German weapons firms find lucrative market in United States
October 5, 2017
In keeping with a macabre Wall Street ritual, the stock prices of major gunmakers rose by an average of 3 percent in the United States following Monday's mass shooting in Las Vegas, which left 58 people dead and hundreds more injured.
As has happened in the wake of other shootings, traders bet on a rise in gun sales following the shooting, as enthusiasts begin hoarding firearms in anticipation of possibly increased restrictions — though the market reaction was weaker than it was following high-profile mass shootings during the Obama administration, possibly because current President Donald Trump is a self-professed friend of the gun lobby.
With US lawmakers reluctant to take action on gun control, German weapons makers have begun to see the United States as a potential source of big profits.
Read more: Conservatives must say 'enough is enough' on gun control
'We're the Porsches'
Heckler & Koch (H&K), based in Oberndorf, southern Germany, is currently building a $23 million (€19.55 million) gun factory in Columbus, Georgia, that will exclusively make "sports and hunting" weapons for the US civilian market.
In a statement, the company claimed that the new plant would bring 84 new jobs to the town over the next two years — many of which would go to German and US engineers. Meanwhile, all the firm's military guns would still be made in Oberndorf.
In May CEO Norbert Scheuch — who has since been let go and is suing H&K for wrongful termination — said the German government's increasingly restrictive export policies were forcing the company's hand: "If the politicians are practically preventing us from carrying out any sales to the Middle East, we have to look for alternatives. We will expand the NATO business and the civilian US market. We're the Porsches among the weapons in that market."
But Scheuch also acknowledged that the plan had a preventive quality, with Trump having become president in part on a protectionist platform. "Because of the slogan 'America First,' it could get all the more difficult to export to the US," he told Der Spiegel magazine. "The Americans want local production."
Read more: Las Vegas shooter converted guns to automatics with gadget
A gunmaker's ethics
Having become the first ever gunmaker to withdraw from exporting to the world's "crisis regions," H&K — once named "Germany's deadliest company" by activists — has made the US's civilian market a priority.
The plan appears to have paid off: In 2016, its turnover in the United States rose by 48 percent, to €76.5 million — that represented 40 percent of its total turnover for the year. Sales appear to have dipped for 2017 so far.
H&K's Swiss-German rival, SIG Sauer, made the move to the United States decades ago. The company, based in Eckernförde, northern Germany, also has significant manufacturing interests in the US — specifically in the Northeastern state of New Hampshire, where SIGARMS, a separate company founded initially in 1985 to import SIG Sauer weapons, now makes a variety of handguns.
The shooter who killed 49 people in a nightclub in Orlando, Florida, in June 2016 used a SIG Sauer MCX assault rifle made in the United States - as well as an Austrian Glock.