Other states woo Maryland's gun manufacturers

Beretta USA contends gun control proposal may force it to leave

March 09, 2013|By Erin Cox, The Baltimore Sun

As Maryland contemplates passing one of the nation's strictest gun laws, at least seven other states have courted its gun manufacturers, offering tax incentives and open arms elsewhere.

The governor of Texas, West Virginia's House speaker and an Illinois congressman have written to Beretta USA officials, inviting a move and promising a better business climate if the 400-year-old Italian company chooses to abandon its U.S. headquarters on the Potomac.

Another arms manufacturer and defense contractor on the Eastern Shore, LWRC International, received offers, some including tax incentives, from elected or government officials in Nebraska, Mississippi, North Dakota, Nevada, Texas and West Virginia, a company executive said.

The wooing of gun manufacturers is part of a national trend as several state legislatures across the country consider stricter gun control laws following the Newtown, Conn., shootings. Invitations from a handful of states have gone out to companies in Connecticut, New York, Massachusetts and Colorado as their legislatures pass or consider tighter gun laws.

In Maryland, Beretta's threat to suspend an expansion and possibly leave altogether so far hasn't swayed lawmakers — even in its home county — to vote against Gov. Martin O'Malley's legislation. The sweeping proposal, among other things, would limit magazine to 10 bullets and ban the sale of certain assault-style rifles the company makes.

Every Prince George's County senator voted for the bill, including Senate President Thomas Mike V. Miller, whose district includes Beretta's Accokeek manufacturing plant and who calls company president Ugo Gusalli Beretta a friend. Beretta has operated in Prince George's for more than 25 years.

"I'm hoping that they understand why the state of Maryland felt the need to take this next step forward," Miller said. "There's no question they are [being courted by other states]. ... If they were going to offer them huge economic incentives, it's very possible that they could leave."

O'Malley's staff on Friday pitched the Senate version of the bill — which includes provisions designed to protect Beretta — to House committees expected to vote on the proposal as early as this week.

Meanwhile, the usual home page for Mississippi House Speaker Philip Gunn has been replaced with one that reads "GUN MANUFACTURERS: COME TO MISSISSIPPI." It invites constituents to sign a petition to lobby nine companies, including Cambridge-based LWRC, to move there.

LWRC executive vice president Darren Mellors said that even if Maryland's laws don't expressly prohibit it from making its firearms, the company might be forced to leave or face an image problem with customers deeply offended by the state's ban.

"The rest of the country wouldn't forgive us for staying," Mellors said. "It's a brand issue."

The company makes what the state considers assault rifles, which could not be sold to the public in gun shops under O'Malley's bill. LWRC projects $130 million in revenue for 2013 based on back orders and existing contracts, Mellors said, some of which are for the military, law enforcement and the government of Saudi Arabia. The company opened in Maryland two years ago.

Texas Gov. Rick Perry sent letters this year to about 30 manufacturers, including Beretta, urging them to consider the Lone Star state and its "extensive list of financial incentives."

"As you consider your options for responding to unwarranted government intrusion into your business, you may choose to consider relocating your manufacturing operations to a state that is more business-friendly," Perry's letter reads. "There is no other state that fits the definition of business-friendly like Texas."

This week, U.S. Rep. Marlin A. Stutzman sent a letter to Beretta USA's president touting the strategic benefit of his northeast Indiana district, which he said is already home to Chevrolet and Vera Bradley.

"Hoosiers would proudly welcome Beretta's operation with a noticeably different tone and more competitive tax and regulatory structure than what you must navigate in Maryland," Stutzman wrote.

West Virginia House Speaker Rick Thompson's letter to Beretta promoted the state's high gun ownership rate and included an offer to personally visit Maryland to sell Beretta leadership on a move.

Beretta first publicly threatened to leave behind its headquarters in February, both on principle and because the laws could threaten their production line. "The slap in the face has already occurred," said Jeffrey K. Reh, a Beretta USA board member and the company's general counsel. "The idea of whether we expand in Maryland is now the big question."

Reh said the 300-employee company was planning an upgrade and expansion that would involve hiring another 40 people in Accokeek, a town of just over 10,000 people where the volunteer fire department's most recent fundraiser was a "gun bash" that gave away 30 firearms.

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