Industry News: March 2001

By Robert Hausman

Israel Military Industries (IMI) is rumored to be seeking a business expansion opportunity in the U.S. small arms marketplace, but its plans probably do not include any merger or acquisition with Colt’s Manufacturing Co. After Colt’s sold off Saco Defense Systems to General Dynamics, IMI lost interest as Saco was the Colt asset that most interested IMI, sources say.

While IMI’s ammunition lines have been sold in the U.S. for well over a decade, the company is reportedly seeking a deal that will allow it to develop a new handgun and rifle line. Its semi-auto UZI line has been banned from importation as an “assault weapon,” and the company is said to be seeking an alliance allowing it to gain market share in both the civilian and law enforcement sectors. Magnum Research is currently marketing one of IMI’s pistol designs.

New Carbon Fiber Rifle

Professional Ordnance, known for designing innovative firearms with carbon fiber technology, is introducing the new Carbon-15 Type 97S centerfire rifle chambered in .223 Remington/5.56 NATO and packed with features usually available only through the aftermarket.

Self-lubricating, non-corrosive and wear resistant, the upper and lower receivers, buttstock and foregrip are made from space-age carbon fiber. The oval foregrip is double-walled and insulated with a sheet of ultra-lightweight aluminum silica ceramic fiber insuring optimum insulation. The total weight of the rifle is a mere 4.3 lbs.

Factory tuned internal parts on the new Type 97S provide aftermarket performance right out of the box. The bolt and extractor are of precision CNC machined hard chromed steel. The machined tool steel extractor has been redesigned to provide 58% more gripping area and the bolt carrier has a longer recoil buffer to reduce felt recoil. The extractor, ejector and recoil springs are made from chrome silicon to insure maximum durability and longevity under extreme heat conditions.

Standard is a full-length Picatinny rail with “Scout” extension, featuring a combination ghost ring/200 yard peep flip rear sight. The rifle is also furnished with a multi-carry-mode “silent” sling and a Hogue pistol grip, along with one 30-round magazine.

In other news, excise tax collections on firearms and ammunition have risen steadily over 1999 figures in the first three quarters of 2000, indicating higher 2000 firearms and ammunition sales. However, some reports from distributors indicate sales slowed in the fourth quarter.

The Bureau of Alcohol, Tobacco & Firearms (ATF) reports first quarter fiscal year 2000 guns and ammo tax totals came to $52,054,000, a significant rise over the $42,925,000 collected during the same quarter the year before. The slightly more than 20% rise in the first quarter accounted for almost the entire increase as the second and third quarters remained largely steady.

By the second quarter, the total excise taxes for the first six months of 2000 came to $95,394,000, compared to $84,055,000 taken in during the same six-month period in 1999. At the end of the third fiscal quarter of 2000, total firearms and ammunition excise taxes stood at $141,754,000, versus $131,735,000 at the end of the same period in 1999.

The Bureau of Alcohol, Tobacco & Firearms is proposing new rules that would require firearm shippers to verify that packages are actually received by the intended recipients, in a move to thwart theft from common carriers. If adopted, the regulation could add as much as $4 million to the firearms industry’s freight costs. Some wholesalers have been encouraging their retail customers to contact ATF to express their opposition to the proposed rule.

The proposed rules also require all federal firearm licensees to conduct at least one physical inventory annually. ATF said inventory discrepancies, record-keeping errors and employee theft accounted for 40% of the some 5,000-theft reports it investigated during 1998 and 1999.

An oversupply of handgun ball ammunition in the U.S. marketplace is resulting in some of the lowest prices seen in years. This has prompted some dealers and distributors to discontinue carrying the loads until the market returns to normal. Weak handgun sales in the late summer and early fall have partly contributed to the oversupply of stocks.

On the legal front, the question of whether a Michigan state law nullifies the lawsuits filed against the firearms industry by the City of Detroit and Wayne County, Michigan, is on hold pending a decision by circuit Judge Jeanne Stempien. The state legislature passed the law last spring that grants the authority to file such suits only to the state attorney general.

Similar questions are pending before the courts in Georgia and Louisiana, where state laws have been enacted that would void the lawsuits filed by the cities of Atlanta and New Orleans. In 2000, Stempien rejected claims of negligence against gun manufacturers and dealers, but refused to dismiss the city’s and county’s allegations that the industry creates a public nuisance as its products are sometimes used in crimes.

Stoeger Publishing Co. of Wayne, NJ has issued the 23rd edition of Gun Trader’s Guide, a resource giving complete specifications and current prices for used guns made after 1900. The all-new guide describes and prices over 6,000 firearms, both domestic and foreign. This latest edition includes numerous listings of military and defense arms. The alphanumeric listings and the comprehensive index make finding, identifying and pricing firearms easy.

International News

In international news, Canadian defense scientists are developing a sensor to be carried by individual soldiers or mounted on an armored vehicle that can precisely locate small arms fire. The system would use highly sensitive microphones attached to a soldier’s backpack and connected to a computer to analyze the direction and range of enemy gunfire. The location would be transmitted to a hand-held viewing screen carried by the soldier. Total cost to develop the technology was $2.04 million (U.S.).

The system is not designed to find the professional sniper who might be equipped with specialized ammunition and a silencer. Instead, it is for locating enemy soldiers who might be firing from inside buildings. The shooter can be pinpointed at a range of 200 meters.

Metso Corp. recently announced it has agreed to sell the entire share capital of Sako, Ltd., a Finnish manufacturer of rifles, to the Italian company Beretta Holding. “Beretta intends to keep rifle development and production in Finland and commit further resources to the company in response to expected volume growth,” stated U. Beretta, president of Beretta Holding. “Sako will become the Beretta unit responsible for the company’s entire product range in northern Europe,” he added.

In a downsizing move, Royal Ordnance plc of the U.K. will close its ammunition production plant at Faldingworth, England.

Firearms Training Systems, Inc. (FATS) has received contracts worth $9,650,000 in backlog, plus options for about $6,400,000. The British Ministry of Defence awarded a support contract valued at $3,800,000 to provide for two years of repair and maintenance of the 163 FATS systems used to train the U.K. armed forces throughout the world. The government of Singapore also awarded FATS two support contracts to operate, train and maintain Singapore Army and Police Coast Guard systems with a value of about $5,300,000 over three years with options for a three to nine year extension. Additionally, FATS advised that the Bahrain Defense Force has purchased small arms simulators valued at $550,000 with options to procure an equal amount in the future.

In additional contract awards, the Venezuelan Army has selected FATS to provide small arms simulators to train their forces by awarding a $1,400,000 contract with opportunity for additional systems and components. The company was also selected to provide small arms simulators to support the Greek Army with an initial contract value in excess of $500,000 and opportunities to expand the program.

FATS reported revenue for its first quarter of fiscal 2001 ended June 30, 2000 was $10,271,000, versus $15,196,000 for the same quarter the previous year. Net loss was $3,275,000, or 16 cents per diluted share, as compared with net loss of $195,000, one cent per diluted share, for the same quarter in fiscal 2000.

In an ongoing search to find alternatives to land mines, the Pentagon is expected to award contracts for a so-called Self-Healing Minefield. The concept calls for the development of mines using an autonomous communications network. When enemy troops remove some mines from the field, others automatically are signaled to fill in the gap. Rather than using complex robotics to move mines into the gap, the Pentagon’s Defense Advanced Research Projects Agency is looking for mines that will pop into the air and land in the area to replace the removed mines.

On another level, while the U.S. military packages anti-personnel mines with anti-tank mines to prevent the latter’s removal by enemy troops, the Pentagon is seeking an anti-tank mine that does not require an anti-personnel mine. The three-year program is funded with about $13 million.

The Australian Army has ordered 3,167 grenade launchers, worth $5.8 million (U.S.) from ADI Ltd., Sydney. The 40mm launchers will be attached to the Army’s standard-issue F88 Austeyr rifle and will replace M-79 and M-203 launchers in current service.

Alliant Techsystems of Hopkins, MN, and Israel Military Industries, Ltd. of Ramat Hasharon, Israel, will co-produce IMI’s M971 120mm Dual-Purpose Improved Conventional Munition mortar cargo ammunition for the U.S. military.

Alliant Techsystems will supply the first environmentally friendly artillery propellant to the U.S. Army for use in the Crusader Howitzer vehicle currently under development. The company won a $6 million contract from the army’s Armament Research, Development and Engineering Center, Picatinny Arsenal, NJ. The propellant will be produced at the Radford Army Ammunition plant in Radford, VA.

Alliant Techsystems has also entered the small arms market by way of a 10-year U.S. Army contract expected to generate annual revenues of about $100 million. Alliant will operate for 25 years the Lake City Army Ammunition plant in Independence, MO, the Army’s only small-caliber ammunition production facility. Under the contract, Alliant will produce about 350 million rounds of 5.56mm, 7.62mm, .30 caliber and .50 caliber cartridges per year.

A unit of Primex Technologies, Inc., of St. Petersburg, FL, is producing the Shoulder-launched Multipurpose Assault Weapon (SMAW), a combination rifle and rocket launcher for the U.S. Navy. The company’s CMS Defense Systems division is making the SMAW under a $12.9 million modification to a previously awarded contract with the Navy’s Surface Warfare Center in Dahlgreen, VA. The SMAW consists of a reusable launcher with integral 9mm spotting rifle and individually encased high explosive, anti-armor rockets.

For the reloader, Hodgdon Powder Co. of Shawnee Mission, KS, has introduced the second version of its “Blast Electronic Manual.” The program contains updated data from Hodgdon’s #27 Data manual for rifle and pistol; Hodgdon, Alliant, IMR and Winchester powder data with an in-depth selection of bullet weights; and a Barnes external ballistics program linked to the data section of the program including printable ballistic tables and loading data.

The American Knife and Tool Institute, a cutlery industry trade organization, announces the availability of a Guide to Understanding the Laws of America Regarding Knives. This pamphlet-sized publication describes basic knife laws, consequences of violations and how to find and understand knife laws. For more information contact the group by telephone at: 877-752-8770 or 319-752-8770.

Mustard Plants Negate Lead

In an effort with wide implications for outdoor shooting ranges everywhere, officials at the U.S. Army’s Armament Research, Development and Engineering Center in Picatinny, NJ, are demonstrating how mustard plants can be used to remove lead and other materials harmful to the environment. The program is called Range-Safe and deals with the growing problem of lead buildup at the Army’s 3,000 live-fire ranges. The effort will be teamed with use of the Green Bullet, the new small arms ammunition with a tungsten core.

The U.S. Environmental Protection Agency shut down all live-fire training on the Massachusetts Military Reservation in 1997 after a study showed a buildup of lead and other contaminants in the local community’s water supply. The concept is being tested at a live fire range at Fort Dix, NJ, with the removal of 4,000 yards of soil from the range’s berm.

The soil was treated with water to remove the lead slugs and then spread over a large area. Mustard seedlings were then planted, as they are known for their metal accumulating capability. The plants lift the remaining lead dust from the soil as they grow. The plants are then harvested, bailed, dried and sent to a battery manufacturer to be recycled in a smelter for their lead content. The soil is later returned to the range.