Smith and Wesson Update

rock_jock · April 21, 2000, 01:23 PM

The following is from Townhall.com:

Last month, when the Clinton administration announced its agreement to resolve government-sponsored litigation against Smith & Wesson, other gun makers were supposed to start lining up to get in on the deal. So far, that hasn't happened.

Instead, Smith & Wesson seems to be having second thoughts. A "clarification" the company recently posted on its Web site effectively nullifies some of the settlement agreement's key points.

The company had said that its dealers would "make no gun show sales unless (SET ITAL) all (END ITAL) sales at the gun show are completed only after a background check." Now it says this provision "does not apply to private sales," which are the only sales for which background checks are not already required by federal law.

The company also says that various requirements the agreement imposes on distributors apply only to Smith & Wesson guns. The most significant of these rules would allow customers buying multiple handguns to take home only one on the day of the sale, requiring them to return two weeks later for the rest. Under Smith & Wesson's "clarification," customers could immediately take possession of as many handguns as they wanted, as long as the guns were made by other companies.

If Smith & Wesson's interpretation of the agreement prevails, the Clinton administration will not have much to show for its arm-twisting. Almost everything else in the deal is either a pre-existing Smith & Wesson practice, a previously planned change, or a provision that does not take effect unless other manufacturers sign on.

Anti-gun activists see Smith & Wesson's "clarification" as an act of defiance. The Violence Policy Center's Kristen Rand told The New York Times, "They are basically thumbing their noses at the administration, saying, 'This is how we interpret it, and if you don't like it, you can sue us.'"

Smith & Wesson's sudden display of gumption may be partly due to its disappointment at the protection provided by the deal. So far only the federal government (which has yet to file a suit), a couple of states, and about half of the 30 or so cities and counties that are suing gun manufacturers have agreed to leave Smith & Wesson alone.

Meanwhile, the company's capitulation has aroused intense anger from distributors and retail customers as well as manufacturers. The National Rifle Association and the National Shooting Sports Foundation, the industry's trade group, both condemned the deal, while Second Amendment supporters called for a boycott of Smith & Wesson products.

"If we all stopped buying new S&W firearms, knives, hats, and accessories for the rest of 2000 and '01," Hamline University law professor Joseph Olson wrote in a late March e-mail appeal, "there would be no S&W to keep the 'deal' with the Clinton administration."

Many retailers and at least one major wholesaler have said they would rather give up the Smith & Wesson line than comply with the conditions in the settlement agreement. In addition to the expense and hassle, these distributors presumably want to avoid offending their customers.

"Basically, we are very disappointed in what (Smith & Wesson) did," a spokesman for RSR Group, the company's biggest customer, told The Wall Street Journal. "They have agreed to something we can't adhere to."

To anyone concerned about the threat to our civil liberties posed by legislation disguised as litigation, the shunning of Smith & Wesson was a refreshing show of courage and good sense. But to New York Attorney General Eliot Spitzer and Connecticut Attorney General Richard Blumenthal, both of whom had a hand in the Smith & Wesson deal, it was a conspiracy in restraint of trade.

After it became clear that Smith & Wesson would pay a price in the marketplace for its attempt to placate the gun controllers, Spitzer and Blumenthal, joined by four other attorneys general, announced an antitrust investigation. In their view, apparently, the law requires people to do business with Smith & Wesson, even if they've decided it's not in their best interests.

Plainly, the politicians are annoyed that, instead of gaining the advantage they promised, Smith & Wesson is suffering for giving in to the government's extortion. Now their embarrassment has been compounded by the company's efforts to rewrite parts of the settlement agreement.

Perhaps it is dawning on Smith & Wesson's executives that it can be dangerous to show weakness in the face of statist demands. Too bad they didn't pay closer attention to the fate of the tobacco companies, whose efforts at appeasement have only whetted their opponents' appetites.

**Mal H** · April 21, 2000, 01:34 PM

This belongs in the Legal and Political forum. Look for it there...

Jon K · April 21, 2000, 04:01 PM

I belive that after seeing how many people bailed out on S&W after they made their deal with the devil, the exec's at S&W would try anything to get back into the good graces of the shooting public. That sucking sound you hear is the rear ends of the CEO and Board of Directors wondering what happened to their 6 figure incomes and stock options.
No new S&W's for me.

**Dennis** · April 21, 2000, 04:57 PM

I would guess S&W stockholders also were less than enchanted with their S&W puppet.

I wonder if S&W is trying to make enough of a comeback to sell the company without taking a financial bath. (?)

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Either you believe in the Second Amendment or you don't.
Stick it to 'em! RKBA!

Gorthaur · April 21, 2000, 08:31 PM

S&W is a very small part of Tomkins Plc. In 1999, Tomkins had a profit of $800M. The group that includes S&W, plus some lawnmower companies, contributed $37M of that, or 4.6%. Tomkins is publicly traded, it's listed as TKS on the NYSE. A little over $12B would buy the company....

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Protect your Right to Keep and Bear Arms!

[This message has been edited by Gorthaur (edited April 21, 2000).]

DC · April 21, 2000, 08:47 PM

Dennis...
I believe Tompkins has been trying to unload S&W for the past 2 yrs, with no takers. This last deal pretty much destroys S&W as a saleable asset, unless (and it would have to be legally binding) a new owner would not be liable to the existing lawsuits.

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"Quis custodiet ipsos custodes" RKBA!

Gorthaur · April 21, 2000, 08:58 PM

I would guess that they would sell the rights to the designs and names, sell the manufacturing equipment, and dissolve the rest of the company. That's basically what happened with AMT (makers of the Automag), for instance. It remains to be seen whether the new company, Galena Inc., can really dodge the suits against AMT.

Check out Lawyers Guns and Money.

------------------
Protect your Right to Keep and Bear Arms!

[This message has been edited by Gorthaur (edited April 21, 2000).]

jimpeel · April 21, 2000, 09:45 PM

I wish the manufacturers would stand on their hind legs and sue the attorneys general for a RICO Act violation.

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Gun Control: The proposition that a woman found dead in an alley, raped and strangled with her own panty hose, is more acceptable than allowing that same woman to defend herself with a firearm.

April 21, 2000, 01:23 PM	#1
rock_jock Senior Member Join Date: January 19, 2000 Location: SE Texas Posts: 1,789	The following is from Townhall.com: Last month, when the Clinton administration announced its agreement to resolve government-sponsored litigation against Smith & Wesson, other gun makers were supposed to start lining up to get in on the deal. So far, that hasn't happened. Instead, Smith & Wesson seems to be having second thoughts. A "clarification" the company recently posted on its Web site effectively nullifies some of the settlement agreement's key points. The company had said that its dealers would "make no gun show sales unless (SET ITAL) all (END ITAL) sales at the gun show are completed only after a background check." Now it says this provision "does not apply to private sales," which are the only sales for which background checks are not already required by federal law. The company also says that various requirements the agreement imposes on distributors apply only to Smith & Wesson guns. The most significant of these rules would allow customers buying multiple handguns to take home only one on the day of the sale, requiring them to return two weeks later for the rest. Under Smith & Wesson's "clarification," customers could immediately take possession of as many handguns as they wanted, as long as the guns were made by other companies. If Smith & Wesson's interpretation of the agreement prevails, the Clinton administration will not have much to show for its arm-twisting. Almost everything else in the deal is either a pre-existing Smith & Wesson practice, a previously planned change, or a provision that does not take effect unless other manufacturers sign on. Anti-gun activists see Smith & Wesson's "clarification" as an act of defiance. The Violence Policy Center's Kristen Rand told The New York Times, "They are basically thumbing their noses at the administration, saying, 'This is how we interpret it, and if you don't like it, you can sue us.'" Smith & Wesson's sudden display of gumption may be partly due to its disappointment at the protection provided by the deal. So far only the federal government (which has yet to file a suit), a couple of states, and about half of the 30 or so cities and counties that are suing gun manufacturers have agreed to leave Smith & Wesson alone. Meanwhile, the company's capitulation has aroused intense anger from distributors and retail customers as well as manufacturers. The National Rifle Association and the National Shooting Sports Foundation, the industry's trade group, both condemned the deal, while Second Amendment supporters called for a boycott of Smith & Wesson products. "If we all stopped buying new S&W firearms, knives, hats, and accessories for the rest of 2000 and '01," Hamline University law professor Joseph Olson wrote in a late March e-mail appeal, "there would be no S&W to keep the 'deal' with the Clinton administration." Many retailers and at least one major wholesaler have said they would rather give up the Smith & Wesson line than comply with the conditions in the settlement agreement. In addition to the expense and hassle, these distributors presumably want to avoid offending their customers. "Basically, we are very disappointed in what (Smith & Wesson) did," a spokesman for RSR Group, the company's biggest customer, told The Wall Street Journal. "They have agreed to something we can't adhere to." To anyone concerned about the threat to our civil liberties posed by legislation disguised as litigation, the shunning of Smith & Wesson was a refreshing show of courage and good sense. But to New York Attorney General Eliot Spitzer and Connecticut Attorney General Richard Blumenthal, both of whom had a hand in the Smith & Wesson deal, it was a conspiracy in restraint of trade. After it became clear that Smith & Wesson would pay a price in the marketplace for its attempt to placate the gun controllers, Spitzer and Blumenthal, joined by four other attorneys general, announced an antitrust investigation. In their view, apparently, the law requires people to do business with Smith & Wesson, even if they've decided it's not in their best interests. Plainly, the politicians are annoyed that, instead of gaining the advantage they promised, Smith & Wesson is suffering for giving in to the government's extortion. Now their embarrassment has been compounded by the company's efforts to rewrite parts of the settlement agreement. Perhaps it is dawning on Smith & Wesson's executives that it can be dangerous to show weakness in the face of statist demands. Too bad they didn't pay closer attention to the fate of the tobacco companies, whose efforts at appeasement have only whetted their opponents' appetites.

April 21, 2000, 01:34 PM	#2
Mal H Staff Join Date: March 20, 1999 Location: Somewhere in the woods of Northern VA Posts: 10,595	This belongs in the Legal and Political forum. Look for it there...

April 21, 2000, 04:01 PM	#3
Jon K Member Join Date: April 20, 2000 Location: Driggs, Idaho Posts: 74	I belive that after seeing how many people bailed out on S&W after they made their deal with the devil, the exec's at S&W would try anything to get back into the good graces of the shooting public. That sucking sound you hear is the rear ends of the CEO and Board of Directors wondering what happened to their 6 figure incomes and stock options. No new S&W's for me.

April 21, 2000, 04:57 PM	#4
Dennis Staff Join Date: November 23, 1998 Location: a small forest in Texas Posts: 7,095	I would guess S&W stockholders also were less than enchanted with their S&W puppet. I wonder if S&W is trying to make enough of a comeback to sell the company without taking a financial bath. (?) ------------------ Either you believe in the Second Amendment or you don't. Stick it to 'em! RKBA!

April 21, 2000, 08:31 PM	#5
Gorthaur Senior Member Join Date: January 19, 2000 Posts: 851	S&W is a very small part of Tomkins Plc. In 1999, Tomkins had a profit of $800M. The group that includes S&W, plus some lawnmower companies, contributed $37M of that, or 4.6%. Tomkins is publicly traded, it's listed as TKS on the NYSE. A little over $12B would buy the company.... ------------------ Protect your Right to Keep and Bear Arms! [This message has been edited by Gorthaur (edited April 21, 2000).]

April 21, 2000, 08:47 PM	#6
DC Moderator Emeritus Join Date: September 30, 1998 Location: Calif Posts: 4,241	Dennis... I believe Tompkins has been trying to unload S&W for the past 2 yrs, with no takers. This last deal pretty much destroys S&W as a saleable asset, unless (and it would have to be legally binding) a new owner would not be liable to the existing lawsuits. ------------------ "Quis custodiet ipsos custodes" RKBA!

April 21, 2000, 08:58 PM	#7
Gorthaur Senior Member Join Date: January 19, 2000 Posts: 851	I would guess that they would sell the rights to the designs and names, sell the manufacturing equipment, and dissolve the rest of the company. That's basically what happened with AMT (makers of the Automag), for instance. It remains to be seen whether the new company, Galena Inc., can really dodge the suits against AMT. Check out Lawyers Guns and Money. ------------------ Protect your Right to Keep and Bear Arms! [This message has been edited by Gorthaur (edited April 21, 2000).]

April 21, 2000, 09:45 PM	#8
jimpeel Senior Member Join Date: October 11, 1999 Location: Longmont, CO, USA Posts: 3,800	I wish the manufacturers would stand on their hind legs and sue the attorneys general for a RICO Act violation. ------------------ Gun Control: The proposition that a woman found dead in an alley, raped and strangled with her own panty hose, is more acceptable than allowing that same woman to defend herself with a firearm.