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Business

Italian gun manufacturer Beretta chooses Tennessee

2/7/14 | By Sheila R. Cherry, Associate Editor

MARYLAND—In direct response to Maryland’s new gun law, executives from Beretta USA, which has operated a manufacturing facility in Accokeek since 1978 and affiliate operations in Pocomoke, announced on Jan. 29 the company has chosen Gallatin, Tenn., as the site for a new $45 million manufacturing facility for a needed expansion of its U.S. operations.

Once constructed, the new state-of-the-art plant in the Gallatin Industrial Park is expected to bring 300 new jobs over a five-year period to the town, which is located 30 miles north of Nashville, according to company executives. “The company is expected to complete construction on the facility this year,” a company statement said.

So far, company representatives have been vague on whether operations that employ roughly 350 workers in Maryland will close once the new facility is operational. Multiple calls for comment from Bayside Gazette went unanswered.

But in an online video interview at a National Rifle Association’s Web site http://www.nranews.com/cam/video/jeff-reh-maryland-s-gun-laws-forced-expansion-to-tennessee, Jeff Reh, general counsel and vice-general manager of Beretta USA, made it clear the move was in response to Maryland’s new gun control law.

Noting that for Tennessee officials the move was received as a major economic boon for the region surrounding Gallatin, “It’s unfortunate; those are jobs that could have gone to Maryland,” Reh said. But, he added, “we have good friends in Tennessee and we are looking forward to working with them for many years in the future.”

Reh said during the interview the family-run company plans to maintain its operations in Accokeek and at its affiliated Benelli USA and Stoeger Industries facilities in Pocomoke City, in order to fulfill an ongoing contractual commitment. “We’re in the middle of a contract,” he said. “We can’t move production.”

However, Reh added the company is holding the roll out of several new product lines until the Tennessee facility is opened. “We’re going to use the new facility for product lines that you’ve never seen or heard of yet that we’ve had on the drawing board for a while, but that we’ve kind of held back on while we looked for a new place to put the investment and buy new machines.”

Reh said company representatives were planning to break ground at the new site around mid-April and to hold a ribbon-cutting to open the new facility in December. He also noted the decision to choose a site outside Maryland for the company’s expansion was a reluctant one for both himself and the Beretta family.

The current Beretta facilities are located in communities that are supportive of the company’s activities, according to Reh. “But then the government goes in a different direction,” he said, adding “the population demographics are such over time that the nature of the state itself has changed politically.” The gradual change in political dynamics led executives to search for a new place for the expansion project. He said other industry executives operating in the state were struggling with the same decisions.

He noted that a far more restrictive version of the gun bill was passed by the Maryland Senate and had it survived in the final legislation it would have prohibited the company from manufacturing many of its products in the state. But for efforts made by legislators in the House who were able to strip the language banning the manufacture of certain weapons out of the bill, Reh said, the company would have had to move their operations immediately. “But a lot remained that’s really onerous for Maryland citizens and actually for us as a manufacturer,” he added.

According to an update by Delegate Michael McDermott, Department of Business and Economic Development Secretary Dominick Murray addressed the Eastern Shore Delegation about the overall business climate during a Jan. 31 meeting. McDermott said he asked Murray whether Beretta was leaving Maryland for Tennessee.

According to McDermott, Murray confirmed the company was expanding and was choosing to do so in another state. “He also alluded to statements made by the company when the Gun Bill (SB-281) was passed last year indicating they were simply following through with what they had stated at that time,” McDermott said.

No official statement was published on the department’s Web site about the expansion plans.

In a separate statement, Franco Gussalli Beretta, vice president and managing director of the Italy-based parent company Fabbrica D Armi S.p.A. and executive director of Beretta USA, said Tennessee had been chosen as the new home for Beretta USA’s expansion after an extensive nationwide search.

Executives made their decision after reviewing traditional business-related factors such as tax rates, cost of living, cost of doing business, availability of white and blue collar workers, traditions of high-level manufacturing in the area, the quality of local educational institutions, availability of job recruitment, screening and training, Reh said when announcing the move to Tennessee. From that analysis, he said, the search team developed a list of 80 sites within seven states in which they conducted site visits to winnow the selections down to a list to three, before making the final choice of Gallatin.

The extensiveness of the products that nearly cleared the General Assembly last year rattled the executives of the family-owned corporation, according to Reh, who added that the company is continuing to monitor legislation this year. He said the good news about the expansion in Tennessee was, “Now we’ll have the land and potentially the facility that we could move to if we had to do so in a hurry.”   

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