Break up Federal

[BehindBlueI's]

I'll address the HST point first: If it walks like a duck, is colored like a duck, quacks like a duck, etc... its probably a duck. The bullet itself was probably tweaked/changed at the same time that they intermingled product lines. I'm not trying to say the "new" HST is now Gold Dot... its not. but the changes happened around the same time, if you were paying attention. The casings, the bullet/primer sealant, the package size, and the plastic trays, are all identical to the CCI/Speer products... hence my drawing the conclusion that things are intermingled. The same thing happened with a AE9FP 147gr 9x19 load. I really don't give a damn what the investor statements say. If you have proof, fine, but mere words on paper or the internet doesn't mean much, when you can look at things and clearly see they are physically identical, IMHO.

I do know a bit about the HSTs, but it's one of things you'll either just have to trust me or don't.

Lying in an investor's prospectus is illegal, so while it's certainly possible to lie there would need to be some pretty strong motivation to do so. Why lie about it? Is it not pretty plausible that one supply chain now feeds several subsidiaries. I doubt they make their own plastic trays. If they updated the Federal factory (they did) with the same machines that CCI uses (which follows, since CCI experts were called in to do the updating), why would they buy two different plastic trays? Why would you buy different package sizes? Would you not buy in as big a bulk as possible from suppliers you have a good relationship with at the best price you can? Simplify logistics where ever you can.

And, again, they are subsidiary companies. That has a specific meaning, and that specific meaning includes for tax law purposes. I didn't take any tax law classes, but I believe intermingling as you suggest would not be a subsidiary, it would be a business unit. What they could do is purchase ammo from other subsidiaries. Federal could purchase ammo from CCI to sell under their label just as they purchased ammo from Lake City. With everyone selling everything they make, I don't see why they would, but it's the closest to intermingling you'd get.

So while I wouldn't swear under oath they aren't intermingled since I haven't been on the factory floor, I'd consider that a strong indication they aren't.

The companies that get the contract or operate Lake City are not customers of Lake City, they are responsible for the operation and management of everything there... Personnel, Equipment, facilities.... the whole thing. They don't own it... but they sure as hell RUN it.

When did Federal have the contract to run Lake City?

From 2020 report to investors:

We rely on an outside supplier for certain of our ammunition products.

We currently have agreements with a subsidiary of Northrop Grumman pursuant to which such subsidiary
manufactures and supplies certain ammunition products from the Lake City Army Ammunition Plant in Independence,
Missouri that have historically represented a significant portion of our ammunition sales. That agreement expires on
September 30, 2020. Beginning on October 1, 2020, management and control of the Lake City Army Ammunition Plant
will transition to Olin Corporation’s Winchester business, which is a competitor of our ammunition business. After
expiration of our current agreement with Northrop Grumman, we may not be able to purchase Lake City Army
Ammunition Plant products from Winchester on favorable terms or at all, and we may not be able to purchase ammunition
products to replace the products we currently purchase from the Lake City Army Ammunition Plant from another supplier.
If we fail to maintain an adequate supply of such ammunition products, our business, financial condition or results of
operations could be adversely affected.

So...yes, Federal occupied the role of a customer.

[Inspector71]

Interesting message from Federal ammunition:
https://www.youtube.com/watch?v=KIgvoJKovIg

[BehindBlueI's]

Interesting message from Federal ammunition:
https://www.youtube.com/watch?v=KIgvoJKovIg

Yeah, thread on that here: https://pistol-forum.com/showthread....dy-and-Federal

which is what spawned this thread.

[Jared]

Guess I’m the opposite, as I was hoping that Vista would improve the QC of Remington ammo (namely the Golden Saber hollow point line). I had this crazy idea that if GS was a more consistent performer like Gold Dot and HST then that would be a net win for consumers.

As far as a monopoly, I hardly think so. Hornady and Winchester both have a solid market presence. Winchester in particular offers products that compete with the Vista brands in pretty much every category I can think of. They’re also mainstream and widely available during times of normal demand, just like the Vista brands.

If someone chooses to eschew the products offered by competitors, it doesn’t mean there are no viable competitors.

[DocGKR]

Wow.

Which American ammo companies have large USG contracts?

Winchester
Vista (Federal & Speer)
Hornady
Black Hills

Seems like there is competition among ammo vendors (less so for primers and propellants). Seems like all these companies are currently making as much ammo every day as possible, including working extra shifts. Why are people upset and why do they think there is some nefarious issue?

[joshs]

Guess I’m the opposite, as I was hoping that Vista would improve the QC of Remington ammo (namely the Golden Saber hollow point line). I had this crazy idea that if GS was a more consistent performer like Gold Dot and HST then that would be a net win for consumers.

As far as a monopoly, I hardly think so. Hornady and Winchester both have a solid market presence. Winchester in particular offers products that compete with the Vista brands in pretty much every category I can think of. They’re also mainstream and widely available during times of normal demand, just like the Vista brands.

If someone chooses to eschew the products offered by competitors, it doesn’t mean there are no viable competitors.

Me too. I don't remember the last time I bought Remington 9mm ball ammo because it never seems to be even close to price competitive with Federal/CCI or Winchester products. (Not to mention Magtech, Aguila, PMC, S&B, etc.)

[Joe in PNG]

Seems like there is competition among ammo vendors (less so for primers and propellants). Seems like all these companies are currently making as much ammo every day as possible, including working extra shifts. Why are people upset and why do they think there is some nefarious issue?

There's an odd thing I've noticed- some people cannot comprehend something until it affects them personally, and then they take it personally.

Some people take any increase in the price of something they want as a personal affront, as proof of some nefarious plan to deprive them personally. No matter how much you explain the facts of the matter, they just can't grok "more people want this thing now than they did a year ago". The idea of "there's less stuff to make this thing, so the price of the stuff has to go up" likewise doesn't penetrate.

[GJM]

The current ammo drought has gone on over eight months, with no end in sight. Primers are now generally unavailable, 9mm is either unavailable or $700/1,000. Anyone think our current manufacturing capability is getting the job done or likely to in the foreseeable future?

[Joe in PNG]

The current ammo drought has gone on over eight months, with no end in sight. Primers are now generally unavailable, 9mm is either unavailable or $700/1,000. Anyone think our current manufacturing capability is getting the job done or likely to in the foreseeable future?

Why is a shortage surprising under the current circumstances?
-Demand is way, way up, even above what the current manufacturing capability could meet.
-It takes a long time to build up manufacturing capability- years even.
-There's uncertainty about potential regulation following the election. Why build a new factory if the government is going to regulate the output to next to nothing?
-Supply of components is way down. A lot of downstream providers of things like ores, refineries, and other processes are low on employees due to the various lockdowns.
-A lot of the component material isn't exclusively for just ammo makers. Copper, for one, is in high demand, and not just for brass in cases and jackets.

As the saying goes, it is what it is.

[Jared]

The current ammo drought has gone on over eight months, with no end in sight. Primers are now generally unavailable, 9mm is either unavailable or $700/1,000. Anyone think our current manufacturing capability is getting the job done or likely to in the foreseeable future?

This is an honest question. Have you worked in manufacturing?