So what went wrong? Starke blames weak leadership. The company also hasn't kept up with the times. Compact and light handguns have been popular in recent years. While Colt makes compact pistols like the Mustang and the Defender, customers seem to prefer other models made by another handgun maker Glock. American cops carry Glocks, which are known for being lighweight despite their ability to hold high capacity magazines. Though Colt is no longer the standard issue side arm, it makes a wide variety of other weapons for military, including the AR-15, the M-16 and the M4, and also the M203 grenade launcher. But the military is no longer Colt's cash cow as the wars in Iraq and Afghanistan are winding down.
I had a long conversation with an insider about this in the press room at the NRA national meeting, and the short answer is "felonious mismanagement."