Contact Center Solutions Industry News

[August 18, 2006]

New Haven, Conn., fails to restart rifle plant

(New Haven Register (New Haven, CT) (KRT) Via Thomson Dialog NewsEdge) Aug. 18--NEW HAVEN -- A determined effort to keep the famed Winchester rifle made in the United States was gunned down this week when Olin Corp. granted the license to Browning.

The city of New Haven had teamed up with the chairman of a Greenwich investment and consulting firm to buy the U.S. Repeating Arms Co. plant at 344 Winchester Ave., which was closed in March after 140 years making "The Gun That Won the West."

The move by Belgian parent company Herstal Group put 186 factory workers out of their jobs.

Stephen Oster, chairman of The Oster Group Inc. in Greenwich, had formed a new company, American Firearms Co., after reading about the shutdown.

Oster wanted to buy the Winchester plant from Herstal Group, but to do that he had to obtain the license to make the Winchester rifles from Missouri-based Olin Corp., which used to own the New Haven plant. Olin receives licensing fees from the sale of the rifles and also makes Winchester ammunition.

Over the last few months, Oster and the city's representative, Kevin Tierney, president of Workout Solutions Inc. in Guilford, had been negotiating with Olin to buy the license. But Utah-based Browning, another Herstal subsidiary, also wanted the license, which covers the models built in New Haven, including the revered Model 70 and Model 94. Browning already makes some lesser-known Winchester models.

Tierney and Oster said Thursday they believe Herstal plans to have Browning make the two famous models through March 2008, then transfer production overseas, most likely to Portugal and Russia. Union agreements signed by Herstal prevent the company from moving production overseas until after March 2008.

Browning officials have denied allegations the company plans to eventually make the New Haven models overseas.

"We wanted to keep Winchester in America, made by an American company," Oster said. "We were quite surprised and ... disappointed that Olin chose this route. We did our best."

Oster, who was backed by several Wall Street private equity firms, said he planned to build a state-of-the-art manufacturing facility within the United States, and to keep at least some parts of the Winchester operation in New Haven.

On Thursday he offered to continue to help New Haven find a buyer for the plant, even though it looks like it won't be a gun manufacturer at this point.

A spokeswoman for the city said city officials will continue trying to find a buyer.

Tierney said he has asked Browning to consider transferring the license to American Firearms -- at a huge premium -- but has not received a positive response.

The city received two bids for the plant by the June 23 deadline, Tierney said, adding that one, by an existing firearms manufacturer, was rejected because the offer was to buy equipment and inventory only, not the 225,000-square-foot USRAC building. Oster submitted the second bid.

"American Firearms made an offer to buy all of the real estate, equipment and inventory, and received a conditional acceptance from USRAC (based on obtaining the license from Olin)," Tierney said. "American Firearms then informed Olin that it was prepared to pay more money for the license than Herstal would, and was prepared to guarantee it with letters of credit from the bank."

Tierney said Olin officials indicated they thought it might take American Firearms too long to get up and running, even though American Firearms estimated it would need only a year to get production started.

During the negotiations, "Herstal indicated it was their long-term intention to produce these firearms overseas, most likely in Portugal and Russia," Tierney said.

Tierney, who co-founded a Web site called www.saveWinchester.com in April, said the site has received 8.9 million hits from 53 countries. A survey on the site showed 95 percent of respondents felt Winchester should remain in America, he said.

"Apparently Olin did not feel that going overseas will affect the buying public's decisions," said Tierney. "Herstal apparently believes the firearm public is totally indifferent as to whether Winchesters are made in America, Portugal or Russia.

"We're not so sure of that. The kinds of people who have been calling the Winchester Web site may take umbrage that Olin did not allow a true American company the opportunity to keep an American icon in this country."

To see more of New Haven Register, or to subscribe to the newspaper, go to http://www.nhregister.com.

Copyright (c) 2006, New Haven Register, Conn.
Distributed by McClatchy-Tribune Business News.
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