Gun-maker refuses demand for ‘human rights impact’ study
With the nation reeling from another school massacre, Sturm Ruger is not signaling any immediate plans to change its stance against a consortium’s demand for a review of any impact its policies have on human rights.
In the attack on Robb Elementary School in Uvalde, Texas, the perpetrator used an AR-15-type rifle made by the independent manufacturer Daniel Defense. The Black Creek, Ga.-based company posted a statement on its website expressing condolences for the 21 victims and their families, and vowing to cooperate with authorities in any investigation.
Ruger was neck and neck with Smith & Wesson in 2020 as the largest gun maker in the country, according to a federal report of U.S. production, with nearly 1,900 employees and in the hunt to hire more. Ruger has its headquarters just off Interstate 95 in Fairfield where it crafts a small number of guns each year. Its main factories are located in Newport, N.H., Mayodan, N.C., and Prescott, Ariz.
The Ruger proxy challenge is being organized by members of the New York City-based Interfaith Center on Corporate Responsibility, including CommonSpirit Health, the nation’s largest Catholic hospital system with a cluster of hospitals between the Houston and Austin metropolitan areas.
Other members include Trinity Health, which runs Saint Francis Hospital and Mount Sinai Rehabilitation Hospital in Hartford; Saint Mary’s Hospital in Waterbury; Johnson Memorial Hospital in Stafford Springs; and Mercy Medical Center in Springfield, Mass.
The group is demanding a study on Ruger’s “policies, practices and products” by an outside consultant, assessing the impact of its guns on human rights in the context of violent crime.
“To be in compliance with international human rights norms, companies must take a comprehensive approach in assessing their risks, including evaluating corporate policies, procedures, practices and products for their potential to contribute to human rights harms,” the Ruger shareholder proposal reads. “This assessment should also evaluate how gun safety products and resources are marketed, distributed, and used to prove whether the Company’s human rights safeguards are effective in practice.”
‘Leveraging investor power’
The Interfaith Center on Corporate Responsibility uses the slogan “leveraging investor power to catalyze social change” to describe its mission, as part of the larger movement for socialresponsibility investing that has gotten fresh momentum the past few years amid the “Black Lives Matter” movement and severe storms and droughts blamed on climate change as a result of pollution.
ICCR lists a half-dozen proxy campaigns underway to date this year to sway companies into addressing human rights. The only other one focused on weapons is targeting General Dynamics, which sells armaments to the military and government agencies. General Dynamics is Connecticut’s largest corporate employer via subsidiary Electric Boat’s submarine yard in Groton.
Ruger is getting pressure from another angle — along with Smith & Wesson and several other gun manufacturers, it is the target of an ongoing federal lawsuit by Mexico which is attempting to hold them liable for gun violence. The industry maintains they are protected under the 2005 Protection of Lawful Commerce in Arms Act, which gun makers have long claimed shields them from liability when others use weapons in criminal or negligent acts.
Remington went bankrupt after years of litigation with the parents of children killed in the 2012 murders at Sandy Hook Elementary School in Newtown, with families accepting earlier this year a $73 million settlement. Families based their argument on what they said was irresponsible marketing of guns by Remington in violation of the Connecticut Unfair Trade Practices Act, drawing a White House statement from President Biden that more states should pass similar laws to give plaintiffs an avenue to sue.
After Massachusetts lawmakers proposed a ban on the production of some types of assault guns, Smith & Wesson served notice last year it would move its Springfield headquarters to Tennessee in 2023 while shutting down a plastic injection molding factory in Deep River.
In 2019, Ruger acceded to shareholder pressure to publish a report on steps it has taken to address gun
safety. Ruger also posts a “human rights policy statement” on its website that does not specifically address gun violence in the United States or globally.
In its annual proxy to shareholders with the U.S. Securities & Exchange Commission, Ruger labeled any further human-rights impact assessment an “affront” to the Second Amendment and a possible “bellwether” for the company’s long-term viability in its words.
Ruger CEO Chris Killoy addressed the request directly in a conference call in early May with investment analysts.
“These folks are not satisfied,” Killoy said. “We do not believe the proposal is necessary or appropriate and they will only serve to harm the company to the detriment of our shareholders.”
CommonSpirit Health and its fellow proponents argue the study would provide shareholders a better sense of the risk in holding shares of Ruger.
Ruger’s board assigns risk assessment to Phillip Widman, the former chief financial officer of construction equipment giant Terex based today in Norwalk. Other risk committee members include Sandra Froman, the onetime president of the National Rifle Association and former Ruger CEO Mike Fifer.
In response to a Hearst Connecticut Media query on Thursday on its stance against producing a human-rights impact statement, Ruger’s chief financial officer referred to a lengthy company statement to investors in its proxy without providing additional comment.
“The inherent lethality of firearms exposes all gun makers to elevated human rights risks,” Ruger states in its proxy to investors. “In selling its firearms to civilians, Ruger assumes they will be used safely, and while that is mainly the case, the grave threat for product misuse and resulting harm to society is not accounted for in Ruger’s governance structures or in policies or practices that would mitigate this threat.”
Ruger had $30.2 million in profits in the first quarter, with revenue down 10 percent to $167 million. The company’s share jumped 4 percent on Tuesday and Wednesday to $67.60, as lawmakers in Congress and state legislatures nationally vowed to stiffen gun control in an attempt to turn the tide of mass shootings in schools and other venues.
On the conference call earlier this month, Killoy said Ruger saw “some moderation” in the early months of 2022 for what manufacturers dub “modern sporting rifles” — those that resemble military weapons but with a lower rate of fire and magazine capacity — and center-fire pistols which pack more of a punch with larger cartridges compared to rim-fire handguns.
“Coming off the highs that we saw in the last couple of years, those two categories for us had accelerated the most — and they decelerated the most as we’ve gone into 2022,” Killoy said in early May.