General Cycling Discussion - Cannondale shuts down

:confused: Take a look: http://www.racerxill.com/pages/news/news_012403_2.cfm

Well...

I read the same rumor, referencing the same link on the Yahoo "BIKE" message boards... until i hear an official word, its just a rumor. However, it would'nt suprize me one bit if true.

I hope it just turns out to be the moto division.:(

From B.R.A.I.N.
http://www.bicycleretailer.com/bicycleretailer/headlines/article_display.jsp?vnu_content_id=1804453

Originally posted by Precision Pedal
From B.R.A.I.N.
http://www.bicycleretailer.com/bicycleretailer/headlines/article_display.jsp?vnu_content_id=1804453

Thank you for the link! Great information there... :)

When I first heard of Cannondales move into the motorcycle and quad market I was skeptical that they could survive. Too many big guns there already with loyal brand followers who would never abandon them for a newcomer.

Its not old news if u havent heard it before and i havent.

Just like when Raleigh stopped making bikes over here about three years ago!!!! :(

As stated many times concerning this, it would be a damn shame to lose another quality American bike company. :(

I think everybody is getting cabin fever, you bunch of grumps :D

Back to C'dale. In the feb issue of Mountain Bike they are advertising the iDrive 2.0. Plus there's several other mentions of them in that mag. So what's up, are they in or are they out? Or will they go the way of Schwinn?

Look, thats enough fighting! If you have a problem with what's happening then send a PM to the mods, me included. For now, I will close this thread until Joe decides what he would like to do with it.

Ok I decided to deal with this myself. I deleted the the fighting posts as this is a thread about Cannondale and not about Klein having ads in his signature. If the mod department (that includes me) thought that Klein having those links in his signature was gonna greatly affect the forum, we would have spoken to him. Please just stick to the topic of this thread (that is a rule in this forum you know -- stick to topic). If there are any other problems, pm the mods, thats what we're here for. :)

Have a good day,

Brian

Wow...

I knew that their ideas of motor-powered vehicles would draw problems..

I remember back in 98' ... when their V-bikes were still "the bike to have" ...


what a shame.............:rolleyes:

It's kind of their own fault though...

Originally posted by MikeOK


Back to C'dale. In the feb issue of Mountain Bike they are advertising the iDrive 2.0. Plus there's several other mentions of them in that mag. So what's up, are they in or are they out? Magazine stuff,especailly ads are prepared months in advance.

World- you da man there bud, hang in there. I know I couldn't be a mod, I would end up kicking out everybody but about a dozen of us, then we would end up arguing amongst ourselves :D

I just got my new MBA mag today, I'll look to see if they have any c'dale writeups. If MBA is anything like their cousin MXA, they will be brutally honest. I really hope they survive, at least the bicycle division. I've never owned one but several people I know ride them. They've always been known as cutting edge and not afraid to try something new. I hope that doesn't end up costing them.

:( bummer, why is it that seemingly good companies, have trouble staying afloat in the cycling industry... :rolleyes:

vegas- they had to take a huge hit on the motor division. I'm a member of several dirt bike forums, and I remember watching the cdale topics when they first announced them. In fact, one of the dirt bike mags made one of cdale's off road dirt bikes "bike of the year" and this was even long before they released them to the public. I would hate to be that editor. MXA was about the only one that told the straight story, and in the end they turned out to be right. For about a year there all the forum topics were positive, then a few of the bikes made it to the public, and after that everything went downhill. Now it's hard to find anything at all positive being said about those bikes (motorcycles). I don't know this for sure, but I think it would be a safe bet that the motor division is completely seperate than the bicycle division. Everywhere except for the bottom line, that is.

Originally posted by MikeOK
World- you da man there bud, hang in there. I know I couldn't be a mod, I would end up kicking out everybody but about a dozen of us, then we would end up arguing amongst ourselves :D

I just got my new MBA mag today, I'll look to see if they have any c'dale writeups. If MBA is anything like their cousin MXA, they will be brutally honest. I really hope they survive, at least the bicycle division. I've never owned one but several people I know ride them. They've always been known as cutting edge and not afraid to try something new. I hope that doesn't end up costing them.

I'm da man!!! w00t!

I predict C-dale will be sold very soon or auctioned off by the bank. But who is buying? Will a motorcycle company buy them and treat the bicycle division like a stepchild? Will Trek buy them and dump the motorbikes? Or will Huffy pick them up and sell C-dales in K-Mart?

I think Cannondale will sell the moto devision at a huge loss, and go back to what they are good at doing, bicycles. I'm looking forward to some announcement or news on monday about the situation. I hope they pull through, there a good company, and have done alot for cycling in the past.

Wow...Bedford is just up the road. Have always been proud of the fact that Cannondale was 'local'. It played a role in my choice of an XS800 in 2001, unquestionably the finest bike I've owned to date. The company has been responsive to requests for information and assistance in the past. Based on our experience with Cannondale my wife just chose a 2003 T2000. I hope they can get this thing pulled out of the fire. I'd hate to see them dissapear into cycling lure.

Speaking of bike companies going out of business, does anyone know if Ross is still in business? I have a 1985 Ross road bike. I've heard they were once in business in eastern Pennsylvania (maybe Allentown).

Ross bit the dust years ago........

A while back, I bought some stock in two companies; Cannondale and Krispy Kreme. Cannondale has tanked, down to about 1/3rd of where I bought it :cry:. Krispy Kreme, on the other hand, has done rather well and I recently sold some for a nice profit:thumbup:.

There's got to be some sort of weird, freaked-out message in all of this somewhere. :confused:

Originally posted by MageJack
A while back, I bought some stock in two companies; Cannondale and Krispy Kreme. Cannondale has tanked, down to about 1/3rd of where I bought it :cry:. Krispy Kreme, on the other hand, has done rather well and I recently sold some for a nice profit:thumbup:.

There's got to be some sort of weird, freaked-out message in all of this somewhere. :confused:

We are all getting fat and lazy? :)

Originally posted by Joe Gardner
We are all getting fat and lazy? :)

people are buying more doughnuts than cannondales mb :(

Originally posted by VegasCyclist


people are buying more doughnuts than cannondales mb :(

MMM, I love the Krispy Kremes that they brought into Toronto.

I'd hope that they can keep up the bicycle end, and not just as a sharecropper for Trek. I'm not an aluminum bike fan, BUT--All-US made frames, imaginative spec (hydraulic brakes on touring bike, Lefty fork, Headshock, Bad Boy, Road Warrior,) and the fact that when working with Cannondale-owning customers or seeing them on the road, they seem to be doing a good job of keeping their customers happy. It would be a terrible shame to see that company disappear or get hollowed out.

I'm personally not a big fan of C-dales, but it is truely sad to see another American bicycle company going down as the low quality offshore bikes invade the cycling world. In any case, I doubt this would happen, (C-dale hasen't even declared bankruptcy yet...) but I think it would be a good move for Trek if they were to buy the cycling devision, dump the motorsports and just let the company run independantly. Not eveyone one wins, but there are lots of benfits. C-dales remain on the market for their following to enjoy, the industry still gets to experience C-dales BICYCLING inovation, and trek eliminates some competition.

Seems clear to me that a Cannondale that had focused solely on its core business would not have gotten into this fix. The bicycle division is profitable, and whether Cannondale saves it by divesting everything else, or whether someone else saves it by buying it so it can simply be operated as a bicycle business, I don't see why it should have to go under.

The real tragedy would be for the bike division to be destroyed as a result of foolish expansion into motorsports. I don't understand why their management didn't do a better job of protecting their profitable core business when structuring the expansion.

RichC

one of my local shops used to sell Cannondales as their high-end stuff, Schwinn and GT as the middle of the road stuff and Trek for the low-end. I haven't been there in a while. I wonder how they're dealing with things.


Looks like Cannondale should have stuck with making those kiddie trailers they started out with :p

A while back, I bought some stock in two companies; Cannondale and Krispy Kreme.

Why on earth did you buy Cannondaloe stock? Was it reccomended by some broker? FWIW, C'Dale has been on the receiving end of a lot of scorn from the business community for a couple of years now. Even the cycling press has been complaining about misplaced priorities for some time now. Everybody could see C'Dale's problems coming months ago. If your broker suggested you buy Cannondale, I'd find another broker!

Sad to hear about them, immensely sad. But in a sense they pay the price for making a bad business decision. The moto division was literally a bridge too far. Problem though, is that someone made the decision to take on the Japanese manufacturers and that someone is a pratt, category-A.

I could never work out why they tried it. The specialist companies are more innovative and I suspect they were always playing catch-up. The cost of tooling, R&D, manufacturing, sales potential all add up to a bad decision by them. Maybe they were lured by the promise of a quick buck. Whatever, I hope they survive.

When I heard they were getting into MX, I knew it would cause them trouble. Why go head-to-head right off the bat with the big Jap MX companies. I still scratch my head wondering why they didn't do the MX line with a different Co. name. Did they think there would be a huge cross-over from their cyclists? NOT! I'm sure the MXers, turned their noses up to C'Dale. If they wanted to do MX, they should've started making "quality" aftermarket components. All the while doing R&D. Once they showed everyone they could produce some "good" stuff, then release the bike, not just a prototype!

Oh well, let's hope Mr. Montgomery drops the MX crap and resurrects the cycling side of the company!

L8R

And it's official:

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030127/bs_nm/manufacturing_cannondale_dc_1

Hopefully they'll be able to rescue the bike division intact.

RichC

BikeMagic (http://www.bikemagic.com/news/article.asp?SP=&v=1&UAN=3130) also reports on Cannondale's closing. A moment of silence for a company that caused a revolution in cycling. I remember seeing the first of the fat tubed aluminum frames and thinking that they looked like cartoon drawings of bicycles. Now narrow gauge steel tubes look skinny to me.

Many and many a long year ago, my parents gave me a seat bag. It was the first Cannondale branded item I ever owned...or saw.

I hope they can salvage the bike division. I'd hate to see them vanish...or worse, end up in WalMart.

Got this from a bike mailing list....

Cannondale Announces Plans to File Voluntary Chapter 11 Petition
Monday January 27, 3:18 pm ET


BETHEL, Conn., Jan. 27 /PRNewswire-FirstCall/ -- Cannondale Corporation
(Nasdaq: BIKE - News), has announced that it intends to file a voluntary
petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on
January 28th.
Cannondale and its lenders, The CIT/Business Credit, Inc. and Pegasus
Partners II, L.P. have reached an agreement in principle that, subject to
Bankruptcy Court approval, will provide the Company with interim financing
to fund post-petition operating expenses and to meet supplier and employee
commitments. "The interim financing will be used to continue the operation
of our bicycle business," said Cannondale Founder and President Joe
Montgomery.

Cannondale has also reached an agreement in principle with Pegasus Partners
II, L.P. to sell substantially all of its assets to Pegasus Partners II,
L.P. pursuant to Section 363 of the Bankruptcy Code, subject to better and
higher offers and court approval. Pegasus would operate the bicycle business
as a going concern with the involvement of current management and would
purchase separately the Company's motorsports assets, including the
intellectual property related to the design of Cannondale's motorsports
products. In the meantime, management continues to work with other potential
interested buyers for either or both of these businesses.

Because the Company has obtained interim post-petition financing, Cannondale
will be able to pay vendors for goods and services received after the filing
in the ordinary course of business.

Montgomery explained that difficulties with Cannondale's motorsports
business made the filing necessary, and that the Company has determined to
suspend operations of the motorsports division pending a potential sale.
"The motorsports division was threatening the bicycle division," explained
Montgomery. "Although we believe in the value of our motorsports products,
we did not have sufficient financial resources to make the additional
investments necessary. We look forward to bringing a renewed focus to our
core bicycle business and to working through this present challenge with the
greatest possible speed."

The suspension of operations of the motorsports division will mean that
production workers who had been furloughed from Cannondale's motorsports
factory in Bedford, Pennsylvania in December will not be recalled.
Production workers at Cannondale's Bedford bicycle factory, who have been
idled during a recent shutdown, are scheduled to return to work in the near
future.

The Company's foreign subsidiaries are not included in the filing. Business
done through Cannondale subsidiaries in Europe, Japan and Australia
accounted for approximately 42% of the Company's total sales in fiscal 2002.

I think we'll see C'Dale bikes come through. Chapter 11 is reorganization, not liquidation, you know.

Originally posted by D*Alex
I think we'll see C'Dale bikes come through. Chapter 11 is reorganization, not liquidation, you know.

Ditto. Chapter 11 is specifically for helping a company to survive a hard time, reorganize, streamline and reemerge.

Continental Airlines has been there a couple of times and emerged, United is there now. They are still flying.

I think they will be around for a while, and I am glad to hear they are dropping the motorcycles.

So what happened to the CEO saying that he will take Cannondale under before he shuts down the motorcross division?

OK, the last few posts got it right. They are going to ditch the MX division to their lenders or highest bidder. The bicycle division stays intact and C-11 to rebuild finances.
42% of Cannondale is NOT affected-- that's alot! Cannondale had a financial setback and is rebuilding. They are not going out of business!

The more people that don't take the time to understand the reality, the longer it will take Cannondale to rebuild some capital!

Difficulties with Cannondale's motorsports business made the filing necessary, and it wants to focus on its core bicycle business.

That's a snip I took from the official statement. The point here is ...wants to focus...

Clearly an admission they know they screwed up. They once did focus on bikes, and they admit they lost it. Hopefully they'll get back to doing what they do best. Nobody will remember them for producing MX bikes but we all remember them for making great bikes. I hope it goes well. In a world of throw away consumables it is important that company's like Cannondale pull through. I think US folk should be proud of what they've done and the quality of their goods.

Even though they may no longer be innovative at this time, there is invariably a leap-frogging where other company's take it forward, and then they play catch-up, and all the time we get to win. You need Cannondale, Santa Cruz, Klein, you name them. One by one they all bring and continue to bring great things to the party.

Believe it is now offical. Seems the bicycle part will be OK. Why the egomaniacs thought they could compete against Honda, Yamaha, Suzuki, Kawasaki and Bombardier is beyond me. Bikes get reorg'd and start running again in a week or two and the motor division gets sold off. Hopefully they will get new management at the top. But, as always, the shareholders will get screwed. Something very dubya about that.

I think it's the shareholders who are part of the problem. There is a big difference between being profit-oriented and profit-motivated. Shareholders fit in the latter category, so I guess Cannondale were committed to trying to get better dividend returns for them. The company possibly made a lot of money from share selling but the bike division only had a finite set of design and manufacturing parameters to work within. So they possibly saw the MX division as a means of investing with potentially bigger profits. As we've seen, it's not such a simple equation.:)

Originally posted by D*Alex
Why on earth did you buy Cannondaloe stock? Was it reccomended by some broker? FWIW, C'Dale has been on the receiving end of a lot of scorn from the business community for a couple of years now. Even the cycling press has been complaining about misplaced priorities for some time now. Everybody could see C'Dale's problems coming months ago. If your broker suggested you buy Cannondale, I'd find another broker!

Not a broker recommendation, and it wasn't a big thing. I didn't buy a whole lot of it, just playing a bit with some small change. I bought it at $2, and it went up to $3. I thought about selling it then, but decided to hold on for a while. Bad decision? Perhaps, but one I can easily live with (not like it was the kid's college fund or anything). So today it was at $0.50. I can hold onto it at this point. If it tanks, it tanks. If it comes back up, then I haven't lost anything.

Bottom line: I feel better investing something in Cannondale than Altria (nee Philip Morris).

I'd hold, if I were you. Once they go through ch.11, I'll bet the bike division alone, unencumbered by the weight of a sinking motocross division will be worth something fairly quickly. Maybe they'll even make a new frame or two that don't use those awful oversized Coda BB's.....

Just as long as the tubes are fat. I reckon a frame is not a frame unless it has plenty of meat on it. You just have to dig those big fat mommas.:D

http://www.bicycleretailer.com/bicycleretailer/headlines/article_display.jsp?vnu_content_id=1805068

Originally posted by D*Alex
I'd hold, if I were you. Once they go through ch.11, I'll bet the bike division alone, unencumbered by the weight of a sinking motocross division will be worth something fairly quickly. Maybe they'll even make a new frame or two that don't use those awful oversized Coda BB's.....

They have always offered the choice of Si (Cannondale BB) or standard BB shell on all their bicycles.

Originally posted by ParamountScapin
[B]Believe it is now offical. Seems the bicycle part will be OK. Why the egomaniacs thought they could compete against Honda, Yamaha, Suzuki, Kawasaki and Bombardier is beyond me.

I'm not trying to follow you around this board, but I did a search on "broken aluminum" and found this post.

Anywho, listen, Cannondale tried something new. Can't be to bad of a thing to try: I mean Honda made the Acura and the germans said "They'll never compete with Mercedes, why try?".

Have you ever tried to best someone on a bike who looked faster, had a better bike, and win?

A long time ago, a geek started designing software. Everyone said he should so something else. He's Bill Gates.

The founder of Learjet got a C minus on his buisness paper outlining the plan for Learjet.

The point bieng, is that America is all about trying. You may not win, you may not be first, but you tried. If no one tried, we'd all be driving Model T's and riding wood frames.