MONTREAL (BRAIN) – Dorel Industries announced that it’s restructuring operations at its recreational/leisure segment. Dorel will close its assembly and testing facility in Bedford, Penn. The Bedford plant, which at one point produced Cannondale’s midrange to high-end aluminum and aluminum-carbon fiber bikes until manufacturing moved to Asia in 2010, still handled some assembly, testing, quality control and customer and technical services.
In a statement the company said it will “leverage the strength and capabilities of its global resources, third-party partners and existing facilities.”
Product-related activities will transition to Asia while service-related issues will be handled by the bike division's other facilities.
Dorel will also move its research and development facility from Bethel, Conn., to the bike division’s new headquarters in Wilton, Conn. Its former retail lab in Bethel will be converted to accommodate Guru Academy activities — a training program for its Guru Fit system. The value of the former Bethel headquarters will be written down to reflect the market value of the property.
About 100 employees will be laid off. A spokesperson for the company said Dorel will offer severance and career transition support. The restructuring will cost the company $14 million to $16 million, Dorel said in a statement. Dorel expects to realize annual cost savings of at least $6 million once the restructuring is complete in late 2014.
“The objective is to accelerate operational excellence at our recreational/leisure segment by strengthening its working relationships with its global partners," said Peter Woods, global CFO and interim recreational/leisure president. Robert Baird, group president and CEO of the division, left the company in December.
"We want to significantly reduce development and supply chain lead times, improve cost structures and operating margins, and enhance quality while lowering warranty costs," Woods added.
"Today marks the beginning of the next phase in Dorel's evolution as a global bicycle and apparel company. This plan will result in higher-quality products and services for our customers and consumers," stated CFO Jeffrey Schwartz.
Dorel’s recreational and leisure segment houses its three cycling divisions and a range of brands including Cannondale, Schwinn, GT, Mongoose, Caloi, Iron Horse, Charge Bikes, Sugoi and Guru.