George Soros Plans to Buy and Close Gun Companies Like Marlin Firearms – Fiction!
Summary of eRumor:
Marlin Firearms is closing because a company owned by billionaire George Soros called the Freedom Group purchased Marlin Firearms with plans to shut it down.
George Soros did not purchase Marlin Firearms, and the company hasn’t announced any plans to shut down.
The eRumor first surfaced in 2011 when a chain email claimed that the Freedom Group, a company supposedly owned by George Soros, had purchased Marlin Firearms and other gun and ammo makers like Remington, DPMS, Dakota Arms and H&R with plans to shut them all down.
TruthorFiction.com first reported on this eRumor in 2011 and classified it as fiction. Over the years, a number of variations of the eRumor have gone viral; so we decided to take another look at a version that was in circulation in early 2015:
“For the last several years a company called The Freedom Group has been buying up gun and ammunition manufacturers. Some of the companies are Bushmaster, Marlin, Remington, DPMS, Dakota Arms and H&R. Some people worry that this Freedom Group is going to control most of the firearms companies in the United States. If you control the manufacturers you can decide to stop selling to civilians. What a perfect way to control guns. Now if you do some digging you will see that The Freedom Group is owned by a company called Cerberus Capital Management. Guess who controls Cerberus??? GEORGE SOROS, Obama’s chief financier!! He wants to restrict or ban all civilian guns.”
First, let’s take a look at the email’s claims about the ownership of the Freedom Group and Cerberus Capital Management. Cerberus Capital Management isn’t owned or controlled by George Soros, as the email claims. Soros isn’t even listed as a director or board member of the hedge fund. Amid viral claims about Soros’ alleged role, the NRA even said in a 2012 statement that, “George Soros has never been a part of the Freedom Group or Cerberus,” to calm its members’ fears.
The man behind Cerberus Capital Management and the Freedom Group is Stephen Feinberg, the chief executive of Cerberus. The New York Times reports:
“Mr. Feinberg, a Princeton graduate who began his Wall Street career at Drexel Burnham Lambert, the junk bond powerhouse of Michael R. Milken fame, got into private equity in 1992. That year, he and William L. Richter founded Cerberus, which takes its name from the three-headed dog in Greek mythology that guards the gates of Hades.
Today, Mr. Feinberg presides over a private empire that rivals some of the mightiest public companies in the land. Cerberus manages more than $20 billion in capital. Together, the companies it owns generate annual revenue of about $40 billion — more than either Amazon or Coca-Cola last year.”
Cerberus Capital Management formed the Freedom Group in 2006, and it has become “the world’s leading innovator, designer, manufacturer and marketer of firearms, ammunition and related products,” the company says. Since then, the Freedom Group has rebranded itself as the Remington Outdoor Co., so it’s commonly referred to by both names.
The Freedom Group has acquired some of the most recognizable names in the industry: Bushmaster in 2006, Remington in 2007, DPMS Panther Arms in 2007 and Marlin Firearms in 2008. Cerberus also owned a number of gun and ammo makers before the Freedom Group was formed. The company’s firearms business quickly earned more than $1 billion in revenue a year, according to SEC filings.
Claims that Marlin Firearms had “closed down” went viral in 2011 when the Marlin Firearms manufacturing plant in Connecticut was shuttered after 141 years in business. A spokesperson for Remington said the move was made to consolidate manufacturing operations to cut costs in light of “intense” competition. Bushmaster’s plant in Maine was also closed in an effort to consolidate manufacturing. But those brands weren’t discontinued; their products were just rolled into other manufacturing operations.
Reports indicate that the gun and ammo maker had fallen on hard times by the end of 2012. A Bushmaster gun was allegedly used to carry out the shootings at Sandy Hook Elementary School in Newtown, Connecticut, and a group of parents later sued the gun maker over the shooting. Remington also faced a $25 million recall of misfiring guns in 2014. All the while, gun sales had bottomed out. Buyers flocked to the market in 2013 as stricter federal gun laws were being debated, so demand for new guns was unusually low with those buyers off the market a year later, the New York Post reports:
“The situation ‘spells disaster’ for Remington, said a source familiar with the company’s financials.
Remington has seen its
earnings before interest, taxes, depreciation and amortization fall from $240 million last year to $125 million this year, the source said. Revenue has fallen from $1.25 billion last year to $1 billion in 2014.
In October, Moody’s Investors Service downgraded Remington’s debt to B2, or high credit risk.
‘Remington’s weakened financial condition heightens ongoing rating concerns, including high regulatory and product liability risks and the discretionary nature of its products,’ Moody’s wrote.”
Cerberus Capital Management has reportedly been trying to sell the Freedom Group since late 2012. A Florida company named Global Digital Solutions emerged with a $1 billion cash offer to purchase the company in early 2014, but Freedom Group officials later dismissed the bid.
In December of 2014, it was reported that the company had taken on more than $1 billion of debt.