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Cannondale Shifts Manufacturing from Bedford, PA to Taiwan

SportsOneSource Media Posted: 4/2/2009

Cycling Sports Group (formerly the Cannondale Sports Group) plans to consolidate all North American product development, marketing and business management functions for the four cycling brands Cannondale, Schwinn, GT and Mongoose to Bethel, CT, said Dorel Industries in a press release this week. Bike frame manufacturing will shift from the Bedford, PA location to the new Taichung, Taiwan CSG location. Nearly 200 of the current 300 employees will be cut from the Bedford location by 2010 as a result of this shift.

CSG plans to focus its existing Bedford operations on final bicycle and Headshok assembly, CNC machining, testing and quality control, bicycle warranty repair, inside sales/service, distribution and customer support/administration.

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Bicycle.net’s Viewpoint

That’s tough…I just bought my 3rd Cannondale last week (R2000, System6, and now a Slice tt bike) and have felt good about buying great bikes from a “local” company that has a good reputation for quality and for standing behind their products. Between these three bikes, Cannondale got enough $$ from me that I could have bought a car instead.

Now…I’ll have to mull over how much my loyalty to the company will remain intact when I won’t get the satisfaction of using a local company. I’ll also need to see how well they retain the quality and customer service amid all these changes in their company. I’m not closed minded and won’t say that this is the end of my doing business with Cannondale, but let’s just say that it won’t be such an automatic decision as it has been to date.

I feel bad for the C-dale employees who are losing their jobs, and hope they land softly somewhere else. Hopefully they’ll be able to take their hi-tech manufacturing and design skills and apply them elsewhere.

What makes this all not seem quite so bad for me as a bike-a-holic is that there are a healthy number of domestic bike builders churning out great equipment. I’ll certainly be looking extra closely at those companies when I start to fancy another set of wheels.

At the same time, I imagine that the folks at Dorel probably don’t have horns sprouting from their heads nor do they sport flaming pitchforks, but might actually be trying to figure out how to take a bunch of good brandnames from companies whose financial distemper has always been somewhere between worrying and chronic — and is doing what good business people do to try to nurse them to health. In which case, one could argue that without their actions, we might not continue to have brands like Cannondale and Schwinn and so on to choose from. And when I think to myself, maybe I could buy from Trek instead, the question comes immediately to mind as to whether I wouldn’t be getting a frame from Taiwan anyway.

Truth is, I’ll go out of my way to buy similar quality products locally, and even be willing to stretch a little on the price to get the satisfaction that “my neighbor” built that bike. However, we all compete on a global stage and if my neighbor costs a lot more to do the job than it would cost someone else to do it, my neighbor’s job is at risk.

Management cannot simply overlook the economics. To blame Dorel without considering the economic facts would be prejudice (i.e., judging before having and weighing the facts).

Remember, Cannondale went bankrupt in the past. It made so little money on bicycles it diversified into motorcycles, lost its shirt and filed chapter 11. Fortunately, someone else came along and thought it could be a good investment to resuscitate the company, and that there would be a way to make it a financially viable concern. More or less, Schwinn, GT and Mongoose have had similar checkered pasts, financially. Thus Cannondale was put on the path that led it to Dorel, and now to more cost-effective manufacturing, leading us to the company’s recent announcement above.

For the reasons elaborated above, it’s too simple to just say Dorel is bad, or we shouldn’t buy Cannondale because it’s now going to produce overseas.  Maybe so, but perhaps without these changes I wouldn’t even have the opportunity to consider a Cannondale for my next bike — perhaps their cost disadvantages would take this option away entirely.