Manufacturing: Guns 'n' Losses

Is it the tough economic times, the huge appetite for cheap "Saturday-night- sp ecials" -- or both? Last week Colt's Manufacturing Co., a leading maker of commercial and military firearms, filed for bankruptcy under Chapter 11. A $10 million line of credit proffered by the Connecticut Development Authority and an Austrian bank, Creditanstalt, should give the company, the seventh largest gun producer in the U.S., time to reload and reorganize.

There was a time when Colt's .45 revolver was synonymous with the Wild West. But a decline in military and police orders for quality weapons, foreign competition and a seemingly insatiable public hunger for automatic weapons and cheap handguns combined to stifle the 156-year-old firm.