That is in the unlikely event that it actually happened. Vista Outdoors has a contract with the government. If the government decides to break the contract then Vista could walk away and let them run their own plant. What would be their incentive to stay and just fulfill military orders?
In total agreement. Of course, the US Government never intervenes and breaks contracts to the detriment of everyone other than a few insiders, so we really don't have to worry THAT much.
Just ask GM's bondholders from 2009.
Now, there could be some very good reasons why Vista wouldn't walk away. A provision in the 'renegotiated' contract that they're made good for the loss in revenue? The government really doesn't care if they pay a bit more per round if their social engineering policies are still met.
After all, the increase just comes out of our pockets anyway. It's a win-win for them. We have less disposable income to buy ammo with from elsewhere, they 'close a loophole' and we're less able to defend ourselves.