Gun Manufacturing

The US gun and ammunition manufacturing industry includes about 200 companies with combined annual revenue of $2 billion. Major gun manufacturers include Remington Arms and Sturm, Ruger & Company. Winchester Ammunition and Remington are major manufacturers of ammunition. The industry is highly concentrated.

COMPETITIVE LANDSCAPE

Demand, which has been flat for years, is driven partly by hunters and partly by weapon upgrades by police departments. The profitability of individual companies is closely linked to marketing. Small companies can compete effectively by producing premium-priced high-quality or decorative guns. Although automation has increased, the industry is still fairly labor-intensive: average annual revenue per worker is about $150,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

The industry produces about 3 million guns per year: 620,000 pistols; 320,000 revolvers; 1,300,000 rifles; and 700,000 shotguns. About 60,000 machine guns are made, principally for the government. Sturm Ruger is the only company with large sales in each of the four categories. Remington makes mainly rifles and shotguns; Smith & Wesson mainly pistols and revolvers; other companies specialize in one category. Within a category, a company may make guns of different caliber and style. The most popular pistol calibers are 9 millimeter; .45; and .22. The most popular revolver calibers are .357; .45; and .38.

Gun manufacture is similar to the manufacture of other metal products with moving parts that require precision machining and assembly. A typical gun contains between 50 and 100 parts. The precision parts are ...