Did the company start a new business strategy since the last case?

what changes should the company make moving forward?

Case 13: Sturm, Ruger&Co and the US. Freams Industry 6-199 Company Overview with Project HomeSafe to deliver gun safety materi- als and cable locks to inner city gun owners who may Today, Sturm, Ruger & Company ("Ruger") is principally not otherwise have access to the needed gun safety engaged in the design, manufacture, and sale of firearms materials. However, these types of programs are some- to domestic customers. Since 1990, Ruger has been pub- times met with skepticism. As Ruger has stated in its licly traded on the New York Stock Exchange under Ruger Red Book - Firearms Ownership in America- the stock ticker RGR. The company operates with two Our Responsibility for the Future: distinct business segments: Firearms and Investment Castings. The Firearms segment offers products in three Firearms safety education can and has demonstrably industry product categories: rifles, pistols, and revolvers. reduced needless accidents with firearms, particularly There are several available models within cach product among younger persons. Yet, any suggestion of such a category, each of which varies based on caliber, finish. widespread educational program is immediately met barrel length, and other features. Under the Investment with the response that it is actually promoting guns Casting segment, the company manufactures and sells If we took this attitude toward sex and drug education investment castings made from steel alloys and metal programs, we would be accused of being naive and injection molding parts for internal use in the firearms immature segment, with minimal sales to outside customers. In 2016, investment castings represented mercy 1% of total sales. The majority of Ruger sales are domestic, Management with exports accounting for only 3%. As of 2017, Roger Ruger has a very seasoned and talented top manage employed approximately 2.110 full-time employees. In ment team. Ruger's CEO Christopher Killoy. was pre- addition to the full-time employees, Kuger employed viously the President and Chief Operating Officer of roughly 320 temporary employees to supplement its Ruger, and has been employed by Ruger in some capac- workforce? ity since 2006. Killoy was also involved in the gun and ammunition manufacturing field before joining Ruger, as the Vice President of Sales and Marketing at Smith & Vision Wesson Killoy offers experience to Ruger. both as a sea- From its start in 1949. Ruger has lived up to its motto of soned veteran in the gun and ammunition manufactur- being an "arms maker for responsible citizens and has ing business, and through his membership on the Board strived to achieve its vision: of Directors of the Sporting Arms and Ammunition Sturm, Ruger & Co., Inc. is one of the nation's icading Manufacturing Institute and the International Hunter manufacturers of rugged, reliable firearms for the com Education Association Foundation Killoy served in the United States Army Armor division mercial sporting market. The only full-line manufacturer of American-made firearms, Ruger offers consumers over Mark Lang has served as Ruger's Group Vice 400 variations of more than 30 product lines. For more than President since February 18, 2008. He arrived with con 60 years, Ruger has been a model of corporate and comme siderable business experience, having previously served nity responsibility: as the President of the Custom Products Division for Mueller Industries, as well as a manufacturing execu- Consistent with its emphasis on community respon live with Thomas & Betts, Black & Decker, and General sibility, many advertisements focus on the importance Electric of being a safe gun owner, while safety messages are Thomas Dineen has a longstanding history with posted on the Ruger website. Ruger believes in and the company, joining Ruger in 1997 as a Manager of invests in educational programs emphasizing safe Corporate Accounting. He worked as an Assistant gun ownership and gun usc, knowing that this edu- Controller from 2001 to 2003 before being promoted to cation has the potential to save lives. The company Treasurer and CFO in 2003. Dineen was promoted to has dedicated materials and other resources to the Vice President and CFO on May 24, 2006. promotion of gun safety to all gun owners, including Thomas Sullivan was hired as the Vice President through youth programs. Each Ruger gun is designed of Newport and Mayodan Operations and Pine Tree with safety in mind by incorporating both internal and Castings on August 14, 2006, after previously serving as external safety measures. Recently, Ruger partnered the Manufacturing Executive at IMI Norgren, Rexnord, C-200 Part Case Studies and TRW Automotive. Sullivan brings extensive knowl- Exhibit 1 Sturm, Ruger & Co. Inc. Board of Directors edge of supply chain operations, manufacturing, and product development to Ruger. He has demonstrated C.Michael Jacobi, Chamon-Mr Jacobi has served on the Board since June of 2006. He is President of Stable House 1, LLC a continued dedication to education as a student and a private company that specializes in real estate development teacher of the Toyota Production System for the last Jacobiis a Certified Public Accountant and brings considerable fifteen years. audit experience to the Board of Directors Kevin Reid started with Ruger in July 2001 as John A. Cosentino, Jr., Vice Chairman-Mr. Casentino is a Assistant General Counsel. From there he was pro founding partner of the lowood Manufacturing Fund and has moted to Director of Marketing in June of 2007. As served on the Board uince August 2005. He has considerable the Director of Marketing, Reid not only oversaw experience as a manufacturing executive and leading several daily marketing activities, but he also successfully led private investments Iwo highly anticipated product launches. On April 23, Michael O. Fifer Mr. Fifor served as the CEO from September 2008 the Board of Directors elected Reid to serve in 2006 to May, 2017 and has been an active member of the Beard since 2006. He possesses considerable industry his current position of Vice President and General experience from his tenure, Fifer earned a BS in Physics from Counsel. Reid served in the United States Marine the United States Naval Academy, an MBA from Harvard Corps from 1980-1984. Business School and served as a submarine afficer in the United States Navy Shawn Leska has a longstanding history with Ruger. starting with the company in 1989 as an Accounting Sandra S. Froman--Ms. Froman has been an active member Office Assistant. He climbed the ranks of the organiza- of the National Rifle Association since 1992. She served as Vice President from 1998 to 2005 and as President of the NRA from tion and was promoted to Director of Sales in November 2005 to 2007. Ms. Froman has a BS in Economics from Stanford of 2011. As Director of Sales he worked through sev- University and a JD from Harvard Law School. She currently cral new product launches and was involved in sales practkes us a private civil attorney for her own fum. programs and corporate initiatives. In his twenty-nine Terrence 6. O'Connor-MeOConnor joined the Board with years with Ruger, Leska has developed strong industry considerable financial and audit experience. He currently serves relationships on the Nominating and Corporate Governance Committee and helps dve strategy for Ruger as a member of the Rick Oversight Background information for the Ruger Board of Committee. He received a Mechanical Engineering degree from Directors is included in Exhibit 1. the Imperial College in London, Amir P. Rosenthal-Mr. Rosenthal has been on the Board Operations since 2010. He was Chief Financial Officer of Performance Sturm, Ruger & Co. is headquartered in Southport, Sports Group, LTD. for seven years and is a current Director Connecticut, and maintains manufacturing facilities at Ruger in Newport (New Hampshire). Prescott (Arizona). Ronald C. Whitaker Mr. Whitaker has served on the Board Mayodan (North Carolina), and Earth City, Missouri. Since 2006. He retired from Hyco International after serving as the organization's CEO from 2003 to 2011 The Newport facility is the largest, at 350,000 square feet, and is the only facility that manufactures both fire- Phillip C. Widman-Mr. Widman is a current director at Ruger arms and castings. The Prescott and Mayodan facilities and has served on the Board since January of 2010. His expe- rience includes years of financial roles. CFO of Pip Service sit at 230,000 and 220,000 square feet respectively and Corporation and work as an independent consultant manufacture only firearms. Finally, the Earth City facil- ity is the smallest with only 35,000 square feet, and man- Source Stum, liges company, nebent ef netersections triping.com corporisBOD. Accred November 30, 2017 ufactures only castings. Historically speaking, new product introductions do not tend to cannibalize demand for existing products Ruger is very strategic about its manufacturing in this industry. Often, with the launch of a new prod facility locations. For a city to qualify as a potential uct, the demand for mature products tends to grow as location candidate, il must contain abundant electrical well. As a result, machines are not freed up and addi supply, good transportation, a good workforce in the tional manufacturing space is ultimately required. community, numerous available engineers with strong Consequently, with the surge in sales from 2013 to 2016, manufacturing skills, and a building with space for several manufacturers, including Ruger, tried to increase future expansion. If these requirements are all fulfilled. their facilities and production capabilities to account for Ruger then evaluates the city's crime and drug-scrates the industry growth. Once President Trump took office, because all employees are required to pass a federal facility expansion efforts stopped. background check." Case 15 Stum. Huger&Co. and the US Firearms Industry C 201 Gun manufacture is similar to the manufacture of Pistol and its LCP II, which in turn offers consumers other metal products with moving parts that require more value at a better price. precision machining and assembly." A typical gun con- Ruger's products have excellent reputations, exem- tains between 50 and 100 parts. The precision parts are plified by the fact that the company has been given made from raw steel shapes using expensive computer the Firearms Manufacturer of the Year award by the controlled machining stations. Third parties supply National Association of Sporting Goods Wholesalers Ruger with various raw materials for its firearms and for eleven straight years. The company supports this castings. These materials include things such as fabri reputation by advertising through a number of chan cated steel components, walnut, birch, beech, maple, and nels, including magazines, online advertising, and laminated lumber for rifle stocks, wax, ceramic mate- trade shows. Ruger also uses promotional marketing rial, metal alloys, various synthetic products, and other tactics to create special relationships with its deal- component parts. Given the limited supply of these ers. One example of this is the "Rapid Retail Rewards raw materials in the marketplace, the purchase prices Program," also known as the "4R Program." This pro- tend to fluctuate based on a number of market factors." gram awards points to dealers who sell Ruger guns. Parts are assembled and finished by hand (sometimes Those points can then be redeemed for free Ruger with elaborate metal etching or other design work), and firearms. Thus, the program helps keep dealers sat weapons are individually test-fired." isfied while also increasing sales and gaining more exposure for Ruger products, Research and Development Ruger firearms are primarily sold through a net- Innovation and new products drive demand for Ruger work of federally licensed, independent wholesale firearms, Bill Ruger was a big proponent of innovation distributors who purchase the products directly from and made it a priority for his company. While he was Ruger and then resell them to federally licensed, inde CEO, he made guns that he wanted to shoot, oversee pendent retail firearms dealers. Each distributor car- ing every design detail. In 1981, he stated, "If I really ries the entire line of firearms manufactured by Ruger personally like it, then I can be fairly sure and posi- for the commercial market. Currently, 18 distributors tive that there will be a lot of other people who feel the service the domestic commercial market, with an same way.*** To this day, the company remains focused additional 23 distributors servicing the domestic law on R&D efforts, hiting the best engineers and ded- enforcement market, and 41 distributors servicing the icating 141 employees toward R&D efforts. In 2016, export market. In 2016, Ruger's 4 largest distributors 2015, and 2014. the Company spent approximately accounted for 65% of total sales: Davidson's (19%): 58.7 million, $8.5 million, and $10,0 million, respec- Lipsey's (17%): Jerry's Ellert Brothers (15%); and tively, on research and development activities related Sports South (14%). to new products and to the improvement of existing Civilians purchase firearms through gun stores, products. About 31% of firearm sales are driven by new sporting goods stores, individual sellers, and some products, defined as those products having been in the large retail stores, Ruger's website is also an import- market for less than two years." ant avenue through which customers can familiarize themselves with guns, although regulations restrict Marketing how individuals can purchase firearms online. An indi- Ruger is known for providing high-quality products at vidual can buy a gun online from a federal firearms low prices. In the early years of the company's history, license holder. The license holder then ships the gun to Bill Ruger recognized that the company did not have a licensed dicalet, and the consumer has to go directly the kind of brand name that some of its competitors to the dealer for a background check before picking up had, so Ruger was forced to figure out a way to produce the gun. high-quality firearms at a lower cost. That is when he Ruger performs a semi-monthly review of the implemented the precision investment casting tech estimated sell through from the independent distrib nique, which allowed for the production of castings out utors to retailers, as well as of the inventory levels in of the highest strength alloys available at a reasonable its warehouses and in the warehouses of its indepen- cost. As a result of this technique, Ruger had the highest dent distributors. These reviews allow the company to margins in the industry, which helped keep prices low: better plan production levels and appropriately man- 'The company still prices a number of its products mod. age inventory levels, Computer systems are used for estly, such as its SR1911 Lightweight Commander Style the extensive documentation required to track each G-202 Part 4 Case Studies individual gun." Ruger aims to turn its inventory six to eight times per year. Despite a tough second quarter in 2017, Ruger was still able to turn inventory five and a half times." Human Resources Ruger's training programs for employees vary depend- ing on the type of employment. In 2011, the company implemented the Ruger Code of Ethics, which provides the Board, management, and employees with the neces- sary tools needed to comply with industry standards. Additionally, the Code helps create a workplace that pro motes accountability among its employees and ensures that Ruger is holding itself accountable to its customers. The company's employees participate in a profit sharing plan and bonuses are awarded to employees based on the company's financial success. The company actively recruits individuals via the employment page on its website and continuously posts new openings available in each of the company's facilities." Financial Condition Over the last five years, overall revenue for Ruger has been choppy." For example, revenue decreased in 2015 to $551 million dollars, followed by a subsequent increase to S664 million dollars in 2016." Total current assets have been steadily increasing over the past five years, while total current liabilities have remained rel- atively constant. Ruger's cash and short-term invest- ments have experienced a major increase in the last three years, increasing from a little less than $9 million in 2014 to $87 million in 2016." Ruger's Q3 2017 financial results indicate that the company is not meeting Wall Street expectations for its earnings per share and sales. Ruger's operating profit margin in 2016 was 20.4% Exhibits 2 and 3 contain detailed financial information. 2015 $544850 6.244 2014 $542,267 2.207 544474 375,300 169,174 551,094 378,934 172.160 49,864 27.864 Exhibit 2 Sturm. Ruger & Company Income Statements Consolidated Statements of income and comprehensive Income in thousands except per share data Year ended December 31 2016 Net firearms Sales $658433 Net castings sales 5.895 Total net sales 564,328 Cost of products sold 444,774 Gross profit 219,554 Operating Expenses Selling 56,146 General and administrative 29.004 Defined benefit pension plans settlement charge Other operating income net 251 Total operating expenses 85,145 Operating income 134,409 Other income Royally income 1.142 Interest income 14 Interest expense (186 Other income expensel.net 542 Total other income, net 1.512 Income before income taxes 135.921 Income taxes 48,449 Net Income and comprehensive income 587.472 Basic Earnings Per Share $4.62 Diluted Earnings Per Share $4.59 Cash Dividends Per Share $1.23 Source: Sturm. Ruger & Company, Inc. 2016. Form 10-K Southport C1 Stun. Muger & Company Inc 52. (1131 77615 44.550 28.899 40.999 11.612) 119.896 56,338 94.545 1.054 5 (1561 622 1.55S 96,100 33.974 562.126 $3.32 $3.21 468 2 (152) 594 902 57,240 18,012 $ 38,628 $1.99 $1.95 5163 $1.10 C-204 Fart Case Studies The U.S. Gun and Ammunition Industry The US gun and ammunition manufacturing industry has over $13 billion in annual revenues (sce Exhibit 4 for other industry facts). Approximately half of that revenue is generated by the top seven domestic manufacturers. which include American Outdoor Brands Colt, National Presto, Remington Outdoor, Vista Outdoor, Sig Sauer, and Ruger. Products include ammunition and firearms such as shotguns, rifles, revolvers, pistols, and machine guns. Demand is driven mostly by hunters, gun enthusiasts, and weapon upgrades by law enforcement. Profitability is closely linked to marketing efforts made by individual companies. The industry is costly to compete in due to high initial investment costs, considerable research and development costs, and high machine operation costs. Large companies benefit from purchasing economics when they acquire materials from suppliers. However, small companies can effectively compete by produc ing premium-priced, high-quality, or decorative guns. The three major market segments within the guns and ammunition manufacturing industry include civilians and law enforcement, the military, and exports." Growth in the U.S. gun industry was stagnant from 2012 to 2017. Even so, some analysts expect the indus- try to grow 3.5% annually from 2017 to 2022. Defense spending and increased legislation are predicted to have a major impact on the growth of the industry over the next five years. However, there is so much volatility in the industry that trends are hard to predict (See Exhibit 5). Close Rival American Outdoor Brands Corporation In many ways, American Outdoor Brands Corporation (AORC-FY Sales of $903 M) is Ruger's closest rival. It is a domestic gun manufacturer that sells nearly the same number of firearms as Ruger, has a similar balance in sales between handguns and long guns, and many of its weapons compete head-to-head through the same retailer channels. AOBC grew from a single firearms operating division founded in 1852 under the widely known Smith & Wesson brand to multiple operating divisions and consumer brands today. AOBC now serves as the holding company for the historic Smith & Wesson Corp., Battenfeld Technologies, Inc., and Crimson Trace Corporation, which represent firearms, manufacturing services, accessories, and electro-optics divisions. AOBC operates in two business segments: () Firearms (which includes the Firearms and Manufacturing Services divi- sions) and (2) Outdoor Products & Accessories (which includes Accessories and Electro-Optics divisions). The firearms division, which accounted for roughly 95% of revenues for FY 2017, produces and sells handguns (pistols and revolvers) and long guns (rifles). ABC has added to its growth through several acquisitions in the past few years, including $211.1 million in acquisitions in 2016/2017. Annual revenue increased by 25-30% cachycar from 2015 to 2017. and net income grew from $49.6 million in 2015 to $127.8 million in 2017." AOBC's mission is: "To leverage our employees capabilities and experiences to design, produce, and market high-quality, innovative firearms, accessories, and outdoor products that meet the needs and desires of our consumers and professional customers while delivering a healthy financial performance. The com pany's vision is: "To be the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast." Like Ruger. AOBC has a strong emphasis on inno- vation. The company releases new products every few years with new features and technology. This keeps con- sumers excited for new opportunities to enhance their firearms collections. Following the successful launch of Exhibit 4 Economic Impact of the Sporting Arms and Ammunition industry in the United States Tax Impact Business Taxes Excise Taxes Federal Taxes $3,843,285,200 $838.059.600 State Taxes $2,695,451,100 Total Taxes 56,538,736,300 $83,059,600 Direct Supplier Induced Total Jobs (FTE) 141,500 56,614 93.009 301,123 Wages $5,847 837.400 $4,522,015,700 54.813.571.600 $15.153.424700 Economic Impact 520.223.132.100 $15.525,775,600 515,502,536,200 551,251,443,900 Source: The Form Industry Trade Association Forms and munition industry economic impact porttitor.songgeven mot Accessed leverber 30, 2017 G-205 Case 1: Storm, Huger & Co. and the US Fires industry Exhibit (xternal Influences on Gun Sales Spikes in gun sales (millions per month 2.500 2 million guesseld month of Oloma's re election and the shooting at Sandy Hook Elementary School 2.000 1.500 1.1 million Suns sold month of Obama's election 1.000 754.000 guns sold month of 9/11 attacks Estimated gun sales per month 0.500 0.000 20.00 2002 2004 2006 2008 2010 2012 2014 2016 Soares AnchG. 2016. Wur happen to eat for her parention des gaun The New York Times Online. 12. /2016/12/tetovantes... November 30, 2017 the M&P Shield pistol in 2012, AOBC launched the M&P AOBC announced that it had decided to streamline 2.0 Pistol in 2017. This new product has an upgraded trig- and standardize its distribution process. The com- ger, grip and frame from the popular M&P Pistol used pany plans to create a Logistics and Customer Service by many law enforcement agencies today. Their two Division that will operate from a new 500,000 square main production plants in Springfield, Massachusetts foot distribution center in Missouri. The center will and Houlton. Maine have sometimes become strained be equipped with latest technology, which will help during high demand periods, leading to huge backloge. to improve their operating efficiency by serving as a In May of 2014, then Smith and Wesson acquired Tri central distribution center. Town Precision Plastics, a previous supplier of poly- mer molding and prototyping for their products. Once Other Significant Competitors acquired, the new operating name became Deep River Remington Outdoor Company (2016 Sales of $865 M). Plastics, LLC. The acquisition helped case capacity prob. founded in 1816, is the oldest firearms manufacturer lems by significantly shortening the time it took the in the US. The firm is well known for manufacturing company to get materials from Tri Town and provided rifles and shotguns, as well as ammunition. Remington an additional 150,000 square foot production facility to is the market leader in long guns with a 15.8%, market be used to increase production capacity. share in the domestic rifle market in 2014. While the In the US, five prominent arms distributors account firm was not active in the handgun market for most for most of AOBCs sales. The company also sells firearms of its existence, it entered this segment in 2010 with directly to law enforcement agencies. In addition, a the RI 1911. The company believes this is an area of significant portion of its firearms are sold overscas, opportunity, as the handgun market continues to grow. mainly through commercial distributors." In 2017. Finally, Remington is a major player in the ammunition C220 Anetareth WWE port. Mis med sri C-206 Part 4 Case Studies market, with three major brands under the firm's umbrella, Remington has two major strategic initiatives to sustain growth in the future. The first is to focus on new product development, specifically in the hand- gun segment. The firm recognizes the growing market opportunity with handguns and is committed to cutting into the market share of Sturm Ruger and American Outdoor Brands. With new product development, the firm has invested $180 Million to increase operational capacity and efficiency. Finally, Remington hopes to tap into the domestic and international law enforcement and military defense markets. In addition to Remington a few other competitors are noteworthy. Vista Outdoor Operations (FY 2017 sales of $2.5 B) has outdoor sports (ie, outdoor cook- ing equipment, eyewear, paddleboards) and shooting sports business segments." Vista's shooting sports seg- ment, which accounts for a little over half of its sales, produces firearms such as centerfire rifles, rimtire rifles, shotguns, and range systems." Vista sells to civil- lans, law enforcement agencies, the government, and international markets. Its Federal Premium ammuni- tion brand is number one in market share in the ammu- nition segment. Sig Sauer, Inc. (est. recent sales of $305 M) makes and imports handguns and firearms accessories, and also sells apparel and knives. The com pany is the largest member of a worldwide business group of firearms manufacturers. Also, smaller competitor Colt Defense (est. recent sales of $54 M) is an American firearms manufacturer that designs, develops, and manufactures handguns, long guns, and other firearms for international military, law caforcement, and individual domestic consumers. In addition, National Presto Industries (2016 sales of $342 M) is primarily a housewares and electrical appli- ance company. However, in 2001, the company purchased AMTEC, which allowed it to enter the defense segment. This segment "manufactures precision mechanical and electromechanical assemblies for the U.S. Government and prime contractors. In addition, numerous compa nies compete in the U.S. with very inexpensive firearms. For example, Cobra Enterprises, based in Utah, and Hi-Point Firearms (Strassell's Machine, Inc.) manufac- lure handguns that can sell for less than $200. No discussion of gun industry competition would be complete without mentioning international compet- itors that sell their products in the US, Glock is chief among these competitors in the handgun segment. Glock, Inc., based in Smyrna, Georgia, operates as a subsidiary of GLOCK Gres.m.b.H of Austria. The com- pany has been very successful in the law enforcement and military segments in the U.S., and sells its products commercially. Other international companies with sig. nificant gun sales in the US include Beretta (Italy) and Taurus International (Brazil). The National Rifle Association The US gun and ammunition industry has a very pow- erful political ally in the National Rifle Association ("NRA"). The NRA was established in 1875 with the purpose to "promote and encourage rifle shooting on a scientific basis." It has since grown to be an organization focused on training, education, and marksmanship. In 1975, recognizing the great need to defend the second amendment through political action. NRA established the Institute of Legislative Action (ILA) to lobby legisla- tors and engage members for political action. The NRA has grown to have more than five million members in 2017, and it actively engages its members by calling them to action every time a piece of restrictive "gun con- trol" legislation is proposed at the local, state, or federal level. Since its establishment, the NRA has had a great influence on American gun laws and policies. CBS News reported in 2016 that from 2011 to 2016, there were more than 100 gun control proposals introduced by lawmak ers. However, due to the lobbying efforts of NRA mem- bers, none of those passed, and only a few were brought to the house and senate floor." In addition, when a gun tragedy occurs, the NRA quickly releases a statement in an effort to promote pro firearm interests. The NRA is very active during presidential cam- paigns, contributing to the campaigns of candidates that support expanded gun rights and targeting those who threaten to control or regulate guns. In the 2016 election, the group threw its support behind President Donald Trump, and against Democratic opponent Hillary Clinton. Nevertheless, its political power is greater at the state level than the federal level. It uses a "grading system to grade each politician on their will- ingness to support NRA causes, and the NRA uses those "grades to help determine the best candidate to represent the Republican party in state elections." Any firm in the industry that chooses to cross the NRA does so at its own peril. Smith & Wesson (now AORC) learned this the hard way. Starting in 1998, cities and counties around the USA, fueled by the momentum of earlier legal suits against cigarette makers, filed suits against gun makers. Smith & Wesson was hit with law suits by over 28 cities, suing it for damages caused by gun violence. In response to these suits, Ed Schultz, Smith & Wesson's CEO at that time, met with the Clinton Administration, and settled on an agreement that would Case 15 Sturm, Roger & Co and the US Firearms Industry C-207 further regulate and control the way it manufactures same story and call for a lock down on gun purchas firearms. As part of the agreement, Smith & Wesson ing and stricter gun regulations. The media has con- agreed, amongst other things, to include a second hid tinuously highlighted these types of stories, resulting den serial number on its firearms to offset the tendency in many Americans believing that gun violence has for criminals to scratch out the number, to include a escalated in the US. In fact, gun violence dropped sig- small lock in each gun that would prevent the trigger nificantly from the 1990s to the early 2000s and has from being pulled, and to develop a smart-gun tech- remained more or less stable since 2005. On the other nology" by 2003 that would allow handguns to be fired hand, it is still a serious problem. Data from the U.S. only by authorized users. The NRA did not like the new Centers for Disease Control and Prevention (CDC) agreement, and sought to mobilize its members to boy- shows that on an average day, 93 Americans are killed cott Smith & Wesson products. That same year. Smith & with firearms. Wesson suffered a decrease in sales by 40%, causing it to Two very significant pieces of legislation have influ- lay off 15% of its workforce, and subsequently replacing enced the US gun industry in September 1994, a Federal its CEO. By 2001 things were so bad at Smith & Wesson Assault Weapons Ban (AWB) went into effect, which that it was soll by its parent company, Tomkins PLC, for prohibited the manufacture, transfer and possession of a mere S15 million. The company then sought to, and certain assault weapons and all large capacity magazines was successful in, regaining a prominent position in the (LCMS), but the law expired in 2004. Since then, assault- U.S gun industry. They did so, in part, by publicly reject- style weapons and ICMs are common characteristics of ing the terms of the Clinton gun safety agreement and guns discussed in policy debates because they are dis- coming up with a new line of high-capacity pistols and proportionately used in mass shootings. For instance. an assault-style rifle, the first of its kind for the company the suspect in the mass shooting at a movie theater in These new products became best sellers, and the Bush Aurora. Colorado, used an assault rifle with a 100-round administration also helped by awarding Smith & Wesson magazine. Similar weapons were used in the mass shoot- with several new federal contracts.** ings at Virginia Tech University and Fort Hood, Texas. The deadliest mass shooting by an individual in US. Social and Political Forces history occurred in October 2017 when the shooter used The gun industry in the US is subject to state and federal a bump-fire stock to make a semiautomatic weapon regulations. Most federal regulations are implemented perform like a machine gun. The shooting prompted through the Bureau of Alcohol, Tobacco, Firearms, and support in the US. Congress for legislation that would Explosives (ATF). All manufacturers, dealers, and retail ban bump fire stocks and the National Rifle Association ers must have a federal license in order to participate (NRA) supported these regulations." In November 2017, in the industry. Prospective buyers are subject to point- Massachusetts became the first state to ban the sale, of-sale background checks, and those with criminal possession, or use of such devices records or any other disqualifying factors are restricted In October 2005. Congress passed the Protection of from making a purchase. Some state and municipal Lawful Commerce in Arms Act (PLCAA), which was governments have gun laws that are stricter than federal put in place to protect firearm manufacturers from laws. Such laws may prohibit entire dasses of firearms, being held liable when crimes have been committed ammunition, or ammunition magazines from being with their products. The firearms industry has success sold in the respective governing arca. Gun manufac fully defcnded numerous civil action lawsuits from gun turers are also subject to state and federal laws and violence victims due to this federal law. For instance, in regulations regarding the use, storage, and disposal of October 2016, a Connecticut superior court judge dis- hazardous materials. missed a lawsuit filed by the families of victims of the In today's political climate, there is a lot of talk 2012 Sandy Hook Elementary School shooting against a about gun violence, gun control, and individual rights. firearm company. However, in November 2017, families The NRA has done well informing Americans of their of victims appealed to the Connecticut Supreme Court, Second Amendment right to bear arms. The media which will now decide if the families claims can proceed. has done a terrific job of highlighting recent gun vio- This case will be a test of the federal law, which protects lence, mass shootings, and terrorist attacks to motivate firearms manufacturers from liability claims. If this law Americans in two different ways. Some view these is repealed or changed. then arms manufacturers may storics and desire personal protection, and are subse- have to allocate substantial financial resources to fight quently motivated to purchase a gun. Others View the and settle such claims ... T-Mobile LTE 3:05 PM 98% 42