When Colt's Manufacturing spun off Colt Defense in June 2003, the Defense mission was to sell rifles and carbines to law enforcement and military worldwide. "We have no rights to sell any product into the consumer market," Grody explained. Colt Defense can sell Colt-branded handguns to military customers, but Colt's Manufacturing has the rights to sell handguns to law enforcement.
The Defense company can sell other brands, as well. "We can sell Joe Blow's rifles anywhere we want, but people don't want that, they want Colt rifles," said Grody.
More recently, the lines between the companies have been blurred. By 2011, the Army had stopped buying up Colt Defense rifle output. And so the company looked for new customers. It wasn't easy, as competitors had gobbled up the domestic consumer market for what Grody calls "the modern sporting rifle."
The market is huge, he said, "But we weren't in it, because we [had been] making guns for more serious purposes."
In 2011 and 2012, Colt Defense began to sell consumer versions of the military M-16 rifles to the civilian market, through Colt's Manufacturing. The rifle, marketed as the AR-15, is not used for deer hunting, but it's popular for recreational shooting, and hunting prarie dogs and other varmints.
"A lot of people had seen the Iraq war on television, and there are a lot of recreational shooters," Grody said. "They want the gun that the military guys have. It's easy to shoot, easy to aim and doesn't have a big kick. People like that military feel, and the big magazine to fire off a lot of shots without having to reload. It's a convenience factor."
It began to aggressively win back market share. As a result, the past two years have been highly successful. Specifically? "I can't say, our 10-K isn't out yet," Grody said, referring to a report that publicly owned companies file with the Securities and Exchange Commission.
Grody's GC counterpart in Colt Manufacturing is Joseph Dieso, who was not available for an interview last week.
Zero Litigation
Inside, the gun factory has the aroma of metal-cutting lubricants, and some corner rooms have the grimy feel of a well-used, small town auto garage. Under harsh fluorescent lighting, women assemble small parts for pistols with the precision of watchmakers.
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