SIG Gambles Big And Wins

posted on November 28, 2017

I first glassed my quarry, a wide-bodied aoudad ewe, through the lenses of my Zulu9 binocular from a distance of roughly 400 yards. After surveying the nearby terrain, I was elated to find the ideal spot from which to take my shot, and I stealthily slinked into position. Next, I brought the Kilo2400ABS rangefinder to bear and lased the target; having already input my load data into the system’s Applied Ballistics app, the unit’s heads-up display provided both the precise distance to the goat (411 yards) and the elevation adjustment necessary on my scope in order to make the shot. After dialing my dope into the Tango6 riflescope, I centered its crosshair on the kill zone of the giant sheep—factoring for wind drift, of course—and lightly squeezed the trigger of my 716G2 DMR rifle. The SRD762TI-QD suppressor brought the report of my rifle down to a level where the thunk of the bullet striking home was unmistakable.

The above true story is noteworthy in a number of ways. One, each piece of equipment used to bring the beast down—an AR-10-style rifle, a suppressor and three different classes of optics—was manufactured by the same company, and the list of contemporary makers who can claim such a broad spectrum of products under a single brand begins and ends at the name SIG Sauer. Secondly, SIG has expanded into each of the product categories represented above (in addition to several others) only recently; the company began making semi-automatic rifles a little more than 10 years ago, and the electro-optics and suppressor lines have been extant for roughly only three—yet the products within each new line already stand as high-performing and well-regarded examples of their types. If SIG’s level of diversification is rare within the gun world, its ability to dive head-first into totally new markets and find immediate success is even more so. And lastly, but perhaps most remarkably of all, SIG’s current status as one of the most revered names in the gun world—by professional and commercial users alike—is made all the more staggering in light of the fact that at the start of the 21st century the company’s U.S. operation was a whisper away from closing its doors forever.

The tale of SIG since the year 2000 is among the greatest corporate comeback stories of the modern era. Thanks in part to bold new leadership, a shift toward domestic production, the ability to effectively read the market and capitalize on emerging trends, the willingness to take big risks, an unwavering dedication to quality and a few dashes of good fortune, SIG Sauer has today positioned itself as the closest thing our industry has to a one-stop shop. Calling itself “The Complete Systems Provider,” in short order the company has grown from a boutique handgun importer to a trusted maker of everything from rifles, optics and ammunition to pistols, suppressors and airguns.

Once primarily an importer of German-made handguns, today SIG Sauer has expanded into virtually all corners of the firearm industry. The author recently used a SIG 716G2 DMR rifle, backed by several types of SIG optics and a SIG suppressor, to take down an aoudad at 411 yds.

On The Brink

Seventeen years ago, the company today known as SIG Sauer was on the verge of dissolution. Called SiGARMS at the time, the firm—which had originally started life in the mid-19th century as a wagon builder and had initially entered the realm of firearm manufacturing in 1864 in order to build 30,000 muzzleloading Prelaz-Burnand rifles for Switzerland’s ministry of defense—existed as little more than an American importer of German-made handguns and a few high-end bolt-action rifles and over-under shotguns. Although its steel-frame, hammer-fired, semi-automatic pistols were high-quality firearms with sterling reputations among American shooters in the know, import fees and inefficient manufacturing practices hiked up the prices on the company’s products so much so that it couldn’t sell enough units to remain profitable.

The situation was so dire that, in 2000, when L&O Holding was in negotiations to purchase several of SiGARMS’s sister companies (JP Sauer & Sohn, Blaser, Mauser and Swiss Arms), the group’s management team saw no value in the fledging little enterprise and did not want it included in the sale. However, its owners at the time had no interest in holding on to the hemorrhaging firm either, so they threw SiGARMS into the deal for the bargain price of $1.

For a few years the company sputtered along using the existing business model under the leadership of a number of chief executives, none of whom were able to reverse the company’s downward trajectory. Then L&O made a hire that would change everything. Ron Cohen, an engineer with prior industry experience at Kimber—and who had served as a field commander for the Israeli Defense Forces—was hired in late 2004 and made chief executive officer in early 2005. He would immediately make his presence felt.

“It would be an understatement to say that Ron shook things up when he came in. He saw SIG’s potential as a gunmaker, but he came to realize that in order to make the company profitable again, a complete restart was needed,” said Tom Taylor, SIG’s chief marketing officer and executive vice president of commercial sales. “SIG Sauer, as it exists today, was pretty much built from the ground up after that.”

SIG’s airgun line includes models that mimic some of the company’s most successful center-fire pistol and carbine designs.

Pressing The Reset Button

Cohen immediately went to work on a head-to-toe reorganization of SiGARMS, and, in hindsight, of the many changes to the company’s business plan that he instituted, two would prove to be the most effectual in resurrecting the ailing firm: shifting to American-based manufacturing and diversifying the product catalog. Concerning the former, the company had previously been building some of its Model P229 handguns in the States, but the lion’s share of the manufacturing took place in Europe, and Cohen quickly took steps to curtail that practice. Moving production to New Hampshire allowed the pistols to be built much more efficiently from a cost standpoint—without sacrificing the quality of the German-made guns—while also avoiding import tariffs, which allowed them to be offered at a much more affordable price point. Sales immediately spiked.

The decision was also made that the time had come for SIG to expand its list of product offerings beyond just four or five hammer-fired pistols. President Clinton’s so-called “Assault Weapons” Ban had just sunset in 2004 after a decade of ineffectiveness, and the market was clamoring for all the semi-automatic rifles it could get. Management recognized the opportunity at hand and directed the company’s engineers to begin development of an autoloading rifle line. First out the gate was the SIG556 in 2006, a variant of the Swiss SG 550 modified to feed from standard AR-15 magazines. The M400, SIG’s version of the direct-impingement AR, was soon to follow, as were the piston-operated 516- and 716-series guns—platforms specifically requested by elite military and law enforcement units.

“The company recognized that the semi-automatic rifle market was absolutely exploding at the time, so it was identified as the perfect next step for SIG as it expanded its horizons,” Taylor said. “When SIG decided to start making rifles it sent the message, to both the professional and civilian commercial markets, that the company was dedicated to diversifying what it was, and it opened the door to military units that already trusted SIG for their handguns.”

SIG’s turnaround was dramatic; during a 30-month period, growth forced the company to more than triple its workforce and to invest $18 million in new, state-of-the-art manufacturing equipment. In October of 2007 SiGARMS changed its name to SIG Sauer. With the introduction of its semi-automatic rifle line, the company had become a more comprehensive player in the defense market and had taken the first step toward becoming the complete systems provider that it is today, and the success of its new long guns spurred further development of the firm’s handgun line.

Already dominant within the relatively small market of premium, metal-frame, hammer-fired pistols, SIG recognized, however, that both the professional and civilian consumer markets were trending in the opposite direction—toward more economical, polymer-frame, striker-fired designs. The company’s response, the SP2022 and P250 pistols—models that incorporated lightweight plastic frames but retained the hammer-operated ignition system of their progenitors—were only marginally popular, but did serve as stepping stones toward much greater future handgun success.

Branching Out
By 2010 SIG Sauer was once again a successful firearm maker, but Cohen’s vision of the company as the source for all things gun related remained unfulfilled; its catalog had grown by leaps and bounds in only a short period of time, but it still contained only guns. However, the successes of the previous five years had positioned the company to where it was finally ready to do something about that.

Plans were initiated to start development on seven concurrent expansion projects—a growth plan that would have been called reckless had it not worked so well. In addition to three major new firearm introductions (the MCX, MPX and P320 lines), the company began laying the groundwork for building its own ammunition, optics, suppressor and airgun facilities.

“There was a little bit of trepidation on the part of the leadership about expanding into so many new areas at one time—because if the strategy failed, it would set the company back financially for years—but there was certainly a go-for-broke mentality around the building about it,” Taylor said. “In my experience, if you decide to just test the water a little bit with something, to just dabble in it, then you’re probably going to fail. SIG was kicking off four new businesses and three major new gun platforms; the company couldn’t afford to go timidly about it and expect to have success. SIG shoved all its chips into the middle of the table and went all-in.”

But rather than go the route that many companies follow when undertaking similar expansion projects, that of acquiring a smaller firm and simply slapping its name on the side of someone else’s product, SIG knew from the beginning that it wanted to build the new divisions from the ground up. This allowed it to control completely both the design and quality of its new lines. In order to do so, the company sought out the brightest and most experienced experts from the associated industries that it could find and brought them into the fold.

Andy York, vice president of sales, marketing and product development at Leupold for about a decade, was hired to head the new electro-optics division. Dan Powers, who brought 25 years of experience on the component side of ammunition manufacturing, was added to lead the new ammunition line. Lou Riley, president of Gamo USA, was brought in to direct SIG’s airgun initiative. And lastly, several engineers who had been causalities of Advanced Armament Corp.’s acquisition by the Remington Outdoor Company were scooped up wholesale when their non-compete agreements lapsed.

“SIG wanted to hire people who were all well-established in their respective fields, people who had already been there and done that elsewhere within the industry, so that no on-the-job training was required,” Taylor said. “I don’t think you can overestimate the importance of hiring the right people, and there’s no question that the company was able to do so when it started expanding into these new markets, and it has proven to have been a massively important factor in how quickly the new divisions were able to get up to speed.”

The first new project to come online was the ammunition division in 2013, which curiously was not initially envisioned to be a major player on the commercial market. SIG had recently lost out on an international military contract because another manufacturer was able to better handle the ammunition portion of the requirement, and after evaluating how much the company was spending to purchase other firms’ ammunition for its engineering and testing purposes, management made the decision to just start making cartridges for its own internal use and to be more competitive on defense market tenders. However, given the ammunition shortage and gun-buying frenzy going on at the time, SIG quickly realized that the commercial market was champing at the bit for a new supplier, and the firm was more than happy to oblige.

Although it started off small, the company’s ammunition lineup currently stands at roughly 40 loads in 18 chamberings.

Manufacturing of SIG’s ammunition originally took place at a leased property in Kentucky, but in March of 2017 all operations were moved to a dedicated factory in Jacksonville, Ark. The product lineup started small, with just a few SKUs in the most commonly used cartridges, but has grown larger with each passing year—and now stands at roughly 40 loads in 18 chamberings.

The suppressor, optics and airgun divisions all started production at more or less the same time, between late 2014 and early 2015. SIG’s suppressor category is housed within the company’s New Hampshire facilities alongside its firearm production. Given the built-in added cost of a $200 tax stamp, as necessitated by the ATF’s current classification of suppressors as NFA-applicable items, SIG made the decision right off the bat to offer its new silencers at a moderate price point, so as to not further dissuade their purchase. Ten models are offered at present, including a rimfire suppressor, two handgun variants and a line of tubeless center-fire rifle cans available in a number of different calibers and construction materials.

The Pacific Northwest is a hotbed of American optics innovation, and given that many of its newly hired optical engineers were already located in that area, SIG’s choice of the Portland, Ore., area for the headquarters of its electro-optics division was a no-brainer. Aware from the outset that its optics division would offer models in a myriad of product categories, SIG chose to name each discrete line after a letter in the NATO phonetic alphabet, as a creative way to differentiate between the types.

Designed in Oregon but assembled at facilities in Japan, China, the Philippines and in the States, the first products to come to market were the Kilo line of rangefinders, Oscar spotting scopes, Romeo micro optics, Tango tactical riflescopes, Whiskey hunting riflescopes and Zulu binoculars. The division today stands as a comprehensive optics maker with more than 180 SKUs, as SIG has added fixed-magnification battle sights, replacement pistol sights, thermal optics and magnifiers to its list of offerings in subsequent years—and is currently in the final preparations to launch the Lima laser sight and Foxtrot weapon light series.

Envisioning potential use as low-cost training tools for adults and an inexpensive way to introduce youth to its product line, SIG patterned its CO2-powered airgun line after several of the company’s most successful contemporary center-fire pistols and carbines. More than just outwardly mimicking these other SIG products, the airgun models perfectly emulate their dimensions, weights and operating controls. Engineered and designed in-house, but built at several factories in Asia, the quality of the products’ manufacture is ensured by company engineers stationed within each location.

And SIG’s sustained quality really is one of the single greatest catalysts for its latter-day success; the types of risks that the company has undertaken in the past 15 years could only be possible if the reliability and functionality of its products were beyond question. Brand loyalty runs deep within many corners of the gun community, and SIG enjoys among the fiercest in the industry, for just that reason. The company’s initial foray into semi-automatic rifles would not have been anywhere near as successful as it was if existing SIG patrons, whether individuals or government agencies, weren’t already impressed by the handgun line. And the subsequent explosion of expansions into entirely new fields only worked because people trusted SIG’s reputation for excellence.

“SIG was very cognizant of the fact that expectations for the new introductions would be very high right off the bat, and that people were going to be skeptical about the company moving into so many new directions at once, so great care was taken to ensure nothing was rushed,” Taylor said. “When you rush to market that’s how mistakes are made—you end up letting a product out that harms your brand instead of helping it—and I think waiting to ensure that every product manufactured meets the SIG quality standard will prove to be the right choice in the long term.”

Counting Chips
So just how successful have the new divisions been? SIG has a policy of not disclosing revenue or production figures, but the proof is in the pudding. In January 2014 the company moved into a new 206,000-sq. ft. corporate headquarters in Newington, N.H., and the plan at the time was to close all other existing firearm manufacturing locations and to shift all their operations to the new facility. Growth of the new segments so far exceeded initial projections, however, that not only has SIG been unable to shutter its Exeter location, it has even had to lease an additional building in nearby Dover.

Within three years of their respective launch dates, products within each of the new branches have already won government or law enforcement contracts and/or awards. The company’s suppressors are being used by top-tier Special Operations units around the world. SIG’s V-Crown line of jacketed-hollow-point ammunition achieved the highest score in a recent evaluation of defensive loads by the FBI, and the Romeo4 has also been selected as the red-dot optic of choice for the Bureau’s M4 rifles, with a five-year, 25,000-unit contract. Not to mention the fact that one of the company’s concurrent firearm introductions—the P320—just won the most prestigious handgun contract in recent history, and will now serve as the standard-issue sidearm for the U.S. Army.

Taylor’s characterization of SIG being “all-in” with regard to its most recent spate of expansions is appropriate—because regardless of how well-laid the company’s plans may have been—diving head-first into unfamiliar territory, on numerous fronts simultaneously, still represented a huge gamble. And it appears that the gun-buying community is rewarding SIG for its audacity. Business is booming at SIG Sauer these days—a far cry from the dire straits that the firm faced not too long ago. According to the ATF’s Annual Firearms Manufacturers and Export Report for Calendar Year 2015 (the most recent currently available), SIG manufactured 440,726 handguns during that year, in addition to nearly 40,000 rifles, positioning it as the third largest pistol maker in the United States—behind only long-time American stalwarts Smith & Wesson and Ruger.

Today, elite professional operators, hunters and armed citizens alike can surround themselves exclusively with SIG Sauer branded products—from the gun to the ammunition to every piece of equipment backing the gun—with the confidence that they have everything needed in order to complete their mission. Yet the company tells me that Ron Cohen’s vision of SIG as a complete systems provider is still far from complete. We’ll just have to wait and see what it has in store next—but one thing is certain—history shows us that it’s unwise to bet against SIG.


A man aims a rifle equipped with a Silencer Central Banish 46 suppressor.
A man aims a rifle equipped with a Silencer Central Banish 46 suppressor.

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