Dorel to make Cannondale's Bethel, CT, factory into an 'Innovation Center', reduce staff at Bedford, PA

Cannondale to cease US manufacturing

From 2010, Cannondale frames will be sourced from Asia, there will be no manufacturing from the US.

The outsourcing has been going on for some years: currently only Cannondale’s lower end bikes have been made in the US.

In a press release, Dorel put a positive spin on the restructuring by stressing the move was part of a plan to create five Centers of Excellence around the world.

Dorel’s other bike brands will also be part of the restructuring.

Dorel’s five centres are to be:

Bethel, CT ("global headquarters and innovation center for high-end and enthusiast bicycles);

Basel, Switzerland ("for high-end and enthusiast bicycles sold/marketed in Europe");

Madison, WI ("for global mass market products");

Vancouver, British Columbia, Canada ("for active lifestyle and urban apparel and footwear" ie Sugoi)’

Taichung, Taiwan ("for coordination of sourcing, testing and quality of Asian suppliers/partners").

All North American product development, marketing and business management functions for Cannondale, Schwinn, GT and Mongoose will be centred in Bethel, CT within the newly named Cycling Sports Group (formerly the Cannondale Sports Group).

Robert Baird, President of Dorel’s Recreational/Leisure segment, said:

"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.

"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. Mass market bikes are sold to consumers through Pacific Cycle, while high-end specialty retailers have been our channel of choice for premium and enthusiast bikes through CSG. Naturally, Cannondale and CSG are key components of our commitment to our independent bicycle dealers as we realize how critical IBDs are to the cycling community and to us.

"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 will create "one of the best bicycle testing laboratories in the world at its facilities" in Bedford, PA. CSG will also begin to focus its existing operations in Bedford on final bicycle and Headshok assembly, CNC machining, and customer support.

Bedford’s manufacturing operations will be fully outsourced by 2010. Headcount at Bedford will be reduced from the current 300 employees to approximately 100 by the end of 2010.

"Today is the beginning of a very exciting period for Dorel’s recreational and leisure business," said Jeff McGuane, President CSG North America. McGuane has been with Cannondale since 1994 and until recently was President of CSG International.

McGuane continued: "We have realised significant benefits from identifying and acquiring strong brand leaders in the recreation and leisure industries, as well as driving organic growth from our existing businesses. However, for us to continue on our quest to remain competitive and to become the world’s premier provider in delivering the top recreation and leisure brands and products that consumers trust and want, we must continue to simplify and streamline our operations to help us drive forward.

"Creating the Center of Excellence in Bethel, consolidating our CSG resources within North America to two main locations, and leveraging the manufacturing resources at our Taiwan-based Center of Excellence are critical steps along the path of achieving our objective – becoming the global innovation leader in the recreation and leisure segment."

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