Ask Ian: Going Broke Making Guns During War

Published on December 27, 2022
Duration: 13:36

This video details how the Imperial Contracting Company and subsequently Hopkins & Allen went bankrupt during WWI despite massive demand for firearms. Poor planning, lack of down payments, impossible deadlines for custom tooling, and underbidding on subsequent contracts led to financial ruin. The assets were eventually acquired by Marlin-Rockwell, which found success with different contracts.

Quick Summary

Firearms manufacturers can go bankrupt during wartime due to poor business decisions, like impossible deadlines for custom tooling on SMLE contracts and underbidding on subsequent Belgian Mauser contracts, leading to massive debt and financial collapse.

Chapters

  1. 00:00Introduction: War-Time Bankruptcy
  2. 00:34The Imperial Contracting Company
  3. 01:55The British SMLE Contract Failure
  4. 03:13Hopkins & Allen's Role
  5. 04:30Contractual & Tooling Issues
  6. 07:10The Belgian Mauser Pivot & Loss
  7. 08:30Financial Collapse & Bankruptcy
  8. 10:00Acquisition by Marlin-Rockwell

Frequently Asked Questions

How did companies go bankrupt making guns during WWI?

Companies like Imperial Contracting and Hopkins & Allen went bankrupt during WWI due to poor business decisions, such as impossible delivery deadlines for custom tooling on SMLE contracts and underbidding on subsequent Belgian Mauser contracts, leading to massive debt.

What were the main reasons for the failure of the British SMLE contract?

The British SMLE contract failed because the five-month deadline for delivering 400,000 rifles was impossible given the extensive custom tooling required in 1915. Additionally, there was no down payment, leaving the manufacturer financially exposed.

What happened after Hopkins & Allen went bankrupt?

After Hopkins & Allen was forced into receivership and bankruptcy, its assets were purchased by Marlin-Rockwell. Marlin-Rockwell successfully utilized the facilities to produce BARs and machine guns for the U.S. government, making the operation profitable.

Why did Hopkins & Allen take the Belgian Mauser contract at a loss?

Hopkins & Allen took the Belgian Model 1889 Mauser contract as a desperate measure after failing the British SMLE contract. They underbid by 10%, meaning they lost money on every rifle produced, a strategy that ultimately contributed to their bankruptcy.

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