U.S. firearms industry--it's not all in the x-ring.

Author:Thurman, Russ
Position::Industry watch

The firearms industry is enjoying a level of commerce that is rightly the envy of other businesses in the nation. Manufacturers are in maximum production mode, distributors are scrambling to acquire every product they can, and dealers are shouting, "I can't get enough guns to fill my sales."

Yes, business is good, as I report in my annual look at the industry (see page 36).

That said, not every company in the industry is celebrating, and there are ongoing and future battles that would hurt the industry.

With the steady U.S. withdrawal from battlefields in the Middle East, and federal spending cuts that could cut the 2013 defense budget by $54 bil lion, many high-value government contracts are being short-ended. Industry companies counting on the full range of the contracts are facing major shortfalls.

In U.S. firearm production, many new rifle manufacturers are floundering after misreading the future of the market. In 2010, according to the ATF's annual report, 44 additional companies began producing rifles, many obviously motivated by the white-hot rifle sales in 2009, when production jumped 29 percent over 2008. However, in 2010, rifle production dropped 19 percent, the largest decrease of all firearms for the year (see page 38).

In comparison, 17 new handgun manufacturers and three new shotgun manufac turers began production in 2010. Handgun production increased 17 percent in 2010 and shotguns decreased 1.2 percent. Hopefully, the new rifle manufacturers will regain their footing and continue in business.

On the anti-gun, anti-industry front, there are major issues that constantly threaten the future of firearms and the health of the market.

Microstamping is a flawed technology that would greatly increase the cost of a firearm and impact the marketplace at a significant level. Despite numerous studies denouncing the technology, major politicians, most notably New York Gov. Andrew Cuomo, nevertheless champion microstamping.

The issue continues to be debated in New York's State Assembly. In March, Remington Arms and Kimber Manufacturing strongly opposed an effort by the state to require microstamping.

Traditional ammunition is another hot topic...

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