted by Bat Guano

It's one of life's mysteries as to what has propped them up for all the years of mismanagement.

Yep. It's not like they have put out much in the way of new products.
With the proliferation of CCW, it was a whole new market segment worth fighting for.
Springfield Arms offered the XDs while Colt started reproduction of the SAA. Brilliant.

come to think of it, their current products have two toxic distinctions.
Neither the 1911, nor the AR platform rifle were designed internally.
Eugene Stoner was with Fairchild aerospace and we all know Browning was in far too much demand to work for anyone, but rather worked with companies.
And both of these engineers are dead.

Next issue, they do not have an exclusive on any product they make.

[DHart]

Colt has languished while the industry exploded all around them. Piss poor management at the heart of it.

As mentioned above, the best we can hope for from this iconic brand is a phoenix resurrection in another state, free of the union parasite. And hopefully, the new management will focus on quality to associate with this very-cherished, traditional, American brand.

[HOUSTON RICK]

They must have bought some of their own guns....

[williamlayton]

Firearms are not a business that will make the money that a petrochemical business will produce----but---if run properly it can make a nice profit.
I will also concede that large government contracts are a good thing---be it local LE or US military.
Heck fire---the AK has made some money.
Blessings

[the ringo kid]

I think a simple approach should be----make a totaly revamped line selling all of their classics from all versions of their SSAs, to their GI models and making a Winchester-like lever-action....etc. I wouldnt mind Springfield-like rifles too.

[Whitwabit]

Originally Posted by williamlayton

Firearms are not a business that will make the money that a petrochemical business will produce----but---if run properly it can make a nice profit.
I will also concede that large government contracts are a good thing---be it local LE or US military.
Heck fire---the AK has made some money.
Blessings

They seem to have priced themselves out of business. Some very nice pistols but almost all are beyond my price tag compared to other makers . If one's product is so costly that it prohibits major sales you won't stay in business very long ..

It is sad they have been around so long ! And do make a fine product .

[cmort666]

Originally Posted by Onomea

Hey, if you think they were priced through the roof -- and I agree with you -- check out their prices now!

Pietta seems to be sending up trial balloons that they might make repro Pythons. I saw a picture on another forum yesterday.

I'd be happy with a repro Official Police or Police Positive.

[CCantu357]

Originally Posted by the ringo kid

I think a simple approach should be----make a totaly revamped line selling all of their classics from all versions of their SSAs, to their GI models and making a Winchester-like lever-action....etc. I wouldnt mind Springfield-like rifles too.

This makes the most sense. Go back to basics, as well as bring in the new. It seems to have worked for S&W the past 10-15 years now. The new polymer frame Mustang is a step in right direction. Maybe find a way to bring back the DS and Magnum Carry at a competitive price. Maybe the Lawman/Troopers as well. Their 1991s are great 1911s, but bring back the ORM M1991A1. I have one, its a great GI style Colt with just enough enhancements to make her perfect. Dare I say, even find a way to break into the LEO market with a striker-fired pistol.

[DWalt]

Armscorp in the Philippines was making a sort-of replica Detective Special, and maybe it still does. But it's fairly crude, at least in appearance. They were selling in the sub-$200 price range. At that price, I was considering buying one just to see what they were like, but I never did.

[James&theGiant1911]

Do not get me started on Colt and that ANVIII fiasco, yes Colt first said that they were going to make only a 1000 then they said 3000 but they ended up building over 7000 of them. That is not a limited firearm but a regular production model. I sold it and bought a Special Combat Government model and then sold that and bought a Gold Cup NM Trophy.

A limited gun is a limited gun, you do not whore it out and make many many thousands of them. I have 3rd gen tacticals and performance center models that are limited to 500-600 pieces. They are worth more and will hold their value more than the Colt. After seeing how they did this I knew right there that they were all about the sale and not about the value of the Colt brand.

Then they wonder why their brand has been going down and may soon be out of business. They need to sell the brand to a gun maker that knows what they are doing, and can bring it back to what it should be.

[the ringo kid]

Originally Posted by DWalt

Armscorp in the Philippines was making a sort-of replica Detective Special, and maybe it still does. But it's fairly crude, at least in appearance. They were selling in the sub-$200 price range. At that price, I was considering buying one just to see what they were like, but I never did.

A gun shop guy recently told me that Heritage Arms are NOT made in Florida like the box says, butin he Philppines. However, I have two Rough Riders--and they perform perfectly so, im satisfied.

[the ringo kid]

Originally Posted by CCantu357

This makes the most sense. Go back to basics, as well as bring in the new. It seems to have worked for S&W the past 10-15 years now. The new polymer frame Mustang is a step in right direction. Maybe find a way to bring back the DS and Magnum Carry at a competitive price. Maybe the Lawman/Troopers as well. Their 1991s are great 1911s, but bring back the ORM M1991A1. I have one, its a great GI style Colt with just enough enhancements to make her perfect. Dare I say, even find a way to break into the LEO market with a striker-fired pistol.

I wish they would and at a respectible price too. I cant afford or even if I could? I would not pay aprox $1,800 or some commemortive that SHOULD be priced at about $500.

[James&theGiant1911]

I am not putting your gun down, it is a colt and kind of a neat package but it is not a limited or special firearm as much as you want it to be. When they ended up in the 6 thousand range I was like it is time to go and sell mine and I would imagine you probably did not give retail for thing if I am a guessing. A limited gun is limited and holds it value while a run of the mill mass produced gun slides in value as the qualities increase. I would imagine that there is a surplus on GB right now for that very gun.

Probably numbered in the 6-7 thousand range maybe more. Not a rare gun, not a rare piece, can get them anywhere. Enjoy your pistol it is fun, I like my Colt GC NM trophy so they are fine firearms but your pistol is not going to appreciate and is not an investment piece.

If you bought it thinking it was a limited firearm in any manner than you would be wrong and fell for faux Colt marketing.

[LostintheOzone]

Do not get me started on Colt and that ANVIII fiasco, yes Colt first said that they were going to make only a 1000 then they said 3000 but they ended up building over 7000 of them. That is not a limited firearm but a regular production model. I sold it and bought a Special Combat Government model and then sold that and bought a Gold Cup NM Trophy.

A limited gun is a limited gun, you do not whore it out and make many many thousands of them. I have 3rd gen tacticals and performance center models that are limited to 500-600 pieces. They are worth more and will hold their value more than the Colt. After seeing how they did this I knew right there that they were all about the sale and not about the value of the Colt brand.

Then they wonder why their brand has been going down and may soon be out of business. They need to sell the brand to a gun maker that knows what they are doing, and can bring it back to what it should be.

I have to agree with this. This is just plain bad marketing. I don't buy repro's of anything for this reason. I understand why a person would buy one though. You get the look and a better gun, something you can shoot if you want. It's a connection to the past that can be experienced, not just imagined. The fact is just about anyone can produce a repro these days and people will buy them. Colt seems to think their repros are worth more because of the company that produced them. Well, it's still a repro just like all the rest and if you shoot it there really isn't a whole hell of lot difference no matter who made it.

Most repro's don't increase in value. The guns that they replicate do however, the only problem is, if you shoot them they lose value.

Colt just keeps cranking out those ANVIII's. They also said the guns built in 2011 and roll marked "100 years of service" would be exclusive to the guns produced in 2011. Well, guess what, they're back. I had one of those and I sold it because it wasn't a limited production as they claimed.

I have a Trophy also. Best bang for your buck hands down if you want a 1911 range gun.

[James&theGiant1911]

those are nice pistols, I think Colt will survive, sure but will they prosper?

doubt it.

improve their product reintroduce a Python then maybe.

The top of the line Special Combat Colts are not on par with house jobs from Wilson, Nighthawk and Novaks. No way no how. If you have ever shot any of those special pieces then hold a Special Combat in your hand you can tell the difference. Performance Center Smiths including the tactical hold their value more than the current 1911 Colts. Now the Pythons that is a different story but they have not made them in a while. For some reason their wheel guns are more collectable than their 1911s do not know why that is other than they were the original peacemaker?

and since they were large at the time Browning went to them with his 1911 design. IMO, the commander style 1911s are about the ultimate 45 as the best guns Browning ever designed, again IMO, is the Browning Hi Power and the Auto 5.

the 1911 would be a strong third or fourth though.

[Drm50]

I never was a Colt collector but I owned all the top of the line.
Gold Cups, Python, Diamond Back, Woodsman Match. I was aware of the UAW label on boxes in 60s & 70s. I think Colt was
the producer of Holley Carborators. Also I know that they had
a Industrial Scale Division at this time. Can some of this trouble
be pension liabilities? A series 70 1911 45 could be had for about
$100 in 1970 dollars back then.

[James&theGiant1911]

those are nice guns, here is my recent addition. Made by true 1911 craftsman, This is the type of work Colt should be doing.

I will have to send my GC NM to Nighthawk soon to get them to work the accuracy and reliability of it. Novaks will not take in any more 1911s but several custom houses will. The Colt was sooo stiff and not lubed coming from the factory that I scratched the lower frame removing the slide pin.

A little picture of a few of my pieces.
The Nighthawk (1 of 100), Gold Cup and a PC 40 aka Shorty 40 (1 of 500)

[LostintheOzone]

I've always thought that Colt was adding about 15% markup to their product because of their name. I've heard it said many times that the name wasn't worth the extra 15%. Many 1911 mfg's beat them at their own game, or what should have been their game. Even as far back as WW2 Colt couldn't come close to the production numbers of Remington Rand, an office machine company which had never built a firearm before 1943.

The prices are now where they should be. I have a feeling that it's more of a fire sale as they try to reduce their inventory of parts on hand before the company is liquidated. Might not be a real good time to buy one without holding it in your hand.

[ladder13]

Colt filing Chap 11

Colt Defense to File for Chapter 11 Bankruptcy Protection by Monday - WSJ

[Hapworth]

Originally Posted by ladder13

Colt filing Chap 11

Colt Defense to File for Chapter 11 Bankruptcy Protection by Monday - WSJ

Yup. Here's Colt's official press release:

Colt Defense Announces Fast Track Restructuring | Business Wire

[Watchdog]

Originally Posted by LostintheOzone

I don't buy repro's of anything for this reason.

If you've purchased a Rock Island, a Remington, or a Kimber (just to mention a few), you've bought what amounts to a repro 1911. All of them owe their existence to the original design.

[venomballistics]

Originally Posted by WATCHDOG

If you've purchased a Rock Island, a Remington, or a Kimber (just to mention a few), you've bought what amounts to a repro 1911. All of them owe their existence to the original design.

yes ... but Browning never really made them as a production arm, so repro has always been the way.

[leswad]

Looks like Colt has filed again.

Gunmaker Colt Goes Bankrupt Again | The Weekly Standard

[DWalt]

That's probably the best thing they could have done to stay in business, as it wipes out their liabilities. However, their creditors could still force them into a liquidation, but that doesn't happen very often.

[Texas Star]

Another board said this is just Colt Defense going into Chapter 11, not the consumer div.

Who knows what here?

[Hapworth]

Originally Posted by Texas Star

Another board said this is just Colt Defense going into Chapter 11, not the consumer div.

Who knows what here?

Colt Defense and Colt Manufacturing were separate some years ago, but I recall reading were recently merged.

I think this Chapter 11 filing is for Colt in its entirety.