INDUSTRY NEWS: ATK ACQUIRES EAGLE INDUSTRIES

By Robert M. Hausman

Alliant Techsystems (ATK) has acquired accessory manufacturer Eagle Industries, as it expands its position in the domestic and international tactical accessories markets. While terms of the agreement were not disclosed, ATK expects the acquisition to add more than $80 million to Fiscal Year 2010 revenues, and be slightly accretive to FY10 earnings per share. Eagle Industries will become part of ATK’s Armament Systems group.

Eagle Industries is a manufacturer of operational nylon gear and equipment for tactical operations. It makes more than 5,000 products including tactical assault vests, load-bearing equipment, weapon transport gear, holsters, and personal gear carriers. Main customers are the military and law enforcement agencies in the U.S. and internationally. The company has approximately 2,300 employees.

ATK has also been awarded a contract from the U.S. Army Contracting Command, Rock Island Contracting Center, Rock Island, Ill., to continue operating the Lake City Army Ammunition Plant (LCAAP) for an additional four years. Under the new contract, ATK will continue to supply small-caliber ammunition through September 2013. The award assures an uninterrupted supply of ammunition to the U.S. military beyond ATK’s current 10-year contract.

The U.S. Army also awarded ATK $481 million in orders under the new contract for production of 5.56mm, 7.62mm, and .50 caliber ammunition and to continue work to modernize the Lake City facility.

ATK began operating the plant, located in Independence, Mo., in April 2000 and has increased production from 350 million to more than 1.4 billion rounds annually. The plant has the capability to produce a mix of 5.56mm, 7.62mm, .50 caliber, and 20mm cartridges, as well as ammunition links.

ATK is a premier aerospace and defense company with more than 19,000 employees in 22 states, Puerto Rico and internationally, and revenues in excess of $4.5 billion.

Smuggled U.S. Firearms in Mexico Not a Major problem

The media and some politicians present as “true” the shocking statistic that 90 percent of the arms used to commit crimes in Mexico come from the United States.

• Secretary of State Hillary Clinton said it to reporters on a flight to Mexico City.
• CBS newsman Bob Schieffer referred to it while interviewing President Obama.
• California Sen. Dianne Feinstein said at a Senate hearing: “It is unacceptable to have 90 percent of the guns that are picked up in Mexico and used to shoot judges, police officers and mayors … come from the United States.”
• William Hoover, assistant director for field operations at the Bureau of Alcohol, Tobacco, Firearms and Explosives, testified in the House of Representatives that “there is more than enough evidence to indicate that over 90 percent of the firearms that have either been recovered in, or interdicted in transport to Mexico, originated from various sources within the United States.”

There’s just one problem with the 90 percent “statistic”: It’s just not true. In fact, it’s not even close. The fact is, only 17 percent of guns found at Mexican crime scenes have been traced to the U.S.

What’s true, an ATF spokeswoman told FOXNews.com, in a clarification of the statistic used by her own agency’s assistant director, “is that over 90 percent of the traced firearms originate from the U.S.”

But a large percentage of the guns recovered in Mexico do not get sent back to the U.S. for tracing, because it is obvious from their markings that they do not come from the U.S.

“Not every weapon seized in Mexico has a serial number on it that would make it traceable, and the U.S. effort to trace weapons really only extends to weapons that have been in the U.S. market,” Matt Allen, special agent of U.S. Immigration and Customs Enforcement (ICE), told FOX News.

The Numbers

In 2007-2008, according to ATF Special Agent William Newell, Mexico submitted 11,000 guns to the ATF for tracing. Close to 6,000 were successfully traced – and of those, 90 percent – 5,114 to be exact, according to testimony in Congress by William Hoover – were found to have come from the U.S. But in those same two years, according to the Mexican government, 29,000 guns were recovered at crime scenes.

This means that 68 percent of the guns that were recovered were never submitted for tracing. And when the approximately 6,000 guns that could not be traced are deducted from the remaining 32 percent, it means 83 percent of the guns found at crime scenes in Mexico could not be traced to the U.S.

The crime guns in Mexico come from a variety of sources:

• The Black Market. Mexico is an arms bazaar, with fragmentation grenades from South Korea, AK-47s from China, and shoulder-fired rocket launchers from Spain, Israel and former Soviet bloc manufacturers all readily available to those with cash and connections.
• Russian crime organizations. Interpol says Russian Mafia groups such as Poldolskaya and Moscow-based Solntsevskaya are actively trafficking drugs and arms in Mexico.
• South America. During the late 1990s, the Revolutionary Armed Forces of Colombia (FARC) established a clandestine arms smuggling and drug trafficking partnership with the Tijuana cartel, according to the Federal Research Division report from the Library of Congress.
• Asia. According to a 2006 Amnesty International Report, China has provided arms to countries in Asia, Africa and Latin America. Chinese assault weapons and Korean explosives have been recovered in Mexico.
• The Mexican Army. More than 150,000 soldiers deserted in the last six years, according to Mexican Congressman Robert Badillo. Many took their weapons with them, including the standard issue M16 assault rifle made in Belgium.
• Guatemala. U.S. intelligence agencies say traffickers move immigrants, stolen cars, guns and drugs, including most of America’s cocaine, along the porous Mexican-Guatemalan border. On March 27, La Hora, a Guatemalan newspaper, reported that police seized 500 grenades and a load of AK-47s on the border. Police say the cache was transported by a Mexican drug cartel operating out of Ixcan, a border town.

Many of the fully automatic weapons that have been seized in Mexico cannot be found in the U.S., but they are not uncommon in the Third World.

The Mexican government said it has seized 2,239 grenades and rocket-propelled grenades (RPGs) in the last two years. The ones used in an attack on the U.S. Consulate in Monterrey in October and a TV station in January were made in South Korea. Almost 70 similar grenades were seized in February in the bottom of a truck entering Mexico from Guatemala.

“Most of these weapons are being smuggled from Central American countries or by sea, eluding U.S. and Mexican monitors who are focused on the smuggling of semiautomatic and conventional weapons purchased from dealers in the U.S. border states of Texas, New Mexico, Arizona and California,” according to a report in the Los Angeles Times.

Alberto Islas, a security consultant who advises the Mexican government, says the drug cartels are using the Guatemalan border to move black market weapons. Some are left over from the Central American wars the United States helped fight; others, like the grenades and launchers, are South Korean, Israeli and Spanish. Some were legally supplied to the Mexican government; others were sold by corrupt military officers or officials.

Chris Cox, spokesman for the National Rifle Association, blames the media and anti-gun politicians in the U.S. for misrepresenting where Mexican weapons come from.

“Reporter after politician after news anchor just disregards the truth on this,” Cox said. “The numbers are intentionally used to weaken the Second Amendment. The predominant source of guns in Mexico is Central and South America. You also have Russian, Chinese and Israeli guns.

Industry Conducts Second Annual Washington, D.C. Fly-In to Meet with Legislators

Recognizing the direction current political winds are blowing, the National Shooting Sports Foundation (NSSF) sponsored a second Legislative Fly-In for firearms and ammunition industry executives in early April in Washington, D.C. The nearly 40-industry member delegation heard a keynote address from Sen. Jon Tester (D-MT) and also remarks from Rep. Paul Broun (R-GA), co-founder of the Second Amendment Task Force.

“We have banded together to go up on Capitol Hill and talk to key legislators both in the House and Senate about issues that are really important to our industry. We create jobs in the United States and it’s important that they understand our point of view,” said Smith & Wesson Holding Corp. President and CEO Michael Golden.

This was the second year that the NSSF conducted the legislative effort in Washington, D.C., which was similar to the efforts formerly undertaken by the now defunct American Shooting Sports Council.

Commenting on the meeting, NSSF President Steve Sanetti said, “This was a tremendous opportunity for industry leaders to express their concerns to lawmakers. Participants identified those actions that needed to happen in order to keep America’s firearms and ammunition industry financially sound in an ever-changing global marketplace.”

Fly-In participants heard from Rep. Dan Boren (D-OK), co-chairman of the Congressional Sportsmen’s Caucus (CSC), and Rep. Ron Kind (D-WI), the immediate past co-chairman of the CSC, at a breakfast briefing sponsored by the Congressional Sportsmen’s Foundation (CSF). Other presenters included CSF President Jeff Crane, former congressman Lindsey Thomas, and Ron Regan of the Association of Fish & Wildlife Agencies before going to the Hill to meet with members of congress.

“It’s really critical that we come to Washington from time to time to tell our story,” said Sturm, Ruger CEO Michael Fifer. “If we’re not here telling our story, somebody else is going to tell it for us.”

Among the issues affecting the industry that were discussed was federal excise tax reform, the removal of anti-competitive export controls that harm U.S. manufacturers, support for keeping firearms tracing data secure within the law enforcement community (the Tiahrt Amendment), increasing funding for the Don’t Lie for the Other Guy anti-straw purchasing campaign and support for protecting today’s modern semiautomatic sporting rifles as the Obama Administration begins to move to reenact the federal ban on so-called “assault weapons.”

“These face-to-face meetings play an integral role in policy decisions that impact the everyday business of the entire firearms and ammunition industry,” said NSSF Senior Vice President and General Counsel Lawrence G. Keane. “Engaging legislators directly is a must and our team could not have done a better job representing their companies, employees and this industry.”

Gun Sales Tax Holiday Proposed in Louisiana

A New Orleans area lawmaker is proposing a state sales tax holiday for firearm purchases one weekend each year. Rep. Cameron Henry, a Republican from Jefferson, LA, calls his bill the “Second Amendment Recognition Act.” The proposed firearms sales tax holiday would occur annually on the Friday through Sunday after Thanksgiving, traditionally the busiest time of the year for firearms sales.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.