- The Washington Times - Friday, June 1, 2012

Franco Beretta is the vice president and managing director of Beretta in Italy, executive vice president of Beretta USA (the manufacturing, distribution and marketing arm of Beretta in the United States) and one of two sons of Ugo Beretta, president of Beretta Holding. He began work in the engineering department of the business while in college more than 25 years ago. The famous firm, with its headquarters nestled in the Alps, dates back almost 500 years when the family produced arms for the doge of Venice. It has been family-run for 16 generations. An official supplier of the U.S. military, more than 600,000 American-made 9 mm Beretta pistols have been delivered to U.S. troops. Today, the company produces approximately 1,500 weapons daily and achieved sales of $600 million in 2011. You can find out more about this historic gunmaker and its firearms at: berettausa.com.

Decker: Your family business has been in operation since 1526, making it the world’s oldest firearms manufacturer. Management books instructing executives how to run companies grow on trees, but none has the benefit of centuries of handed-down experience. What practices have made Beretta survive and thrive so long in such a competitive industry?

Beretta: One of the keys to our success is, in my opinion, the ability to resist the temptation to be a “shareholder” rather than a “manager.” After five centuries, it is sometimes easy to think that the company will simply run itself. My father and the many generations of leadership that came before him have always been very clear on this concept: It might sound nice to heed the temptation of managing from an island in the tropics, but one can only provide leadership when his or her finger is securely planted on the pulse of the company in order to quickly react or take advantage of new opportunities.

This concept must be tempered with the need to travel to where the business is happening, to understand existing and emerging markets, consumer needs and new trends. One last secret is about keeping resources inside the company: reinvesting profits with an eye to immediate and long-term projects and challenges, and with a breadth that goes beyond the next few years. To look at the next generation is one way to ensure that there is constant growth and improvement.

Decker: How important is the American market to Beretta and the gun trade in general?

Beretta: It is more than important: It is fundamental. Firearms are part and parcel with the American culture. From the right to self-protect to the culture of harvesting what the land has to offer, the use of firearms as a tool is in the DNA of most Americans. I feel that, today, if a firearms manufacturer is not actively engaged in the American market, it’s virtually not in the firearms business. At Beretta, we are present in the U.S. market through products manufactured in Italy, but we have been manufacturing right here in the United States for decades. The decision to manufacture in the USA was in response to legislative limitations which prohibited the importation of certain products, but it was also an acknowledgement of the fact that there are brilliant resources for development and manufacturing in America, and not taking advantage of them would have been short-changing our ability to sustain growth. The ability to tap into the experience of people whose culture is so deeply entwined with the world of firearms becomes, in certain cases, essential.

Our conviction has obviously paid off handsomely: Our R&D and manufacturing have steadily grown over the past several years, and will almost double in size in the near future. Our Accokeek, Md., plant employs now hundreds of American workers and is the engineering and manufacturing outlet for firearms that aren’t produced anywhere else in the world. It also offers dedicated lines for the U.S. market for products like the 90-series of handguns (also known as the M9, issued to all the branches of the U.S. armed forces) and the much-anticipated ARX160.

Decker: The United States is a rare example of a nation where the individual right to own firearms is generally protected for hunting, collecting, sport or personal protection. What trends do you see in laws around the world, and are gun-ownership restrictions a long-term concern for your enterprise?

Beretta: I think that - after the many political changes that have occurred around the world in the past 15 years - world markets have reached a stabilization point. After the fall of the Berlin Wall and the disintegration of the Soviet bloc - which opened new, large hunting markets for us, like Russia and Kazakhstan - many world markets have reached a point of maturity. Beretta continues to cater to them through new products and technologies that serve their specific needs. While certain markets continue to be completely closed to us, our ears are constantly to the ground. One of the keys to longevity is the ability to understand the markets we serve, and even anticipate their needs. A global reach makes this task more challenging but also substantially more rewarding.

Decker: I hear that your wife is driving a red Porsche in an upcoming charity car race. What’s that all about, and is it controversial that such a famous Italian name isn’t behind the wheel of a red Ferrari instead?

Beretta: My family has always been convinced of the importance of re-investing profits to ensure growth and prevent stagnation. These reinvestments spill beyond the confines of the manufacturing plant and the offices and expand to the community we serve: The small town of Gardone Val Trompia (which headquarters Beretta Holding), for example, used to have a day care created and funded by my family to offer child care for the sons and daughters of Beretta workers; we used to have a summer camp for employees’ kids at a mountain retreat not far from Gardone. Today, we have a beach house where our employees can take turns spending a weekend by the sea, and Beretta was a major financial donor in the development of “Pietro Beretta Retirement Home,” to which we still contribute every year.

As the reach of the company grew worldwide, so did the process of “giving back.” In the 1980s, we created a foundation whose objective is to help in the research and therapies to defeat cancer. Interestingly, there is an American link to this foundation: When Beretta reached a settlement agreement with General Motors over the name of one of their vehicles, the Chevy Beretta, the two companies decided to turn it into an opportunity for charitable giving. GM made a sizable contribution to the Beretta Foundation, allowing it to do even more and touch even more lives.

Today, my wife Umberta carries on that charitable tradition with fervor and enthusiasm and feels very passionately about the importance to share our good fortune, and to show our son, Carlo, the importance of giving back and creating a better world for the next generation. The cause she’s championing in this race is that of RED (joinred.com), an organization whose objective is to combat AIDS and protect unborn children from the transmission of the virus. Umberta will be driving from London to Montecarlo, via Paris and Milano. She and her co-pilot are also very involved in the collection of funds before the race, and even created a website to help donations (crowdrise.com/umbertaandgabriella).

Why not a Ferrari? I think the choice to go with a Porsche is for the best. For a racecar enthusiast like myself, the risk of my taking and keeping a car like a red Ferrari for my own enjoyment, driving it down the winding roads of the valley where Beretta is located and not giving it back, was much too great, so Umberta decided to go with the still-powerful but more manageable Porsche, which was generously donated (and painted a special shade of red) by Saottini, the local Porsche dealer.

Decker: Americans tend to be rather inward-looking as a people, but the modern global economy ties us all together more than ever. The dark clouds of the European debt crisis are looming large. As a businessman, what do you think needs to be done to address this financial emergency?

Beretta: I don’t consider myself a guru in global policies, but I think that the root of many of the woes we’re facing originates from the fast globalization process that the world has undergone in the past couple of decades. New markets, economies that suddenly opened up and flourished, coupled with galloping technological advancements, have allowed for an unprecedented flow of ideas and goods. These changes, in my opinion, are for the better, but that required adjustments in policies and domestic and international approaches to respond to these shifts in long-established balances.

A new model is now required; this is evident in the fact that the only companies that really thrived, and not just survived, were able to do so by questioning the existing approach to most things, while those that clung to an old model have been vanquished or acquired by more nimble and adaptable enterprises. The same can be said for political models (and nowhere is this more painfully obvious than the eurozone.) I think politicians anywhere in the world have a great challenge before them: Adapt and rethink the model or be replaced. My only hope is that it is not too late already to rethink the existing model. Maybe a younger generation, a more adaptable one, and one that has been raised to understand global thinking, might be the answer to the question, “how do we adapt to change?”

Brett M. Decker is editorial page editor of The Washington Times. He is coauthor of the new book “Bowing to Beijing” (Regnery, 2011).

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