Cannondale To No Longer Make Frames In The U.S.A.

In a story on Bike Biz written by Carlton Reid, it has been reported that Cannondale is going to cease frame building operations in Bethel, CT and will turn that facility into one of five “innovation centers” world wide. The production of Canondale bikes will be outsourced to Asia and will commece with the 2010 line up.

Following is a portion of the press release as put out by Dorel Industries, Cannondale’s parent organization:

New Innovation Center

Key to the Centers of Excellence strategy in North America are plans to consolidate all North American product development, marketing and business management functions for all four cycling brands (Cannondale, Schwinn, GT and Mongoose) to Bethel, CT within the newly named Cycling Sports Group (formerly the Cannondale Sports Group).

The Bethel location will be expanded into a world-class Innovation Center for all of Dorel’s Recreational/Leisure brands and products. This will help integrate brand teams to power innovation and to more fully capitalize on the unique potential of each of the CSG brands.

“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. Dorel has acquired several top companies with superior product lines and some of the strongest brand equities in the recreation and leisure sector, including the acquisition of both Cannondale Bicycles and SUGOI Performance Apparel in early 2008.

“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 (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.”

A new mission for Bedford

In addition to its global headquarters in Bethel, CT, CSG 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,
-testing and quality control,
-bicycle warranty repair
-inside sales/service, distribution and
-customer support/ administration (including a new call center on-site).

In shifting Bedford’s operations away from bicycle frame manufacturing by 2010, CSG will be able to take full advantage of the strengths and capabilities of the new Taichung, Taiwan-based Center of Excellence in manufacturing oversight, sourcing, testing and quality control. Therefore headcount at Bedford will be reduced from the current 300 employees to approximately 100 by the end of 2010.

The total cost of the overall re-organization plan is expected to be no more than US$4.5 million, the majority of which will be related to employee re-location and severance. These costs will be incurred over the course of 2009 and 2010. Once completed, the Company expects to realize annualized cost savings of up to US$4 million.

“Today is the beginning of a very exciting period for Dorel’s Recreational/Leisure business,” said Jeff McGuane, President CSG North America. Mr. McGuane, who has been with Cannondale since 1994 and most recently was President of CSG International, was named to his new post last month.

“We have realized 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,” concluded Jeff.

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2 Responses to “Cannondale To No Longer Make Frames In The U.S.A.”

  1. martini Says:

    Is it really that much of a surprise? Really? We all knew this was going to happen.

  2. John B. Says:

    I’m not surprised, but I am disappointed. All the corperate happy talk from the press release aside, the bottom line is that Made in the USA made Cannondale special. Now they’re just the same as Brand-X. What a shme. I do think this will hurt their sales. Do they really think that their new “designs” from their new “innovation center” are going to be so super special to offset the distinction of last domestic production frame builder? Whatever.

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