Monday, May 18, 2009

Yawn...I'll Be Sleeping Later...

Okay, it appears to be morning again...how could that be?

Quick clarification on the last pst, DRTV and our sponsors — Insight Technologies, Tactical Solutions and Crimson Trace — sponsored the "Happy Hour, " our second annual, that the CS Monitor article referenced. We weren't mentioned because, hey, we are now the Establishmentt— affiliated with a television network, Outdoor Channel; the largest firearms website on the Internet; the best-read firearms blog, the largest firearms podcast, blah blah — good heavens, we are the Mainstream Media! Life is infinitely strange, isn't it?

Seriously, regardless of who backs us, I believe DRTV, my broadcast shows and our various projects will always be in the vanguard of new media because Marshal and I apparently can't resist pushing limits...often to our detriment! LOL!

RE: Ammo companies, I asked the same question you guys did...can you increase capacity? Basically, they looked at me as if I'd beamed in from Uranus. "You know manufacturing, Michael!" one friend said. For those of you who don't, here's the Cliff Notes version — a minimum of five years to get an ammo factory up and running, assuming the permitting issues can be worked out...and that is a hell of an assumption. Ammo factories are right up there with nuclear power plants for NIMBY whining. And who works in the new factory...sure jobless numbers are up, but Americans aren't looking for factory jobs...they want to be rock stars, rich software millionaires and suck the government tit.

Secondly, even if you wanted to build that factory, there's virtually no credit available for such an undertaking. It would also be considered a high-risk venture, subject to a morass of permitting and environmental issues and at the mercy of future political whims. Thirdly, we're all working under the assumption that this is a bubble, and that regardless of the pricing of future ammo, the demand will eventually fall to a level consistent with what we've seen in the past plus the increase due to in new shooters. The wars will end; the bubble will burst and current capacity (with modest increases) will accommodate the demand.

The two wild cards in this equation are the foreign manufacturers and the Washington administration's willingness to tie those manufacturers up in an import tar baby. Wolf, Fiocchi, Aguila, Prvi Partisan, probably even the Chinese factories are no doubt thinking if they can route more of their prodigious product output into the American market would be worth a fortune, if they can get it in past Washington.

9 comments:

Anonymous said...

Gee, lack of finance money, who would have thunk it?

Oh yea, I did an few months ago...

No money, no shootee.....

Good info Mike...

Timothy

Anonymous said...

From April...

http://www.downrange.tv/forum/index.php?topic=5819.msg69377#msg69377

Tim

Dave S. said...

It would be the height of foolishness to build a factory at the peak of a boom. There will be a bust, and you'll have a useless factory.

Anonymous said...

RE: Capacity to manufacture ammo.

I have no way to prove it but I suspect American manufacturers alone have an excess of capacity to produce ammo in normal times. I expect when you factor in world wide ammo production there is a literal glut of capacity in normal times.

I feel the boom is about over and so probably does the industry exec who told MB that it'll be 2010 before we see ammo and the cost will never come down. My take is ammo companies are using the gun media to try and keep the hype/boom/panic going.

Anonymous said...

I've stopped buying ammunition, unless I come across a decent deal.

Last time I actually bought, I picked up 11 boxes of WWB 7.62 NATO for $14.50 a box, and I only did so because I felt my reserves in that caliber were unacceptably low.

The store managed to restock, and the price is now $20.99. They're not gouging...that's the price they were charged plus their standard markup.

The old stock (of which my WWB was) stays on the shelf until it sells. The new stuff is marked on the case as to what it needs to be priced at, and is stocked when the old stuff gets sold.

The distributors are playing the game as well, and this bubble WILL pop.

Buying 1k of brass-cased 55-grain 5.56 for any more than $500 would be a major mistake at this point in time, IMO.

I would not want to be the guy that bought Federal XM-193 for $800 a case, only to see it going for $300 in a year.

Overload in Colorado said...

While it takes a lot to start up a new factory, they could easily add an extra shift at their existing factories. I remember reading stories here that they aren't doing that.

Geoff aka Pathfinder said...

I had a thought today - I wondered if the slow-down (sort of) in AR/AK sales is due in part to 2 things: 1) newby buyers are finding out they can't get ammo for the gun they're looking at and taking a pass on the gun for now, and b) experienced folks are holding off buying yet another AR/AK cuz, well, they just can't get ammo.

Thoughts?

Ammo - We were wondering about building new capacity within existing facilities, maybe even modernizing the ones they already have? New buildings are tough, new equipment shouldn't be. Maybe they're just parked and waiting for the bubble to burst?

As for employees, hell, I will walk away from this crappy white collar job and build bullets for anyone - for a decent wage. And yes, I will work (partly) for ammo, especially if it is 6.8 Rem SPC

Anonymous said...

I work in manufacturing. We started looking at capital equipment more than a year ago.

We have ordered it recently but delivery won't be for several months and credit was impossible to obtain.

Ramping up production capability can be done in the short term but if you don't have the JIT inventory to support production, you can't make product.

Credit runs this country and if the companies can't get credit for raw materials, well....it's that blasted Catch 22 that Heller wrote about thirty years ago...

Timothy

Anonymous said...

Thank goodness I reload.

And cast.

And had enough sense to stock up on primers a year to two years ago.