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Interview with Ed Shultz, the President and CEO of Smith & Wesson.

The President and CEO of Smith & Wesson signed an agreement with the Department of Treasury and the Department of Housing and Urban Development and various state, city and county parties "to reduce the criminal misuse of firearms, combat the illegal acquisition, possession and trafficking of firearms, reduce the incidence of firearms accidents, and educate the public on the safe handling and storage of firearms." As part of the agreement, the lawsuits brought against the manufacturer parties by various state, city and county parties would be dismissed.

Among the firearms community, the signing of this agreement by Shultz on be ha If of Smith & Wesson has been severely criticized. As editor of Handguns, I believe that the entire Bill of Rights must he respected. One does not pick and choose which rights he will honor according to the current vagaries of political correctness. This column is about your right to free speech, just as this magazine is about your right to keep and bear arms.

Following is an interview with Schultz that you will not find anywhere else as we look at his decision to enter into an agreement that is unprecedented in the history of this country and the firearms industry.

Handguns: There is a lot of conjecture flying around about how this agreement between Smith & Wesson and the parties to the agreement with the Department of Treasury and the Department of Housing and Urban Development came about. One of the popular conspiracy theories is that Bill Clinton called Tony Blair and then Tony Blair called the head of Tompkins in the UK to put pressure on you to sign this agreement. Is there any truth to that theory?

Shultz: No, the people at Tompkins had absolutely no in to do with this. Smith & Wesson, as you know, is run as a separate autonomous company. It is a part of a group of companies that are in that holding group called Tompkins.

Handguns: How did this settlement come about then?

Shultz: It came about when the previous group (the Heritage Foundation and the NSSF) that was dealing with the cities and the attorney general of New York and those discussions fell apart because the industry group refused to talk to representatives from the federal government. Those people contacted me and asked if we would talk to them. Smith & Wesson has had the position all along that we will talk to anybody, anytime, anywhere if it relates to reducing further firearms misuse whether accidental or intentional. So, we began discussing with them how to proceed. By and large, the other discussions had totally broken down and nothing was scheduled and nothing was going forward.

Handguns: Why did you feel this was the time to sign this agreement?

Shultz: From Smith & Wesson's standpoint, the issue has to do with the lawsuits. Many of them have moved. We have had three of them actually terminated, where they have been thrown out of court, although all three of those are on appeal. Two others have had part of them thrown out. The balance are moving forward. We are entering into a time now when the process has moved to discovery. In our case there is nothing to discover that we didn't provide for the Hamilton case, but it means enormous amounts of time and energy from those at Smith & Wesson are going to have to go to continually producing all of this information. The costs of defending these have gone up dramatically.

Handguns: What do you calculate those costs to be?

Shultz: I think the costs could be in the millions per suit just to defend. If they go through trial and through appeals, then it becomes significantly more.

Handguns: Do you think that if you were to defend and spend that money that you would have jeopardized the operation of Smith & Wesson? Would you have had to shut Smith & Wesson down?

Shultz: Well, Smith & Wesson would have definitely gone out of business if we continued on the track that we were going. We are looking at ten years or more to go through all of this process. Clearly we have many other things to do with our resources, including developing new products and markets and moving forward. Also, the difficulty with the lawsuits as they go forward is that they are probably going to multiply dramatically as more and more people get on the bandwagon. So in each case you have to go out and deal with each suit separately. As each manufacturer is sued separately by each city or whatever and the costs of defending this did not make sense to us.

What we are being asked for if you go back and look at my letter to the city of Boston (Handguns, "Speak Out," November 1999) in Smith & Wesson's case, now it is not true with all of the manufacturers, but in Smith & Wesson's case what we were being asked to do, we have already been doing for years. Many of these things that the industry is refusing to consider or to do, Smith & Wesson is already doing. We have been dragged into these lawsuits because of our name. Why else would a city say in a lawsuit, "Something vs. Smith & Wesson" rather than what the first "A" in the handgun alphabet would be?

We needed to find a way to get ourselves off this issue. The other issue is that the company is unable to move forward. We are unable to make acquisitions, to buy other companies. We are not able to be sold by Tompkins if in some future point they wanted to sell the company. Smith & Wesson is not currently for sale, but you can't sell a company with all of these lawsuits against it. We needed to clear the deck, and waiting for ten years just didn't make sense to us.

The other issue of course is, we believe, that if we are going to be able to provide handguns to private citizens well into the future we can't take the route that some of the others have that we will just sell to law enforcement or military. We have to do those things that happen at the point of sale that makes sense to the majority of our population.

We do not want ever a gun transferred to someone who is not entitled to have it. We want to make sure that the people at point of sale are trained, whether they are part-time or full-time employees, so that they are not likely to get caught in a scam and end up in either a straw purchase or someone stealing a gun because it wasn't properly handled in the store. There are multiple cases that the ATF (Bureau of Alcohol, Tobacco and Firearms--U.S. Treasury Department) have brought forward showing that a variety of things are happening out there at the retail level.

We can wait until legislation makes it happen. Legislation is extremely painful to all of us. Doing things that make sense at the retail level to make sure the products are sold to people that are entitled to have them and people are instructed at a minimum to safely use and store the products. It just makes sense.

Handguns: Why did you think it was a good idea to sign this agreement if it doesn't eliminate all of the lawsuits or new ones?

Shultz: The issue here is to eliminate this current spate of lawsuits. Now that does not keep more from coming, it doesn't keep individuals from suing companies. And I am sure that the lawyers out there will find new ways to sue companies. But for now, we at Smith & Wesson needed to get this cloud off us so we could go forward.

Clearly there are a number of customers that are quite upset by what we have done, but there is also a huge number of customers and dealers and distributors that see that somebody has to do something other than continue to stonewall what the general public believes makes some sense. And that is that manufacturers somehow get involved and help this whole issue of firearms misuse rather than let it be a political issue.

There is literally a huge group of mothers out there who are looking for people to do some responsible things. Rather than just continue to say the product has been made like this for hundreds of years, there is no reason to change it, everybody knows that it is dangerous and clearly the world has changed.

The landscape we are in has changed. The opponents that we have are changed. We can continue to ignore them or we can grapple with this, get it behind us and move on.

Handguns: Did you expect that there would be such a reaction to your signing the agreement? Are you surprised by the boycott of Smith & Wesson products by groups like Gun Owners of America?

Shultz: No. I expected it to happen. In every case in the past when a manufacturer has done something that others have disliked, there has been an overwhelming backlash. It has happened to a number of the manufacturers over the last 20 years.

Clearly there is a group that is very much opposed to any changes in anything whatsoever. So, the issues are all known in advance.

Handguns: Do you think you made the right decision?

Shultz: I think we made the only decision that we had open to us. We had to make a decision that will ultimately preserve the longevity of the company. In my opinion, I would, much rather be put out of business by our customers than by our opponents. And if our customers decide to put us out of business, they will. That is just the way it will be. But that is far better than spending the assets of the company fighting against those who want guns banned ultimately.

I think that the key issue here is that every gun owner needs to carefully analyze what has gone on here and make sure that they understand what it is that Smith & Wesson actually agreed to do and what it intends to do. Rather than having someone else interpret it for them, we do not believe that we have done anything that will inhibit the sale of our products to legitimate law-abiding citizens. As a matter of fact, we think that we have done things that will enhance it.

We recognized that we would be alone. The right thing to do is seldom the popular thing, especially if it involves change. The world has changed, our market has changed and we must change with it.

Handguns: How do you feel about the Second Amendment?

Shultz: I believe that the Second Amendment is an absolute right. And I am as emotional about it as anybody. My guns will not be confiscated in my lifetime. Now they may take them all away from me right after the firefight, but they won't take my guns in my lifetime.
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Title Annotation:in which Shultz is questioned regarding agreement between Smith and Wesson and U.S. Departments of Treasury and Housing and Urban Development
Author:Smith, Kerby C.
Article Type:Interview
Geographic Code:1USA
Date:Jul 1, 2000
Previous Article:Questions & Answers.
Next Article:A look inside Milt Sparks Holsters.

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