ILION — The latest news about Remington Arms has given public officials and area residents something to celebrate.
An op-ed article in Forbes Magazine reports George Kollitides, chairman and chief executive of the Remington Outdoor Company, formerly known as Freedom Group Inc., informed employees the group is buying out stockholders who no longer want to invest in gun manufacturing.
Cerberus Capital Management, L.P., which owns the Remington Outdoor Company, had been trying to sell the firearm group since last December when the mass shooting that killed 20 children and six adults at Sandy Hook Elementary School in Newtown Conn., prompted debate about gun control once again. The shooter, 20-year-old Adam Lanza, reportedly used a Bushmaster semiautomatic rifle in the shootings. Bushmaster is a subsidiary of the Remington Outdoor Group. The California State Teachers’ Retirement system held 2.4 percent of Freedom Group and threatened to pull out its funds unless Cerberus sold its gun makers, according to the Forbes article. No buyer had been found and Kollitides and other investors decided to buy out the unhappy investors. Remington could still be sold, the article points out, but this move makes the sale less likely.
The article quotes a memorandum from Kollitides to employees which states, “The $175 million loan proceeds will be used to repurchase $150 million of shares from exiting investors, with the remaining $25 million in cash being placed on ROC’s balance sheet, which will be used to grow our business with capital equipment, facility and acquisition investments.”
“It’s great news,” said Ilion Mayor Johns Stephens, adding the group’s ability to raise the necessary capital for the transaction bodes well for Remington. “Once again this shows the dedication Remington has shown and it shows they’re going to stay here — that’s clear as far as I’m concerned.”
He mentioned getting Remington Arms onto the village’s low-cost municipal electric system as one of his accomplishments as mayor during a village board meeting earlier this week.
“I think it’s the best news we’ve heard in 2013 will be for 2014,” said John Scarano, executive director of the Herkimer County Chamber of Commerce. “These are people who have been loyal to this area and this indicates they want to stay here and probably create even more jobs here. From a Chamber of Commerce perspective this is great news, from a Herkimer County perspective this is great news and for anyone who works there this is really great news. This management group has been very good. This is the best Christmas present we could get and we don’t even have to unwrap it. Remington has been a partner, a big partner of the Chamber of Commerce and the area.”
He said the move shows the company’s commitment to the area and the Chamber is willing to help in any way it can.
Page 2 of 2 - “They’ve certainly helped us along the way,” said Scarano.
“I know Mr. Kollitides has the greatest respect for Remington Arms, its employees and its legacy in Ilion as a manufacturer of world class firearms,” said state Assemblyman Marc Butler, R-Newport. “His involvement with this transaction undoubtedly means good news for us. A cloud over Remington has now been lifted and the company has the great opportunity to move forward and continue to excel right here in Ilion.”
“It’s great news and it shows they’re stable and, you hope, shows a solid commitment to the valley and Herkimer County,” said Vincent Bono, chairman of the Herkimer County Legislature. “This is welcome news for the employees and all the ancillary companies that do business with them. And if the county can do anything for them they know we’re only a phone call away.”
“This is very welcome news for the employees, families and community that continue to support Remington’s operations in Ilion,” U.S. Rep. Richard Hanna, R-Barneveld, said. “I’ve worked with Remington Arms and its union workforce to support their work and keep them right here in the Mohawk Valley where they belong. The value of Herkimer County’s homegrown talent is broadly recognized, and I look forward to continuing to advocate on their behalf in the New Year and beyond.”
Rumors about the future of Remington Arms in Ilion have surfaced multiple times over the years. In the past year, the passage of a strict new gun control law raised concerns, as did published reports that other areas were trying to woo the gun manufacturer to relocate.
Remington Arms employs some 1,200 people at its Ilion plant.
In March, Remington was awarded a nearly $80 million contract from the Pentagon to produce sniper rifles at the company’s Mohawk Valley plant. The contract called for Remington to make more than 5,000 sniper rifles and millions of rounds over 10 years for the U.S. Special Operations Command. That announcement came two days after an announcement that the company planned to spend $20 million upgrading its gun manufacturing plant in Ilion.
Earlier this month Hanna reported that Remington Outdoor Company had been awarded a $47 million direct commercial sale contract to produce the more than 50,000 R4 carbine rifles for the Armed Forces of the Philippines.