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Tuesday, December 18, 2012

Teacher Retirement System Invested In Gun Conglomerate

In this 2006 photo, a Bushmaster AR-15 semi-automatic rifle and ammunition is seen at the Seattle Police headquarters in Seattle. Authorities say the gunman in last week's school shooting in Newtown, Conn. also used a Bushmaster AR-15 rifle. (Ted S. Warren/AP)

In this 2006 photo, a Bushmaster AR-15 semi-automatic rifle and ammunition is seen at the Seattle Police headquarters in Seattle. Authorities say the gunman in last week’s school shooting in Newtown, Conn. also used a Bushmaster AR-15 rifle. (Ted S. Warren/AP)

In a statement on Tuesday, Cerberus Capital Management called the Newtown shooting a “watershed event” and announced it’s getting out of the gun business.

Cerberus owns the gun and ammunition manufacturer Freedom Group Inc. that makes the Bushmaster rifle – used by the Newtown shooter, Adam Lanza, to kill 20 children and six adults at Sandy Hook Elementary School last week.

Martin Feinberg, father of the CEO of Cerberus, lives in Newtown, Conn. He told Bloomberg News that Friday’s school shooting in Newtown, Conn. was “devastating.”

The move by Cerberus comes after it came out that funds from the California State Teachers’ Retirement System (CalSTRS) were invested in Cerberus’ gun conglomerate - apparently in violation of CalSTRS’ investment policies.

Fortune magazine senior editor Dan Primack wonders whether a foreign gun maker will buy Freedom Group.

Guest:


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  • Galinsky

    The argument that gun advocates make for assault weapons is that these weapons, in the hands of citizens, will serve to prevent government oppression, as occurred in Athens, TN, in 1946.  I wonder how high these assault weapons can shoot?  5,000 feet?  7000 feet?  I ask because the federal government has predator drones (and FA-18s and M1 Abrams).  So, just how do the far-right gun advocates think that they’re going to prevent government oppression by stockpiling weapons and ammo?

  • Lange2250

    That was the worst analysis of a corporations decision making that I have ever listened to. The reporter should be censored by his editor for failing to do the minimum of research needed for a story.
    Cerberus has been struggling with the profitable management of Freedom Group since the initial purchase but continued to double down  with additional company purchases to try to achieve some sort of economy of scale. The companies were profitable when managed independently in there unique manor but most had not updated design or manufacturing processes which cause huge problems because that was not understood by Cerberus. Marlin is the prime example, after the plant was relocated the quality control went off the cliff.
    The current market for firearms, particularly modern sporting rifles (wrongly called assault rifles) is at a historic high. The reelection of  Obama had already caused a bump but the latest shooting and the promises from some politicians to re institute a ban have pushed sales through the roof. Try to find an AR15 variant anywhere, they are selling faster than they can be produced. Bushmaster and DPMS, Freedom Group holdings, will see record sales in these quarters. Just look at the latest FBI background check numbers.
    The 1994 “Assault Rifle” ban did not ban sales  or possession of semi auto rifles. It banned the sale of new manufacture  rifles  with too many banned features. In most cases all that was needed to continue sales of a rifle was to change the muzzle device. In other words the sale continued.
    Unless the congress were to some how pass a total ban with confiscation of literally millions of personally owned firearms, which is not going to happen, the best they can hope for is to reinstate the previous ban.  So with a design change sales will continue, most likely at a continually increasing rate.

    The analysis of the decision should have been – Cerberus has had issues with Freedom Group from the beginning due to a fundamental lack of understanding  of the industry. Sales are at a record level and the most likely outcome of any future firearms legislation will not stop future sales. Now is a very good time to sell at a profit to the buyer who understands to situation and get a little PR bump in the process.

  • http://www.facebook.com/profile.php?id=100003000884786 Navin R Johnson

    I did some quick reading about the Battle of Athens in 1946 and was surprised to read the citizens did possess any true “assault rifles” while the government forces did.  The closest the citizens had was an M1 Garand, which is semiautomatic, but only has an 8 shell clip which is difficult to reload quickly.  The M1 is also fairly long.  The government had a Thompson submachine gun, which many would argue was one of the first “assault rifles.” 

    Using the Battle of Athens as an argument against banning assault rifles is a ridiculous argument, but what other sort of argument do you hear from the NRA?

    • Lange2250

      The citizens had access to the same first line battle rifle of the military which is the intention of the second amendment as outlined by the authors of the constitution and reaffirmed in court decisions and congressional committees. 
      No one with a technical understanding of firearms would argue that the Thompson Sub machine gun is one of the first assault  rifles because it shoots a pistol cartridge   . The long range performance of a pistol cartridge to a rifle cartridge  is like a moped versus a high end sports car  on the autobahn.

      • http://www.facebook.com/profile.php?id=100003000884786 Navin R Johnson

        I disagree about the Thompson, it depends on how you define assault rifle.  There is no standard definition and just because it shoots pistol ammo (like most submachine guns) doesn’t mean it is not an assault rifle.

        But, that is irrelevant because the civilians certainly had no assault rifles at the Battle of Athens.

        • Lange2250

          There is a standard definition of assault rifle. To start with it’s a rifle, firing a rifle cartridge. Next it is select fire or automatic. Typically it is chambered in an intermediate cartridge like 7.62×39 or 5.54 nato. Finally it has a detachable magazine. The first one was the Sturmgewehr 44.

          Correct, there were no assault rifles at the battle of Athens. There were the current front line battle rifles. Now the current front line battle rifles are M4′s and other assault rifles. Like it or not that is what the 2nd amendment is about according to the founders, court decisions and congressional committees.

    • Pumptowaste

      the only people that would group a Thompson submachine gun with modern assault rifles dont know anything about firearms.

    • LibertarianGuy

      Actually, the M1 Garand is one of the quickest reloading rifles in existence. And it’s long, but not prohibitively so. I’d much rather be armed with an M1 Garand than an AR15. 8 rounds of 30-06 beats 30 rounds of 5.56 any day in my book.

  • it

    Do they own stock in General Atomics Aeronautical Systems?

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