The Gun Explosion

Why the firearms boom is good news for the American economy

In a February 2012 fund-raising appearance, President Barack Obama expressed his desire to keep America's assembly lines humming. "I want to make sure the next generation of manufacturing isn't taking root just in Asia or Europe," he told a crowd of supporters. "I want it taking root in factories in Detroit and Pittsburgh and Cleveland and California.…I want to reward companies that are investing here in the United States and creating jobs all throughout this country." Perhaps because the president was speaking in San Francisco, where most of the local factories had long ago been converted into luxury condos for venture capitalists and software designers, he was short on specifics. Or maybe he just couldn't think of any American manufacturing industries that still seemed salvageable. 

Two weeks earlier, however, a federal agency had released a report that suggested at least one component of the manufacturing sector was not only still making stuff in Detroit, Pittsburgh, Cleveland, California, and thousands of other places in America, but making more of it than it had in decades. According to the "Annual Firearms Production and Export Report" from the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE), American manufacturers produced 5,459,240 handguns, rifles, shotguns, and miscellaneous ordnance in 2010. (To comply with the Trade Secrets Act, the BATFE waits one year to publish these data; numbers for 2010 therefore are not published until January 2012.) It was the second year in a row the industry had attained numbers not seen since the glory days of the late Carter administration.

A little more than a decade ago, the domestic firearms industry was staggering like a villain on the wrong side of Dirty Harry's .44 Magnum. "The future has never been more uncertain for America's oldest manufacturing industry," a Businessweek cover story reported in 1999. Flat sales, the specter of more stringent regulation, and dozens of lawsuits filed by cities and counties seeking damages for the costs associated with gun violence threatened to destroy a uniquely American business. U.S. companies were going bankrupt, foreign competitors were claiming a bigger piece of the action, and even industry executives were expecting the market to "steadily shrink over the long term."

Yet here it is, 13 years later, well into America's great manufacturing exodus and the post-financial-crisis economic slump, and the domestic firearms industry is enjoying near-record productivity. According to Smith & Wesson, one of just two U.S. gun manufacturers that are publicly traded and thus publish their sales figures, the company ended its 2011 fiscal year with a backlog of $187 million in orders after enjoying "record fourth quarter sales and units shipped." Meanwhile, Sturm, Ruger & Co. is on a quest to become the first U.S. gun manufacturer to build and ship 1 million units in a single year. In May 2011, the company announced its intention to donate $1 to the National Rifle Association (NRA) for every firearm it sold from April 2011 through March 2012. At the end of nine months, in January 2012, it had donated $871,000 and seemed well on its way to meeting its goal.

One possible reason for the surge in gun making: feminism. According to Bloomberg News, approximately 250,000 women have served in combat zones in Afghanistan and Iraq during the last decade, and when they complete their service they are "returning with a familiarity of firearms their mothers never had." 

Lawrence Keane, senior vice president at the National Shooting Sports Foundation, an industry trade group, cites war as a factor too. "Returning vets who went into the military without much experience with firearms have now been exposed to them," he says. According to Keane, his organization recently conducted a survey of consumers who had purchased modern sporting rifles, a type of semiautomatic weapon that resembles the M-16s the U.S. military started using in Vietnam. "Half of the folks buying these firearms in the last several years are current or former military and law enforcement," Keane says. "They're buying modern sporting rifles because they're very similar to the rifles they carried while in the military."

Other factors behind the boom include the widespread adoption of right-to-carry laws, which require that carry permits be issued to people who meet a short list of objective criteria; two key Supreme Court decisions that found the Second Amendment protects an individual right to arms against federal and state infringement; and an expanding array of products. "A little over a quarter century ago the majority of Americans owning or carrying a handgun had far fewer choices than today," the February 2012 issue of Combat Handguns notes, "and the majority deferred to the same guns being carried by FBI agents and police detectives. Now, Smith & Wesson alone produces 166 different models of handguns—and 46 of these have been introduced in just the last two years." On a similar note, new products accounted for 32 percent of Sturm, Ruger's sales in the first nine months of 2011.

But it's not just market leaders that are driving the industry's renaissance. "Computer control is making the small firearms manufacturer a practical possibility again," says Clayton Cramer, an adjunct faculty member at the College of Western Idaho and author of the book Armed America: The Remarkable Story of How and Why Guns Became as American as Apple Pie (Thomas Nelson). Computer numerical control (CNC) milling machines reduce both the equipment and the manpower it takes to produce firearms. "Instead of having a dozen craftsmen, each working on a particular step," Cramer explains, "you can now have one skilled programmer setting up a CNC mill to do all those steps in one machine." 

All across America, hundreds of regional manufacturers are popping up, producing anywhere from a few dozen to a few thousand pieces a year and marketing them to their local communities. There may be no such thing as an organic bolt-action rifle, but the contemporary firearms industry has more than a little in common with locavorism, craft brewing, and other artisanal manufacturing movements of the last few decades. The gun show is the .44 caliber equivalent of the farmer's market.

So far President Obama has not championed this industrial resurgence on his watch. But many in the firearms industry are happy to give him credit. Indeed, while Newt Gingrich has tried to brand Obama "the food stamps president," it would be equally fitting to call him "the firearms president." In 2004, when a 10-year federal ban against so-called assault weapons expired, the industry enjoyed only a mild uptick in production numbers. When Obama took office in January 2009 and almost immediately started floating the notion of resurrecting the ban, that mild uptick turned into an explosion, as consumers raced to purchase guns while they still could. One industry news service, Outdoor Wire, dubbed the president "Gun Salesman of the Year."

While Obama has subsequently shown about as much interest in controlling guns as he has in controlling the deficit, some detractors believe his inaction has been part of a careful strategy to lull gun owners into complacency. In a February appearance at the Conservative Political Action Conference, NRA Executive Vice President Wayne LaPierre suggested that Obama won't make any dramatic moves to disarm America until he is re-elected, at which point he will proceed to "destroy the Second Amendment." The threat of a second term for Obama should keep the firearms industry humming throughout 2012, and if he wins, expect sales to shoot through the roof. 

All of which just shows how thoroughly the industry has won over the trigger fingers of America during the last decade. At this point, a victory for Mitt Romney or Rick Santorum represents the anti-gun activist's best hope of curbing the nation's appetite for small-frame semiautomatic pistols.

Contributing Editor Greg Beato writes from San Francisco.