H&K Germany in financial trouble

[JodyH]

http://www.thefirearmblog.com/blog/2013/07/18/heckler-koch-germany-dire-financial-straits/
http://www.welt.de/wirtschaft/article118178155/Gewehrlieferant-der-Bundeswehr-ueberschuldet.html
H&K Germany in financial trouble.
Not enough cash coming in to pay their debts.

My guess is that strict German export laws are strangling them.
When you translate the German article they are optimistic about the future but Moody's has downgraded them to junk status.
I don't see the German government letting them go under, but a government restructure of them would be horrible for US civilian sales.

[CCT125US]

I hope this in no way trickles down to QC issues.

[JV_]

I hope this in no way trickles down to QC issues.

and parts availability

[ToddG]

I hope this in no way trickles down to QC issues.

Anything is possible but this is far form the first time HK has been financially challenged. The German government makes it ridiculously difficult for them to do business. Candidly, they'd be wise to move more of their global manufacturing to the U.S.

[JodyH]

Article says 80% of their revenue comes from US and UK exports.
Might as well leave Oberndorf and set up shop in the USA.
There are a lot of US agencies that would choose HK over Glock and S&W if they were "American made", not to mention unfettered access to the US civilian market.
Might even give them a leg up on future mil contracts.

[abu fitna]

The German gov has odd concepts of global jurisdiction, and odder ways to express its views on what is proper in those concepts. Sometimes that is helpful, as in dealing with precision machine parts or optics or whatever else in the traditional mittelsand wheelhouse that might not be well served to go walkabout in the various kleptocracies. Other times not so much.

HK would likely require quite a bit of restructuring for US manufacturing not to trigger some or all of the same legal hassles.

[JodyH]

Move the corporate HQ to the US and tell the Deutsch gov to kiss their kitten.

[jlw]

I can't keep up with all of the H&K models because H&K hates me...

Don't they already have a facility outside of Fort Benning (Columbus, GA)?

[S Jenks]

They have a plant in southern NH, on the Newington/Portsmouth line. I'm not sure how much production goes on there.

[EricP]

They have a plant in southern NH, on the Newington/Portsmouth line. I'm not sure how much production goes on there.

That is the same address as Wilcox Industries.

[TGS]

That is the same address as Wilcox Industries.

Wilcox does the limited manufacturing work for HK in the US, things like the HK45 frames. They are nowhere near capable of full firearms manufacturing.

HK does not currently have a significant manufacturing ability in the US. The last time they tried they went all in, OmniCorps/Umbrella Corporation style. The facility was even dubbed "the palace." They got completely burned by the passing of several US gun control measures and seem to be very cautious since.

As for completely uprooting from Oberndorf, I don't think that'll ever happen. HK is basically Mauser part zwei, and has history in Oberndorf going back to the mid-1800s. A significant portion of their workforce are people who've been there for decades upon decades, taking the jobs their father had. You don't just uproot that heritage overnight from one of many financial crunches. This is nothing new for HK.

[Slavex]

They'd be wise to move their HQ anywhere but the US. US export laws are almost as bad as German. However importing to the US is a helluva lot easier for most stuff. Moving manufacturing to somewhere like Czech or similar base would do them well. Keep the QC, cheaper labor, and easier exports. Increasing and expanding production in the US for the US market would also be a good idea.

[fixer]

I find this news shocking. Germany's gov't must have a hell of a strangle hold on firearms industry because in the current business climate there is simply no excuse for not making money hand over fist.

I too hope they make a wise decision for the long run and relocate.

[CCT125US]

Maybe a thread split is in order for my questions. I wonder what the actual cost of production is for say a P30. And then what taxes, fees, and regululatory expenses are passed onto the end user? Certainly not everyone is convinced that and HK is "worth" $950 when they can buy a Glock for $550, but I can't really imagine the cost of production and distribution of a Glock is anywhere near $300. So I guess my question is if HK charges enough? I have heard that HK's minimum order is $100K, curious as to what margin they make on that sale. Not sure if that is at the distributor level or if any FFL dealer can buy direct from HK.

[GJM]

Hey, I have an idea. Now that S&W has split with Walther, maybe HK and S&W can align, with S&W marketing HK products, and building a special US line of HK pistols on their M&P production line. :)

[JAD]

I think it just bothers you that your P30s are so accurate that it makes you doubt your GLOCKs. If S&W could hose the accuracy of the P30, you would have fewer distractions.


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