Colt Industries' firearms division will be sold to the State of Connecticut and striking workers and managers.
Companies Colt is putting its firearms division up for sale.
Its firearms division, based in Hartford, had been coping with a bitter strike since 1986.
Shortly after announcing withdrawal of the AR-15, the parent company put the firearms division up for sale.
Officials have denied that either the loss of the contract or the strike prompted the decision to sell the firearms division.
To Mr. Rossi of the firearms division in California, the question is not whether the technology works, "it is whether we have the political will."
A Colt spokesman, Michael Dunn, said the company plans to emphasize growth in those areas and did not feel the firearms division meshed with its goals.
In addition to the assault rifles, the firearms division makes revolvers, automatic pistols and specially engraved models for commemorative or historic events.
The firearms division was profitable, but Colt says its low offer reflected uncertainty in the gun industry.
Colt announced that it would put its profitable firearms division up for sale.