Colt Bankruptcy

photocosmo

photocosmo

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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!
 
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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.
 
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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.
 
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federali said:
... 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...
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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'
 
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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.
 
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
 
No wonder they are bankrupt, look at the condition of their factory in Paterson,NJ.
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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.
 
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.
 
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! :mad:
 
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chief38 said:
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! :mad:
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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.
 
sheepdawg said:
They relied too much on a government contract and we all know what happens when you rely on the government.
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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.
 
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.
 
Colt bankruptcy

federali said:
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.
Click to expand...

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
 
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? :)
 
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