The post-election gun industry downturn has hit Federal Premium Ammunition, which laid off a significant number of its employees earlier this month. 110 of the roughly 1400 workers at the company were let go from the company’s Anoka, Minnesota plant, the company confirmed. This announcement surprised Minnesota state officials, who had before the end of last year granted the company set of grants and loads worth $1.15 million to expand. Federal informed the state that these grants would no longer be necessary, and that they were cancelling them. Although the expansion is expected to continue, the hiring goals that were conditions of the grants are no longer achievable, Federal said.
The Star Tribune reports on the layoffs:
Citing a market downturn, Federal Cartridge laid off 110 production workers at its ammunitions plant in Anoka over the weekend, company officials confirmed Monday.
Affected workers were notified Thursday and let go through the weekend. All layoffs are effectively immediately, said spokeswoman Amanda Covington.
The factory had roughly 1,430 employees before the announcement.
News of the layoffs came as a surprise to state officials, who in November approved $1.15 million in state grants and loans for Federal Cartridge.
The funds were designed to assist the company with a $33.9 million factory expansion and equipment upgrades in Anoka.
The project had promised the addition of 50 additional jobs.
The building project remains on track, but the hiring goals are off the table and the loan and grant requests have been withdrawn, Covington said.
The Minnesota Department of Employment and Economic Development learned last week that “both of those awards have been canceled because … they no longer needed the state incentives to continue their projects,” DEED Spokesman Shane Delaney said.
Doug Borglund, the community development director for the city of Anoka, said the city also just learned that the city’s help would not be needed.
Covington said that Federal Cartridge, which is a subsidiary of Utah-based Vista Outdoor Inc. and formerly a unit of Alliant Techsystems, said the company notified the state and city as soon as it realized it would not be able to live up to the hiring pledge made in November.
“Market conditions have changed,” she said. “And it was important to us to maintain a good working relationship with the state of Minnesota. As soon as we recognized that we would have to do a head-count reduction, we felt it was prudent to notify the city and the state. Out of fairness to the state and taxpayers, we wanted them to be able to use those funds for other projects rather than wait on us.”
The plant expansion and equipment upgrades are just starting in Anoka and are expected to be finished this summer. The end result will be a more efficient plant, Covington said.
Since the election in November, several companies have been forced to downsize as a result of a suddenly calm customer base no longer worried about “getting theirs” before restrictive legislation hits. SilencerCo and Colt both laid off some portion of their workforce, and they were likely not alone in this. The industry rush that many anticipated simply never hit, and many of those companies that had bet on a different horse by expanding their operations now are left with less demand than warrants their size. Federal Premium Ammunition certainly seems to be an example of this.