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By Prathapan Bhaskaran 5:21 am ET
Why has Gunmaker Smith & Wesson (NASDAQ: SWBI) announced moving its headquarters from Massachusetts state to Tennessee? The proposed nearly 900-mile move from Springfield, MA to Maryville, TN caught many by surprise.
For law enforcement agencies
The rethink about the headquarters in the backdrop of a likely regulatory push by the state of Massachusetts to restrict the manufacture of certain firearms.
The proposed legislation could contain provisions prohibiting the manufacture of assault weapons in the Bay state except for use by the law enforcement agencies and the military, a Boston.com report says.
The announcement of the move saw Smith & Wesson share fall on NASDAQ to USD20.76 at close on Friday, Sept 30, 2021 from USD21.49 at close a day earlier.
Smith & Wesson CEO Mark Smith has said the decision has been a difficult on for the company. This has been an extremely difficult and emotional decision, but after a thorough an exhaustive analysis, for the strength and continued health of the company, we have been left with no other alternative, Smith said in the statement.
Smith & Wesson has proposed a $120-million investment on a facility in Maryville apparently due to the State of Tennessee's view of the 2nd Amendment, business-friendly environment, higher education institutions and a location favorable for distribution efficiency.
‘Ideal for new headquarters’
The strong support we have received from the State of Tennessee and the Blount County leadership of throughout this process, combined with the quality of life, outdoor lifestyle, and low cost of living in the Greater Knoxville area has left no doubt that Tennessee is the ideal location for Smith & Wesson's new headquarters, Smith told Boston.com.
“We would like to specifically thank Governor [Bill] Lee [R] for his decisive contributions and the entire state legislature for their unwavering support of the 2nd Amendment and for creating a welcoming, business friendly environment.
The gun manufacturer proposes to close facilities in Connecticut and Missouri which the company thinks will allow a streamlining of manufacturing and distribution operations, according to a report on the website TheHill.com.
Parts production to continue
The move expected to be completed in 2023 will affect 750 employees in three locations, according to the company. Construction of the new headquarters will begin in the fourth quarter of this year.
The Springfield facility will remain operational for machining and parts production with about 1,000 employees in the state of Massachusetts, according to the company.