Smith & Wesson is Moving!
There are very few classic American companies left in tact. Winchester has reduced itself from an arms manufacturer to mostly ammunition produced through the Olin factory acquired years ago, Remington is dead, living on only as a brand under Vista for ammunition and a recreated "Rem Arms" firearms manufacturer, though there's plenty of Remington branded non-firearm stuff if you want a green R on a dog collar. Colt is now owned by the Czechs, Browning is basically just a name with ammunition being produced by Winchester, and Springfield survives on imports. Of all the classic, great, American brands with any age to them Smith & Wesson is one of the few that not only has remained alive, but also managed to create new products and remain relevant (though that latest shotgun sure looks borrowed).
The fact that Smith & Wesson has remained a real company is worth applauding, but one thing that always rubbed me wrong about them was their location. Yes, they remained in the same state for quite some time, but as with most large companies the politics get questionable from time to time. My beef was that during the decades that Smith & Wesson was in Massachusetts the company watched the rights of local citizens, including their own employees erode and can say little of the fight they put up to defend those rights. Today Smith & Wesson, using local labor, happily churns out rifles, pistols, and magazines that locals can't own. That left a sour taste in my mouth and is part of why you don't see much S&W on the channel. I'd rather not cover a gun than support a company that doesn't seem to care about basic human rights.
Today that appears to change as the following press release was sent out:
"Smith & Wesson to Relocate Headquarters to Tennessee
Move includes headquarters and significant portion of operations due to changing business climate for firearms manufacturing in Massachusetts
SPRINGFIELD, Mass., September 30, 2021 – Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI), one of the nation’s oldest firearms manufacturers, announced today that it is moving its headquarters and significant elements of its operations to Maryville, Tennessee in 2023. Smith & Wesson has been based in Springfield, Massachusetts since the company was incorporated in 1852.
Mark Smith, President and Chief Executive Officer, said “This has been an extremely difficult and emotional decision for us, but after an exhaustive and thorough analysis, for the continued health and strength of our iconic company, we feel that we have been left with no other alternative.” He specifically cited legislation recently proposed in Massachusetts that, if enacted, would prohibit the company from manufacturing certain firearms in the state. “These bills would prevent Smith & Wesson from manufacturing firearms that are legal in almost every state in America and that are safely used by tens of millions of law-abiding citizens every day exercising their Constitutional 2nd Amendment rights, protecting themselves and their families, and enjoying the shooting sports. While we are hopeful that this arbitrary and damaging legislation will be defeated in this session, these products made up over 60% of our revenue last year, and the unfortunate likelihood that such restrictions would be raised again led to a review of the best path forward for Smith & Wesson.”
Smith indicated that the company vetted a number of cities and states and, after careful consideration, made the decision to relocate 750 jobs and its headquarters to Maryville, Tennessee. The key factors in the decision included the following:
Support for the 2nd Amendment
Business friendly environment
Quality of life for employees
Cost of living and affordability
Access to higher education institutions
Availability of qualified labor for its operations and headquarter functions
Favorable location for efficiency of distribution
Smith continued, “The strong support we have received from the State of Tennessee and the entire leadership of Blount County throughout this process, combined with the quality of life, outdoor lifestyle, and low cost of living in the Greater Knoxville area has left no doubt that Tennessee is the ideal location for Smith & Wesson’s new headquarters. We would like to specifically thank Governor Lee for his decisive contributions and the entire state legislature for their unwavering support of the 2nd Amendment and for creating a welcoming, business friendly environment.”
Smith & Wesson will also close facilities in Connecticut and Missouri as part of consolidating in Tennessee. This process will result in the company reducing the number of locations it maintains from four to three and will significantly streamline its manufacturing and distribution operations.
The company emphasized that the move will not begin until 2023 and will not have an impact on employees’ jobs until then. “Our loyal employees are the reason for our success and are always our number one priority. We are deeply saddened by the impact that this difficult decision will have on so many of our dedicated employees, but in order to preserve future jobs and for the viability of our business in the long term, we are left with no choice but to relocate these functions to a state that does not propose burdensome restrictions on our company.” Smith said. “We are making this announcement now to ensure that each employee has the time to make the decision that is right for them and their families. We are firmly committed to working on an individual level with each and every one of those who will be affected. We will assist any affected employee who is willing and able to move with financial and logistical relocation assistance. However, we also fully realize that this is simply not feasible for some. Therefore, for any affected employee who cannot move with us, we will offer enhanced severance and job placement services. We understand that this announcement will be very difficult for our employees, and we will do everything we can to assist them during this transition,” Smith said. All employees whose jobs are moved will be given these offers.
The facility in Springfield, Massachusetts will be reconfigured but will remain operational.
Smith & Wesson will keep some of its manufacturing operations in Springfield, Massachusetts, including all forging, machining, metal finishing, and assembly of revolvers, and will continue to have over 1,000 employees in the state.
The new facility will be built in Maryville, Tennessee and will comprise of the company’s headquarters, plastic injection molding, pistol and long gun assembly, and distribution.
Total investment in the project is estimated at $120 million, will be funded from cash on hand, and is expected to be accretive to EPS by $0.10 to $0.12 per year once fully operational.
Construction in Maryville, Tennessee is expected to begin in the calendar fourth quarter of 2021 and be substantially complete by the summer of 2023.
Upwards of 750 jobs will move from Springfield, Massachusetts; Deep River, Connecticut; and Columbia, Missouri to Maryville, Tennessee.
The company’s plastic injection molding facility in Deep River, Connecticut, which services both Smith & Wesson as well as a significant number of external customers, will be sold. The Smith & Wesson portion of the operations will be moved to the new facility in Maryville, Tennessee, however, the external customer business will remain in Connecticut and will be divested.
The company’s distribution operations in Columbia, Missouri will be moved to the new facility in Maryville, Tennessee, and the Columbia, Missouri facility will be marketed for sublease.
The relocation will have no impact on the company’s operations in Houlton, Maine.
The company will host a conference call September 30, 2021, to discuss the relocation. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 10:00 a.m. Eastern Time (7:00 a.m. Pacific Time). Those interested in listening to the conference call via telephone may call directly at (844) 309-6568 and reference conference identification number 3073758. No RSVP is necessary. The conference call audio webcast can also be accessed live on the company's website at www.smith-wesson.com, under the Investor Relations section..."
Congratulations to Smith & Wesson. We've appreciated moves other companies have made such as when Stag Arms moved to Wyoming. By moving you are taking many jobs with you, and more importantly a lot of tax revenue for the state. Stop feeding the un-American governments, and support those states who support your right to exist! It's difficult for any company to keep their politics on a side that makes everyone happy, but as an arms manufacturer there are some big virtues that are rather easy to comply with.