—could we stop a mostly plastic gun at the airport?” he told me.
Koch wasn’t alone in his fears. Israeli intelligence operatives had found out that, not long before Shultz’s visit to Vienna, Syrian ruler Hafez Al-Assad had ordered Glock 17s for his presidential guard. Gaston Glock prepared a special shipment of pistols for Assad with ornamental Arabic inscriptions inlaid in gold. Israel, which monitored Assad’s every move, passed word to Washington about the transaction. The Reagan administration viewed Assad as a Soviet ally, a mortal enemy of Israel, and an instigator of international terrorism. The Syrian president’s interest in the new firearm reinforced Noel Koch’s unease about Gaston Glock and his gun.
Koch’s apprehension was compounded when the Israelis told their American intelligence contacts that emissaries from another terrorist financier, Libyan dictator Muammar al-Gaddafi, had visited the Glock plant in Deutsch-Wagram. The Libyans, whose activities in Europe Israeli spies closely followed, looked over the merchandise but hadn’t made a purchase—at least not directly from Glock.
Israel had its facts essentially correct, according to Karl Walter and his fellow Glock employee Wolfgang Riedl. In separate interviews, they admitted that Assad was an early Glock customer, and Gaddafi, or someone in his inner circle, showed, at the very least, intense curiosity about the pistol. Walter and Riedl insisted that Glock never sold guns to Libya.
Nonethless, Koch had ample reason to be alarmed. The unpredictable Gaddafi remained an active threat to Americans. In December 1985, he reportedly provided logistical aid to Palestinian terrorists who carried out murderous mass attacks on travelers at airports in both Rome and Vienna. Koch, an experienced national security hand who had served as an intelligence operative with a covert Army unit in Vietnam, decided to conduct some personal research into whether the Glock 17’s plastic construction would allow hijackers to sneak it onto planes.
In late 1985, Koch stripped the Glock he received from the West Germans and bundled the components into a duffel bag. He disguised the gun’s main spring by wrapping it around a pair of metal-framed glasses. He separated the magazine from the frame and slide and emptied the ammunition into a small plastic pouch. He then put the duffel bag through the X-ray machine at Washington National Airport. Alarmingly, no one noticed.
Reverberations from this experiment would be loud and long. Koch, for one, was determined to stop the Glock from entering the United States. “We didn’t need another thing to worry about,” he said.
Unaware of the growing consternation over the Glock 17 at the Pentagon, Gaston Glock, Karl Walter, and Wolfgang Riedl were trying to establish a market for the gun in America. Walter recommended that the manufacturer locate an outpost near Atlanta. Georgia was a gun-friendly state, and the city’s large international airport allowed for efficient shipping. The three settled on the quiet suburb of Smyrna.
Riedl felt that the European market alone for handguns was too small. Military and law enforcement orders, by their nature, were unpredictable and subject to political whims. The American commercial market, with its tens of millions of civilian gun enthusiasts, was the mother lode. “I thought if I can get two percent or three percent of the US commercial market, that’s much more than the commercial markets of fifty other countries,” Riedl said.
The son of a three-star general in the Austrian Army, the well-connected Riedl had first heard of Gaston Glock several years earlier from his father-in-law, who was also a senior army officer. “There is an interesting guy,” his father-in-law had mentioned. “He never in his life designed a field knife, and he delivered the best-quality samples among all the industry participating, and all those guys have been in the knife industry for hundreds of years.” Then this “interesting guy” came back and sold a newly designed handgun to the Ministry of Defense. Riedl’s father-in- law introduced him to Gaston Glock, and a week later, the pistol inventor offered Riedl a job.
An engineer by training, Riedl had a comfortable position at the time as an executive at Steyr, a conglomerate that manufactured not only weapons, but tanks, trucks, and bicycles. Government-controlled, Steyr was stodgy, and the road to promotion into senior management was long. “I was interested to work for a small company, but one with potential,” Riedl explained to me. “From what Mr. Glock showed me, I thought the company had potential.”
Gaston Glock was rightly proud of the gun he had designed, but he was devoid of management or finance skills, and fearful of revealing his weaknesses. Glock complained when workers spoke to one another on the job, claiming that if they had time to talk, they weren’t staying busy enough—an approach sure to breed needless resentment. Glock was so nervous about dealing with Viennese bankers that he instructed Riedl to do all the talking at meetings they attended together. “This created a strange impression of a mute business owner,” Riedl said. “Mr. Glock seemed to outsiders as naive or aloof, a little odd. In private, within the company, he made all the decisions, but in public, at this time, he was awkward.”
In November 1985, Glock signed the legal papers that established Glock, Inc., as a Georgia corporation. He wired money from Austria to a new company account in Atlanta, and Walter found a small suburban warehouse- and-office complex in Smyrna. Riedl flew to the States to plot a pricing strategy with Walter. They worked in Walter’s basement, with Walter’s wife, Pam, serving ham sandwiches and coffee.
The pair settled on a commercial wholesale price for the Glock 17 of $360 and a recommended retail price of $560. These levels undercut comparable American and European brands, yet assumed generous potential profits. According to Riedl, Glock’s gross margins exceeded an astounding 65 percent—the manufacturer pocketed $240 on each gun sold. By comparison, manufacturer margins on pistols at companies such as Smith & Wesson and Beretta ranged from 5 percent to 20 percent, according to people in the industry. The Glock’s simpler design and the computerized manufacturing methods allowed for larger profits.
Gaston Glock at first urged his marketing men to try a lower price to boost demand even further. Walter strongly disagreed. “If you sell it for cheap, you will have the image of a cheap gun,” he told Glock. “Quality will always bring you more money.” Glock deferred to Walter’s experience in the American market. It was a crucial early decision, one that eventually made Gaston Glock a very rich man.
Riedl drafted an initial sales plan. Under the plan, the company’s gun operation would break even in its first year if it sold 8,500 units. By comparison, S&W and Beretta each sold hundreds of thousands of guns annually. For Glock, the sale of knives, bayonets, and other products, such as machine-gun belts and plastic fragmentation grenades, to the Austrian military provided a revenue cushion for its fledgling firearm business.
That December, Riedl and Walter traveled to Denver for the annual trade show of the National Association of Sporting Goods Wholesalers. Industry rumors had piqued interest in their gun, even though it wasn’t widely available yet in the United States. The Austrians themselves had only a handful of pistols to display. They borrowed exhibition space from one of the wholesalers with whom Walter was friendly.
The response was overwhelming. On the very first day of the event, Riedl and Walter logged orders for 20,400 guns—far more than Riedl’s target for the entire first year. It would take months to manufacture and ship that many pistols to the United States. “We couldn’t get enough out the door,” said Walter—the sort of predicament any small company would love to have.
To celebrate their triumphant debut in Denver, Riedl and Walter invited sales representatives to join them that night for free drinks at the bar of a Holiday Inn. The men from Glock arrived in navy blue business suits and ties, as they had dressed for the trade show. The Americans, to their dismay, turned up in cowboy hats, denim jeans, and pointy Western boots. “A little embarrassing,” Riedl admitted.
The next morning, he and Walter rushed to a Western outfitter to buy Stetsons and the rest of the frontier costume. Feeling prepared, they invited their new colleagues back to the Holiday Inn bar on the second night of the wholesalers’ show. This time, the Austrians came attired like John Wayne in
It turned out that the previous evening had been a special Western Night at the Holiday Inn—which was why everyone had dressed like a cowpoke. “We had something to learn about the United States,” Riedl said.
A few weeks later, the Glock team received another lesson in business, American style. During a retailers’ trade show in Dallas, an FBI agent with whom Walter was acquainted asked the salesman what he thought about that morning’s column by Jack Anderson in the
Walter assumed the gossip was some kind of strange joke. A couple of days later, when he returned to his still-bare office in Smyrna, he discovered that the FBI man had not been kidding. “Sure enough,” Walter said, “the shit hit the fan.”
Jack Anderson, in the sunset of a long muckraking career, thrived on scandal. Factual accuracy was not his
