Colt on the Verge of Bankruptcy, Again

It appears, once again, Colt is on the verge of bankruptcy. Nobody appears to be shocked by this. Colt has a long history of making decisions that could be generously called questionable. In fact BusinessWeek has put together a nice summarized history of Colt. The article is focused mostly on Colt’s bad decisions because, frankly, there aren’t a lot of good decisions to look at. For me the dumbest decision the company made was all but abandoning the civilian market in favor of focusing on the military market after it had lost the contract to produce the sidearm and rifle for the United States military:

In the 1970s, Colt and other American gunmakers, following the bad example of Detroit’s Big Three automakers, grew smug and lazy. Like Japanese and German car companies, more nimble foreign gunmakers grabbed market share. By the 1980s, Smith & Wesson had lost the U.S. police to Austria’s Glock, while Colt saw Italy’s Beretta snatch its main U.S. Army sidearm contract. In 1985, Colt plant employees who belonged to the United Auto Workers launched a protracted strike for higher pay. Replacement employees weren’t up to the task, and “quality suffered badly,” says Feldman, then an organizer for the National Rifle Association. In 1988 the Pentagon gave Colt’s M16 contract to FN Herstal of Belgium. Four years later, Colt filed for bankruptcy court protection from its creditors. “With the end of the Cold War,” says Hopkins, the firearms marketer, “it seemed like the company might never recover.”


In 1999, Zilkha named a new CEO, William Keys, a retired three-star Marine Corps general. The company announced it would end production of all but a handful of civilian handguns and focus on military production. As a reporter at the Wall Street Journal during this period, I interviewed a memorably glum Zilkha. He complained that on top of his other problems, he felt unfairly targeted by gun rights activists who criticized his past contributions to Democratic New York Senator Charles Schumer, a vocal proponent of stricter gun control. When I suggested to Zilkha that he seemed to regret ever having entered the gun business, he didn’t argue.

Admittedly Colt has backed away from the decision over time. Now if you want an authentic Colt firearm you can get one but it will cost you your first born child. I know a few people who still herald the Colt 1911 as the end all be all in 1911s but I could never figured out what Colt 1911s do that other 1911s manufactured by reputable manufacturers for less don’t. Maybe the stamped on mustang makes the slide move faster, I don’t know.

That’s the other thing. Releasing 1911s is fine and all but there are approximately eleventy bajillion 1911 manufacturers out there. Name alone is seldom enough to keep one relevant in a market for very long. Smart manufacturers try to provide some kind of innovation be in new models of firearms or firearms designed to service niche markets. As far as I can tell Colt does neither.

I wouldn’t be surprised if the Colt name is bought up by a foreign manufacturer at a fire sale price. While the name alone isn’t enough to keep one in the market it certainly would offer quick credibility to a new manufacturer looking to enter the market (since a lot of people will mistake the new Colt for the old Colt just as many people mistake Springfield Armory, Inc. for the Springfield Armory of lore).