Cannondale closing US production facilities

Italian star Ivan Basso races his Cannondale in the recent Tour of California. (Doug Pensinger/Getty Images)
Dorel Industries, parent company of Cannondale, Schwinn, GT, Mongoose and Sugoi, announced it was consolidating locations in the United States, while phasing out production in its Bedford, Pennsylvania factory.
The number of Bedford employees will shrink from 300 to 100 by late 2010, as Cannondale moves 100 percent of its production to its new facility in Taichung, Taiwan. The Bedford facility will be used for final bicycle and Headshok assembly, some CNC machining, testing and quality control, bicycle warranty repair, inside sales/service, distribution and customer support/administration (including a new call centre on-site).
The Lake Forest, California and Longmont, Colorado facilities, home to GT and its testing facilities for years, will close as part of the consolidation. All high-end jobs will be based out of Cannondale's original Bethel, Connecticut facility, with some current employees being offered jobs in Connecticut.
Pacific Cycles, based in Madison, Wisconsin, will focus strictly on mass market bikes, where its roots lie since Chris Hornung began selling bikes from the Orient in the mid 1970s. Dorel bought Pacific for US$375 million in 2004.
According to Dorel, all North American product development, marketing and business management functions for all four cycling brands (Cannondale, Schwinn, GT and Mongoose) will move to Bethel, within the newly named Cycling Sports Group (formerly the Cannondale Sports Group).
“Our vision is to create the most innovative and admired company in the recreation and leisure marketplace, and to become a global leader, which is why the Dorel segment was established in the first place,” said Robert Baird, president of Dorel’s Recreational/Leisure segment. “The strategy for transforming that vision into reality requires a unified, collaborative, and highly engaged workforce, relentlessly committed to innovation and supported by management in rapidly advancing the quality of the products and services we deliver.
“The Cannondale purchase led us to segment our bicycle business to provide best-in-class service to the distinct retailer categories," he added. "Naturally, Cannondale and CSG are key components of our commitment to our independent bicycle dealers (IBD) as we realize how critical IBDs are to the cycling community and to us.
"In addition to the plans outlined above, and to ensure we delight our customers with our distinctive brands, innovative products and impactful in-store programs, we are also consolidating our North American CSG operations to two locations from five.”
Dorel has created 'five centres of excellence' around the world, with each location focused on a specific market segment or expertise. These centres will be based in:
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- Bethel, Connecticut (global headquarters and innovation centre for high-end and enthusiast bicycles)
- Basel, Switzerland (for high-end and enthusiast bicycles sold/marketed in Europe)
- Madison, Wisconsin (for global mass market products)
- Vancouver, British Columbia, Canada (for active lifestyle and urban apparel and footwear)
- Taichung, Taiwan (for coordination of sourcing, testing and quality of Asian suppliers/partners)
Bedford has been Cannondale's domestic bicycle manufacturing hub since the first model, the ST500, rolled off the line in 1983. Company founder Joe Montgomery sold panniers and child trailers in 1971, taking the company public in 1995. A misguided effort into motorcycle production brought the company to bankruptcy in 2003.
Italian road star and 2006 Giro d'Italia winner Ivan Basso currently races a Cannondale SuperSix HiMod carbon road bike with the Liquigas team. Stars who've raced Cannondales include Mario Cipollini, Damiano Cunego and Gilberto Simoni (Saeco), Tinker Juarez, Brian Lopes, Missy Giove, and Myles Rockwell.
Dorel, founded in 1962, is a Montreal-based publicly traded company with annual sales of US$2 billion. Dorel purchased Cannondale and Sugoi from Pegasus Partners for nearly US$200 million in early February 2008.
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User Comments
There are 17 comments on this post
Showing 1 - 17 of 17 comments
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Uzbek
Posted Fri 3 Apr, 6:59 am BST Flag as inappropriate
Verbiage alert! What a hilarious press release.
"Today is the beginning of a very exciting period" = the new boss has to start changing things fast or we are done for.
"The strategy for transforming that vision into reality requires a unified, collaborative, and highly engaged workforce, relentlessly committed to innovation" = we are cutting a load of jobs so the rest of you have to work harder
"to ensure we delight our customers with our distinctive brands, innovative products and impactful in-store programs, we are also consolidating our North American CSG operations to two locations from five" = we are cutting sites too (and shifting production to Taiwan).
Would it really be so terrible to say (in plain language) that the congomerate is feeling the pinch, working hard to be more efficient but still intends to offer great products?
This corporate ordure actually makes me think less of the brands. Does it convince anyone anymore?
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Beachgrub
Posted Fri 3 Apr, 7:17 am BST Flag as inappropriate
Yeah another solid US brand goes down the hill into a generic conglomerate with GT. I still love my old GT Zaskar HT I bought right off the factory floor more than a decade ago. I rode the new ones recently just to see and what a pile of crap. They are such a sad shell of what they once were. There was a time when Schwinn was good also though I don't really even remember that.
I ride a well made and fun riding Santa Cruz now.
In the market for a road bike though and may just buy one of the last US made Cannons. Or maybe a Trek. May as well support someone who is still sticking to it for now. Wish I could afford one of those beauty handcrafted Ti's.
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steve_l
Posted Fri 3 Apr, 8:42 am BST Flag as inappropriate
This is poignant, not just for the Cannondale "Made in the USA" workers, but for biking in general. C'dale made Al bikes popular -they made oversized tubes popular, now their work is outsourced to a facility off mainland china.
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Uzbek
Posted Fri 3 Apr, 8:51 am BST Flag as inappropriate
It is a shame for US workers sure, but somebody in Taiwan will be happy to have a more secure job.
I have no specific issue where my bike is made as long as the quality and design are good. I've owned three 'Dales over the years and the US built MTB's were hardly a paragon of reliability!
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chuckcork
Posted Fri 3 Apr, 1:15 pm BST Flag as inappropriate
"The strategy for transforming that vision into reality requires a unified, collaborative, and highly engaged workforce".
Well, except for those who are being fired, of course!
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Lampwick
Posted Fri 3 Apr, 2:10 pm BST Flag as inappropriate
I live I Pennsylvania...less than a few hours drive from where my C'dale road bike was made. It is the 5th one I've owned, from the brutally harsh 3.0 to the CAAD8 I now ride, which is fantastic. It will be my last. Sad...
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andystorey
Posted Fri 3 Apr, 3:40 pm BST Flag as inappropriate
a real shame. turrned a decent brand into any generic stickered up bike.
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Shiny Flu
Posted Fri 3 Apr, 5:59 pm BST Flag as inappropriate
Dorel has just taken away one of the key selling point of buying a Cannondale.
As of 2010, it's going to have to compete with all the other Taiwanese big guns that are already established and some providing far better value for money (Scott/Giant).
It's not so much a matter of quality, both the US and Taiwan produce some very comparable frames. I think Dorel doesn't understand that us bike-freaks buy more than just a frame and associated technology.
Why not adopt Trek's model of production and keep high-end production state side?
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Juju_uk_68
Posted Fri 3 Apr, 6:09 pm BST Flag as inappropriate
At the end of the day, Cannondale is a very "desirable" brand name. Two identical bikes, one from Taiwan and one from USA will not appeal to the same buyer. You might take a pragmatic view and say "they're the same" but Cannondale bikes are expensive, because of the US pedigree, and purchasers "buy into" the ethos of the brand.
Its like watches. You pay a fortune for a Tag Heuer, but a similar watch from Citizen,Seiko are 1/5 of the price for an equvilent standard. But Tah Heuer ownwes want their watch to say more than "the time".
If the desirability of the brand falls, without a "repositioning" of the pricing strategy, then you jsut end up with mass produced Taiwanese bikes. They become no more "special" than Giant or any other far easter brand.
I forecast the death of the brand inside 3 years. You cant just "make the bike the same, but cheaper", and expect to make the simple calculation that "overheads = $200 less per bike" = "$200 more profit per bike".
Given bike sales are still rising and with recession, labour costs could/should be dropping, if they can't make money now, they never will. I'd have pushed the brand further upmarket and charged more - they got Schwinn and GT for the low end.
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spin_to_win
Posted Fri 3 Apr, 10:56 pm BST Flag as inappropriate
Once again showing that the huge investment in technologies/people skills that the far eastern production centers have made are paying off. Brands such as BMC,SCOTT,SPECIALIZED etc ( list only grows.) are all manufactured in this outsourced way, Purchasing,maintaining, Carbon production facilities cannot be cheap! Reducing their production costs allows more funds for development we can only hope. Perhaps we shall see more of cannondales innovative products making it to the market place?
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bresson
Posted Sat 4 Apr, 2:56 am BST Flag as inappropriate
C'dales were as American as a Cadillac or McDonalds. Hard to see manufacturing, etc for the brand relocating to Asia.
No offense to off-shoring enthusiasts but all things being equal in a bike, "made in the USA" was always a tie-breaker and led to my second C'dale MTB bike in 2006. Now that manufacturing is based in Asia, that special cachet is all but gone to me.
C'dale is now no different than Giant or Specialized. I'll turn my attention to Ellsworth, Turner, or Yeti.
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Buckled_Rims
Posted Sat 4 Apr, 1:39 pm BST Flag as inappropriate
What I can't understand is Cannondale has a great name, and being made in USA is a premier bonus, so why throw it all away?
No offense to the Asian workers or factories, but I really do like a "Made in the USA" sticker on the frame.
This reminds me of of my other passion - guitars. Despite Fender/Gibson off-shoring, there's always been a huge demand of USA products and I for one would rather spend money on a good qualtity USA product.
I can't help but feel Dorel needs to look at the likes of Fender who have been down this route since the 1980's and are gradually rebuilding their USA facilities.
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frenchfever
Posted Sat 4 Apr, 3:56 pm BST Flag as inappropriate
the good old days are dead !! Welcome in a capitalist world !
it's a big mistake,american workers or european workers are customers of asian products.
these greedy people destroy the greenland into ashes....thanx to wall street and the bunch of idiots making people greedy.
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GarethPJ
Posted Sun 5 Apr, 5:25 pm BST Flag as inappropriate
What I don't get is why being made in the USA is considered such a great selling point. My experience of other US built machinery is limitted to cars and they tend to be built with looser tolerances than the average shanty town and shut lines inspired by the grand canyon.
Beachgrub's comment that "another solid US brand goes down the hill into a generic conglomerate with GT." is laughable. The company is only 38 years old after all, and has already gone bust once and has had two changes of ownership in the last six years. I seem to recall that Canondale was a backpack company that moved into bikes on the back of the bike boom. Hardly a solid brand then.
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ESHER SHORE
Posted Mon 6 Apr, 6:57 pm BST Flag as inappropriate
the biggest shame is the loss of more domestic manufacturing - in other words skilled workers
once these jobs go, they will never come back, and it weakens any country to lose skilled manufacturing labour - there is real strength in having a diverse economy as we cannot all work in banks (!!), call centres and branches of Tesco
the Taiwanese factories make VERY good bikes and frame, but its always a real shame when any domestic production facility closes its doors
Cannondales were always sold at a premium price, and that reflected the USA fabrication
It seems the new owner wants to take the brand "mass market" and to do this, higher volumes of cheaper off-shore production is the only way this can work
what about the UK? who do we have left? Orange, Middleburn, Hope? and a handful of small custom frame builders.....
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Spector
Posted Fri 10 Apr, 2:36 pm BST Flag as inappropriate
I'm absolutely disgusted by the whole thing and I called their headquarters to complain directly -- I had bought my Cannondale from them BECAUSE they were American-made. I could have spent far less and got another Chinese-slave-labor-made bike dripping in welds, but I wanted a high quality American bike, made by Americans. A Cannondale made in Taiwan is nothing but a worthless label slapped on a cheap Chinese bike, no different from a GT or a Specialized or a "Schwinn." And Buckled Rims, BIG offense straight to Asian manufacturers from me, pal. They're nothing but a modern version of slave labor and their masters. They make pennies and slave away in unsafe, third-world factories cranking out whatever garbage their masters order them to ship off to Wal-Mart, or in this case, Doral/Cannondale. How can American workers compete with slave labor?
It sure would be nice to be able to complain to someone in the government about this kind of destruction of American industry due to unfair trade practices.... Artificially devalued Chinese currency only makes things worse. How many American made bikes are the Chinese consumers now able to buy? Do they even allow them in for import? Maybe a small US tariff on the industry is what Doral should have really worked for, rather than so willingly moving to destroy the last major American bike manufacturer!
I really dont know where I'll get my next bike from, but if Cannondale really goes through with this move, I won't bother giving them any of my money.
And Doral, with your saccharine little "vision is to create the most innovative and admired company in the recreation and leisure marketplace, and to become a global leader," you had better listen up to the many Cannondale consumers who are dead set against this move. Do this and you will alienate them and create "the most HATED company in the recreation and leisure marketplace."
Ask Macy's how that whole 'buy up and destroy Marshall Field's and other cherished retailer brands" business plan is going! Ask them about what consumer boycotts and public protest marches will do to a company! Or maybe just call up Coca Cola and ask about that little New Coke incident....
Doral is going to make a terrible, terrible mistake, and it will be the effective end of Cannondale as a cache bicycle brand. The Cannondale brand will devolve into nothing but another damn bike made on the cheap by Chinese slave labor drones, who replaced American workers who once crafted them here. Great way to build up a loyal American following, Doral!
The train's stopping at Cannondale for the very last time. Goodbye friend.
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reiko
Posted Wed 1 Jul, 1:24 pm BST Flag as inappropriate
I myself is a Cannondale fanatic. I even currently owning a super six and a system six of their great product, and its was the most excellent road bike I have ever used. It is so sad to know that Cannondale factory in the US will be closed from 2011. Not because of the quality since I believe that it will still remain, I feel sad because it will loose it's Made in the USA authenticity and the laborers that will loose their jobs.
But, it's WRONG to mock us Asian's and be called by names like slaves etc. This not about race so please refrain from being a racist. By the way I'm a Japanese and we made the Shimano's well knowned world wide, maybe you are using our product and enjoying it, as I have the privilage of owning 2 of the high end road bikes of Cannondales and "loving it".
Reiko Sato


