At least they’re going to be able to increase production. Hopefully other manufacturers do the same.
I'm pretty surprised that they are spending money on capital equipment to increase production to react to this current demand spike. When this all ends, and it will end....they will have invested in excess capital and may well find that demand drops even below what it was prior to this spike. People will have bought lots of expensive ammo and probably will decide they have enough and won't buy at normal replacement rates.
They will have excess capacity, will be laying people off and equipment will sit idle.
This demand will end, BUT there are also more guns and first- time gun owners also. The ammo manufacturers are taking all this in before they decide on whether to invest or extend hours(24/7). Tough choice...
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There is a new ammunition plant going to be built in Conway Ark this coming year.
Who's operating it?
You also have to consider with the increased revenue, they likely need capital expenditures to offset the taxes. They can then depreciate the cost of the new equipment.
The videos that I've seen about ammo production, it appears that the process is mostly automated. Probably doesn't require a large amount of payroll for a large amount product.
Let's see....spend millions of dollars on equipment so you can claim new capital equipment depreciation against revenue that is taxed at a maximum of 21% ? Seems like kind of a bad idea to me if you don't need the equipment a year down the road.
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