INDUSTRY NEWS: DECEMBER 2003

by Robert M. Hausman

In a move that awakened the industry, Heckler & Koch, the noted German firearms manufacturer, announced it would build a new factory in Columbus, Georgia, to manufacture firearms for the US military, law enforcement, and commercial markets.

The planned state-of-the-art factory will incorporate all of the technologically innovative manufacturing processes the company is famous for, including the cold hammer forging of barrels, advanced polymer molding, and CNC machining. “We will initially create about 200 American jobs in Columbus,” said US VP Peter Simon, “and forecast additional growth as some of our US-based design and development projects mature into production.”

Current military design and development programs include the US Army’s XM8 Assault Rifle and the Special Operations Forces Combat Assault Rifle programs. The company may also shift a portion of its Design and Engineering Office from its Sterling, Virginia headquarters to the Columbus, Georgia location.

“Recent significant contract awards and our assessment that the company is well positioned in competing for additional business have convinced us to accelerate our plans to establish a manufacturing facility in America,” said Simon. “This decision reflects our strategic commitment to the US market and also our acceptance and support for ‘Buy American’ provisions.

“We have a reputation for superior quality that has resulted in long-term relationships with America’s most elite Special Operations Forces warriors and federal, state and local law enforcement officers who fight terrorism and crime with our MP5 submachine gun, our Mark 23 SOCOM pistol, our Grenade Machine Gun and our USP 40 Compact LEM pistol,” Simon added.

Current plans include the manufacture and assembly of assault rifles for the US military and USP 40 Compact LEM pistols for federal agencies. H&K expects to formally break ground in the fall of this year and for the new factory to be operational by the end of 2004. It is forecast that the plant may eventually employ 500 people.

“This has been an eight-year effort,” commented Mike Gaymon, president of the Greater Columbus Chamber of Commerce, on the state’s efforts to lure the plant. Officials said the initial construction phase would cost about $20 million for the plant to be situated in Muscogee Technology Park.

Glock, the Austrian firearms manufacturer, has its North American headquarters in Smyrna, GA, a suburb of Atlanta. Glock pistols are used by 65% of American law enforcement agencies, according to the company’s web site.

TSA Contract Award Literally Up in the Air

Meanwhile, the Transportation Security Administration (TSA) is reported to be reconsidering its recent decision to arm US commercial airline pilots with German-made H&K handguns, only a few days after House Small Business Chairman Donald Manzullo (R-IL) inquired about the agency’s method of choosing a supplier.

The companies that competed for a three-year, $5 million contract to supply TSA with as many as 9,600 .40-caliber semiautomatic pistols have been told that their bids will be re-evaluated, but the reasons were left unclear. TSA officials told at least one firm they had questions about the information the agency used earlier this month to select H&K as the winner. The questions came from Manzullo, an outspoken advocate of “Buy American” laws to help support US manufacturing jobs.

Aides to Manzullo said he had met in late July with TSA officials to learn why H&K beat other bidders, including American-owned Smith & Wesson and foreign firms, such as Beretta, that have manufacturing facilities in the US.

Manzullo raised the issue of whether the TSA award to the German firm would influence officials elsewhere in the Homeland Security Department and ultimately cost U.S.-based firearms manufacturing jobs. At press time, the Bureau of Immigration and Customs Enforcement, which includes the enforcement arm of the old Immigration and Naturalization Service, was expected to award a substantial contract in late August to supply handguns to its officers, Manzullo said.

With a contract from TSA-situated in the same division as the immigration and customs agency, H&K would be well-positioned to win the other contract, which committee aides say could be worth $30 million. The announcement that it would build a new plant in the US, should defray any concerns raised about the US government’s purchase of “foreign” handguns.

The decision to re-evaluate the bids is only the latest twist in the TSA’s effort to buy handguns for the airline pilots who volunteer for the Federal Flight Deck Officer program.

According to industry sources, the agency changed its handgun preferences several times once the program was authorized last November by the Arming Pilots Against Terrorism Act. Late last year, TSA initially favored Austrian gun manufacturer Glock, then changed its mind.

ATF WILL PROVIDE MORE GUIDELINES FOR DESTRUCTION OF MACHINEGUN RECEIVERS

In a move that brought audible sighs of relief from some of the importers in attendance at the second annual presentation of ATF And The Imports Community meeting, ATF representatives announced that the agency will provide diagrams to importers showing how to properly destroy (by torch cutting) any type of machine gun receiver. Some 150 executives in the firearms and ammunition imports and national defense sectors gathered in Washington, D.C. July 21 and 22, for the one-and-a-half day intensive seminar focusing on topics related to the importation of firearms, ammunition and related articles.

A cooperative effort between the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Bureau of Customs and Border Protection, the Department of State and the F.A.I.R. Trade Group (which represents licensed importers), the meeting was held at the Wyndham City Center hotel, in the center of Washington, D.C.

Firearms importers, through their main industry organization, the F.A.I.R. Trade Group, have been working to get better guidance and communication from ATF on approved methods of machinegun receiver destruction. During the July conference, ATF representatives said the agency would soon make drawings available to importers detailing the exact torch cuts the agency deems necessary to destroy a machinegun receiver with a welding torch. ATF has also stated that machinegun receivers may also be destroyed by smelting or crushing but has thus far provided little in the way of guidance to importers. ATF does continued to recommend that a writing describing the proposed method of destruction be submitted to ATF’s Firearms Technology Branch (FTB) prior to importation for approval. At the request of an importer, the FTB will examine firearms to determine if they are legal for importation or have been properly destroyed. The announcement at the Importer’s gathering in July that ATF would now provide diagrams for proper deactivation methods of virtually all machinegun receiver models was considered a major gain by the importers present.

One problem importers have had with ATF diagrams issued in the past is that they have illustrated torch cutting of component parts in addition to the receiver. When such diagrams have been used as attachment for import permits, U.S. Customs personnel have logically assumed that the components parts, or the complete arm, has to be cut as indicated in the illustration to meet ATF requirements. This has caused delays in releasing shipments to importers. ATF continues to maintain that only the frame or receiver of a machinegun needs to be destroyed to remove it from the controls of the National Firearms Act.

ATF Minimum MG Destruction Standards

ATF’s minimum acceptable standards for machinegun receiver destruction are: To completely sever the receiver in at least three critical locations, that the agency specifies by model, with an oxy/acetylene torch that has a cutting tip capable of removing one-quarter inch of metal per cut.

Some guns require more than three cuts. For example, demilitarization of the semiautomatic .30 M1 carbine is accomplished by making four different cuts: through the rear sight, receiver and rear of the trigger guard; a second cut is to made halfway between the rear sight mount and the barrel chamber, cutting downward to the left through the trigger guard while ensuring that the bolt and both sides of the frame are completely severed; the third cut begins 1 inch back from the front of the receiver, cutting downward to the right through the barrel chamber, operating slide, guide and spring; the fourth cut begins toward the front of the barrel, cutting through the barrel and center of the bayonet lug. Each cut must displace at least one-half inch of metal.

US Origin Policy

Incidentally, US origin curio and relics, such as the .30 M1 carbine, were the subject of a possible policy change with the US Department of State earlier this year which would have allowed the retransfer of US origin curio or relic firearms, including the .30 M1 carbine, to US importers for resale to the qualified public.

The F.A.I.R. Trade Group board of directors held two meetings with ATF following the importer’s gathering. One area of discussion related to the US Origin firearm policy.

In an earlier interagency review process headed by the Department of State, ATF was the only entity on the review team to express concern with a change in the current presumptive denial of re-importation of US origin goods. ATF concern was solely on the issue of conversion of .30 M1 Carbines to the M2 full-auto version. FAIR has subsequently met with ATF on this matter on several occasions and provided ATF with a White Paper detailing reasons why the .30 M1 Carbine conversion issue is not a pressing policy matter. This information has also been provided to the Department of State.

The State Dept. has subsequently reissued a new proposed policy for review by ATF. FAIR has been assured it will be given an opportunity to comment on any remaining concerns ATF may have regarding .30 M1 Carbine importation.

Another order of discussion consisted of a notice to ATF senior management regarding significant concern that unofficial communications with the ATF personnel in select positions with critical oversight/approval authority have resulted in policy statements contrary to current ATF policy and potentially damaging to existing and future business opportunities to the firearms import community. FAIR says it was assured that existing ATF policy had not changed and that the individuals concerned would be directly contacted and advised of existing policy.

US Exports to Canada

The FAIR Board also raised the issue of the financial limit for exemption for permit requirements when exporting to Canada. Several years ago, the Department of State asserted that the government of Canada and the OAS treaty and corresponding model regulation required that the US lower the threshold requiring permits for the exportation of parts to Canada from $500 to $100. Since that time, no other country has adopted similar restrictions and Canada has actually gone in the opposite direction, FAIR says.

Canada no longer requires import permits for parts that are not key to the functioning of the firearm (such as the barrel, receiver, slide, etc.). Given that the US justification for promulgating the change in export policy has proven baseless, FAIR requested that State revisit the issue. Since the Canadian exemption was based on policies set forth by the office of Defense Trade Controls, the message regarding this issue will be relayed on FAIR’s behalf and FAIR will revisit the issue at a later date with the appropriate staff.

Finally, during the importer’s conference, participants were advised that ATF would issue a notice of proposed rulemaking regarding restricted importation for barrels, frames and receivers subject to the 925(d)3 rule. ATF said FAIR’s appeal of the agency’s policy was the direct driver of the anticipated change in import restrictions on these goods. However, the ATF policy during the period of transition (which could last 18 months) remains unclear.

Robert M. Hausman is the publisher of the small arms industry’s two most widely read trade publications, The New Firearms Business and The International Firearms Trade. A subscription to the domestic Firearms Business costs $112 for one-year (22-issues), while a one-year subscription to the monthly International Firearms Trade is just $72. To order a subscription, send a check to: P.O. Box 98, St. Johnsbury, VT 05819 USA.