G. Chambers Williams III

The Tennessean

NASHVILLE — For more than a century, the stretch of New England along the Connecticut River has been known as "Gun Valley" for its heavy concentration of firearms manufacturers.

"The gun industry was founded in New Haven, Conn., by Eli Whitney even before he made his cotton gin," said Lawrence Keane, senior vice president and general counsel of the National Shooting Sports Foundation, the trade association for the U.S. firearms industry. "There are companies all up and down the Connecticut River that make guns, ammunition, parts and supplies."

Today, though, communities stretching from Massachusetts to New York are rapidly losing much of that lucrative manufacturing base, in part because increased gun control legislation — prompted most recently by the Newtown, Conn., school shooting — has put the region's firearms industry in the crosshairs.

The firearms makers are moving out because the changes have made them feel unwanted, and in some cases, even made their products illegal to sell.

Tennessee is one of the beneficiaries of this exodus, this past week having landed a major expansion of a previously announced deal with Maryland-based Beretta USA. The company is moving all of its manufacturing to Gallatin from gun-unfriendly Maryland, bringing at least 300 jobs.

Among other recent moves, New York-based Remington Arms is expanding its manufacturing in Huntsville, Ala., adding 2,000 jobs to the local economy.

Famed shotgun maker O.F. Mossberg & Sons is expanding not in its home of North Haven, Conn., but in Eagle Pass, Texas — after being wooed by conservative Texas Gov. Rick Perry.

And Colt Manufacturing is moving its Colt Competition AR-15 rifle production from West Hartford, Conn., to Breckenridge, Texas. The company cited new legislation that outlaws some of its products in Connecticut — pushed by the state's governor, Dan Malloy — as the reason for the shift.

Others have moved to Kentucky, North Carolina, Pennsylvania, South Carolina and South Dakota, and many more are looking to make moves, Keane said.

"Companies are still being recruited today," he said. "The story about Beretta, I'm sure, will encourage other states to renew their efforts to attract these companies. A number of state economic-development teams came to our trade show in January in Las Vegas."

'Political and economic'

The reasons for the moves aren't just anti-gun activism, industry experts say.

"It's political and economic," said Brian Ruttenbur, an analyst with CRT Capital Group in Stamford, Conn., who closely follows the firearms industry.

"These companies are saying, 'Why not go to a state that's not only friendly to our type of manufacturing, but also has a better tax rate and lower labor costs, with available skilled labor?' New York and Connecticut, like California, have priced themselves out of the manufacturing business," he said.

"Labor is a lot cheaper in the South, the restrictions are less, and there is more openness. And why not go to the South where you can manufacture all the firearms you want? Right now, South Carolina and Tennessee seem to be the most attractive."

State and local financial incentives also are a major boost to recruitment efforts in the South, said Ruttenbur, who works long distance for the Connecticut financial company from his home in Nashville.

"Every manufacturer is looking for incentives," he said, "and there are incentives going on."

Those include state and local money for training, which is an important element as the gun makers bring an industry that is new to a region, he said.

"The South had a very bad name 20 or 30 years ago, but education levels and manufacturing standards have improved," Ruttenbur said, citing the region's burgeoning automotive industry. "Almost all new manufacturing in this country is going to the South."

For its part, Tennessee is geared up to take advantage of the exodus of firearms makers to places that offer a better manufacturing climate, said Bill Hagerty, the state's commissioner of economic and community development.

"We're being extremely present and relevant to the people in this industry," Hagerty said. "We see it as a significant growth opportunity."

New markets

For some of the firearms manufacturers, the moves are "more about expansion than completely uprooting," Hagerty said. Many are looking to replace factories in the Northeast that are more than 100 years old.

And he said Tennessee's economic recruiters know that the decisions about where to put their new factories are based on more than just a political issue.

"Our stand on the Second Amendment may be an initial clearing point, but by the time we're having the conversation, it's about why expanding into Tennessee makes financial sense for them," he said.

"There is a fundamental step up for growth here; they're looking for new markets, trying to find ways to be in a position to capture that growth, such as with female gun owners," Hagerty said. "Tennessee has so many elements of their industry covered."

There's also a large flow of retiring soldiers in Tennessee looking for work, which "manufacturers see as a great potential workforce," Hagerty said.

"I think this growth wave — whatever caused the movement in this direction — is happening," he said. "These companies have to grow so they can thrive and compete. Logistics, efficiencies, supply-chain management all matter.

"We have been focused on the business fundamentals. It's down to the basics, whether they can locate here profitably. That's what drives their decisions."