Colt had union problems in the 80's, and went bankrupt in the 90's, and new investors stepped in - they hired General Keys to run it in 2002, where most people agree they have turned things around.
I wouldn't call it a turn around, because you have to include the military division of Colt's. They have certainly turned the quality around on their civilian guns. I think Colt's makes a first rate 1911 these days, and the reintroduction of the New Frontier revolver was a stroke of genius; gotta give them props for that.
But the problem is, Colt's is over 90% supported by military contracts, and when the US drops the M16/M4; they're screwed because they have no backup plan.
