The Death of the Ruger Red Label II
What happened? In short, Ruger simply miscalculated the cost of production. They no doubt are and were well-aware that they need to be under the mid-range market leaders (Beretta and Browning) in price point, as well as actually make money, in order for the new Red Label II to be sustainable. It did not work out that way. Further, the strength of the dollar vs. the Euro and the Japanese yen makes this goal much more difficult than it was just a year or two ago.
In 2013, Ruger manufactured and sold 2,294 shotguns, according to the ATF, and the new Red Label was released late that year. It was not a cobbled-together redesign. Dwight Potter was hired away from Browning in part, I suspect, for the Red Label II project. A lot of effort went into the re-release.
I would expect at least some initial issues with a new line and new tooling. I do not know the actual numbers, but let's speculate 1% of the first 5000 new RRLs had problems. Still, that is 50 shotguns and everyone who has a problem will post about it somewhere, or grumble to their acquaintances, at least 50 times. Then, the "I hear" syndrome starts. It means little in the long run, if there is indeed a long run. Initially there sure was, for the original Red Label was in production for over thirty years and developed a strong following.
If you are losing money on a product, you are not going to make it up in quantity. Ruger takes care of problems, they always have, but there should be no mistake: repair and replacement costs a lot of money. No one expects Ruger employees to work for free.
The first sign (at least to me) that things were going tragically wrong was the radical jump in MSRP on the Ruger website. It was $1399 MSRP when I tested mine, right at $1000 street price. Then, seemingly overnight, up it went to $1795 MSRP. It was as if Ruger was trying to discourage new orders for the Red Label, which they actually were.
If the numbers do not work, you have to pull the plug and cut your losses. That is what any wise businessman would have to do. There is a good reason pre-production cost figures are called estimates and projections.
In January 2015, a Ruger representative said:
"The (new) Red Label has been removed from the web site and will not be present in the 2015 catalog. Our plan is to ramp down the production of the O/U in the first third of the year. Our current backlog is larger than our capacity, so we removed it from the marketing material. We are releasing about 250 20 gauge models this week, but have no plans to make more. While we are all pretty upset having to cease production (again), the numbers don't lie. The current design is just not able to be manufactured for the retail price we need to hit."
There is no other explanation than the obvious: Ruger stuffed it up, embarrassingly so. To actually release 250 shotguns in 20 gauge and abruptly throw your hands up in the air is tantamount to admitting a stinging defeat. I predicted the new Red Label II would be a hit in my article The Ruger Red Label II O/U Shotgun is a Sure-Fire Hit:
"For the money, $1000 or so at discount retail, the new Red Label is quite an accomplishment. No other name-brand manufacturer has a competitive product, not even close. The $1000 O/U is largely the import market creature of cheesy chemical fake case-coloring or belt-buckle adorned receivers, spotty black chrome finishes instead of bluing, choke tubes that look like they were made with a rat-tail file and vinyl-crucifix recoil pads. The Red Label is a huge jump over that clumsy class of low-grade double. The Red Label II is not beyond improvement: the automatic reset safety is annoying, and the triggers could be lighter and crisper. However, the Red Label II's barrels are lighter, it is better handling and it is softer-shooting, with a generous, well-fitted recoil pad. The Red Label began its journey as a 20 gauge, and that's the gun to which I am really looking forward."
Well, woulda-coulda-shoulda and I could not have been more wrong. Ruger is a clever, extremely well-managed company, lauded by Forbes as #9 on their list of America's Best Small Companies. It goes to show, at present, a popular priced, American made, O/U shotgun is not viable in the marketplace. No one has tried at any significant level and been successful, except for Ruger with the original Red Label.
Whether you are making donuts, refrigerators, or widgets, if you project that a given amount of machine time nets you 100 pieces of finished product, but the reality is half of that, it won't last for long. The Red Label II was a brief, laudable attempt, but the record shows production costs were too far off the mark.
Copyright 2015 by Randy Wakeman. All rights reserved.