It’s no secret that European weapons makers love the U.S. civilian market. Faced with stricter gun laws and tougher export controls in their own countries, companies like the German Sig Sauer and the Austrian Glock have built reputations for their handgun expertise across the Atlantic.
However, Germany’s Heckler & Koch (H&K), which specializes in assault rifles and other military-style weapons, is finding that its products have some prestige among U.S. gun owners.
According to H&K spokesman Florian Bokermann, “The product portfolio we offer in the USA is comprised almost exclusively of guns whose customers are sports marksmen, or whose buyers need them for self-protection.”
But a visit to the company’s U.S. website shows that H&K also sells four different military-style rifles on the U.S. civilian market. “That would be semi-automatic rifles with pistol grips and high-capacity magazines,” said Nicholas Marsh, a small-arms expert at the Peace Research Institute Oslo. “And those tend to be the favorite weapons carried by people who carry out mass shootings. They’re very deadly.”
Though statistically handguns are the most common guns used in shootings in the U.S., the use of assault rifles (in both the Dayton and El Paso shootings, just to name recent examples) has reignited questions about how appropriate they are for “self-protection.” Because these types of weapons are legal in the U.S., H&K is bolstering its business by catering to civilians in this country.
Understanding the business strategies of gun manufacturers is key to understanding their role in gun-related violence, and the evolution of H&K’s sales strategy is particularly notable — especially a recent decision to pursue an “ethical” strategy.
A Company That Kills People Worldwide
In July, H&K convened an extraordinary annual general meeting. The scene of the meeting was odd enough: a 100-year-old bathhouse where workers in a nearby gun powder factory would wash themselves after a day’s work arming the German Reich. But what made this particular meeting so strange was the uneven confrontation that took place — between protesters who had been harrying the company for decades and company executives who had suddenly decided to listen to them.
The event, which took place in the picturesque medieval town of Rottweil, felt more like a tribunal than an annual general meeting. The real investors were mostly absent, represented by a few silent men with leather briefcases, which meant the room was mainly filled by around 20 “critical shareholders,” as they call themselves — a collection of peace activists, young students, local campaigners, journalists and church representatives.
This disparate group had each come with one of H&K’s 21,657,289 shares, which, thanks to German stockholder law, gave them the right to ask the board questions — as many as they liked and for as long as they liked.
For two straights hours, CEO Bodo Koch, CFO Björn Krönert, and board members Martin Sorg and Nicolaus Bockhardt sat on stage in the old bathhouse and listened while the shareholders queued up to deliver a relentless inquisition from the speaker’s lectern.
There were nearly 125 questions in all, some printed in advance, others formed on the spot. Some preceded with speeches about the danger that the company’s products could be used in mass shootings in the U.S., police repression in Hong Kong or murky deals in Saudi Arabia. By law, no one was going home until each one had been answered. (H&K had even brought along a lawyer to ensure procedures followed correctly).
“Do you hear the screams of people who have fled your products or have been injured by them?” asked Alexander Schleicher, a Catholic priest.
“How do you assess the repeated reports in various media outlets that Heckler & Koch weapons are being used both by government troops in Yemen and have fallen into the hands of jihadists?” Ruth Rohde, a student, wanted to know.
“In the past 12 months, has Heckler & Koch used operational facilities in other countries to get around current export bans to Saudi Arabia?” asked Frank Chudoba, a journalist for a local newspaper.
Meanwhile, Charlotte Kehne, an arms export control specialist at the German campaign group Aktion Outcry–Stop the Arms Trade, wanted to know how H&K could ensure that weapons produced in the U.S. wouldn’t be re-sold in other countries.
There was a lot of ground to cover: For 70 years, Heckler & Koch has been a source of firepower to police forces, North Atlantic Treaty Organization (NATO) armies, Middle Eastern dictatorships, Latin American mafia organizations and terrorist groups everywhere. For the last few years, it has also been a supplier to the U.S. civilian market, with a plant in Virginia.
But what made this event so surreal was the reaction of the well-coiffed executives on stage. The company men did not ignore the activists’ questions or grimly set their faces into a rictus of suppressed guilt. Instead, Sorg, Koch and the others listened, interrupting only to ask that the questioners slow down so that their “back office” (some 25 staff listening remotely from upstairs) could more easily note down the details faithfully and come up with answers.
Afterward, veteran anti-arms-trade campaigner for the organization Global Net–Stop the Arms Trade, Jürgen Grässlin, was grappling with what he had just witnessed. Grässlin has been a headache for H&K for more than 30 years. It was he who pressed the charges against the company in 2010 that led to the firm’s conviction earlier this year for an illegal arms sale to Mexico – 4,686 G36 assault rifles shipped between 2006 and 2009, in violation of German arms export laws, which stipulate that guns may only end up in places set down in the end-user certificate. That led to a fine of €3.7 million (US$4.1 million), an unprecedented punishment for a German gun-maker.
“I stood there and told them that someone is killed by a Heckler & Koch gun every 13 minutes. Any other arms company and they would’ve stopped me and said: ‘Repeat that and you’ll be served a cease and desist order,'” Grässlin told Truthout.
“After three and a half decades of hard confrontation, blockades, legal action against us by Heckler & Koch, they’ve moved to this culture of communication, where we listen to each other, and take each other seriously,” he added.
This is all because Heckler & Koch is trying to do something unique in the world of arms dealing.
A Weapons Manufacturer Tries to Greenwash Its Public Image
Two years ago, H&K revealed that from now on it would pursue what it called a “green country” strategy. That meant it would only deliver weapons to countries in the European Union and NATO, or what are known as “NATO equivalent” countries, such as Switzerland, Japan, Australia and New Zealand. This was the first time that a German arms company had an export policy that was more restrictive than the government’s – after all, Angela Merkel’s administration is still approving weapons sales to Israel and Saudi Arabia.
This strategy was adopted in part by necessity. The Mexico scandal hit hard in Germany, where the national public broadcaster, ARD, aired a documentary and a fictional TV movie about the affair. But things hadn’t been going well for the company before: In 2015, the German Defense Ministry canceled new orders for the G36 after reports that its accuracy failed in hot climates. This left H&K in a position it had not been in for decades — competing for the contract to supply the German military’s standard rifle. On top of that, the financial situation was disastrous. Reports emerged last year that the company was carrying a debt of €380 million (US$420 million) and was being kept afloat by loans from its majority shareholder, Andreas Heeschen, who never appears in public.
All these factors, but especially the Mexico court case, left H&K with plenty of incentive to clean up its image. “As a consequence of [the Mexico scandal], we have undergone a comprehensive transformation process in the past few years,” company spokesman Bokermann told Truthout. “Today, Heckler & Koch is set up completely differently to the middle of the last decade. Heckler & Koch is expressly committed to its social and legal responsibility.”
These changes included a basic change to its sales strategy, as well as the establishment of “new ethical standards.” The company also claims to have adjusted its compliance system so as to “constantly sharpen the sense of responsibility of the company and its employees,” while potential business partners are subjected to a “strict compliance check,” as Bokermann put it.
Arms trade observers think it’s an unprecedented new idea. “I can’t think of another private company that has done this,” said Marsh. “Usually, the gun-making companies say, ‘Ethical and legal decisions are beyond our pay-grade; we leave that to the government.'”
But it might also be a tactical retreat, trying to head off new government attention following the unpleasant brush with the law over the Mexico deal. “I would suspect it’s a way to prevent even tighter regulation coming in,” said Marsh.
Andrew Feinstein, author of a definitive history of the weapons business – The Shadow World: Inside the Global Arms Trade – is also skeptical that this is anything more than a PR strategy for pleasing two specific audiences: investors and the German government.
“Investor sentiment is very important to a company like Heckler & Koch,” Feinstein told Truthout. “If any grouping in the investor community decided that Heckler & Koch should be the subject of an investor boycott, it would significantly increase the pressure on the majority shareholder. In targeting the financial community in its PR, it means the value of the company is likely to actually go up.”
On top of that, becoming an “ethical” company makes it far easier for the German government to offer H&K contracts. “The German government can say, ‘This is a principled, ethical defense company, and that’s why we’re so supportive of it, and that’s why we want to do business with it,'” said Feinstein. That is also likely, most observers say, why the company has recently hired Harald Kujat, a retired top German military general, as its new board chairman.
“Of course, it’s better that these companies make these statements than they don’t,” said Feinstein. “And I think in the case of H&K, it’s been a consequence of the court case and civil society pressure.”
Grässlin, who knows H&K better than perhaps anyone else, thinks the company pulled a sleight of hand at the annual general meeting with the way it subtly redefined its new “green country” strategy. “Last year, [H&K] made very clear how the ‘green country’ strategy should be defined,” Grässlin said. “Namely, no weapons exports to countries outside the EU, NATO or NATO-associated countries.”
At the annual general meeting, however, the company’s board members were suddenly including another category in its list of “green countries”: those that are party to certain international treaties, or have agreements with the International Criminal Police Organization (Interpol). That last condition is particularly baffling, since Interpol is an administrative network that includes pretty much every country in the world. “They’ve made a Swiss cheese out of the bulwark they built,” said Grässlin.
One of the biggest holes in that Swiss cheese is the U.S. civilian market, and H&K’s decision to sell its specialty – assault rifles – there. H&K’s annual report for 2018 indicates that new products are being developed specifically for the U.S. market, even though it is already flooded. The Small Arms Survey says there are 120.5 firearms for every 100 U.S. citizens, and more than half of violent deaths in the U.S. are caused by guns.
On top of this, there is plenty of evidence that guns bought in the U.S. are taken across the border into Mexico. The Center for American Progress reported last year that some 70 percent of the 105,000 firearms confiscated by the Mexican police between 2011 and 2016 in the course of criminal investigations came from the U.S. Given that it is difficult to control where guns end up once they’ve been bought legally, H&K’s “ethical” sales strategy seems fatally flawed in the U.S.
As H&K’s critical shareholder Kehne put it in her speech at the annual general meeting, “Many aspects suggest that this isn’t a green market at all, but a deep red one.”
When it comes to selling guns, even the so-called ethical options don’t always look that ethical.