|June 25, 2005, 04:59 PM||#1|
Join Date: December 20, 1998
Location: NE Pennsylvania
Ithaca shuts doors!
Another great american name in trouble: http://www.auburnpub.com/articles/20...ews/news02.txt
Ithaca Gun loses buyer, closes its doors
By Louise Hoffman Broach / The Citizen
AUBURN - It was late May and Ithaca Gun Co.'s future finally looked promising.
Andrew Gibson, the company's potential new owner, met with David Miller, Cayuga County's director of planning and economic development. Gibson, of Scituate, R.I., told Miller how the historically important firearms company was working to resolve some of its financial issues. He said there was new management in place and he showed Miller a new marketing plan, an extensive analysis of costs and a new labor structure. Gibson said he would be investing a significant amount of his own money.
"He had great enthusiasm and he seemed to understand the business," Miller said. "I was very impressed. I don't know what happened to change his mind. It was a complete shock to me."
Gibson decided not to go through with the purchase. The group of investors that owns the company - which moved from King Ferry to the city of Auburn technology park at the end of April - shut it down and is now looking for another buyer, Miller said.
"He was interested, but things just didn't work out," said Gibson's wife, Katherine, who is also one of his business partners.
As the Gibsons learned more about the 124-year-old company and delved deeper into its financials, they realized the numbers weren't going to add up, she said.
"He's a sportsman, and he wanted it to work," she said. "But it just didn't."
When Gibson backed out, Andrew Sciarabba, the major investor of the seven partners who bought the company in 1995 out of a bankruptcy, decided to close, Miller said.
The company is several hundred thousand dollars in debt. Part of that is most of a $150,000 loan from Cayuga County's revolving loan fund. Miller said Ithaca Gun has missed the May and June payments that total just less than $1,000. The money was loaned for equipment while the business was still in King Ferry.
As collateral, the company put up existing manufacturing equipment, as well as the Ithaca Gun trademark. The company was founded in 1880 in Ithaca and became world renown for manufacturing high-quality, affordable guns such as the Deerslayer and Deerslayer II.
It went out of business for a time, and then was re-established in the 1980s, when it came to King Ferry. When the company again fell on hard times, Sciarabba and his partners bought it.
It has struggled recently. Ithaca Gun earlier this year had a $12,000 judgment filed against it by a Watertown educational television station because the gun manufacturer had agreed to underwrite a hunting show, but never paid. Several other judgments were filed against the company for unpaid bills as well and there were problems with the state Department of Labor regarding unemployment benefits. The labor department judgment was satisfied earlier this month.
While they were still in King Ferry, Miller said, Sciarabba and his partners pointed out one of the company's greatest difficulties was operating in an antiquated former school building that was energy-inefficient.
Miller said he helped connect Ithaca Gun officials with representatives of Johnston Paper, the firm that owns the Allen Street property in the technology park. Johnston Paper moved to a new facility in Aurelius in 2004.
On May 5, at an Auburn City Council meeting, Katrinka Ryan, Ithaca Gun's finance manager, announced the company was under new management, was in Auburn and was working with the city's Office of Planning and Economic Development. Eventually, the company, which had employed 26 people in King Ferry, would have 50 workers, Ryan said.
Miller said he and Sciarabba talk weekly and he's convinced Ithaca Gun is actively working to find a buyer. He said the county won't foreclose on the loan yet.
"It would be premature to call it in and foreclose," Miller said. "We desire to see the company survive and prosper, but we're not going to let this go on indefinitely."
Miller is confident the county will get its money. He said if it does foreclose, it will "be in the first position" to own the gun manufacturing equipment, worth about $183,000, that the company put up as collateral. Subject to legal interpretation, Cayuga County will also likely own the company's famous trademark, an intangible that was also offered as loan security.
The county would contract with experts in the firearms manufacturing field to help sell the equipment and trademark.
Sciarabba could not be reached for comment Wednesday.
When Gibson and his business partners looked like they would step in and save the company, Miller said there was a great degree of optimism.
The purpose of the meeting with Miller was to see if the revolving loan could be transferred from Sciarabba's group to Gibson's. Miller said he was prepared to arrange a meeting with Gibson and the loan committee for further investigation.
"That's why this is such a surprise," Miller said.
"It wasn't like they were this moribund company that we hadn't heard anything about for a long time. And the new people coming in were all young, in their late 20s and early 30s. That's why this one is kind of disappointing. We thought it was on the right track."
Staff writer Louise Hoffman Broach can be reached at 253-5311 ext. 238 or firstname.lastname@example.org
Anyone in TFL land got a few spare hundred thousand?
I am no longer a member of this forum. Bye!
|June 29, 2005, 05:34 AM||#2|
Join Date: May 14, 2002
Beats me why the difference between sink or swim is just a couple of 100K for a gunmaking firm going back to the 1800s. Unless they have all vanished over the years, I'd be surprized if they didn't have some historical pieces of their own in the company vault that wouldn't add up to more than a few 100K.
Maybe rather than looking at "more energy efficient buildings" perhaps they need to move to a different State.
|June 29, 2005, 07:59 AM||#3|
Join Date: February 5, 2002
American Classic , machined and proven from Vietnam to who knows how many deer, pheasant, duck, pheasant, dove and quail felled.
With so many American mfgs letting the quality erode to fit a price - or - allowing an import gun to bear their namesake...Ithaca is one Classic I truly hate to see be lost.
I agree with finding another firearm friendly state and moving Ithaca. With many firearm states having such great industrial centers, more friendly tax laws and such - well so Ithaca will not be in the original home state of NY - beats being made in a third world company , name only - less quality.
I would not even be upset or laugh if Kel-Tec out of FL said come on down and bailed them out.
Use Enough Gun
|June 29, 2005, 08:45 AM||#4|
Join Date: February 18, 2005
How can all there machinery only total $180.000 some one sell off there stuff under the table.Don't think you can even make a cap gun with that amount.There stuff must be from the 1800s