|Felix Salmon||Mar 13, 2018|
It’s anti-gun season, and not a day too soon. Tomorrow students around the country will walk out of their schools for 17 minutes, in advance of the March 24 March For Our Lives and an April 20 student walkout which will be a day-long affair.
These protests are explicitly political, and have clear political demands. In short: Assault weapons should be banned; anybody buying a gun should have to pass a background check; gun-owners showing a propensity to harm themselves or others should have their guns removed; and police should stop being militarized. The protestors also oppose mooted legislation which would arm teachers, or allow concealed carry nationwide.
There have already been legislative successes, especially in Florida. And there have been popular-opinion successes too. America’s biggest gun retailers have raised the minimum age for buying guns, and if you were a corporate partner of the NRA last month, there’s a very good chance you’re not any more. At the margin, that’s going to make it a little bit harder for the NRA to attract paying members, and therefore will cause a little less money to flow through the NRA’s coffers.
Which leaves just one major avenue: The gun manufacturers themselves. This one will take a little bit of time, but is possibly the most promising of all, just because Remington, one of the largest gunmakers, is about to go through Chapter 11 bankruptcy.
People often think of bankruptcy as what happens when a company dies — and that’s true, almost all corporate deaths end in bankruptcy. But not all bankruptcies are corporate deaths; many of them boil down to an expensive way of changing ownership. And that’s what’s going to happen in this case. The old owners were a private-equity shop named Cerberus. (Yes, after the monstrous three-headed dog which guards the gates of hell.) The new owners will emerge from the ranks of Remington’s creditors, and will include Franklin Templeton and JPMorgan Asset Management.
Hence the opportunity. Franklin Templeton and JPMorgan won’t hold on to Remington for long: they’re bond investors with zero interest in owning one of the most controversial companies in the world. But they’re going to own it, whether they like it or not, and that means they can transform it, for the better, while they do.
JPMorgan, for one, doesn’t seem to have a huge amount of appetite for taking such an active role: in a statement, they said that “any holding we have would be minority, passive and temporary”. (My emphasis.) But that doesn’t really pass the smell test. If you’re actively trying to sell a company to the highest bidder, you by definition are taking an active interest in it. And part of that interest can and should be to shut down its most toxic and socially destructive activities.
As Rob Cox says, Remington’s new owners “could, for instance, insist on an end to the production and marketing of AR-15s and similar hardware, encourage smart-gun safety technology, or even urge reduced funding for the National Rifle Association’s political campaigns.” I’d say they should do all three.
There would be costs to such actions: by antagonizing the NRA, Remington would be risking a boycott from the very people who buy most of its guns. What’s more, it would be very hard to take such actions in an irreversible manner. Once JPMorgan and the other creditors sold Remington to its new long-term strategic owner, that owner could simply revert to the status quo under Cerberus.
Still, it’s worth a try. Remington’s temporary owners will, after all, have full control over whom they sell it to, and they can vet that owner quite carefully in terms of its social mission. There’s definitely a possible future world in which Remington stops making assault rifles, starts making smart guns, concentrates on the sport market, and wears the NRA’s disapproval as a badge of honor. That might be risky, but with risk comes opportunity: the NRA is increasingly marginalized, assault-rifle sales are down sharply (everybody who wants one pretty much has one, at this point), and a lot of sports shooters would love to be able to upgrade to an instrument that only their fingerprints could unlock.
By embracing that future, Remington’s current creditors may or may not maximize the return on their equity. But they would certainly be making America a better, safer country. It seems to me that JPMorgan and Franklin Templeton, then, should be the focus of a lot of activism in coming months. The cost, to them, of doing the right thing could be pretty small; the benefit, to the country and the world, would be enormous. So don’t let them off the hook. If you want to make a difference, on the guns-in-America front, put real pressure on Remington’s new owners. Not all positive change comes through legislation, after all.