It was a number of things over years...
During WWI Colt received a number of contracts from the government and production was geared to war time needs. They had about 15,000 workers on 3 shifts in 3 factories producing over 600,000 1911s, the Colt New service in 45 acp, other revolvers for the war and importantly the M1917 water cooled machine gun.
Before the war Colt had stopped production of the SAA due to low sales. During the war they set the machinery for the guns and the tooling outside in the elements where it was destroyed. Other guns met a similar fate or production of stopped, the M1903 and 1908 pocket hammerless semis, the OMM revolver, the Colt Woodsman 22 and others.
By various accounts Colt management somehow squandered a lot of the money it made during those years and from 1945-47 not much was built. It had alienated it's workforce and many older workers quit. Others were laid off and by the early 50s the company was on the verge of bankruptcy.
The military announced that it would move away from the 1911 and go to a new handgun in 9mm with an alloy frame, a higher round count and da/sa. Colt responded with the Colt Commander which became a commercial success but was not what the Army wanted. Costs kept the military from moving to a new gun at that time but from 1948 on no new 1911s were made for the U.S. military. Colt did not pursue the da/sa concept.
Their poor financial performance hurt their ability to compete in the growing police market where they had been neck and neck with S&W for decades. S&W took the lead in law enforcement revolvers and never gave it up. It lost on both sales and service.
Western movies took off like a shot after the war and quick draw and cowboy shooting gained a hold. Ruger and Great Western began selling a lot of guns and the SAA was not in production. Colt lost a share of that market it never regained. When it did return to the SAA it did not innovate.
This allowed Ruger to grow in the da revolver market a few years later and take a bite of Colt's law enforcement market. Just as their Mark I 22s took a bite of that market from Colt.
In 1955 Colt merged with Pratt and Whitney. They also released the Python in a serious bid to win back some of what they had lost. In 1956 they began production of the SAA again as well as runs of commerative guns.
The conglomerate that owned Colt reorganized as Colt Industries.
the 60s and 70s
Robert McNamara shut down Springfield Arsenal. Colt began production of the M16. Production for the wars in South East Asia meant money. It would make over 5 million copies of this rifle and sell them worldwide. Colt developed the AR15 carbine, the SCAMP, the XM148 grenade launcher and more.
It introduced the series 70 1911s. It revamped the design of some revolvers but was still losing share in the law enforcement market. S&W was developing a line of da/sa pistols some of which the military was using in Viet Nam. Law enforcement showed some interest in S&Ws semis. Colt ignored the da/sa market. It's profits were coming from the military.
Colt ownership brought in a new management team in the early 80s which according to the court records provoked a strike in an effort to break the union (which had been formed in the post war period). The strike began in 1985. Replacement workers produced enough guns to keep things going in the plant though quality greatly suffered. The union lost the strike on the picket line but won in the courts 5 years later.
The military went to the Berretta 92 which opened the floodgates for the "wonder nines". S&W made a killing in the police market and Colt had nothing to compete with. 2nd and 3rd generation S&Ws were in the holsters of half the cops in the U.S. within a few years. The wheelgun market in law enforcement was done for. A few years later Glock showed up. Colt took heavy blows.
In the late 80s reveling from blows Colt was on the verge of bankruptcy. The union, the state of Connecticut and a group of investors (led by the Zilkha group) bought out Colt and rescued it.
Colt lost the M16 contract to FN but retained the lucrative contract for the M4.
The Zilkha group brought in new management which tried to get into the da/sa market with the Colt Double Eagle and the All American 2000. Both flopped.
By 1992 Colt was again near bankruptcy and in 94 was bought out entirely by the Zilkha Group. They brought in new management in the form of Rod Stewart brought over from Chrysler with no gun experience. They spent millions on trying to develop "smart gun" technology and pandered to the anti gun forces.
Stewart replied to criticism of the money lost on "smart guns" by saying he was not a "gun nut" this provoked a boycott by the NRA and others which hurt Colt badly for years. Stewart was fired.
The rise of the action shooting sports had led to many, many requests from shooters to upgrades to the 1911. Colt ignored these. In the late 1990s an outfit called Kimber began producing 1911s with many custom add ons at a reasonable price and began eating Colt's lunch so to speak. Springfield followed. Colt was hurt badly.
The da revolvers were falling by the wayside. Colt had tried to upgrade (simplier designs, lower cost as with the Lwman) but too many mis-steps hurt them. Production of the Python was transferred to the Custom Shop.
In 2004 Colt reorganized again. Still owned by the Zilkha Group Colt was split into two companies. One military and law enforcement the other for the civilian market. Both sides, particularly the military, make money.
Last edited by tipoc; February 9, 2013 at 11:51 AM.