http://www.idahostatesman.com/news/business/article144009024.html
The final line made my day.
Idaho gun, ammo makers cheer on Trump as their sales plummet
BY ZACH KYLE
Barack Obama was a godsend for companies in the gun and ammunition business.
Backgrounds checks for weapons purchases increased every year during the Obama presidency. They set a record of nearly 2.8 million in December 2012, the month of the mass shooting at Sandy Hook Elementary School in Newtown, Connecticut. They set another record, 3.3 million, in December 2015, the month of the mass shooting in San Bernardino, California.
Fear that Obama would restrict gun rights spurred sales, said Stacey Nagy, national sales manager for Primary Weapons Systems, a gun maker in Boise. Democrats such as former House Speaker Nancy Pelosi also stoked sales by calling for restricting gun rights after high-profile mass shootings.
Under Donald Trump, business has plummeted. Primary Weapons Systems’ sales are down about 35 percent since Trump’s election last November. Ammunition, gun and accessories makers in Idaho and other states have laid off workers.
“There’s just no political threat,” Nagy said. “In years past, every time a politician got in front of a microphone calling for bans, demand for those items surged.”
But this does not mean the owners and some employees of these businesses wish that Hillary Clinton had won the presidency. Nagy said he and most, if not all, of his coworkers are thrilled that Trump won. The National Rifle Association said Trump “may well be the most pro-gun president to date.”
Stacey Nagy, national sales manager for Primary Weapons Systems in Boise, talks about the company's semi automatic rifle and the difference between sporting rifles and machine guns.
One of the perceived threats came from calls to ban or restrict AR-15-style semiautomatic rifles with pistol grips and military-style stocks.
Versions of AR-15s have been used in several high-profile mass shootings in recent years, including at the elementary school in Newtown, a movie theater in Aurora, Colorado, and a nonprofit center for people with developmental disabilities in San Bernardino.
No single report exists detailing gun sales by category, but Nagy, who cobbles together industry reports, estimates AR-15s made up 7 percent to 10 percent of long-rifle sales a decade ago. Today, the AR-15 makes up more than 70 percent of that market, he said.
Primary Weapons Systems specializes in AR-15-style rifles and components. Most of its guns sell for $1,500 to $2,000 and are sold at more than 900 dealers nationwide. It also sells to law enforcement agencies.
For Primary Weapons Systems, outcry over AR-15s fueled demand, causing backlogs of orders lasting up to four months. During the company’s peaks — usually lasting several months after a high-profile shooting — Primary Weapons shipped between 300 and 500 guns per month, “or however many we could get out the door,” Nagy said.
“If you tell the American public they can’t have something, all of a sudden they want it,” he said.
Orders are down to about 150 per month now, he said. The company does not disclose sales. It does not expect to lay off any of its roughly 70 workers, though many companies in the industry have, he said.
DOWNSIZING
One such company is Vista Outdoor, which operates Idaho’s largest ammunition-making plant in Lewiston, with 1,465 workers.
Vista reported a quarterly loss of $378 million in early March, compared with a profit of $43 million for the same period in 2016, the Lewiston Tribune reported. The company laid off 10 Lewiston workers in February and 15 in March, and it placed about 100 employees on furlough for a month. The company did not return calls from the Idaho Statesman seeking comment.
A Minnesota ammo maker, Federal Premium Ammunition, laid off 110 of its 1,430 workersin March, according to the Star Tribune in Minneapolis.
Remington Outdoor Co. laid off 110 workers at its New York plant in March, according to The Wall Street Journal.
Sagging sales put Treasure Valley businessman Ron Martinez in an awkward position. Martinez owns GemTech, an Eagle silencer manufacturer, and Crossfire Elite, a Meridian company that makes tactical holsters, accessories and apparel. Like other companies, GemTech and Crossfire Elite have seen sales drop since the election, he said.
Martinez hopes to avoid layoffs. He declined to disclose sales.
Gemtech, which has “dozens” of employees, plans to buy new equipment and build a larger headquarters, he said. Crossfire has about 40 employees.
Martinez said he is a friend of Trump who attended a presidential debate in St. Louis and Trump’s inauguration, and he was with the Trump family on election night.
He said Obama was good for gun, ammo and accessory sales, just as Bill Clinton was the last time a Democrat was in the White House pushing gun control. But Martinez said Trump will help by lowering the corporate income-tax rate, allowing companies like GemTech and Crossfire to keep more of their profits. He also expects Trump to lower the personal income tax rate, giving gun enthusiasts greater spending power.
“Yes, having President Trump in office has hurt the firearms industry,” Martinez said. “In the long term, I believe his policies will help stability of the firearms market and help the economy all the way around.”
PREVIOUSLY, GROWTH
Gun and ammo making in Idaho had been an economic bright spot for the past decade.
In 2016, 1,936 Idahoans worked in gun and ammo manufacturing, compared with 818 in 2006, according to the Idaho Department of Labor.
That figure predates recent layoffs and sales declines and does not include employees working at accessory companies such as Crossfire.
Gun and ammo workers earned an average of nearly $47,000 per year last year, and industry payroll nearly tripled from the previous decade to about $90.6 million. The number of employers increased to 16 from 11.
More than 90 percent of Idaho’s gun and ammo manufacturing jobs are in the Lewiston area, making the sector an especially important cog in that area’s economy, said Kathryn Tacke, Labor’s regional economist in Lewiston.
“Because this is a less prosperous part of the state, their growth has meant a huge amount for communities in Lewiston and Orofino,” she said.
SILENCER WOES
Silencer sales have dropped off nearly completely, because two federal bills would make it easier, quicker and cheaper to buy sound suppressors, Martinez said. One of the bills is sponsored by Sen. Mike Crapo, R-Idaho.
Many people in the industry thought one of the bills would pass in the first 100 days of Trump’s presidency. That prompted would-be silencer buyers to wait for its passage before buying, Martinez said.
However, Martinez said there are not enough votes in the Senate to pass either bill. If either survives, passage will take years, he said.
Some silencer companies have laid off half their workers in recent months due to a “perfect storm” of the bills and plummeting gun sales, he said. GemTech has not, in part because it sells silencers to 24 countries and makes steady sales to military and law-enforcement customers.
“The drop in domestic sales does hurt, no question,” Martinez said. “But we have the diversification to withstand the downturn.”
NOW WHAT?
That downturn offers benefits to buyers, Nagy said. The most common rifle and round — the .22 — has been scarce for the last six years as manufacturers struggled to keep up with demand. Now those rifles and rounds are returning to store shelves.
Nagy has seen other weapons that sold for $700 or $800 in stores last year marked down by 25 percent as supply outstrips demand.
“It seems like the lower price point is hit the hardest,” Nagy said. “It’s a race to the bottom.”
Some gun and ammo makers ramped up their inventories because, like most prognosticators, they thought Clinton would win, Nagy said. Primary Weapons Systems did not, which places it in a better position to ride out the downturn without layoffs, he said. The company has worked through most of its backlog and can nimbly fill new orders, he said.
“A lot of left-leaning writers and publications say the U.S. gun market is very disappointed in the election outcome,” he said. “That couldn’t be further from the truth. Even if sales take a hit, we’re pleased and hopeful about the change in direction of lawmaking.”
The final line made my day.
