There’s no doubt the Biden administration hates the gun industry. President Biden displays the hate openly, declaring the firearms industry ‘the enemy” and using every every opportunity to go after an entire industry.
Fortunately, he, like other anti-gunners, has fought most of the battles over their own fatal terrain: the enumerated right to keep and bear arms. It has been upheld, repeatedly, by the Supreme Court. Yet they continue to throw contorted logic and impenetrable red tape at lawful gun owners. Despite consistently losing in the courts, they persist.
While the Bureau of Industry and Security called the “pause” temporary, it quickly pointed out that “The Department may take additional steps to further U.S. national security and foreign policy interests.”
The reasoning behind the decision? To enable the Commerce Department to “more effectively assess and mitigate risk of firearms being diverted to entities or activities that promote regional instability, violate human rights, or fuel criminal activities.”
As explained to me, this “pause” is “a political play to curry favor with anti-gun groups”. Making the gun business a little more difficult and expensive are bonuses.
Unfortunately, this latest move is completely within Commerce Department purview. No appeal, no right to sue, and noassurance that this won’t be escalated to cover existing licenses. In fact, they can use the pause to question and pause licenses that are already approved. All they need is “reasonable cause” to suspect the transaction and they can delay it. If given the opportunity, they’ll find something that’s “reasonable” -at least to them.
In this move, they’ve found a way to punish without scrutiny and little fear of repercussions or reprisal. As explained it to me, the only hope is application of the two things that appear to get every administration’s attention: political pressure from voters and funding threats from Congress.
We’ll keep on top of this one. And you can read the FAQs and “guidance” for yourself here.
We’re also hearing there are potential gunpowder price hikes ahead. Nitrocellulose, essential to the manufacture of several lacquers and paints, is also a primary ingredient of modern gunpowder. Like primers, nitrocellulose is one of those essentials manufactured in a very few locales.
Smokeless gunpowder is significantly more powerful than the black powder it replaced. It’s also more stable and can be rolled into sheets, molded or extruded into various sizes and shapes. Those sizes and shapes control the burning characteristics. Consequently, it’s used in everything from traditional ammunition to rockets.
But it’s not always associated with things that go “boom.” Collodion, a nitrocellulose solution, is used in topical skin applications (Liquid Skin) as well as the application of salicylic acid, the active ingredient in Compound W wart remover.
This concludes the basic science lesson. But it’s not the end of the story.
According to our sources, significant nitrocellulose price increases are probable. This isn’t a scare tactic to start your rushing to buy powder - or ammunition. It’s just one more bit of uncertainty on our horizon.
There’s a court date looming in New York City that every NRA member is keeping an eye on. On January 8, the State of New York (represented by Attorney General Letitia James) will face off with the National Rifle Association (represented by William Brewer). Finally, they’re scheduled to appear in open court. When oaths are sworn, all the he said/she said will stop. Finally, we’ll see the “facts of the matter” -not each side’s heavily “spun” interpretations.
The fate of the 150-year old NRA literally hangs in the balance. New York, charging ongoing and unmediated malfeasance by its leadership, has sued to dissolve its charter- in essence, to kill it as a corporation.
We’ve spoken with confidential sources on both sides. To me, it appears that only New York State is looking forward to the trial. Barring an eleventh-our “deal” on the courthouse steps (not an impossibility), the NRA will be looking to win a civil case that has already burned through nearly $100 million dollars in members’ dues and contributions.
The “ongoing NRA trouble” has divided the industry, fractured friendships, and generally caused turmoil throughout the entire gun community. The tens of millions spent on legal fees, and settlements of other lawsuits and such, has effectively removed one of the most effective lobbying groups from two election cycles.
Those are all wins for anti-gun groups, so AG James, despite having never gone to trial, is already scoring points with her constituents. The controversies have also caused many NRA supporters, including major industry companies, to close their wallets.
Again a win for the New York supporters.
With the NRA’s distractions, other 2A organizations have rushed to fill the void. They’ve had varying measures of success.
One that’s gotten a lot of attention of late is the National Shooting Sports Foundation. Work of the NSSF’s Political Action Committee has recently been praised as being “extremely effective” by groups that watch that sort of thing.
Now, as you’ll see in today’s news section, the NSSF has formed a Super PAC, the Protect Liberty PAC.
A “super” PAC is an independent expenditure only political committee. Super PAC can receive unlimited contributions from individuals, corporations, labor unions, and other PACs for the purpose of financing independent political activity. It can’t contribute directly to a federal campaign.
“Supers” can spend unlimited amounts of their funds on independent campaigning in federal races. Think ads communicating a message that “expressly advocates in support or opposition to a specific candidate’s election.”
They can’t endorse you, per se, but they can run ads that make your opponent look like a bad choice based on their positions on various issues. One way to get a hint as to whether a campaign message is from a candidate or an outside group (like the Super PACs) is to listen for “I’m so-and-so, and I endorsed this message.” It won’t be there on Super PAC ads.
To end the week, Ruger’s Q3 earnings and call reporting results yesterday were the formal acknowledgement of what we’ve all recognized: the industry has slowed.
Ruger reported a drop of just over $19 million dollars in sales for Q3, 2023 ($120.9 million versus 2022’s $139.4 million). For the first nine months of 2023, Ruger’s net sales have come in at $413.2 million, with diluted earnings of $2.13 per share. In a year where stocks have been doing their best roller-coaster imitations, that’s solid performance.
Ruger CEO Chris Killoy calls the current market conditions “a challenging, promotion-rich marketplace.” In other words, competitors were offering a variety of discounting offers to retailers. Ruger, historically, has resisted the heavy discounting offered by other companies working to “make their numbers.”
Ruger, with no debt, cash in the bank, and new products that represented nearly twenty-three percent of sales through the first three quarters of 2023, is in an enviable position.
That’s it. If you have the chance, get out this weekend and enjoy the outdoors. Dress appropriately.
Back next week.
—Jim Shepherd