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Why Are Gun Companies Moving?

by Kyle Wintersteen   |  March 3rd, 2014 90

Since the 1816 founding of Remington Arms in Ilion, New York, the northeastern United States has been the domestic firearm industry’s home for traditional manufacturers such as Colt and Smith & Wesson. Currently, however, an unprecedented number of gun companies are expanding or considering a move to entirely different states.

Why? The most obvious answer is that these companies find it difficult to do business in regions favoring an anti-gun sentiment. Connecticut and New York, both home to large, historic firearms manufacturers, enacted some of the nation’s strictest gun-control regulations last year. The governors of these states continue to foreshadow additional restrictions.

During an interview with CNN’s Candy Crowley, Connecticut Governor Dan Malloy had a telling response to criticism of a new state law that bans semiautomatic rifles and 10-round magazines and requires preexisting magazines to be registered.

“What this is about is the ability of the gun industry to sell as many guns to as many people as possible — even if they’re deranged, mentally ill, [have] a criminal background, they don’t care,” said Malloy. “They want to sell guns.”

In a radio interview, New York Governor Andrew Cuomo was similarly disdainful when asked if his state’s SAFE Act, which was passed just before midnight on January 15, 2013, is a burden to law-abiding gun owners and manufacturers.

“Who are they?” Cuomo asked rhetorically of his opposition. “Are they these extreme conservatives … pro-assault-weapon? Is that who they are? Because if that’s who they are and they’re the extreme conservatives, they have no place in the state of New York, because that’s not who New Yorkers are.”

Perhaps it’s no coincidence then that New York-based companies such as Remington Arms, Kahr Arms and American Tactical Imports are all expanding into or moving to more gun-friendly states, as are Connecticut-based companies including Mossberg, Ruger, Colt, Stag Arms and PTR Industries.

“The comments by Governors Cuomo and Malloy did not go unnoticed, nor has the legislation they passed,” said Larry Keane, senior vice president of the National Shooting Sports Foundation (NSSF). “CEOs have expressed to me that they’re tired of doing business in states with governments that don’t respect their products and that are openly hostile to Second Amendment liberties. New York politicians, for example, have essentially said, ‘It’s OK to make guns and magazines here, but you can’t sell them to our citizens.’ Consider the hypocrisy of that. If the products are so dangerous, then why are politicians OK with exporting them and collecting the tax dollars? It bothers the gunmakers deeply.”

Still, companies don’t just move to spite anti-gun state governments. For them, it has to make financial sense. Interestingly, some of America’s most pro-gun states are also currently some of the best in which to do business in terms of taxes, regulatory compliance, labor and energy costs, and more.

“The states shedding gun companies are making it undesirable for people to do business in general,” said Keane. “Generally speaking, they’re overtaxed and overregulated. Take Connecticut. It’s rated one of the worst states in which to do business or retire. So, if you’re a businessman, are you going to invest there or somewhere like Alabama [where Remington is expanding] or Tennessee [where Beretta is expanding] where it’s not only a better place to do business, but they respect the products you manufacture and are happy to have your tax dollars?”

Many states, particularly those in the South and Midwest, have actively recruited gun companies and competed among one another to secure their business. Texas Governor Rick Perry has been arguably the most vocal in this regard, even tweeting Magpul Industries to “come on down to Texas.”

“You’re seeing a shift of these manufacturers out of states that don’t want them there,” Governor Perry said in a CNN interview. “And I think that is an appropriate move and an appropriate conversation.”

Following Governor Perry’s invitation, Magpul is indeed shifting its headquarters to Texas in response to a high-capacity magazine ban by its home state of Colorado. Texas is also the new home of expansion factories owned by Mossberg and Colt. Many other states join Texas in offering tax breaks and other financial incentives to lure gun companies.

“I’ve had CEOs in New England tell me that the offers from states’ economic development teams are so extraordinary that they could essentially move their factories for free,” said Keane. “In some cases they’ve received these offers almost daily over extended periods of time.”

So, is it any wonder then that states with anti-gun attitudes are losing gun industry jobs and tax dollars?

While difficult to quantify the exact extent of the economic blow, a 2013 NSSF report estimated that Connecticut would lose 1,768 jobs, $13.5 million in business tax revenue and $450 million in economic activity if Colt, Mossberg and Stag exit. All three have announced factory expansions outside Connecticut. Even states with healthy economies will notice a loss of that magnitude.

“The message to the firearm industry from many northeastern states has been loud and clear for some time,” said Keane. “I think the message in response is becoming clear as well.”

Check out this list of firearm manufacturers that have recently moved to different states, and tell us your opinions about gun company relocations in the comments below.

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