Retail Backlash May Await Smith & Wesson

July 7, 2008 - 8:02 PM

(CNSNews.com) - Gun manufacturer Smith & Wesson may have shot itself in the foot by cutting a deal with the federal government, thus avoiding a lawsuit seeking to hold firearms manufacturers liable for the behavior of individuals who commit gun violence.

Under the agreement, Smith & Wesson is changing the way it does business, and because those changes directly affect gun retailers, it may mean fewer of them will be inclined to sell Smith & Wesson guns.

CNSNews.com has learned that Smith & Wesson has called a meeting of its distributors this Thursday, to address their concerns about the agreement signed earlier this month. Smith & Wesson spokesman Ken Jorgenson said the company also will address the concerns of the 22,000 gun dealers who stock Smith & Wesson products. Company officials could not be reached for comment on the meeting's agenda.

Jorgenson urged both gun dealers and gun buyers to read the full text of the agreement Smith & Wesson struck with the federal government, before making judgements about that agreement and whether or not to support Smith & Wesson products.

Jorgenson said there has been much "misinformation" reported about the settlement.

On March 17, Smith & Wesson - the world's largest manufacturer of handguns - shocked gun-rights advocates by breaking ranks with other gun makers and agreeing to the federal government's demands that it install child trigger locks and develop "smart gun" technology.

The 60-point agreement Smith & Wesson signed also makes marketing changes that affect gun dealers, and perhaps most controversial - it provides for the creation of an outside "oversight commission" made up of local, state and federal officials, who would supervise the gun manufacturer.

Among Jorgenson's concerns are reports that the Smith & Wesson agreement will affect retailers' ability to sell weapons made by other companies. "The agreement only affects Smith & Wesson products," Jorgenson said.

But dealers are particularly concerned about a clause in the Smith & Wesson agreement that says "Authorized [Smith & Wesson] dealers will be required to sign a revised Code of Responsible Business Practices," which includes a host of new security and record-keeping requirements for Smith & Wesson products only.

Dealers say they're already burdened by regulations that apply to the sale of all weapons - never mind the new requirements Smith & Wesson has imposed on them.

The agreement Smith & Wesson reached is binding on Smith & Wesson dealers, who must agree - among other things -- to "make no sales at gun shows unless all sales by any seller at the gun show are conducted only upon completion of a background check."

"My customers think it's ridiculous," one Arkansas dealer told CNSNews.com. "If it comes down to the point where Smith & Wesson won't let me sell other products without their approval, then I won't be selling Smith & Wesson."

People probably aren't taking this as serious as they should," said Mark McCord, owner of McCord's Gun Shop in Vidalia, Georgia. McCord fears that other gun manufacturers will follow Smith & Wesson's lead, although two of them - Glock and Browning -- have expressly rejected what Smith & Wesson has done.

McCord said the agreement would burden his "mom and pop" store, where he sells a variety of other merchandise besides firearms, including hardware and snack foods.

"People don't realize that according to the agreement that you'll have to go through a safety class to be able to come here and purchase a particular gun. I'm going to have to go to a class to be able to sell a particular gun," McCord said.

Such concerns are based on a clause in the agreement which requires "all employees to attend annual training developed by the manufacturer, in cooperation with an appointed Oversight Commission and the Alcohol Tobacco and Firearms Bureau."

Jorgenson explained that any additional training and instruction called for under the agreement will be provided by Smith & Wesson.

Additionally, dealers would have to agree to "Transfer firearms only...to individuals who have demonstrated that they can safely handle and store firearms through completion of a certified firearms safety training course or by having passed a certified firearms safety examination."

"If we've got to go through all that trouble just to sell Smith & Wesson guns, then it will probably no longer be a mainstay in our store. Nobody's going to go through all that to carry one line of handguns," McCord said.

"I haven't spoken to a Virginia dealer who is happy about this," said Virginia Firearms Dealers Association president Robert Marcus, owner of owner of Bob's Gun Shop in Norfolk, Virginia. "With these regulations, Smith & Wesson has almost become a regulatory agency. There's a lot of hard feelings that these regulations are being forced down our throat with no input whatsoever from the dealers."

"The Clinton Administration was real good to bring in Handgun Control, Inc. to make sure that it [the Smith & Wesson deal] passed their smell test. So the consensus is that it's all well and good that Smith & Wesson has taken care of themselves, but who is there to take care of the dealers?"

As for his future plans regarding the sale of Smith & Wesson products, Marcus was cautious, but at the same time, committed to making the customer happy.

"We'll continue to sell Smith & Wesson products so long as they're made available to us under the terms of our previous agreement with them. We were asked to sign a code-of-conduct agreement last year, and there was nothing in that code of conduct that we weren't doing already, so it really wasn't a stretch. However, we are waiting for the final shake-out of what this agreement calls for," Marcus added.

Smith & Wesson issued a statement on the day the agreement was announced, acknowledging that its decision would not be popular with everyone and noting that there will always be those who don't understand the circumstances that led to the agreement and who don't have any stake in the future of the company.

"These individuals are not spending millions on lawsuits or seeing their ability to stay in business seriously threatened," the statement read.

"Others are willing to sacrifice our company, our employees and our customers for their principles. We will not allow this to happen when we can make choices to prevent it. Smith & Wesson has provided security and safety to the world for a century and a half and we are not abandoning our goals or our obligations."

The National Rifle Association is among those blasting the Smith & Wesson for signing an agreement to avoid the threat of a federal lawsuit. The NRA's chief lobbyist James Baker has called the move "a futile act of craven self-interest" - something that threatens to undermine "a constitutionally determined right."

Smith & Wesson is a unit of the British company Tomkins Plc.