German Firm Heckler & Koch Reportedly €170 MILLION in the Red
Via a press release published earlier this month, German gunmaker Hecker & Koch announced it had reduced its financial debt to a mere €170 million (~$194 million US), thanks to an equity increase of €50 million via a capital shares increase. With this, the company will issue approximately 6.6 million new shares, backed up by a capital injection of €50 million, and assistance in refinancing its 9.5% Senior Secured Notes at significantly lower debt. According to the release:
These funds will be provided initially in the form of a shareholder loan to be converted into share capital during the share capital increase to meet the time line of the refinancing of the 2011 9.50% Senior Secured Notes. Minority shareholders of H&K will have the possibility to subscribe for new shares on a pro-rata-basis and on the same economic terms against payment in cash.
Being almost two hundred million dollars in debt does not necessarily mean the German firm is in dire trouble, however, as they have recently gained significant contracts that will help offset this burden. Chief among those is the French AIF contract, estimated to be worth over €300 million ($342 million US). The revenue from this contract alone could offset the debt of the company, which as of 2013 was pegged at slightly higher than the company’s net worth. How the company’s finances will shake out, though, isn’t easy to predict, especially given the outstanding $27 million lawsuit from Orbital ATK over the failure of H&K to deliver XM25 CDTE grenade launchers. Still, the company being in debt to the tune of the entirety of or higher than their net worth does raise cause for concern, if they cannot significantly offset or restructure that debt.
Now, I know there are those among you who will cry “GOOD!”, having suffered the slings-and-arrows of their notoriously poor customer service, especially in the civilian market.
Obviously, the civilians aren’t the only one’s who have suffered…
I have no skin in this game. The closest I was to owning an H & K was a Century Arms H & K 91 knock-off, with original internals and furniture. She worked and shot well (when properly lubed). I liked her.
But, she went the way of the missing vault along with the rest of the collection.
I’m a capitalist. If a company cannot provide proper delivery or customer service, they deserve to fail!
Perhaps, if there is another incarnation, they will have learned that?
A lesson from Colt?
Here’s what that bastion of liberal thought, Harvard University, has to say about it:
(from the Daily Wire)
Harvard Study: Minimum Wage Hikes Killing Businesses
Erik Mcgregor/Pacific Press/LightRocket via Getty Images
A new Harvard Business School study found that minimum wage hikes lead to closures of small businesses. “We find suggestive evidence that an increase in the minimum wage leads to an overall increase in the rate of exit,” the researchers conclude.
The study, titled Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit, looks at “the impact of the minimum wage on restaurant closures using data from the San Francisco Bay Area” from 2008-2016.
Researchers Dara Lee Luca and Michael Luca chose the Bay Area due to their frequent minimum wage hikes in recent years. “In the San Francisco Bay Area alone, there have been twenty-one local minimum wage changes over the past decade,” they write.
The Lucas found that lower-quality restaurants (indicated by Yelp scores) were disproportionately affected by wage hikes, increasing their likelihood of closure relative to higher-quality, established restaurants.
“The evidence suggests that higher minimum wages increase overall exit rates for restaurants. However, lower quality restaurants, which are already closer to the margin of exit, are disproportionately impacted by increases to the minimum wage,” says the study. “Our point estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).”
While “firm exit” was the focus of the study, the researchers also noted that there are often other consequences from wage hikes, such as worker layoffs, increased pricing and hour-cuts for existing workers:
While some studies find no detrimental effects on employment (Card and Krueger 1994, 1998; Dube, Lester & Reich, 2010), others show that higher minimum wage reduces employment, especially among low-skilled workers (see Neumark & Wascher, 2007 for a review). However, even studies that identify negative impacts find fairly modest effects overall, suggesting that firms adjust to higher labor costs in other ways. For example, several studies have documented price increases as a response to the minimum wage hikes (Aaronson, 2001; Aaronson, French, & MacDonald, 2008; Allegretto & Reich, 2016). Horton (2017) find that firms reduce employment at the intensive margin rather than on the extensive margin, choosing to cut employees hours rather than counts.
Such findings were backed up by Garret/Galland Research’s Stephen McBride, who highlighted in March the “minimum wage massacre.”
“Currently, rising labor costs are causing margins in the sector to plummet. Those with the ability to automate like McDonalds are doing so… and those who don’t are closing their doors. In September 2016, one-quarter of restaurant closures in the California Bay Area cited rising labor costs as one of the reasons for closing,” McBride wrote in Forbes.
“While wage increases put more money in the pocket of some, others are bearing the costs by having their hours reduced and being made part-time,” he added.
As noted by Red Alert Politics, the Bay Area is headed for a $15 minimum wage in July of 2018, though they’ve already seen over 60 restaurants close since September.
While it would behoove the Bernie Bros picketing for $15 an hour to take a look at this study, it’s entirely unlikely that such evidence would deter their entitled attitudes.
I posted regarding this phenomena before, but I obviously don’t have the gravitas of Harvard (nor, apparently the other sources I borrowed
It’s basic economics – businesses expect X dollar profit to be profitable – having the gov’t mandate paying their employees more money lessens profit. Something has to give.
We’re seeing many more kiosks on restaurant tables and counters these days.
They cost less.
“Come With Me If You Want To Live!”
Harvard ‘Shock’ Study: Each $1 Minimum Wage Hike Causes 4-10% Increase In Restaurant Failures
When I was making minimum wage, I changed jobs when I saw I couldn’t make rent and eat on that income. This was in the 70s, when I began making $1.60 an hour, and moved up to $2.10…
(So much for the magical ‘this won’t hurt management or the owners’ argument regarding State Socialism – Guffaw)
A ‘shocking’ discovery was made when a pair of researchers at Harvard Business School decided to analyze the impact of higher minimum wages in San Francisco on restaurant failures…hint: they went up.
Entitled “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit“, this latest study on the devastating consequences of minimum wage was conducted by Dara Lee Luca and Michael Luca and concluded that each $1 increase in the minimum wage results in a roughly 4-10% increase in the likelihood of a restaurant going out of business.
In this paper, we investigate the impact of the minimum wage on restaurant closures using data from the San Francisco Bay Area. We find suggestive evidence that an increase in the minimum wage leads to an overall increase in the rate of exit.
This paper presents several new findings. First, we provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit, although statistical significance falls with the inclusion of time-varying county-level characteristics and city-specific time trends. This is qualitatively consistent but smaller than what Aaronson et al. (forthcoming) find; they show that a 10 percent raise in the minimum wage increases firm exit by approximately 24 percent from a base of 5.7 percent. Differences in sample and specifications may account for the differences between our study and theirs. (from ZeroHedge, in part)
link to the whole article and graphs
…And while we enjoy the affirmation of a conclusion that we’ve presented multiple times from such a reputable organization as Harvard, one which pretty much anyone could deduce with the application of just a moderate amount of common sense, for some reason the following scene from “Good Will Hunting’ comes to mind.
“You dropped $150,000 on a fucking education you could’ve got for a $1.50 of late charges at the public library.”
(from TFB, in part)
They say there’s a sucker born every minute. No where does this seem to be more true than in the firearms industry. Poorly thought of add-ons, holsters, ammunition design, etc.
I remember Col. Cooper being asked (with regard to the latest variant of some pistol, which certainly was not necessary), “Jeff, what’s it for? To sell, of course!” was his reply.
I’m certain you can think of many others, as well as selections of the ‘good’ variety that didn’t get marketed properly and went away.
Such is the nature of business…
In the past eight years, I went from a low-to-middle income ‘career’, to short-term disability and illness, to long term disability and remission.
While I am most grateful for having survived(!), with long term disability has come a lower income, and the loss of my job and home. I tried to recover in the short term, and ended up maxing out my credit cards coupled with the inability to pay for them. And the medical bills that followed.
Along the way my firearms collection was stolen. Just to add to the ‘fun’.
Through the kindness of friends, I’ve been able to increase my firearms acquisitions to a small collection* (my surviving .38 snubbie and 1911, a Ruger .357 revolver and a compact Sig-Sauer .45! And, of course, a spring-operated pellet pistol and single-shot gas one!!)
My cup runneth over.
Not the over 50 firearms I once owned, but, it’s a great beginning. (I know, poor me.) 😛
So, what do I get in the email the other day?
Your Dream Gun Within Reach
One Gun One Gunsmith combined with oversized hand fit parts makes Nighthawk Custom pistols more expensive than assembly line guns. We know many of you dream of owning one “someday”, well someday is now today. With just 10% down and payments as low as $94 a month we have been able to make owning a work of American Craftsmanship attainable without having to cut corners.
The best part is, even if I had the down payment (which I don’t) with my trashed credit, there’s no way they would approve my application!
Of course, this doesn’t mean you can’t apply…
*We say collection. Arsenal has developed a negative connotation.
(FTC – Nighthawk gave me nothing. Apply for your own pistol! My roomie has one she bought years ago. It’s delightful!)
In an unannounced move, it appears that YouTube has pulled all ads from gun related videos. You might be thinking that is is a good thing and are happy about the decision, but you would be wrong. Thanks to the removal of any revenue that creators use to cover costs and even make a living, YouTube gun channels are in danger of disappearing forever.
Even our own channel, TFB TV, is in grave danger if the new change sticks.
While some gun channels will be able to sustain themselves through services like Patreon, channels like ours that have a small Patreon support base will suffer greatly. This means content could be reduced quite a lot, creators will move on and no longer devote the time to making videos for you to enjoy, and the big YouTube gun guys that rely on it for a living will either have to find another way to create the income to pay their bills or even cover the costs associated with filming.
What can we do about it? Nothing really. Sadly Google makes their decisions and sticks to it. What you can do is support your favorite content creators through whatever donation site they are a member of.
You can find the TFB TV Patreon page here: http://www.patreon.com/tfbtv
Please consider visiting our Patreon page and pitching in a buck or two a month so that James, myself, and the rest of the TFB TV crew can keep the videos coming like you have become accustomed to regardless of what Youtube decides.
You Tube was founded by three guys who had started PayPal (an anti-gun entity). Personally, I’ve no funds lying around to contribute to Patreon or anyone else. A while back You Tube was purchased bu GOOGLE, also infamous for it’s anti-gun politics.
See a trend here?
They have their own political agenda, and enforce the same. Hell, it’s their company! Many folks have voted with their virtual feet away from Pay Pal. I presume they will do the same away from You Tube.
As for Guffaw in AZ, I’ve a Pay Pal link, because I need funding. And I’ve a You Tube link, because I like movies and videos. I also post pictures of many ‘famous’ female celebrities, some of whom are openly anti-civil rights folks. But, they are there, because they are pretty. (that infamous traitorous bitch is not among my collection of photos, and never will be! I have some standards.)
I’m thoroughly convinced. Hollywood has officially run out of ideas.
We were watching commercial TV last night. The big promo was the announcement of the premiere of the new TV show Prison Break! (Hmmm? Wasn’t there a show with a similar title a few years back? Hey look! – they have the same cast!)
Television has a plethora of repeats or re-writes. Time After Time, based on the 70’s film with the same name, is now a series. (BTW – there are at least another THREE time-travel-themed TV shows. Stop looking at each other’s papers!)
I realize there are only so many formats, and popular themes make money. And, to be honest, I enjoy some of the retreads.
But, how many?
Sherlock Holmes, Elementary, Star Trek Generation ∞, C.H.I.P.s, Going in Style, ….
When did sequels and re-writes champion original ideas and thoughts? (not to mention some re-makes are abysmal! The Man From UNCLE?)
Get some original ideas, people!
I read numerous blogs, websites, news postings, editorials and personal emails daily. (When my health permits it.)
Doing so helps me keep up on what’s going on in the world. Mostly.
(An American was killed in the Isis attack in London. Bastards!)
I rarely watch television news. There is way to much spin, and omission for my taste. At least the Internet provides some variety.
But, there’s one commonality.
THEY ALL HAVE AGENDAS.
At least now, with the advent of fake news, it’s more obvious.
Remember when we were told that our Internet searches might
be watched over surveilled ‘reviewed’ by the Intelligence ‘Community’ (“Jesus, you guys are kind to yourselves!” ‘Joe Turner (Condor)’, in Three Days of the Condor)
Now, my friend Borepatch brings us this:
Amazon Echo and Google’s Alexa are Internet Of Things devices that listen for your voice commands and then do not particularly interesting things for you. The minor convenience and gee whiz factor are way outweighed by how you are painting a big bulls eye on your house:
As a rule, IoT devices lack security and these are no different. Unlike other IoT devices, these personal assistants compromise your security in even more ways they you may think. In general, most users don’t read the Terms of Service (ToS) associated with IoT devices or software being installed. Users have a basic understanding that Amazon and Google will maintain your profile information, such as what music you listen to, when you turn off your lights, or even the coffee you order, in an effort to provide a better over-all experience. Over time these devices learn your preferences; the more intuitive and responsive the device, the more we tend to use it.
What is more alarming is what you don’t think about when using these voice activated devices including those from Apple and Microsoft. There has been a lot of discussion around the security and privacy of these devices over the past few months. One of the biggest concerns is the question of whether the devices are always listening. Both Amazon and Google say the devices listen for hot words that activate them, such has Hello Google or Echo/Alexa, but because these devices are controlled by and interact with by Amazon and Google, the hot words and or the device itself can be easily manipulated to allow for an always on “listening mode” by the vendor at any time by the way of a crafty term of service
How’s the security of these devices? You can’t know. What will the Terms Of Service provide to protect your privacy? You can’t know:
Amazon:In order to keep the Amazon Software up-to-date, we may offer automatic or manual updates at any time and without notice to you.
Google:When a Service requires or includes downloadable software, this software may update automatically on your device once a new version or feature is available…
So the services can update the software without your knowledge, whenever they want, for any reason they want. The terms of service state that they may sell or share your data to other organizations. And this is creepy but entirely to be expected:
In addition to the vendor maintaining access to the device, it isn’t unfathomable that cyber-criminals could gain access as well. These are, after all, IoT devices and are just as vulnerable to being pwnd (geek speak meaning owned/or controlled) as any other IoT device. Both devices have indicators when they are in listening mode, however this can be easily disabled by a hacker. A hacker could be listening to your every word and you would not be aware.
And so would NSA listen in? The Snowden revelations suggest that they might already be listening in. How much data do they have? Who knows?
It will be a cold day in Hell when one of these things shows up at Castle Borepatch.
It’s probably good we at Guffaw de alquiler
cannot afford such things. My roomie is not particularly tech savvy (less than I) , but loves toys! Between the two of us, we have a PC, a laptop, two tablets, two smartphones, and she has a smart watch!
If indeed, United States intelligence (or Israeli? They reportedly have a listening post not far from Fort Huachuca) is actually paying attention to what we email, and to whom, and records our cellular calls, and computer searches, adding a voice-actuated room-wide link to the Internet just seems like overkill.
Inviting what is essentially an open wiretap into one’s home, with which to do Internet searches, order products and services, pay bills, etc. seems a little self-defeating. If privacy is your goal.
If we ever get out of this financial hole we are digging (with her working little, and surgery pending – putting her off for six to twelve weeks), I can see her wanting one, though.
(from TFB, in part)
BREAKING: HK Releases SFP9 L, SFP9 SK, Maritime and Optics Ready Pistols
Heckler and Koch has just announced a few additions to their polymer pistol lineup. Known as the VP9 in the United States and SFP9 in Europe, H&K is adding the much awaited long slide SFP9 L and compact SFP9 SK variants to the current SFP9/VP9 offerings. Digging a little deeper, you’ll find a Maritime model as well as an Optics Ready model.
A few interesting features: One, there’s an option for either a push button or paddle magazine release. Two, optional 20 round magazines. Three, an optional manual safety lever.
Obviously we need to dig deeper into the specifications for other hidden gems. But the announcement will obviously elate H&K fans everywhere.
(the article here)
Is this a tempest in a teapot? Does this appeal to the civilian market? Is it even available to the civilian market? And, most importantly:
They are H & K pistols, not known for their customer service. Do we really want specialty firearms we cannot get repaired, should they need it?
“Why are they making these? To sell, of course!” (Jeff Cooper)
What do you guys think?