HUNTSVILLE, Ala. -- In recent weeks, firearms maker Remington has announced it will enter a restructuring plan and file a bankruptcy petition in order to cut its debt by an estimated $700 million.
The company says the move will not affect ongoing operations, including worker pay and benefits.
But the pending filing also raises questions about the roughly $70 million incentive deal the company entered in 2014 with the State of Alabama and local governments including Huntsville and Madison County, in order to locate a plant in Huntsville.
According to the terms of the deal with Huntsville, a bankruptcy filing could cause the deal to be considered in default.
Remington was also scheduled to employ just over 1,000 workers by the end of 2017, but the current workforce is estimated at around 500, according to Chip Cherry, CEO of the Huntsville/Madison County Chamber of Commerce.
The incentive deal would allow the City of Huntsville and other area governments to reclaim the building that houses the company’s operations off Wall Triana Highway, Mayor Tommy Battle said.
But, local officials don’t seem inclined to pursue a bankruptcy-triggered foreclosure.
Cherry said two weeks ago, the expected restructuring could lead to more opportunities for the Huntsville plant to take on work.
“As they work to realize those efficiencies they consolidate operations, so as they consolidate operations this particular facility has the ability to take care of the R&D that they’re going to be doing and to pick up some additional lines of business,” Cherry said.
He also sounded an optimistic note about Remington’s future, despite the fact that the company has agreed to employ nearly 1,900 workers by 2021, and is currently well short of that target.
“Yes, there are some adjustments that may be considered in the future. That is a discussion that will have to take place with the bodies that approved that development agreement, so it’s a little premature to talk about that right now, but we’re still very comfortable they will fulfill their obligation over the long term,” Cherry said.
Published reports suggest Remington, the country’s oldest gun maker, will likely be put up for sale after emerging from the bankruptcy process.