Gun Sales Have Suffered Across the Board Since Trump’s Election Victory
Utah-based firearms manufacturer SilencerCo is slashing as many as 20 jobs in an effort to adjust to flagging gun industry sales in the Donald Trump era while it faces off against regulations on the sale of silencers. This represents the second round of SilencerCo layoffs in 2017.
The company had high hopes that both the Trump presidency and its new product, the “Maxim 50,” would help boost sales to redeem its poor showing this year. SilencerCo previously laid off an unspecified number of employees in February.
But SilencerCo’s problems are not unique, as gun sales have declined since the end of Barack Obama’s tenure in the White House.
SilencerCo’s Second Round of Layoffs in 2017
This recent round of gun industry layoffs is believed to affect around 20 employees in customer service, marketing, and public relations. The company has yet to confirm the exact details of the downsizing, however.
The layoffs come two weeks after the release of the company’s “Maxim 50.” The firearm comes equipped with a permanently attached sound suppressor that allowed the company to skirt around National Firearms Act (NFA) weapon regulations, and it was approved by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Even though the new product was able to be approved under the NFA, the sale of the Maxim 50 is still banned in eight states.
Lack of Fear Means Lack of Sales
The first round of SilencerCo layoffs impacted a large portion of the company’s workforce.
The gun industry layoffs came despite the company’s optimism about a Republican president and Republican control of Congress. Despite having a gun-friendly federal government, there has been little legislation passed to help gun sales as the firearms industry grapples with regulations and declining revenue since Trump’s election win.
While Obama’s victory spurred gun sales, Trump’s win did the opposite. One of the reasons for this is that there is often a correlation between a Democratic government and an increase in gun sales. With a Republican government, there is usually a decline in firearm revenue.
The owners of SilencerCo supported Trump’s White House bid, donating $100,000 to his campaign. SilencerCo also donated another $200,000 to two groups promoting the deregulation of silencers: the National Sportsman Shooting Foundation and an Illinois firearms auction house.
Trump’s son, Donald Jr., visited the company’s manufacturing plant in West Valley City, where he called the federal regulation of silencers “way overblown” and said that he would support easing sales restrictions, which have been in place since 1934.
The legislation was introduced in January to help spur the sale of silencers, but the White House and Congress have been tied up with a number of other legislative issues like healthcare and tax reform. Distractions like the investigation into possible election tampering by Russia haven’t helped.
Sales Decline in the Gun Industry during the Trump Era
The firearms industry seems to thrive most when people perceive that it is under threat. For instance, numerous advertisements that came out during the Obama presidency painted the Democratic president as seeking to impose harsh regulations on firearms. Some even went so far as to say that he would order a mass confiscation of weapons from Americans.
While that never did pan out, gun sales benefited from the idea that regulation was on the way. The gun industry reported that it had grown by 158% from 2008 to 2016, the years of the Obama administration. The National Shooting Sports Foundation reported that the total economic impact of the firearms and ammunition industry in the U.S. rose dramatically, from $19.1 billion in 2008 to $49.3 billion in 2015. The number of full-time jobs related to the gun industry also saw a steep rise, jumping from about 166,000 to almost 288,000 in that same time period.
Even the mere thought of Hillary Clinton as president was enough to boost sales during the 2016 election. The firearms industry experienced record-breaking sales during the election campaign, but, with Clinton’s victory never materializing and the Obama scare a thing of the past, the industry now finds itself floundering.
The Impact of the “Trump Slump”
The “Trump Slump” has left gun manufacturers without a catalyst to boost sales, now that many gun enthusiasts’ fears have been calmed by a Republican White House and Congress.
Gun giant American Outdoor Brands Corp (NASDAQ:AOBC) reported that quarterly net sales were down by nearly 40% in the fiscal quarter ending July 31. That decline accounts for a loss of $78.0 million in overall sales, and the drop may be closer to $100.0 million year-over-year when examining firearms-related revenue only. Many other gunmakers have reported similarly dismal numbers.
The FBI’s National Instant Criminal Background Check System, which tracks how many federal firearms-related background checks were conducted every month, shows that there were about 16.3 million checks performed this year through August, compared to 27.5 million in 2016. This means 2017 is on pace to record fewer than 24.5 million checks, accounting for a nearly 11% year-over-year decline. The 27.5 million checks in 2016 represented an all-time high.
Background checks aren’t a perfect measure of gun sales, since they don’t take into account how many firearms are bought per check, but they’re still a fairly good indicator that fewer guns are being bought this year compared to last year.
While 24.5 million checks would still represent a good year for gun purchases, it marks the first decline in sales in 14 years.
“The Gun Industry Says It Has Grown 158% Since Obama Took Office,” Forbes, April 12, 2016.
“Why Donald Trump Is Bad for Gun Sales,” Fortune, September 11, 2017.
“Industry News: Additional Layoffs At SilencerCo,” TFB, October 1, 2017.