Winchester Will Operate Lake City Army Ammunition Plant
Big News in the ammo industry! At the Lake City Army Ammunition Plant, Northrup Grumman is out, and Winchester is taking over.
Olin Corporation (NYSE: OLN) announced that its ammunition division, Olin Winchester, LLC (“Winchester”), has been selected by the U.S. Army to operate and manage the Lake City Army Ammunition Plant in Independence, Missouri. Winchester will be taking over in the fall of 2020. Winchester’s Lake City contract has an initial term of seven years and may be extended for up to three more years, which would put Winchester in charge of the plant for a full decade.
Prior to its acquisition by Northrup Grumman in 2018, Orbital-ATK ran the plant since 2000, initially as Alliant Techsystems (ATK). Before that, Winchester previously operated the Lake City facility from 1985-2000, so Winchester knows this facility. Following a one-year transition period, Winchester will assume full operational control of the Lake City plant on October 1, 2020.
The Lake City plant, which began production in 1941, is the primary provider of small-caliber U.S. military ammunition for training and combat use. The plant produces as many as 2 billion rounds per year. The plant, encompassing nearly 4,000 acres, also serves as a national and regional test center for ammunition performance and weapons firing.
Orbital-ATK Was Losing Millions at Lake City in Recent Years
The Lake City contract was a huge financial problem for Orbital ATK, now a division of Northrup Grumman. Orbital ATK was losing money on its plant contract, due to the high cost of materials. KCRU.org reported:
“Orbital ATK, the defense contractor that ran the Lake City facility from 2000 until it was bought [in 2018] by Northrop Grumman, stunned investors on August 10, 2016, when it announced it wouldn’t be able to file its quarterly earnings report on time. Orbital ATK stock plummeted more than 20%. Institutional investors… filed a class-action lawsuit alleging the company fraudulently hid the fact it was losing hundreds of millions of dollars on its massive, multi-year Army contract. [Orbital ATK] eventually said it expected to lose $373 million on the contract.”
About Orbital-ATK and Alliant Techsystems: Before it split into two companies, Orbital-ATK and Vista Outdoor, Alliant Techsystems (ATK) was the parent company of numerous major gun industry brands, including: Alliant Powder, CCI, Champion, Federal, RCBS, Speer, and Weaver. These brands are still operated by Vista Outdoor.
Winchester states: “Through extensive evaluation Winchester has determined the above lot of 5.56mm M855 ammunition may contain incorrect propellant. Incorrect propellant in this ammunition may cause firearm damage, rendering the firearm inoperable, and subject the shooter or bystanders to a risk of serious personal injury when fired.”
