Thursday, April 05, 2012


Once again looking out windows at mountains and snow. Every time I visit NYC I get a strange sense of all my memories of living in Manhattan, I'm young, which I am demonstrably not...anymore. Loved my time in NYC, but for the life of me can't remember how I did it.

Couple of YIKES points after the past couple of days comments...

1) RE: AMMUNITION...first, you guys drastically overestimate my influence. I can't cause or stop any sales event, especially the tsunami that's coming. I am, however, in a pretty unique position...I have sent a month traveling to gun companies, walking the production floors, talking to both executives and manufacturing managers, looking at orders, backlogs, production planning, etc. Because I am a very lucky person, I have been talking to quite literally the smartest people in the industry

I am in the position I'm in because for my entire career I have been an expert at analyzing trends. I was trained early on by masters in the last years in college, when I was thoroughly sick of physics and math as a major, I was assigned a "professor/advisor" with dual PhDs in statistical analysis and mass communications...he was happy to have a student who didn't get queasy looking at equations and I was fascinated by the concepts of predictive analysis. Trends are what they are...they don't care about me at all.

Secondly, consider my mindset, which is laid out on a regular basis for everyone to see (and debate). I created and produced THE BEST DEFENSE /SURVIVAL, I served as an expert for the landmark History Channel special AFTER ARMAGEDDON, I live up in the mountains in the Rocky Mountain West and am working on plans for a new, completely off-grid Secret Hidden Bunker, and I am writing a book titled The New Survival Guns...what might my mindset be on "stocking up?" Again, feel free to disagree. If you don't want to stock up on ammo and components, by all means, don't. Keep in mind that there are 2 competitive shooters here at the Secret Hidden Bunker...we routinely maintain a stockpile of components.

I was staggered by the current flood of gun orders (and the resulting backlog, of which about 70% will "disappear"). Yes, it is the leading edge of the coming bubble, but it also represents a flood of new people coming into our culture (and keep in mind that I and Paul Erhardt predicted this flood, Gun Culture Ver. 2.0 years back by, duh, analyzing trends). Even a straight-line extrapolation says:

more guns in the market = more ammo sales

This isn't going to change until we return of a peacetime economy and the big ammo manufacturers divert a larger portion of their manufacturing resources to the civilian market.
2) Modern post-assembly line manufacturing techniques are aimed at reducing the human component of manufacturing, which is expensive, lowering the cost per piece and increasing throughput speed. As it happens, those things tend to have a positive effect on quality, but quality is not necessarily the primary driver.

As I have said over and over, based on my own crash study of manufacturing while working with the manufacturing consultancy R. D. Garwood, Inc. for a decade, appropriate technology need not be the bleeding edge of technology. CNC machines are indeed magic, but you do not need that kind of horsepower to manufacture a widget. Now, you might need that horsepower to produce a lot of widgets, especially if there is significant variations between different types of widgets.

Let's look at EDM machining...because in electrical discharge machining, the cut is by spark — the wire doesn't every touch the metal being cut — it can do very clean, very precise cut on complex angles. Ruger uses EDM to cut the 1911 breech face on the slide. That cut then requires virtually no additional "prepping" before use...fewer hands touch the gun, the cost to produce the piece is reduced. Quality is also increased. Does that mean that the first 1911s to roll off Colt's assembly line on January 1912 had inferior breech faces because EDM had yet to be invented? I have examined first day, first hour 1912 production 1911s, and I have spent hours with master gunsmith Bill Laughridge going over the specs for those first 500 guns...they were and are masterpieces.

I have also handled a 1911 built quite literally with raw steel and a flat file by some unknown Pakistani gunsmith...I would't want to shoot it myself, but it would go bang. Look at S&W revolvers front the early part of the 20th CNC...just plain old boring metal lathes, drill presses and milling machines, handled by some of the greatest gunsmiths ever...tell me that a pristine Triple-Lock isn't a breathtaking example of the gunmaker's art!

I don't know everything...hell, the older I get, the less I realize I know...I knew a lot more when I was hanging out at CBGBs in NYC in my 20s! LOL! But I am a student of the way widgets, especially guns get made, and I'm not afraid to ask the stupid questions. I am also very lucky in having a strangely checkered career. I have been in most of the major, and many of the minor, gun manufacturing facilities in America and some around the world, but before I was in those factories I got a crash course in manufacturing working with Garwood.

I am the co-author of the standard text on structuring bills of material and a text on creating new products for a world-class manufacturing environment. I am also very proud of a book Garwood and I wrote, Shifting Paradigms — Reshaping the Future of Industry. In the glory days of personal computers, I was a technology correspondent for the Chicago Tribune News Syndicate, and I got to spend time with the legends of the industry before They ascended onto Mt. fact, it was Michael Dell, who created Dell Computers, who patiently explained to me how factories would evolve beyond building one specific product to general places that built "stuff"— what we see now in China. I got to hang out at the MIT Media Lab (I've never felt so dumb in my life, but they were patient with me...mostly), where the future gets invented, and some of the big think tanks.

Because of what I do, I get to spend a lot of time with people who design, make and market firearms, and because I spent so many decades as a journalist, I tend to obsessively ask questions. What ends up presented here and in my other media outlets is pretty much my opinions...I'm wrong a lot, but I'm occasionally right.

As always, your mileage might vary...


Anonymous said...

Wow! Michael, You're Hired.
Start Anytime.

Rich In NC

Anonymous said...

This says it all

Wilhem Bayer said...

Michael, I don't know if you've made me happy or sad. I tried to invest in this wave and got washed back. There are 2 publicly traded firearm companies: Ruger and S&W. I tried to get in about 2 weeks too late. We debated about ATK, the only publicly traded ammo maker. That's only a small part of their business and the rest is so-so. They got an order for 450 million rounds and the stock went up 25 cents. My wife is bolder and bought into a couple of these. Is she smarter than me?

Pathfinder said...

Soooooooo . . . . . .

What you're saying is that soon you will have your own Double Secret Hidden Bunker????


tablekiller said...

Put it this way. Listening to the Podcast every week, I am amazed at how much I didn't know! Your insights, experience and tales of Col. Cooper, Walt Rouche, and many others, is very cool. The fact your a competitive shooter as well, IDPA, Cowboy etc. has sparked my interest in the shooting sports. As with everything, time and money in this economy is limited. So, I've been stocking up on bulk ammo. Even .38 wadcutters, just to have an extra 500 rounds of something for each gun, in case OBUMMER, gets elected. To keep that from happening, I have become so politically active that my senators and congressman hear from me about 2 times per month. Will be working the polls and doing whatever I can to make him a one term president.
Thanks for all you do Michael! Hope to see you at the NRA convention in St. Louis!
Chad Hendrix
Horn Lake, MS

John Richardson said...

@William Bayer: There are TWO publicly traded ammo makers. In addition to ATK, you have Olin (OLN) who produces Winchester ammo in East Alton, Illinois and Oxford, Mississippi.

It is trading at about $6 less than its 52 week high.

Ammo makes up a higher percentage of its sales than it does for ATK which is primarily a defense contractor nowadays.

"gunner" said...

great credentials, mike, i'll be paying a lot more attention to your programmes on the telly in the future, as well as on this blog.

Jason said...

Thanks for the bucket of cold water in the face - it is easy to get lulled in to complacency and this is not the time to sit back and assume everything is going to be ok. Great blog, great shows - thanks for all you do.

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