How Foreign Guns Invaded the U.S. - Bloomberg

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The handgun manufacturer Glock likes to project an all-American image. Its commercials feature heartland accents, a neon-lit diner and police officers wielding the company's pistols. A seven-minute video produced by Glock revises an old-fashioned holiday staple, Clement Clarke Moore’s “’Twas the night before Christmas,” to make it a poem about handguns. Taurus, a producer of inexpensive firearms, uses the Wild West wanted poster to market revolvers. Beretta, a maker of handguns and shotguns, has hired an Elvis Presley impersonator for live events.

This devotion to Americana papers over the foreign status of all three gun companies: Glock is based in Austria, Taurus in Brazil and Beretta in Italy. When it comes to feeding the voracious American appetite for firearms, overseas gun makers have not only borrowed U.S. icons—they’ve taken substantial market share once held almost exclusively by American manufacturers like Colt and American Outdoor Brands Corp., formerly Smith & Wesson.

About three out of 10 firearms available for sale in the U.S. come from abroad, according to a Bloomberg News analysis. Imports totaled 5.1 million weapons, or 31 percent of all guns made for the American market in 2016, the last year for which complete government statistics are available. In some cases, foreign gun makers are completely reliant on the American market. HS Produkt, based in Croatia, exported 95 percent of the firearms it manufactured last year to the U.S.

Like foreign car makers that have opened factories in the U.S., foreign-based gun companies also introduced manufacturing facilities in the country, assembling hundreds of thousands of handguns, rifles and shotguns in the U.S. each year. German-owned SIG Sauer alone made more than 634,000 pistols and rifles at its facilities in New Hampshire in 2016, according to data gathered by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The chief executive officer of SIG Sauer's American division was detained by German authorities investigating the sale of handguns made by the company, sold to the U.S. Department of Defense and later exported to Colombian police. The company did not respond to requests for comment.

Overseas gun companies flock to the U.S. for an obvious reason: to access the richest civilian firearm market in the world, one that operates with notably lax regulation. Gun control in Europe is far more strict.

Without the American gun market, some of these companies would see hard times. Glock doesn't disclose its annual sales but a recent lawsuit gives an indication of the importance of the U.S. market to the Austrian company. Losing the suit over popular handgun models sold in the U.S. would cost $115 million, Glock said in a filing, and that's just a portion of the company's U.S. sales. The small Eastern European nation of Croatia is responsible for 7 percent as of 2017 of all the firearms imported into the U.S., thanks to guns manufactured by HS Produkt, making the foreign company heavily dependent on U.S. consumers.

“Europeans sell guns to the Americans that one isn’t allowed to have in Europe,” says Iain Overton, executive director of London-based advocacy group Action on Armed Violence. To the degree they think about it at all, he adds, “people here see no irony in making guns here and shipping them off to the U.S.”

Almost inevitably, given their prevalence, guns made by foreign companies are used in crime, including some of the worst mass killings. The shooter in the Pittsburgh synagogue massacre last month carried three Glock .357 handguns in addition to an American-made AR-15 assault-style weapon.

The number of gun imports to the U.S. has fluctuated annually but the overall trend has been a marked increase compared to the 1980s and 1990s, when far fewer firearms were manufactured in the U.S. The absolute number of guns imported to the U.S. peaked at about 5.5 million in 2013, while the proportion of imports hit a high of 41 percent in 2007 and has decreased somewhat since then. Austria is the top exporter to the U.S., with more than 1.2 million guns in 2016, almost all of them handguns and the vast majority of those Glocks.

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Seeder's note:  The article published by Bloomberg contains several informative graphics.  The article also contains some interesting information about foreign firearm manufacturers supporting the National Rifle Association and indirectly influencing government gun control laws.  Click on the seed link to read the full article, it's not trapped behind a paywall.

Seeder's update:   Someone pointed out that Bloomberg is a paywall bubble which I missed.  Sorry about that.  Here's the rest of the article.  Including the images is more trouble than it's worth .

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Foreign guns aren’t just supplanting many of their American-made counterparts in the marketplace. Foreign money is helping fill the coffers of the National Rifle Association. For years, foreign gun makers, like their domestic U.S. rivals, have sought to shape the American debate over firearms and the Second Amendment by helping to finance the NRA, the main lobbying organization representing the interests of gun owners and manufacturers. While the NRA does not disclose corporate donations, Glock, Beretta and SIG Sauer have all received membership in the NRA’s Golden Ring of Freedom, an elite group honoring individuals and companies that have donated $1 million or more to the association and its affiliates.

Beretta donated $1 million to the NRA Institute for Legislative Action and Civil Rights Defense Fund between 2008 and 2013, according to public records and press releases reviewed by Bloomberg News. In its home nation of Italy, firearms and ammunition are tightly regulated by the government. Austria's Glock has poured half a million dollars into the NRA Whittington Center and its programming. The New Mexico shooting facility is often used by teenagers.

Taurus, the Brazilian gun maker, has spent heavily supporting the NRA, though the exact amount isn’t publicly known. In a well-advertised program, the company donates one NRA membership, a $40 value, for every firearm it sells. Taurus has sold hundreds of thousands of guns in the U.S.

“The foreign manufacturers have stepped up to support the NRA, just like the domestic manufacturers,” says Richard Feldman, a former NRA political organizer and consultant to Glock. “They all know where their bread is buttered.” Like their domestic counterparts, they also direct money to the NRA by buying advertisements in its publications, at its events and on its websites.

Foreign gun makers are also members of the National Shooting Sport Foundation, a quieter gun industry lobbying group with deep ties in Washington. Foreign and domestic manufacturers put their wares on display at NSSF’s annual SHOT Show. Representatives of Beretta, Glock, SIG Sauer and Taurus sit on the group’s 24-member board.

The NRA operates a variety of media platforms, including magazines, news websites and a digital television network. The NRA publishes reviews of foreign-made weapons, something the group does for domestic products as well. In August 2018, the website of American Rifleman, the NRA’s premier publication, featured the Glock 19X pistol as the “NRA Gun of the Week,” noting that it makes available to civilians certain design details originally conceived of for military use.

None of the companies in this article responded to requests for comment.

Overseas gun makers haven’t always appeared to fall in line behind the NRA’s muscular approach to politics. In the 1990s, Glock occasionally showed wariness of the NRA’s hardline stance. For example, the company favored industry distribution of child-safety trigger locks at a time when the NRA opposed the program. But those disagreements are long past. There’s no appreciable difference between foreign and domestic companies when it comes to their lockstep loyalty to the influential lobbying group.

In one dramatic episode from 2000, foreign gun makers proved happy to outflank an American company that temporarily deviated from the NRA’s line. Smith & Wesson almost went out of business in the face of an NRA-fomented consumer boycott protesting the company’s willingness to negotiate with the Clinton administration over gun control. “The foreign manufacturers stepped right in to take advantage” of the American gun maker’s vulnerability, Feldman says.

Foreign gun makers began to make inroads in the U.S. in the 1980s and 1990s for much the same reason that overseas car makers carved out a substantial portion of the American auto market at roughly the same time. Like self-satisfied executives in Detroit, the American gun industry neglected quality and innovation, opening the door to overseas competition.

Colt’s bankruptcy filing in 2015 was   reportedly   partially attributed to the company’s losing military business in favor of a foreign gun maker. In 2013, the 163-year-old American business lost a $77 million military contract to F.N. Herstal, a Belgian gun manufacturer.

Even though they are heavily enmeshed in U.S. commerce, foreign gun makers, most of which are privately held, typically escape the wrath of American protesters and aren’t subject to the concerns of outside shareholders. Smith & Wesson and Sturm Ruger & Co. have clashed with activist investors this year and grappled with shareholder proposals requiring the companies to prepare reports on firearm safety and gun violence in America. The proposals passed despite vocal opposition by company executives.

Smith & Wesson Chief Executive Officer P. James Debney called the effort “an anti-firearms agenda designed to harm the company.” His company has faced similar scrutiny from the leaders of the Major Cities Chiefs Association, an organization that represents dozens of large North American police departments. In a letter sent in September, the chiefs urged Smith & Wesson to address issues related to gun violence and create firearms easier for police officers to trace.

Glock received no such communication from law enforcement leaders, even though its products are popular among American cops. It also has no activist shareholders to fend off. Austrian law requires the privately held company to make one public filing a year—a report with scant details filed to the government.

What all gun makers selling in the U.S. have in common is the shifting influence of American politics. Under President Donald Trump, firearm owners’ fear of stiffer gun control has waned. That translates into fewer consumers running out to buy another gun. Glock’s sales report for 2017 showed a 36 percent decline in handgun sales, with revenue falling 35 percent. American gun makers experienced similar declines.

But the volatility of the American market isn’t likely to discourage foreign imports, particularly since foreign suppliers have embedded themselves deeply within the American firearms industry. Springfield Armory, a Geneseo, Illinois-based company, trades on its patriotic association with the original 18th century Springfield Armory, which made muskets for the young nation. The contemporary company’s products aren’t all made in America. It imports its XD line of “extreme duty” polymer pistols from Croatia, where the handguns are made by HS Produkt.

Croatia, with a population of about 4 million people, exported 574,000 handguns to the U.S. in 2016, making it the third-leading firearm exporter that year, after only Austria and Brazil, according to U.S. government statistics. HS Produkt made the vast majority of those exported guns and Springfield Armory imported most of them.

Though foreign competitors have taken market share from U.S. companies, there is a silver lining for domestic firearm makers. Paul Jannuzzo, the former chief operating officer of Glock’s U.S. subsidiary, sees the heightened competition sparking fresh research and development efforts, bringing new products to gun store shelves.

“They dragged the American gun companies into the 21st century,” Jannuzzo says.