They got their answer last week. Shultz broke ranks and secretly cut a sweeping deal with the White House to keep Smith & Wesson out of court, agreeing to wide-ranging concessions such as locking devices and required training for its customers. To a stunned gun lobby, and to some of his closest colleagues, it was an act of treason. “Wow,” exclaimed Jonathan Mossberg, whose family makes the venerable Mossberg shotgun. “It would have been nice to be told.” Shultz’s old friends at the National Rifle Association instantly became his mortal enemies, faxing members a scathing alert with his office number attached. To Shultz, typically, it wasn’t personal–it was business. “I’m concerned for the industry,” Shultz told NEWSWEEK in an interview just after the announcement. “But at some point, the company has to save itself.”
In the gun world, that’s getting harder to do. With more than 2o cities suing the gunmakers, claiming they make unsafe guns and do nothing to keep them from criminals, and with the Clinton administration and two states threatening to pile on, the companies are facing extinction by legal fees. Meanwhile the rhetoric in Washington is verging on the hysterical; even some Republicans–including George W. Bush–seem resigned to some kind of gun control. A bottom-line man if there ever was one, Shultz concluded it would cost less to overhaul his business than it would to pay an army of lawyers to salvage it. Never mind that Smith’s revolvers are still assembled by old men at rusted metal desks; Shultz’s story shows that the lawsuits have forever changed life in Gun Valley.
Smith & Wesson may now face an even more determined enemy: the people who buy its products. Twice before in recent years, gun companies–Colt and Sturm, Ruger–have embraced far more modest reforms. In each case, a consumer boycott cost them millions. This time, the NRA lost little time in recasting the nation’s most respected gunmaker as a greedy foreigner taking a torch to the Bill of Rights. (Smith is owned by a British firm.) Bracing himself at the company’s Springfield, Mass., headquarters, Shultz said he’d take a rapid consumer uprising over years of costly litigation. “I’m willing to take my chances,” he said, sighing. “It’s the difference between dying of a heart attack and dying of cancer. The risk is the same. But one is considerably more painful.”
The settlement was a coup for Housing Secretary Andrew Cuomo, who stepped into the fray of gun litigation last year. The gunmakers were looking hard for a way out of court, but the companies needed to cut a deal with someone who had the power to make all the city lawsuits go away. Cuomo and White House aide Bruce Reed were supposed to meet with industry negotiators at the annual Shot Show in Las Vegas last January to begin hammering out a compromise. But then the companies suddenly changed their minds; some execs apparently choked at the idea of giving Clinton an election-year victory at their expense. Shultz was annoyed. He had 800 employees, most of whom have been working in the plant for 20 years. A few miles down the road, Colt was already laying off hundreds of workers because of a cash shortfall it blamed on the litigation. When a Cuomo deputy called to feel him out, Shultz decided to listen.
Shultz met with Cuomo’s negotiators first in Nashville, Tenn., where Smith has a subsidiary, and then in Springfield and Washington. It came down to a marathon meeting at an airport hotel in Hartford, Conn., last Wednesday, where Cuomo and Shultz finally met in person. In his usual tough manner, Shultz says the discussion was all business. But others in the room say he and Cuomo developed a mutual trust. The last sticking point was the most important: in order for the settlement to take effect, at least 10 cities had to sign on. Shultz worried that Cuomo wouldn’t be able to deliver them. Sometime after midnight, Cuomo told him: “I’ll bet you that I can.” “You really think so?” Shultz teased. “Put your money where your mouth is.” In front of incredulous aides, they structured a $60 personal wager on the cities. A handshake sealed the bet, which Cuomo won.
The real goal of the lawsuits has always been clear: to take the gun-control issue away from Congress and force the industry to regulate itself. The Smith & Wesson pact went a long way toward making it happen. The agreement includes a weakened version of the “one gun a month” proposal so hated by the NRA; under the plan, anyone who buys more than one gun will have to wait 14 days to take the rest home. Smith won’t allow any of its guns to be sold at a gun show unless all buyers are subjected to a background check. Dealers will have to make their gun stocks “theft-proof,” walling them off in some cases, if they want to carry Smith & Wessons. And Smith will personalize all its new handguns with new technology–meaning that they can be fired only by their owners–within three years.
As it happened, the announcement capped the most dramatic–and least civil–week in the ongoing political debate over guns. In an unusually harsh exchange, Wayne LaPierre, the NRA’s executive vice president, said President Clinton had “blood on his hands” for a murder in Illinois, because the killer could have been prosecuted under federal law for trying to buy a gun illegally. “He’s willing to accept a certain level of killing to further his political agenda,” LaPierre said. Seemingly unbothered, Clinton chided him for shedding “crocodile tears.” LaPierre was probably playing, in part, to his own audience; the NRA’s annual board meeting is a month away, and his comments about Clinton are likely to go over well with the true believers. But in more moderate Republican circles, the attack on the president was seen as less than helpful. Spooked House members urged a compromise on the Hill, while New York Gov. George Pataki endorsed a list of gun-control proposals–including trigger locks and a tougher assault-weapons ban–that even a liberal could love. Straddling the fault line in his own party, Bush seemed almost in denial. Responding in a statement to the Smith & Wesson deal, he praised the trigger-lock provision but ignored the rest.
Ed Shultz hopes he can leave all this behind and go back to his day job–making guns. It’s not likely to be business as usual. The NRA needs money for its election-year battles in crucial swing districts, and Smith & Wesson is likely to feature prominently in its fund-raising appeals. The lobby never tells its members whose guns they should boycott, exactly, but it doesn’t take a cryptologist to get the message. As of last week, a defiant Shultz hadn’t tried to talk to anyone in the gun lobby. “I have no reason to,” he says. Other companies are waiting anxiously to see if dealers or distributors will cave in to pressure and refuse to stock Smith guns. In a dwindling market, some gunmakers may even join the rebellion. “They’ll demonize us and take whatever competitive advantage they can get by going to the user community and saying we’ve done some terrible thing,” Shultz says. Still, if any gunmaker can survive the onslaught, it’s Smith & Wesson. For one thing, the company sells some 25 percent of its handguns to cops, not general consumers. And those people who do buy Smith’s vaunted high-end guns may not be quick to give them up.
It’s probably only a matter of time before other big companies follow Shultz’s lead. Sources say Shultz tried unsuccessfully to persuade another giant, Glock, to join in the agreement. (Glock officials couldn’t be reached for comment.) Emboldened by the settlement, lawyers for the cities say the Smith & Wesson deal is a limited-time offer. “There is a risk to coming forward first,” says Dennis Henigan of the Center to Prevent Handgun Violence. “So we made compromises with Smith & Wesson that we may not be willing to make later.” One promise the lawyers made has held true: Smith & Wesson didn’t pay a dime to settle the suits, and nobody appears to have profited from the agreement. Unless, of course, you count the $60 in cash that ended up in Andrew Cuomo’s pocket, his winnings from a gunmaker. The way Ed Shultz figures it, that’s still a pretty good deal.
