BUSINESSWEEK ONLINE : AUGUST 16, 1999 ISSUE
COVER STORY

No Surrender from Mr. Saturday Night Special


While America's East Coast firearms Establishment is starting to break away from the National Rifle Assn.'s hard line on gun control, one segment of the industry is unlikely ever to accept compromise. Says Bruce L. Jennings: ''There will not be any concessions from the West Coast people.''

Jennings should know. He has long served as the unofficial spokesman for a feisty group of industry upstarts, many of which were started and run by members of his family. These outfits, which include Phoenix Arms, Davis Industries, Lorcin Engineering, and Bryco Arms, are often referred to as the Ring of Fire companies because they are based in the suburbs encircling Los Angeles. Their speciality: churning out easily concealed, small-caliber weapons at prices starting around $50. Jennings calls them ''affordable'' guns. Law enforcement officials call them ''junk guns,'' or ''Saturday night specials.''

BIG OPENING. This maverick wing of the gun industry got its start in the wake of the 1968 Gun Control Act, which included measures to restrict inexpensive European imports by establishing quality and safety benchmarks. Jennings' late father, George, spotted an opportunity for a domestic manufacturer to make the same type of weapons. In 1970, George Jennings converted his California-based machine shop, which had made parts for the aerospace industry, to produce an inexpensive .25 caliber pistol of his own design, the Raven. The little gun was a hit--and quickly spawned many imitators.

Bruce Jennings, a onetime gunmaker who now owns a gun distributorship in Nevada, sees himself and the California manufacturers he represents as apart from the mainstream companies. None of the West Coast companies belongs to the National Shooting Sports Federation, a major industry group that boasts 1,600 members, including 400 makers.

Nor are the Ring of Fire companies sought after to join up. Because they cater unabashedly to their price-conscious customers, the hawkish companies can be ''their own worst enemies [whose] marketing reinforces the impression they are targeting the criminal element,'' says Robert T. Delfay, president of the National Shooting Sports Foundation.

Jennings dismisses any peace negotiations with gun-control forces as unproductive at best and traitorous at worst. Measures such as limiting buyers to one purchase a month or imposing a three- to five-day waiting period before a gun can be purchased are aimed at shutting down gun shows, he says. And without gun shows, there would be no gun collectors. ''It would be just like shutting down doll shows,'' he says. ''Having a doll collection would be meaningless because there'd be no way to buy or sell them.''

TIME OUT? Bankruptcy is the likely way many of the West Coast companies will deal with any litigation. ''It doesn't mean they'll be gone forever,'' Jennings says. ''They can file for bankruptcy, dissolve, go away until the litigation passes by, then reform and build guns to the new standard--if there is a new standard.'' Lorcin and Davis have already filed for bankruptcy.

This strategy may be ethically questionable, but there's a certain logic to a bankruptcy game plan. It would avoid or reduce any potential settlement costs with the cities and private plaintiffs that have sued the industry, not to mention millions of dollars in attorney's fees. More important, the move would consolidate all the municipal lawsuits under local bankruptcy judges, who are apt to be more lenient than juries.

Authorities have tried to rein in the Ring of Fire before. If Jennings has his way, they'll be no more successful this time.

By Larry Armstrong in Los Angeles

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