Remington Arms Company, Inc. Business Information, Profile, and History

Company Perspectives:

Remington Arms Company, Inc. Charter: We are a customer-driven consumer products company focused on becoming a global leader in outdoor recreational products. Our guiding principles are: quality, integrity, innovation, teamwork, respect for the individual, safe working environment. We will direct our resources to building and leveraging our distinctive capabilities in the areas of manufacturing, consumer marketing, and customer service. We will support these efforts with responsive financial controls, integrated technology, and proactive regulatory involvement.

History of Remington Arms Company, Inc.

Remington Arms Company, Inc. is one of the oldest manufacturers of firearms in the United States and the largest U.S. producer of rifles. The company also sells the Stren brand of fishing line and other fishing products. A worldwide supplier of small arms, Remington holds a special place in American popular culture, its name having grown synonymous with the taming of the American West in the 19th century. In addition, the company is known for its long history of innovation, and counts the famous breach-loading rifle among its many advancements in technology.

Early 19th-Century Beginnings

Eliphalet Remington, Jr., the progenitor of Remington Arms, was born in 1793 to Eliphalet and Elizabeth Remington. The family moved west--from Connecticut to New York--in 1800 to find land and start a farm. They settled in what is now Ilion, New York. In addition to the farm, Eliphalet set up a forge and blacksmith shop to help him build his farm equipment. Eliphalet, Jr., was drawn to the shop early, and displayed a canny Yankee ingenuity. For example, when the Remington family wanted some silver spoons for Eliphalet, Jr.'s sister, Mary, they sent the young Eliphalet to a silversmith with pieces of rough silver. After watching the silversmith for a day, Eliphalet, Jr., returned with the silver pieces. He then proceeded to make the spoons himself, to everyone's satisfaction, in the family's blacksmith shop.

Remington acted similarly when he decided to make his own hunting rifle. Unable to afford the purchase price of a new rifle, he fashioned his own from scrap iron. Locals were so impressed with Remington's homemade firearm that they began paying him to make rifles for them. Within a few years Remington's skills were recognized throughout the region and he was deluged with orders for custom-made firearms. Throughout the 1820s Eliphalet, Jr., and his father shipped rifles to customers throughout New England by way of the Erie Canal. In 1828 he expanded the business by purchasing 100 acres of land closer to the canal. With financial backing from friends, he set up a new forge and blacksmith shop. Unfortunately, Eliphalet, Sr., was accidentally killed while transporting equipment to the new location.

Remington's operation continued to blossom during the 1830s as his guns became known for their high-quality craftsmanship. The company received a major boost in 1845 when it landed its first government contract. Also in 1845, Remington crafted the first gun barrel in America to be fashioned from solid steel. Remington's steel rifles quickly garnered a reputation for precision. Orders poured in. Beginning in the 1850s, Remington started designing and manufacturing revolvers. For several years the company sold its popular Beal revolver. It followed that model with the Rider revolver, one of the first self-cocking revolvers. In 1856 Eliphalet and his three sons officially joined forces to form E. Remington and Sons.

Explosive Growth, Diversification, Then Bankruptcy in Later 19th Century

Not surprisingly, E. Remington and Sons experienced explosive growth during the Civil War and contributed to the Union victory. Even before the war started the Remington armory was churning out rifles by the thousands for various government contracts. After the war began, though, production boomed. The company filled one order, for example, for 40,000 rifles priced at $16 each. To keep up with skyrocketing demand, the company built a temporary production facility to make army revolvers and installed a steam generation system to produce power. At times, every man and boy in the town of Ilion worked day and night for periods of weeks to meet contract deadlines. Remington produced nearly $3 million worth of rifles during the war. Importantly, Remington developed its famous breach-loading gun at this time to replace the conventional muzzle-loading rifle.

The demands of wartime production proved to be too much for the 68-year-old Remington. He died during the first few months of the conflict, leaving his three sons to fill his shoes. Philo, the oldest of the three and the best craftsman, became president of the company. Younger brother Samuel, who was known as a savvy businessman, became responsible for finding new contracts. He is credited with extending Remington's reach overseas. In fact, Samuel eventually made his home in Paris and London, and later assumed the title of president of the company in order to enhance his prestige (and ability to get new business) in Europe. Eliphalet, the youngest, was placed in charge of the office and day-to-day operating activities.

Business dropped after the war, but orders surged within a few years as a result of Remington's increasingly popular breach-loading rifles. Besides new orders by the U.S. Army, Remington shipped hundreds of thousands of rifles overseas to countries such as Sweden, France, Egypt, Spain, and Denmark. Samuel eventually secured more than $11 million in contracts with the French government alone, largely as a result of that country's war with Germany. By the 1870s Remington's gun production capacity had surpassed that of the entire nation of England. It employed 1,850 people and, at times, churned out an average of 1,400 rifles and 200 revolvers daily.

International orders slowed during the late 1800s. To keep its workers busy, Remington diversified into a number of unique industries where its penchant for innovation was rewarded. For example, it contracted to build the first 100 Baxter steam cars (streetcars capable of producing 25 horsepower and traveling at speeds of more than 15 miles per hour). Remington was later the first company to manufacture a Baxter steam canal boat. Similarly, the Remington armory manufactured the first 100 velocipedes (vehicles that sported two wooden wheels with attached crank pedals) made in the United States, thus giving birth to the domestic bicycle industry. Remington even shipped a special tandem, or two-seater, model. Other innovations manufactured by Remington beginning in the late 1880s included specialized sewing machines and devices, the typewriter, electric lighting systems, pill- and tablet-making equipment, gasoline-powered engines, deep-well pumps, lathes, burglar alarms, and cigar-making machines.

After development by the armory, most of Remington's inventions were contracted out for manufacture or set up as separate operating companies under the constantly unfolding Remington corporate umbrella. Soon, Remington became known as a haven for inventors. At times during the 1870s and 1880s, Remington secured an average of four new patents each week. Inventors were welcomed into Philo Remington's home, where they would present their ideas. If Philo approved, Remington's armory would assist in patenting and producing the device. Meanwhile, the company continued to innovate in the firearms industry. It introduced the James P. Lee military rifle, for example, a type of bolt-action gun that was followed by more advanced Remington models. Remington also developed a rapid-fire naval gun, one of the earliest precursors to the modern machine gun, and a popular double-barreled shotgun. Among other unique novelties was Remington's 'gun cane,' a gun that looked like a walking stick, and a portable gun designed to project 200 yards of lifeline to the upper floors of burning buildings.

By the mid-1880s Remington had established itself as a pillar of American ingenuity. Unfortunately, the Remington brothers' (Samuel had died in 1882) strategy of diversification had failed to bear fruit and the company was financially troubled. Problems were exacerbated by untimely setbacks, such as the infamous Chicago fire of 1874, which destroyed Remington's sewing machine company. Remington went bankrupt in 1886 and was bought out in 1888 by a partnership led by private investor Marcellus Hartley, who was also a Remington salesman. The town of Ilion was stunned as the Remington family endured its darkest hour. Philo died in 1889, but Eliphalet III lived until 1924. Although he was removed from the company's operations, Eliphalet lived to see the resurgence of E. Remington and Sons as the Remington Arms Company. As the company's performance continued to wane during the 1890s, the new owners shed Remington's non-performing operations, including its long-running farm implements business. Nevertheless, Remington's legacy of innovation continued. It was particularly recognized for its inventions related to the bicycle and the typewriter.

Although Remington experienced financial problems, the company never lost its reputation as the inventor and producer of some of the finest firearms in the world. While Remington became a major player in the northeastern U.S. industrial community, its firearms helped to tame the American West. In fact, many of Remington's rifles and revolvers achieved legendary status. Wild Bill Hickok, for example, was known for carrying a Remington double-barreled Derringer pistol in his vest pocket. Likewise, infamous bank robber Frank James and renowned riverboat gambler Bat Masterson both publicly endorsed Remington firearms in newspaper advertisements. Remington's role in the settling of the country would be recounted endlessly in the Hollywood westerns of the 20th century.

Becoming Affiliate of Du Pont in First Half of 20th Century

Remington's fortunes began to improve following a government order in 1898 for 100,000 guns during the Spanish-American War. As its firearms business healed, the company bailed out of less successful endeavors, including its large bicycle operation. It kept its typewriter division, the Remington Standard Typewriter Company (renamed Remington Typewriter Company in 1903); in 1927 it folded that company into an affiliated office equipment company called Remington Rand, Inc. Sales were again buoyed with the onset of World War I, first by orders from English and French governments and later by the United States when it finally entered the conflict. During World War I Remington spent about $1 million on new land, buildings, and equipment necessary to meet ballooning demand. After the United States entered the war in 1917, Remington's workforce swelled from about 900 to more than 11,000. That figure eventually climbed as high as 15,000, many of whom were women. Daily output reached a record 3,000 rifles daily.

Remington was better prepared to deal with the postwar sales slide following World War I than it had been after previous conflicts. Specifically, Remington introduced its first cash register in 1918. Sales of the patented device were swift during most of the 1920s. But even that business slumped following the Great Depression. Remington sold the operation to National Cash Register Company in 1931 in an effort to buoy lagging gun sales. By the early 1930s Remington employed only 300 workers at its core Ilion plant. In need of a facelift, Remington sold a 60 percent interest to E.I. du Pont de Nemours & Company in 1933. Under Du Pont's direction, Remington tore down several unneeded buildings and refurbished some of its aging facilities. By the late 1930s Remington was well-positioned for the impending World War II production boom.

Du Pont's interest in Remington was both well-timed and appropriate. Founded in 1802, the company had started as a manufacturer of gunpowder and explosives. By the early 1900s Du Pont controlled the lion's share of the U.S. gunpowder market. Because Remington had augmented its firearms operations with extensive munitions manufacturing, the companies complemented one another. The partnership was particularly beneficial during World War II, when demand for both gunpowder and firearms soared. Remington again shifted into overdrive during that war, hiring more than 9,000 workers to produce its renowned Springfield rifle. The U.S. government accepted delivery from Remington of more than one million rifles during the early 1940s. Remington's factories ran 24 hours each day, seven days per week. The company celebrated the sale of its two-millionth rifle in 1942.

Following the war, Remington again focused on developing and producing firearms for sport. Its payroll was quickly reduced to about 1,500 workers and business was expectedly sluggish. To boost sales from its core firearms and munitions segments, Remington diversified into new arenas. Notable was its entrance into the industrial tool field. Remington developed and began manufacturing a 'Cartridge-powered Stud Driver,' a device that fired stud fasteners into various structural materials. The model 450, as it was labeled, used cartridges similar to bullet cartridges. The product enjoyed success during the massive postwar housing and construction boom. Remington sold its power tool business to DESA Industries, Inc. in 1969.

Remington continued to glean profits from military contracts and to sell its sporting rifles and shotguns during the mid-1900s. In addition, it branched out into a number of new markets. It continued to produce sewing machines and office equipment through its affiliation with Remington-Rand, for example, although that unit was eventually sold. Remington began producing goods ranging from hunting knives and mens' accessories (such as Remington shavers) to household utensils and tools. As its offerings and sales expanded, Remington's manufacturing infrastructure extended throughout the United States, with both corporate and government-owned plants spreading to Delaware, Connecticut, Arkansas, Ohio, and Oklahoma, among other places.

Wholly Owned by Du Pont: 1980-93

By 1980, Remington was generating approximately $300 million in sales, most of which was attributable to its firearms and munitions divisions. When Du Pont completed its purchase of Remington Arms in 1980 as part of its strategy to diversify out of its core chemical business, which was suffering from a savage petrochemical industry downturn, however, the investment proved a big disappointment. Remington experienced major setbacks during the early and mid-1980s, especially in the face of strong foreign competition. Low-cost gunmakers, particularly in emerging Asian economies, inundated U.S. markets with inexpensive firearms. At the same time, Remington's strongest demographic market segment, midwestern farmers, fell on hard times.

By 1986, Remington's annual revenues had plummeted to a discouraging $200 million. Distressed by the failure of the division, Du Pont initiated a reorganization at Remington that was designed to streamline operations, improve research and development, and ultimately improve profitability. Du Pont closed some of Remington's facilities, among other cost-cutting measures, and made plans to broaden Remington's product line. Items introduced during 1986 included a line of hunting apparel and high-tech deer rifles made with kevlar (a lightweight synthetic material five times stronger than steel). Providing the foundation for those innovations were proven Du Pont performers, including: the Model 700 line of hunting rifles; the XP-100 pistols, which were considered among the most accurate in the world; and popular shotgun models 11-87, 1100, and 870. In 1992 Remington further broadened its product line when Du Pont placed its Stren brand of fishing line and other fishing products within Remington's purview.

During the late 1980s and early 1990s, Remington's financial performance improved significantly, largely as a result of successful product line extensions and new introductions. By 1992, in fact, Remington had nearly doubled its sales over 1986 levels to about $400 million annually. In 1993, Du Pont announced that it had reached an agreement to sell Remington to leveraged-buyout specialist Clayton, Dubilier & Rice, Inc., a private investment group.

The Clayton, Dubilier & Rice Era, 1993 into the 21st Century

Remington enthusiasts were fearful that the company's legacy of quality and innovation might be trammeled by the private investment group. Those concerns were allayed shortly after the new owner announced its long-term plans for Remington. For example, under the direction of Remington's new chief executive, Tommy Millner, Remington announced plans to open a new $5 million research and development center in Elizabethtown, Kentucky. Opened in 1996, it was initially staffed with about 60 employees. Remington also announced its intent to consolidate operations, lower operating costs, and to more actively support legislation related to gun-owner's and hunter's rights. Regarding the latter, Remington joined the American Shooting Sports Council and the Remington Arms Political Action Committee, which were engaged in legal battles with increasing numbers of municipalities, who were suing gunmakers over alleged negligence in the manufacturing, marketing, and distribution of guns. These suits were somewhat similar to the largely successful suits brought against the tobacco industry starting in the mid-1990s. To show its concern about issues of gun safety, Remington spent $1 million on safety-related advertisements and on producing a safety video to be included with most of the company's new firearms. Also, the Remington Shooting School opened in 1995, near the company's plant in Ilion. Under its new ownership, Remington also bolstered its marketing efforts by becoming a major sponsor of NASCAR Winston Cup auto racing.

Other developments in the mid-1990s included Millner's decision to move the company's headquarters to a more rural setting, in keeping with where the bulk of its customers lived. In 1996, therefore, Remington relocated to Madison, North Carolina, a small town about 25 miles north of Greensboro. Further expansion came in 1997 when the company opened a new firearms plant near Mayfield, Kentucky, its first such new plant since 1828.

Remington's financial position was rather precarious in the late 1990s as the company was carrying a fairly heavy load of debt and had to contend with the stagnant sales that were vexing the entire gun industry. The sales slump had a number of causes, including an aging population of gunowners, which was also declining in numbers, and less interest in hunting (coupled with the diminishment of huntable land due to urban sprawl). The potential for additional federal gun-control legislation and the lawsuits filed against the gun industry placed further clouds over the company's future.

It was against this backdrop that Clayton, Dubilier & Rice began exploring in early 1998 the possible sale of Remington or a public offering of its stock. By mid-2001, however, no deal had been completed to either sell the company or take it public. In the meantime, the gun industry made a bit of a comeback in 1999 when demand for guns surged for the first time in several years, enabling gunmakers to increase their revenues through price increases--Remington boosting its prices from 2.5 to 5.5 percent. The increased demand appeared to stem from a combination of anxiety over potential chaos resulting from the Y2K computer bug and concerns that buying guns might be made more difficult in the future in the wake of the municipal lawsuits and the shooting massacre at a high school in Littleton, Colorado. Of course, the Y2K bug resulted in little chaos, and George W. Bush's ascension to the presidency in 2001 dampened fears about increased federal gun control. It also appeared that the lawsuits might be losing steam as some early court rulings went in favor of the gunmakers.

Principal Competitors: Sturm, Ruger & Company, Inc.; Fabbrica d'Armi Pietro Beretta S.p.A.; Colt's Manufacturing Company, Inc.; Smith & Wesson Corporation; Glock GmbH; SIG Arms Sauer GmbH.

Chronology

• Key Dates:

• 1816: Eliphalet Remington, Jr., makes his first hunting rifle.
• 1856: Remington and his three sons form E. Remington and Sons.
• 1886: Company goes bankrupt.
• 1888: A partnership led by investor Marcellus Hartley buys out the company and reorganizes it as Remington Arms Company.
• 1920: Company is incorporated as Remington Arms Company, Inc.
• 1933: E.I. du Pont de Nemours & Company acquires a 60 percent stake in Remington.
• 1942: Company sells its two-millionth rifle.
• 1969: Power tool business is sold to DESA Industries, Inc.
• 1986: Remington completes a move of its headquarters from Bridgeport, Connecticut, to Wilmington, Delaware.
• 1992: Company assumes control of the Stren fishing product line from Du Pont.
• 1993: Du Pont sells Remington to Clayton, Dubilier & Rice, Inc., a private investment group.
• 1996: Remington moves its headquarters to Madison, North Carolina.