With L&O Holding group’s announcement late last week that their SIG SAUER GmbH (German) division in Eckernforde, Germany was being shut down, the speculation began almost immediately as to what the impact might be on SIG SAUER’s operations in Newington, New Hampshire.

Since the U.S. operation has recently celebrated scores of defense and law enforcement contracts, any disruption in that operation could have a significant impact on the status of our military and many law enforcement agencies.

Here’s the official response: “SIG SAUER, Inc. operations in the U.S. will continue business as usual.”

The 2,300 employees in facilities scattered through New Hampshire, Arkansas and Oregon who are engaged in the design and manufacture of firearms, ammunition, optics, suppressors and air guns won’t be impacted.

The Eckernforde, Germany facility is one that has apparently been diminishing in importance for a number of years. L&O Holding’s decision, according to European reports, is primarily due to undue and growing anti-gun sentiments on the part of German politicians.

The relationship between the various L&O Holding group’s entities is one that’s not easy to interpret, and reflects the complexities of doing business globally. SIG SAUER, for example, appears as one name to most of us, but is in reality at least three separate business entities. SIG SAUER, GmbH -the Eckernforde facility- SIG SAUER’s International Sales Team (based in Europe) and SIG SAUER, Inc. (U.S.A.).

Playing “what if” doesn’t really do much to clarify how German businesses operate. For example, a company closure must be approved by a judge in order to make a determination that assets aren’t being moved elsewhere. Apparently that’s true even for manufacturing that’s apparently fallen out of political favor.

As a longtime fan of their P226 X5 pistol- produced in Eckernforde- I have to wonder what that means for their P226 X5 and X6 lines. They’re still produced there. Could that production be moved here?

No answer at this point, but we’re watching and we’ll update you when we have some facts.

Since I’m already speaking global, an executive survey from the World Federation of the Sporting Goods Industry (WFSGI) I received late last week has a sobering look at how the business of the outdoors is tolerating the uncertainty of the world’s response to COVID-19.

If you’re speaking of the manufacturing portion, there are a few major concerns, the most acute of which is the absence of new orders. According WFSGI, it has “improved slightly” in the US and Europe, but dropped in the rest of the world. Factories have re-opened and only a small percentage (12%) of surveyed companies are having shipping issues.

While concerns over the supply chain, labor shortages and local transportation remain, the primary concern across the industry is low cash flow. Nearly eighty percent of companies responding to the survey say they’re facing crucial challenges in that area.

Overall, ninety percent of businesses say they’re still being negatively impacted by the pandemic. And most predict that even after a return to “normal” they will have lost as much as 50% of their overall business. The most heavily impacted regions are -you guessed it- Europe (80% overall decline) and the United States (70% overall decline).

Overall confidence in the future has dropped among most manufacturers, with more than ninety percent of the companies saying it will take “more than a year” to recover.

And despite a radical increase in online selling, the retail and brand company segments are getting hammered, sales-wise. In the April WFSGI survey, only sixteen percent of retail companies said they would shrink to minimal inventories. In the May survey, that number has increased to forty percent.

A key factor for an overwhelming percentage of global retailers (80%) remains a focus on cash positions, although only about fifteen percent said they anticipated having to make deferred payments to suppliers.

Cost sensitivity - in both acquiring and selling products- remains a key concern, although the idea of sustainability has dropped significantly. In April, 70% of those surveyed said the idea of environmentally friendly products would be a key driver of the Post COVID-19 economy, in May, that number had dropped to only half. Price sensitivity seems to have overcome the concern over environmental sensitivity.

Here’s a bright spot: looking forward, it seems two areas will remain key interests for consumers post-COVID-19: running and outdoor activities.

We’ll keep you posted.

—Jim Shepherd