The arms economy: Small dealers, manufacturers quietly thriving

Robin Dietrich (left) and his father Wayne Dietrich look at the parts of a 1908 Winchester a customer sent them to get it refurbished.  &quotThis is about as bad as it gets." said Robin a trained gunsmith as he was taking enventory of the rusted parts of the rifle. &quotI can fix it but it will take a long time probably about a year  until it can be fired."  They opened Diethrich Gunsmithy in Otis five years ago and have plenty of work cleaning, refurbishing and building custom guns for customers in Maine and out of state as well.  BANGOR DAILY NEWS PHOTO BY GABOR DEGRE
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Robin Dietrich (left) and his father Wayne Dietrich look at the parts of a 1908 Winchester a customer sent them to get it refurbished. "This is about as bad as it gets." said Robin a trained gunsmith as he was taking enventory of the rusted parts of the rifle. "I can fix it but it will take a long time probably about a year until it can be fired." They opened Diethrich Gunsmithy in Otis five years ago and have plenty of work cleaning, refurbishing and building custom guns for customers in Maine and out of state as well. BANGOR DAILY NEWS PHOTO BY GABOR DEGRE
Posted Nov. 15, 2009, at 8:05 p.m.

Robin Dietrich has a gift.

The 22-year-old can take a gun — any gun — dismantle it, replace or refurbish the broken parts, put it back together and make it look brand-new, in some cases better than new. His father, Wayne Dietrich, calls it turning ugly ducklings into swans.

The older Dietrich already was a successful small-business man for many years in Maine and elsewhere when he decided to shift gears five years ago to harness his son’s talent. It was a significant investment and risk, but Dietrich wanted a family business, and he knew his son was skilled.

Today, Dietrich Gunsmithy in the small Hancock County town of Otis, is one of the most sought-after gun repair shops in eastern Maine and is getting more business all the time.

“When we decided to do this, it was like anything else. You just put your head down and do it,” Wayne Dietrich, 56, said recently from his shop off Route 180. “The work speaks for itself.”

The father-and-son team has made guns its entire economic livelihood, and their small business has quietly thrived in its off-the-beaten-path location. While the Dietrichs might be an extreme example, they typify the economic impact that guns have on the state’s economy, whether it’s in sales, shooting clubs and ranges, manufacturing or consumer activity related to hunting.

Still, while most in the industry agree that guns are a significant economic engine, it’s difficult to gauge just how significant, because there are limited concrete data to support the claims.

The Maine Department of Inland Fisheries and Wildlife estimates that $498 million in economic activity is generated through fishing and hunting. A 2005 report by the Sportsman’s Alliance of Maine suggested that hunters spend about $200 million annually on retail hunting-related sales here. That spending ripples through the Maine economy, supporting more than 3,500 jobs and creating an estimated $325 million in economic activity, much of which takes place in rural areas where the impact is greater.

The state has a handful of gun manufacturers that contribute hundreds of jobs, but the many licensed gun shops and trading posts provide even more collectively.From a gun sales perspective, data are harder to find. Anecdotally, retailers all agree that business is steady and even on the rise in the last several years, but there are no comprehensive numbers to support that.

“Maine doesn’t require owners to register their firearms, so there is really no telling how many guns are being sold out there,” said Sgt. William Gomane, who oversees the licensing and permitting division for the Maine State Police.

Permits and tourism

The Dietrichs barely have a minute to talk this time of year. Now that hunting season has officially arrived, the gunsmiths are busier than ever. For them, busy is good.

“We’re further ahead this year than ever before,” Wayne Dietrich said, opening a storage area to show the backlog of rifles waiting to be fixed.

Hunting is likely the biggest economic indicator associated with guns, and it’s an area that can be tracked relatively easily, through hunting licenses, which are overseen by the Maine Department of Inland Fisheries and Wildlife.

Licenses are broken down into a variety of categories. Some are strictly for hunting. Some are for hunting and fishing. Some are for youth hunters. Some are temporary licenses for out-of-state visitors.

Statistics provided by DIF&W that go back more than a decade reveal that the overall number of permits issued to residents for some type of hunting has increased only slightly between 1995 (174,756 permits issued) and 2008 (175,370).

Specific categories show more interesting trends. The number of adult licenses issued in 1997 — 68,452 — dropped to 50,659 last year. The state also has seen a drop in adult licenses issued to nonresidents. In 1995, 36,488 were issued to out-of-staters and in 2000; the number peaked at 40,221. Last year, only 31,743 were granted.

One area that continues to grow steadily, though, is lifetime licenses. In 2000, DIF&W began offering lifetime licenses and 49 hunting licenses and 1,074 hunting-fishing combo licenses were sold in the first year. In 2008, those numbers had increased to 785 and 20,945, respectively.

The cost of a license depends on a number of things. A resident adult hunting license, for instance, costs $21 annually, but a combination fishing and hunting license costs $38 annually. For nonresidents, the costs are much higher. A lifetime license, perhaps the best bargain for sportsmen and women, costs between $150 and $800, depending on how old the licensee is at the time of sale and whether it’s a combo.

An analysis compiled by the Bangor Daily News showed that the state generated nearly $14 million in revenue from license sales in 2008, which is more than one-third of DIF&W’s total budget. That money is used primarily to support safety and oversight of the hunting industry.

In addition to the money generated from permit sales, the state’s tourism industry reaps the benefits of gun use, particularly during hunting season. Residents and nonresidents alike take to the Maine woods to find their game birds, deer or moose. They spend money on gas, lodging, food and supplies, and they spend it in local communities.

Pat Eltman with the Maine Office of Tourism said her department works with DIF&W on trade and travel shows to promote the state as a destination for sportsmen and women. However, she said no hard data exist to link hunting season to tourism.

“It’s hard to know whether they are up here hunting or leaf peeping,” she said.

Retail sales

According to the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, approximately 450 licensed gun dealers are operating in the state of Maine.

Big-name stores such as L.L. Bean, Dick’s Sporting Goods and Cabella’s stand out, but most are small- to medium-size businesses such as Van Raymond Outfitters in Brewer and the Old Town Trading Post.

While there is no debate that significant revenue is generated by gun sales, it’s impossible to get an accurate handle on the volume of buying and selling.

No state agency oversees gun sales, so retailers — whether it’s a giant like L.L. Bean or a small shop in Aroostook County — are not required to track them either. An informal survey of about 20 area gun shops and trading posts suggested that sales have been steady in recent years.

Rick Tozier at Van Raymond in Brewer said he has seen an increase in sales over the last five years and even more so after Barack Obama was elected president in November 2008. Many who feared that Obama might tighten gun control laws rushed out to stock up on guns and ammo.

“We like to think we have a good selection, and handguns seem to be our biggest sellers,” Tozier said.

Most shop owners, however, were reluctant to give sales numbers, and some didn’t want to talk to the media at all.

Dealers are licensed through ATF, with fees covering the expenses of paperwork and background checks. Dale Armstrong, the resident agent in charge of ATF for Maine, said no agency tracks sales.

“We’re precluded from tracking more than what the law says,” he explained. Asked whether the lack of oversight causes problems, Armstrong answered, “That’s a political question.”

Many agree that guns are a legitimate and sound investment. Collecting is quite popular in Maine, but many collectors are reluctant to talk about their treasures for obvious reasons. Wayne Dietrich said he has seen collections that have values well into the hundreds of thousands of dollars, but he understands why they don’t broadcast.

Want to buy or sell a gun? Here’s how it works

Gun sales in Maine involving licenced dealers are governed by state statute.

When a sale is made, a buyer must provide valid identification (driver’s licenses, etc.) and each licensed dealer must conduct a federal background check, which can usually be done instantly with a computer.

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Auctions, such as the annual event conducted by James Julia of Fairfield, draw big-name collectors with big-name money. To put it in perspective, at an event in March, $11.4 million changed hands, although most of that was out-of-state money.

The biggest economic question mark hangs over private sales and gun shows. Armstrong estimated that as much as one-third of all gun sales in Maine take place privately and he said the Internet has made it even more difficult to track sales.

Manufacturing, specialties, conclusions

Gun manufacturing, historically, has had a strong presence in Maine. Smith & Wesson, one of the largest producers of guns and one of the most recognizable names in the industry, has a facility in Houlton that employs nearly 150 people. In 2007, Smith & Wesson’s Houlton plant produced 45,635 pistols, according to the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Bushmaster Firearms Inc., another well-known producer, employs about 75 people at a plant in southern Maine that specializes in rifles and rifle accessories and contracts with the federal government. Outside of federal contracts, Bushmaster produced about 1,600 weapons, mostly rifles.General Dynamics recently was awarded a $13 million U.S. Army contract to extend production of MK19 grenade launchers at its plant in Saco, which employs dozens at any given time. The MK19 is a portable machine gun that fires 40 mm grenades.

But the real impact seems to be in smaller, rural areas. Charles Colgan, an economist at the Center for Business and Economic Research at the University of Southern Maine, said guns are “a pretty big and important way to make a living in some parts of Maine that have little or nothing else.”

As is the case with nearly every industry in Maine, gun manufacturing here is dominated by small, specialty businesses like Dietrich Gunsmithy. In addition to repairs, Wayne and Robin Dietrich build custom guns for customers.

Robin remembers the first gun he built from scratch about four years ago, a nice .270 rifle. It’s a bit of a sore spot among the business partners. Wayne sold the gun to his father-in-law, but is quick to tell his son that he’ll probably get the gun back at some point.

The Dietrichs get many referrals from area gun shops and trading posts because there are very few gunsmiths to call on in the area. That may change in the future, but Robin Dietrich, who will have the business to himself at some point in the future, said he doesn’t want to grow too much.

“I care about the quality of my work,” he said. “The bigger a company gets, the less that seems to matter.”

Guns & Money at a glance

· There are approximately 450 licensed gun dealers in Maine.

· Hunters spend an estimated $200 million a year in Maine on hunting-related equipment.

· Hunting supports an estimated 3,500 jobs in Maine.

· The Bureau of Alcohol, Tobacco, Firearms and Explosives estimates one-third of all gun sales in Maine take place privately and are not monitored.

· General Dynamics was recently awarded a $13 million contract for production of the MK19 machine gun-grenade launcher at its plant in Saco.

Sources: State of Maine; 2007 report by Sportsman’s Alliance of Maine; the Bureau of Alcohol, Tobacco, Firearms and Explosives; The Associated Press.

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