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Industry News: May 1999

By Robert M. Hausman

Strong Sales Mark ’99 SHOT SHOW

Against an ominous backdrop of challenging legal and political issues, the 21st SHOT SHOW experienced strong attendance and buying activity. Four days of enthusiasm took place at the show’s venue, the Georgia World Congress Center in Atlanta, February 1 - 4, although the city did not make attendees feel welcome after announcing its intention to sue many of the industry’s leading manufacturers.

Despite the negative environment created by the host city, many exhibitors said sales of firearms and related products exceeded their expectations, and they took that as a sign that their industry is in good shape for the year ahead.

In Atlanta for the first time in 14 years, the event was within easy driving distance of thousands of retailers who live in the East-one reason that on-site registration proved to be surprisingly strong.

Overall attendance was 25,800, which included 13,300 buyers, 11,400 exhibitors and 1,100 journalists. Having strong international appeal as the biggest show of its kind, exhibitors and attendees came to Atlanta from 75 different countries. The show saw its largest gathering ever of the general and outdoor press, including national television crews.

Both the overall total and buyer attendance figures were lower than that of last year, but show organizers said the falloff was within expected limits. “We always have our best attendance in Las Vegas,” commented Bob Delfay, president and CEO of the National Shooting Sports Foundation (NSSF), which owns the SHOTSHOW.

“We did not expect Atlanta attendance to break the records established in Las Vegas in 1997 or 1998. However, considering some of the negative publicity and negative attitudes resulting from an announced lawsuit against our industry by the mayor of Atlanta, I think our attendance was very good,” Delfay said.

Business was so good that many exhibitors did not notice the difference in attendance, while others said sales made to dealers who came to the show because it was held in the East more than compensated for the drop-off in buyer attendance.

Cecil Cahill, vice president of marketing for Sports, Inc., said, “It’s not a matter of where the SHOT SHOW is held. It’s the most upbeat show out there today.”

Exhibitors appreciated the spaciousness and wide aisles of the World Congress Center, where 466,000-square-feet of booth space was used, making the1999 SHOT SHOW the largest ever in terms of floor space. Some visitors and buyers complained of the large amount of walking they had to do to get to the exhibitors they needed to see. The show was set up in two main exhibition halls connected by a concourse where new products were displayed.

“People were in a buying mood and in a positive frame of mind,” said Paul Clarence, director marketing administration at Winchester.

Bob Morrison, vice president at Taurus International, said, “This was the best SHOT SHOW we’ve ever had and the pinnacle of Taurus’s career so far.” Taurus took the occasion to unveil its new all-titanium handguns, which quickly became one of the show’s most-talked-about new products. “As a result of the show, our orders are coming in and they are big,” said Morrison.

Art Wheaton, vice president of marketing for Remington Arms Co., said business was good. “Remington has had a very, very successful show here,” he observed. “It’s definitely been as successful as Las Vegas for us.”

Echoing Wheaton’s sentiments, Steve Hornady, of Hornady Manufacturing, Inc., said, “It’s been a good show. We have a good, solid base of business for1999.” In fact, it was hard to find an exhibitor who was not pleased with sales. “This has been a positive show and we’ve had a great response to our new products,” noted John Sullivan, director of marketing for W.R. Case & Sons Cutlery Co.

A visit to the floor reservation selling space area for next year’s show found exhibitors engaged in heavy buying activity, with nearly all of the floor space for next year already sold, one year in advance.

While the year 2000 SHOT SHOW had originally been planned to be held in New Orleans, LA, that city’s announced decision to sue the firearms industry has caused the show to be rescheduled for Las Vegas, NV, next January 17 - 20.

The big city suits being filed against the industry could have the effect of ending private firearm ownership without the need for passage of new laws. In the first suit filed by the city of New Orleans, the municipality seeks unspecified “millions of dollars” against 15 gun makers, three firearms industry trade associations (American Shooting Sports Council, National Shooting Sports Foundation, and the Sporting Arms & Ammunition Manufacturer’s Institute), several gun dealers and pawnbrokers. The suit alleges manufacturers have refused to employ user-recognition technology that would allow only an authorized user to fire an individual gun.

While such technology, such as is being developed by Colt’s Manufacturing Co. is far from perfected, the suits can have the effect of spurring anti-gun zealots in state and local legislatures, to introduce bills that would prohibit the sale of firearms not containing additional safety devices. Such an effort recently came to pass in New Jersey, but it has since been tabled, although it is reported Governor Christine Whitman still speaks favorably about the bill.

In Chicago, which since the early 1980’s has effectively banned the acquisition of handguns by law-abiding citizens through its refusal to grant ownership permits to prospective handgun purchasers, lawyers for the city are suing 38 gun manufacturers, distributors and dealers for $433 million under a novel “public nuisance” theory claiming the industry over-saturated the market with more firearms than can reasonably be expected to be sold to holders of Illinois firearms owner’s ID cards.

Last June, the anti-gun MacArthur Justice Center at the University of Chicago filed a lawsuit accusing gun companies of knowingly aiding criminals in the commission of crimes by, among other things, making their products “affordable. If the plaintiffs were to prevail in this suit, lower-priced firearms would disappear from the market, effectively precluding sales of guns at the retail level to those with limited economic means.

The cumulative effect of the wave of suits against the gun industry overall, even if the suits are all eventually dismissed, could result in higher gun prices due to the industry’s need to recoup its legal expenses in defending itself against the suits. The recent tobacco settlement has resulted in an average $1 price hike in the price of a pack of cigarettes nationwide.

This author is of the opinion that if the city of Chicago wants to recover money from an industry truly pandering to criminals, it should sue the sneaker manufacturers. The February 19, 1999 edition of The Wall Street Journal, contains a page one article on a Chicago-area Athlete’s Foot franchise owner who operates several stores in high crime areas of the city. He has found his best salesman are current and former street gang members who advise him on what styles to keep in stock at the stores to appeal to the current fashion tastes of the various criminal street gangs in the city. The article even went on to relate how a shoe designer flew in from New York to visit the Chicago stores to gain insight into the latest street fashions from the store’s part-time gangster salesmen.

Special Meeting

In response to the gun industry suits, a special meeting and press conference was hosted by the American Shooting Sports Council (ASSC) during the SHOT SHOW. Held on the show’s opening day, it was well-attended by industry executives, ATF and FBI officials, attorneys, and various print and broadcast journalists.

Bill Pryor, attorney general of Alabama, and an early critic of the lawsuits filed by state attorney generals against the tobacco industry, called the tobacco suits (and the suits against the gun industry) “threats against the entire business community.”

“This dangerous marriage of tort (injuries to persons and property) lawyers and governments must be severed soon before it further weakens what remains of limited government, the rule of law and respect for individual responsibility,” Pryor stated. “Trial lawyers, richly rewarded for providing financial support for the tobacco suits, have even more resources as they now undertake the gun suits.”

Pryor provided some insight into the legal strategies employed against the gun industry. “When filing these cases, trial lawyers select judges known to be susceptible to ignoring legal doctrines. The judges pander to their trial-lawyer friends, who, in turn, contribute to judicial election campaigns, and the judges bask in the media attention accompanying their ‘landmark’ rulings.

Against this corrosive backdrop, a high-profile public relations campaign can be mounted by political clients such as mayors and attorneys general who extol the virtues of their ‘public interest’ litigation. When framed as a crusade to protect innocent children, the campaign can attract a host of liberal interest groups, Pryor pointed out.

“When the gun industry correctly argues,” Pryor warned, “it provides legal products for law-abiding citizens to defend themselves against crime, the trial lawyers will say that this benefit is irrelevant as the industry created the crime problem that required citizens to defend themselves.”

The lawsuits threaten the notion of limited government as they shift political disputes from legislatures to the judiciary and confuse citizens about the tenets of American government, such as the separation of powers, he asserted. Pointing out such suits are handled on a contingency basis by the trial lawyers (meaning the plaintiff’s lawyers only get paid if the suit is successful), he added that for many years it was considered unethical for an attorney to have a financial interest in the outcome of a lawsuit.

The contingency fee concept was developed to allow greater access to the court system by plaintiffs of limited economic means. The contingency concept is now being abused by the wealthy government clients suing the tobacco and firearms industries, Pryor said.

“While the mayors claim they are acting to fight crime, they are actually playing a blame game,” Pryor theorized. “They are unwilling to take responsibility for the crime problem. As a law enforcement official, I know crimes are caused by criminals, not by the gun industry. Indeed, by providing good-quality firearms at reasonable prices to law-abiding citizens and lawmen, the gun industry helps reduce crime.”

Rep. Bob Barr (R-GA) appeared at the meeting and noted the firearms industry makes a positive impact on America’s economy by contributing $24 - $25 billion annually in revenues. He added the suits against the industry are designed to put gun manufacturers out-of-business and vowed that the big city mayors bringing the suits would not find a “scapegoat” in the shooting industry.

In closing, Barr said Congress is considering adopting remedial legislation to prevent such suits in the future. On another note, Barr added the FBI’s administration of the permanent provisions of the Brady Act is also being looked at by Congress, as there is evidence the FBI has violated at least two federal laws in its method of operation of the National Instant Criminal Background Check System of gun buyers. “This is a matter of concern to those of us interested in upholding the law,” Barr emphasized.

Mayor Mary Ross Augusta of Miami Shores, Florida, a village of about 10,000 persons in Miami’s Dade County, said several recent incidents involving firearms misuse have prompted her to institute a firearms safety awareness program, rather than following the lead taken by the city of Miami in threatening to sue the industry. Augusta recently declared the month of November as “Children’s Safety Month,” and began a program of handing out gun locks to firearms owners interested in securing their firearms so that unsupervised children would not be able to operate the guns if encountered. The locks were provided free-of-charge by the non-profit educational arm of the ASSC, the American Firearms council, as part of its “Gun Lock Giveaway Project.”

NICS Problems

Conversations with firearm dealers reveal a widespread dissatisfaction with administration of the National Instant Criminal Background Check System (NICS), which went into effect November 30. Nationwide, there have been reports of large numbers of firearm consumers leaving gun stores in disgust, unable to purchase firearms due to delays and wrongful denials by the system. Some dealers were left holding special orders they had purchased, but were unable to transfer, due to system glitches that caused customers to give up on completing their firearms purchases.

Gun Owners of America reports there have been several examples of official abuse, including: Federal Bureau of Investigation (FBI) officials telling gun dealers that a buyer can only purchase one handgun in a month’s time (in a state that does not have a one-gun-a-month purchase restriction law); state officials admitting they use the background checks to deny people with unpaid traffic fines; officials requesting copies of the 4473 forms (which all gun buyers are required to fill out) without any statutory authority to do so; and, FBI officials asking for gun serial numbers before approving background checks.

Sanford Abrams, owner of Valley Gun in Baltimore, Maryland, says 30 - 35% of the background checks conducted on his customers result in a “delayed” response from the NICS. Most often, delays occur when the background check is conducted on a person of African-American or Asian descent, Abrams added.

An increasing amount of employee time is being spent on trace requests (on who purchased a particular firearm) for the Bureau of Alcohol, Tobacco & Firearms (ATF) Abrams says. While the agency formerly checked only firearms directly involved in a crime, “now every gun found at a crime scene, for example all firearms found in a raid on a crack house, are checked as to who purchased them at the wholesale and retail levels,” Abrams explained.

Bill Carter, owner of five Carter’s Country stores in the Houston, Texas area says, “The NICS seems to go down regularly during mid-day, when there are a lot of customers in the stores during their lunch breaks. The sales lost during the massive delays experienced during the onset of the system during the hunting and Christmas selling seasons late last year are really having an impact on our bottom line now that sales have slowed down.”

Carter is finding that 25 - 30% of the NICS checks on his customers are resulting in “delayed” responses. Most often, those delayed are people with common names. “This is causing a great deal of consumer frustration, resulting in their leaving the store with no intention of ever returning. Some uninformed consumers, who do not often read newspapers or watch television news, are still totally surprised that the background check applies to long guns, as well as handguns. Some have walked out of my stores and gone to other gun stores in town, thinking the check only applied at my locations. Others have said they intend to buy a firearm from a gun show,” Carter said, or from a seller advertising in a newspaper classified advertisement, where no background check would be needed to complete the sale.

Carter has spoken to FBI officials, as well as to the top NICS executive, Emmet Rathbun, to let them know of his concerns. “They have indicated to me that the NICS operators who take the initial calls from dealers are not trained to process the background check when the prospective buyer’s social security number is voluntarily supplied. If the check results in a delayed response, then the operator turns over the supplied information, including the social security number, if available, to FBI personnel who conduct a more thorough check. What it all comes down to is that the consumer’s expectations of the system as being an ‘instant’ verification of their honesty is not being fulfilled,” Carter points out.

“On the positive side, whenever the FBI gets involved, they have worked diligently to get delayed responses processed. We only wish we could get them more involved before the check goes into a delayed status. FBI officials have also indicated they are moving closer to bringing to reality the promised electronic access to the NICS through in-store computer terminals, as an alternative to telephone voice access,” Carter concludes.

Amish Denied Guns

When an Amish customer attempted to buy a new $500 hunting rifle at the Lewiston Fishing and Hunting store in Lewiston, Pennsylvania, last November 30, the opening day of the state’s deer hunting season, he passed the just- implemented check of his background through the National Instant Criminal Background Check System (NICS) with flying colors. However, the store’s owner, Robert Mort, still could not transfer the firearm to the prospective purchaser as he could not fulfill the new additional requirement of the Brady Act mandating the production of a photo-identification card.

The customer’s Amish faith contains a prohibition on the faithful of having their photographs taken. While a state-run handgun buyer background check system has been in place in Pennsylvania for about the last 40 years, a religious exemption written into the law allowed members of the state’s large Amish population to show other, non-photo identification, such as a social security card, birth certificate, or state-issued non-photo ID card when purchasing a handgun.

But, with the federal government setting the rules for gun buyers, individual states now have no say over the photo identification requirement.

The Amish, Mort says, represent 10 - 15% of the total sales at his three Pennsylvania stores and the loss of their business is being felt. “The Amish, being pious and hard-working folk, engage in little recreation - except for fishing and hunting, which are a way of life for them,” Mort says.

“When an Amish boy becomes old enough to go hunting, it’s a rite of passage. It’s somewhat akin to a Bar Mitzvah for a Jewish boy. Yet, the Amish community will not rally against oppressive legislation, or even write letters to their congressmen. They just go with the flow,” Mort explains, adding he has spoken with other local gun dealers who are also losing sales to the Amish over the photo- ID requirement.

“I have contacted the state police about this, but they say their hands are tied by federal law. I have also contacted my state and local elected representatives, the National Rifle Association and the American Civil Liberties Union (ACLU). I have yet to hear back from any of them with a definitive answer on the Amish issue,” Mort concluded.

SHOT SHOW 1999 coverage continues next month...

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