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  • Captplaid
    http://forums.gunbroker.com/topic.asp?TOPIC_ID=241921&SearchTerms=remington

    Here's my two cent on Cerberus. They are a bunch of idiots.

    My only experience was watching them be the last owners of Anchor Glass Container Corp, the competition to my employer. Cerberus bought the company in bankruptcy. Invested a lot in Plant Property and Equipment. Took the company public. Anchor never made a profit once they were publics. Lost every quarter! Finally Anchor went bankrupt again. I think Cerberus lost there shirt, but anyone who bought the stock from the IPO on definitely lost.

    Anchor should have been a winner. They dumped the hourly pension on the federal government at bankrupcy when they bought it. Anchor also did not have the big asbestos lawsuits their competition has. So with no pension liability and no class action lawsuits to pay for, Anchor should have been in a great position ot compete for the glass bottle business.

    The biggest problem was Cerberus and their management team did not understand pricing, costs, and locking in prices of natural gas on the futures market. According to Bank of America Anchor got the SNapple contract but were ultimately selling the bottles for less than their cost. Anchor got a big contract for 1/3 of Budweiser's business then had to go back in less than a year after bankruptcy and ask for the contract to be torn up because they need more money. Oops.

    Bud basically had to do it. There are only three manufacturers in North America for glass bottles. If they said no, Anchor would close it's doors and Bud would not have a supplier. The lowest priced manufacturer would be out of business and Bud would have to pay a lot more.

    Anchor also did not forward contract their natural gas usage on the futures market. A couple of years ago there was a huge spike in the winter. Anchor's sales contracts were based on the price of natural gas remaining constant. Anchor lost their shorts!

    All of this happened under Cerberus management. Cewrberus was the mythical three headed dog that guards the gates of Hades. That dog was liking it's own but with Anchor. They did not know the industry.


    If you go to that link you'll see they also own Bushmaster.
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  • bpost
    They are a well known, savvy investment group. They also just bought Tower Automotive, the bankrupt auto parts supplier.

    The normal trend they employ is to drive costs down by stripping everything to the bone. The focus is to get max return on investment in very short order. They will most likely drive Remington into the ground within five years or less. Then they will bust it up and sell the divisions to other buyers at a few cents on the dollar.
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  • cpurvis
    Great. Yet another American business icon will be driven to liquidation by F-ing Harvard MBA pinheads.

    Can't somebody find something non-destructive for these clowns to do?
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  • Captplaid
    I know of another company that recently parted ways with KKR, another investment business. They owned 30% of the company. Under KKR's management, all other divisions except the core were sold off. They company was loaded with debt when they were done and the PPE was greatly depreciated. Basically, they made a profit on depreciation and did not keep up with the infrastructure. In the last 2 years after KKR was gone, the company's upper managers that focused on cutting costs are gone (retired) and the new managers are inexperienced but are more focused on increasing production rather than cutting costs.

    Companies like Cerberus don't know the engineering about production. They cannot improve productivity through innovation. They do know how to combine jobs and cut waste. Companies like Cerberus also know how to cut maintenance labor and repairs to make a profit. Low end management that sit on their butts and do nothing, because doing anything costs more money, excel under the management of many buyout cannibalistic firms.

    On another side...Bushmaster and Remington might make a good combination under the Remington name. Combining the two MIGHT make one strong company. It's the reverse logic of conventional wisdom, but I have always thought the key to firearm manufacturing in North America is diversity, shotguns, rifles, and AR's. The Remington name on an AR would be worth something.

    One more thing. Remember Zumbo. Remington hinted they were going to do something with an AR when they gave Zumbo the boot. The picture is becoming a bit clearer. Zumbo probably would not have fit in a Cerberus cut cost image? He was probably a dead man walking and didn't know it.
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  • Captplaid
    As much as I liked to make fun of Anchor going down the drain on the Yahoo forum, I think there is potential with the Remington Bushmaster combination. Hopefully Cerberus won't screw it up. This will be an interesting one to follow.
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  • dlrjj
    Cerberus has had more winners than losers as they've grown. They tend to push for better efficiency, not destruction of companies.

    Here's a link about their operation.

    http://www.businessweek.com/magazine/content/05_40/b3953110.htm

    BTW, Dan Quayle is involved in a couple of them.[:)]
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  • Captplaid
    Good article. Glad to see they mentions Anchor as a big mess. I suspected at the time Anchor went bankrupt that Cerberus was the primary lender and when the stock was declared worthless, Cerberus ultimately owned the company again, but the trail of corporate names was more than I wanted to dig through. The way I saw it, Cerberus buys Anchor, then has an IPO around $16 a share. At that point they didn't own the company but continued to lend it money. As Anchor continued to post losses they stock gradually became worthless. In bankruptcy the creditors owned the company, again Cerberus's lending side. Basically, a different head of the same dog. Kind of appears this article confirmed my suspicions.

    On a plus side, it does sound as is Cerberus has had some good luck with combining companies. I think Bushmaster's public image has improved over the last few years. I can't say that for Remington. Plus, Bushmaster has shown some innovation. They are working on an AR upper with the AK gas system. I think there is potential here for a great company, but I said the same thing when Anchor had its IPO.

    http://www.bushmaster.com/electronic-documents/2007Catalogv1/Page25-30Uppers2007.pdf

    I hope the first thing Cerberus does is fire the idiot at Remington that thought a pump .223 rifle that takes an AR clip was a good idea. At the very least, slap him across the head and cut his pay. Beyond that, I wish the Remington employees the best of luck.
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