Despite Remington financial woes, Huntsville officials remain confident

Despite Remington financial woes, Huntsville officials remain confident
Remington in financial trouble; Huntsville leaders say don’t worry
nThe Remington firearms facility in Huntsville appears to be behind on its promised hiring numbers as the company considers filing for bankruptcy.

Huntsville officials, though, said they are confident that the gun manufacturer – which said upon the announcement of its arrival in the Rocket City that it would ultimately create 2,000 jobs – will fulfill its obligations.

But while overall hiring has not met the mandated threshold, payroll for the plant has exceeded requirements.

“As long as we’re hitting that total payroll number, I feel satisfied that we’re getting what we need to get from the company,” Huntsville Mayor Tommy Battle said Friday. “They are increasing our economy by $30 million in payroll. We’re going to do what our job is, to encourage industry to do well here.”

While Remington faces financial woes – according to Reuters, the company is carrying a debt load near $1 billion – Battle and Chip Cherry, CEO of the Huntsville-Madison County Chamber of Commerce, said they have faith in Remington’s ability to rebound.

Remington received $68.9 million in incentives from the state of Alabama and local governments.

According to the chamber of commerce, Remington has a total annual payroll of $32 million (direct and indirect) and a total jobs impact of 889 (direct and indirect).

Battle and Cherry said they met with Remington officials earlier this week.

“In our conversations with the highest-level execs in the company, I think they have a game plan that gives them a very good chance of coming through and being able to be a leader in the industry again at some point,” Battle said.

Battle said there was “never a thought” that the jobs in Huntsville were not safe and the topic was not discussed with Remington officials.

“We are in this for the long-term,” Cherry said. “We have a very strong relationship with Remington. Actually, the new CEO of the company (Anthony Acitelli) is going to relocate here.”

Battle said he’s been told that Remington’s annual payroll is about $30 million, which is bolstered by higher-than-expected salaries.

“Maintaining employment here and the dollar amount of the employment is such that it reflects what we expected to receive out of the employment through the development agreement,” Battle said.

Raw employment numbers, however, have not met the company’s scheduled increase. By the end of 2017, Remington was to have 1,018 employees. Battle said he’s been told the company has between 400 and 700 employees and Cherry put the number at around 500.

If Remington emerges from its financial hole, the Huntsville plant could be in a position to prosper. While the company has made cuts elsewhere, jobs and research and development have been relocated to north Alabama.

Remington laid off 122 people at its New York plant last year and, in 2016, it closed a plant in Kentucky.

Some of the work at the Kentucky plant was relocated to Huntsville, Cherry said.

“Remington has honored their commitment to us,” Cherry said. “Their overall wage performance is better than what they had promised in the beginning. It’s just the gross number of jobs is where this particular ebb and flow in their business cycle has created some challenges for them. Overall, that whole ebb and flow in this business cycle has created some challenges.

A gun, rifle and ammo manufacturer employing hundreds in north Alabama could be financial trouble. Reuters reports Remington is looking for financing that will allow it to file for bankruptcy protection.

Hundreds of workers are employed at its Huntsville manufacturing plant. City leaders said they’ve been told Remington gun sales are down. The Huntsville mayor’s office and the Chamber of Commerce said people shouldn’t worry. Their confident Remington will be able to weather this storm.

"I’m not sure what it means for all of those employees, but I know what it means for us,” said Huntsville Mayor Tommy Battle. “We are going to work with the company. We are going to work with them to make them a success.”

The manufacturing plant makes a $32 million economic impact yearly and provides 889 jobs. They generate annually $3 million in taxes and since opening in 2014, $14.6 million, according to the Huntsville/Madison County Chamber.

“I think it would be very, very, very unwise to say that people are going to lose their jobs out there. This industry is a pretty solid industry and this company is a pretty solid company,” Battle said.

Chamber president and CEO Chip Cherry said Remington has honored their commitment to the city and then some. He said the company has exceeded the capital investment and wage rate. The new CEO of Remington plans to move to the Rocket City and be based here.

"In the long term it looks very good for that relationship. They just are going to have a rough road for the next couple of years, which led to the incidents you are referring to is restructuring," said Cherry.

Battle said the development agreement they signed is a contract for the protection of the public.

“If something happened with the company we have $12 million invested, which is backed up by mortgage on the building, which is probably worth $200 million so we are well covered in this venture,” Battle said.

“It’s not just a handshake of just hey we are going to do wonderful things and trust us. There are controls on both sides that we would perform that we said we would do and they said they would do,” Cherry said.

The Huntsville manufacturing plant is supposed to employ 2,000 workers within a 7-year period. Officials said that might change, but it’s a discussion to be had.

Remington met with city officials just a few days ago and was up front with how the company was struggling with sales and gave them an idea about what their game plan was for the future.

WAFF 48 News contacted Remington about them seeking financing to file for bankruptcy, but they haven’t returned our call.

“Obviously there has been a number of installations like Kentucky and others that have consolidated into this operation so obviously other parts of the country have felt this impact more than we have,” Cherry said.

Both Battle and Cherry agree the decline of gun sales is due to who’s in the Oval Office.

Owner of Lieutenant Dan’s Pawn Shop, Dan Freda, said he also saw a decline in gun sales. He said gun manufacturers overproduced, thinking sales would be booming after the new president takes office.

"Because the election went the other way, I think the American people have relaxed in their concern about their Second Amendment rights so therefore sales are going down you know," Freda said.

Freda said he’s selling about 30 guns a month, much less than other years. He saw the sales decline at the beginning of the year in Huntsville. He added the price of AR-15s have dropped by $100, but he still sees an interest in them as well as handguns.

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