Are they really down and out?

Discussion in 'Mountain Bikes' started by Carla A-G, Jan 30, 2003.

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  1. Carla A-G

    Carla A-G Guest

    Tags:


  2. Tsheer

    Tsheer Guest

  3. Carla A-G

    Carla A-G Guest

    "Tsheer" <[email protected]> wrote in message news:[email protected]...
    > Do a google search on Chapter 11 bankruptcy and find out what it means.

    I know what it means. Whats your point?

    - CA-G

    Canadian Girls Kick Ass!
     
  4. "Carla A-G" <[email protected]> wrote in message news:[email protected]...
    > They filed for chapter 11 but they're still going to sponsor a team:
    >
    > http://www.rainer-wurz.com/eng/news.htm
    >
    > And apparently they still owe 2002 salaries:
    >
    > http://www.stiksandstones.com/
    >
    > - CA-G comfused...
    >
    > Canadian Girls Kick Ass!
    >

    Carla Here is a note from the prez. to his bike shops. Of course, he puts some serious spin on it,
    but I'm not unloading my bikes just yet.

    Ashmore

    ----- Original Message ----- From: To: Sent: 1/28/2003 2:58:47 PM Subject: A Message From Joe
    Montgomery

    Dear Cannondale bicycle retailer -

    I apologize for having to make this important announcement to you in such an impersonal manner, but
    given the number of Cannondale dealers around the world, it is simply impossible for me to speak to
    each of you directly.

    As you may already know, Cannondale announced yesterday that we plan to file to restructure our
    company under Chapter 11 of the Bankruptcy Code, and that we have suspended the operations of our
    motorsports division. We took this step in order to facilitate a financial restructuring that will
    eliminate the continuing cash drain associated with the motorsports division. While we complete the
    restructuring through the Chapter 11 process, our bicycle business will continue to operate without
    interruption. In fact, we are servicing warranty issues and shipping bicycles and other cycling
    products on a daily basis.

    It is critical that you know that our bicycle division is not going out of business. Our goal is to
    preserve and strengthen our core bicycle business, so that we can continue to compete successfully
    and continue providing you with innovative cycling products, just as we have throughout the duration
    of the motorsports project.

    For our dealers, our intention is that the filing will hardly be noticed at all. You will deal with
    the same account manager, credit manager and in-house dealer service rep. In addition, we have
    received a commitment for substantial post-petition financing from our lenders. We expect this
    interim financing, which is subject to Court approval, to provide adequate funding for all
    obligations incurred after the filing, as well as our ongoing operating needs during the
    restructuring process. We look forward to resuming production in our Bedford bicycle facility in the
    coming weeks.

    We hope that the only difference you'll notice will be an anticipated improvement in our
    performance. With our interim financing in place, we're actually in a better position to order parts
    from our vendors than we have been in recent months. As a result, we're looking forward to smoothing
    out our production and delivery of bicycles. Without the distraction of motorsports, we'll also be
    much more focused on bringing new, innovative technologies to market for you to sell.

    Our plan for the next several months is to provide you with the best possible support, and to keep
    dealer service, customer service and your sales at the highest levels. With your help, we are very
    confident that we will be successful and continue to grow Cannondale as an ever-stronger and
    ever-more-profitable part of your business.

    Many companies that have filed for reorganization - including Harley-Davidson, Macy's, and Toys 'R'
    Us - have strengthened their businesses and are performing well today. These success stories shared
    a common element, and that is teamwork. With your continued support, we are optimistic that we can
    produce similar results.

    Thank you for your understanding, and for your help in moving through this challenging period. We
    will keep you informed as we go forward.

    Sincerely,

    Joe Montgomery Founder & President
     
  5. R.White

    R.White Guest

  6. Slacker

    Slacker Guest

    "Carla A-G" <[email protected]> wrote in message news:[email protected]...
    > They filed for chapter 11 but they're still going to sponsor a team:
    >
    > http://www.rainer-wurz.com/eng/news.htm
    >
    > And apparently they still owe 2002 salaries:
    >
    > http://www.stiksandstones.com/
    >
    > - CA-G comfused...
    >
    > Canadian Girls Kick Ass!

    Bottom line is they will recover......for how long is the question. Chap 11 only gives them some
    time to get their shitte together, so they can continue as a bike company.

    C-dale could make a very good argument to the court that the Race Team is absolutely necessary for
    future prosperity because many people base opinions (wrongly IMO) on the bikes according to how the
    Team does. Plus keep in mind, I'm sure Seimens dished out some big cabbage to play.

    Now salaries, those are expendable ;~ (

    --
    Slacker
     
  7. Chris

    Chris Guest

    Carla A-G" <[email protected]> wrote in message news:[email protected]...
    > They filed for chapter 11 but they're still going to sponsor a team:
    >
    > http://www.rainer-wurz.com/eng/news.htm
    >
    > And apparently they still owe 2002 salaries:
    >
    > http://www.stiksandstones.com/
    >
    > - CA-G comfused...
    >
    > Canadian Girls Kick Ass!
    >
    >

    I took this from the Rainer-Wurz site:

    The Siemens mobile and Cannondale logos will be featured prominently on the race jersey, the three
    Cannondale race bikes (the Gemini for downhill, the Jekyll for four-cross and the Scalpel for
    cross-country), blah, blah, blah...

    Wouldn't it be sweet if, as the release says, they only had the three bikes
    :) Like, Tinker wants to run a 24-hour dealie, but the Scalpel is at some
    world cup even in Italy...

    It does say "the Gemini", "the Scalpel", etc...not "the Scalpel model." It would be awesome if.
    under Chap 11, provisions for the team were made, but were so limited they only had three bikes.

    Yes, this is a ridiculous premise, but boy howdy, I sure hate C-dale, and any chance to rib 'em is a
    good one, in my book.

    Chris
     
  8. John Morgan

    John Morgan Guest

    "Carla A-G" <[email protected]> wrote in message news:[email protected]...
    > They filed for chapter 11 but they're still going to sponsor a team:
    >
    > http://www.rainer-wurz.com/eng/news.htm
    >
    > And apparently they still owe 2002 salaries:
    >
    > http://www.stiksandstones.com/
    >
    > - CA-G comfused...

    The local Cannondale sales rep says they are not down and out. They are selling off their moto
    division (which was never profitable) and they will continue to go strong with their bicycle
    division (which has turned profits every quarter since they started).

    They shut down the factory in December, but that was only their production they shut down... they
    have continued to ship bikes they have had stockpiled. By next week the production crew will be back
    on track, and by June they will be out of bankruptcy (which is really quick... usually takes a year
    or two to get out of the funk).

    They almost certainly will be a privately held company after they are out of the hole, says I. Back
    to grassroots.

    -John Morgan
     
  9. R.White

    R.White Guest

    "John Morgan" <[email protected]> wrote in message
    news:<[email protected]>...
    > "Carla A-G" <[email protected]> wrote in message news:[email protected]...
    > > They filed for chapter 11 but they're still going to sponsor a team:
    > >
    > > http://www.rainer-wurz.com/eng/news.htm
    > >
    > > And apparently they still owe 2002 salaries:
    > >
    > > http://www.stiksandstones.com/
    > >
    > > - CA-G comfused...
    >
    > The local Cannondale sales rep says they are not down and out. They are selling off their moto
    > division (which was never profitable) and they will continue to go strong with their bicycle
    > division (which has turned profits every quarter since they started).
    >
    > They shut down the factory in December, but that was only their production they shut down... they
    > have continued to ship bikes they have had stockpiled. By next week the production crew will be
    > back on track
    <snip>

    How long will they work without being paid?
     
  10. Carla A-G

    Carla A-G Guest

    "Chris" <[email protected]> wrote in message
    news:[email protected]...
    > Wouldn't it be sweet if, as the release says, they only had the three
    bikes
    > :) Like, Tinker wants to run a 24-hour dealie, but the Scalpel is at some
    > world cup even in Italy...

    LOL!, Thanks for the giggle!

    - CA-G

    Canadian Girls Kick Ass!
     
  11. Jd

    Jd Guest

  12. Supabonbon

    Supabonbon Guest

    "Chris" <[email protected]> wrote in message
    news:<[email protected]>...
    > Carla A-G" <[email protected]> wrote in message news:[email protected]...
    > > They filed for chapter 11 but they're still going to sponsor a team:
    > >
    > > http://www.rainer-wurz.com/eng/news.htm
    > >
    > > And apparently they still owe 2002 salaries:
    > >
    > > http://www.stiksandstones.com/
    > >
    > > - CA-G comfused...
    > >
    > > Canadian Girls Kick Ass!
    > >
    > >
    >
    > I took this from the Rainer-Wurz site:
    >
    > The Siemens mobile and Cannondale logos will be featured prominently on the race jersey, the three
    > Cannondale race bikes (the Gemini for downhill, the Jekyll for four-cross and the Scalpel for
    > cross-country), blah, blah, blah...
    >
    > Wouldn't it be sweet if, as the release says, they only had the three bikes
    > :) Like, Tinker wants to run a 24-hour dealie, but the Scalpel is at some
    > world cup even in Italy...
    >
    > It does say "the Gemini", "the Scalpel", etc...not "the Scalpel model." It would be awesome if.
    > under Chap 11, provisions for the team were made, but were so limited they only had three bikes.
    >
    > Yes, this is a ridiculous premise, but boy howdy, I sure hate C-dale, and any chance to rib 'em is
    > a good one, in my book.
    >
    > Chris

    3 bicycles, literally! Wow, that's not funny at all. You should lay off the pipe. Why, Boy Howdy,
    the hatred of Cannondale? I've never owned one (didn't like how they fit), but they're one of the
    few American bike companies who actually put their frames together in the States. And while a some
    of their engineering seems more fashionable than functional to me, they're ideas are all
    interesting, and some of them are bound to become part of the evolution of performance bicycles (the
    oversize BB comes to mind). I think that if the bicycle division does go under it'll leave a
    noticeable void in the marketplace. /s
     
  13. Tom Purvis

    Tom Purvis Guest

    "John Morgan" <[email protected]> wrote:
    > The local Cannondale sales rep says they are not down and out. They are selling off their moto
    > division (which was never profitable) and they will continue to go strong with their bicycle
    > division (which has turned profits every quarter since they started).
    >
    > They shut down the factory in December, but that was only their production they shut down... they
    > have continued to ship bikes they have had stockpiled. By next week the production crew will be
    > back on track, and by June they will be out of bankruptcy (which is really quick... usually takes
    > a year or two to get out of the funk).
    >
    > They almost certainly will be a privately held company after they are out of the hole, says I.
    > Back to grassroots.

    And they all lived happily ever after...

    Pfff.

    What do you expect the local Cannondale sales rep going to say? That the company has slightly better
    than a snowball's chance in hell to recover? They need to keep their dealers placated.

    Bankruptcy filing doesn't erase bad management decisions of the past. It only helps an organization
    hold off its creditors while it becomes profitable again.

    This is going to cost Cannondale big. Getting into the moto industry was a bad management decision.
    They clearly didn't understand that business very well, but they bet the company on it. Did you know
    they had a 1 year buyback agreement with people who bought their machines? That is the same as
    making a bet that the products would retain lots of their value in the used market.

    And these were mega-buck machines. Did they think their reputation as a bicycle builder would
    encourage people to pay more for a C-dale moto than they would pay for a Honda? Oh, but we'll buy it
    back from you in a year if you aren't satisfied.

    If the moto division had any VALUE, it could be sold off for a fair amount of cash which could help
    Cannondale come back strong. But if it *had* any value, it would probably have been sold before this
    to keep them out of Chapter 11.

    The moto division will sell for a fire-sale price IF it sells at all. And then, when C-dale goes
    back to the bike business, it's still going to be dealing with an industry that's barely profitable,
    even for companies that don't make stupid decisions.

    They'll have piles of debt, so they won't have much $$ for R&D. Their standing with parts suppliers
    like SRAM, Shimano, and the bazillion small anonymous parts mfg-ers in Asia willl be crap. That
    means the terms of all their supply contracts will be harsh. And all the while sales are flat in the
    whole industry.

    The best hope for the C-dale shareholders is that, once the frigging stoopid moto division is
    liquidated, there will be some shred of value left in C-dale, such that they'll be an attractive
    acquisition for Trek, Specialized, or even SRAM (or some other industry outfit). Their trade name is
    worth something, and they do have some patents and technology that might be valuable to somebody
    (like the lefty fork? there's a solution out looking for a problem to solve...)

    I think the days of C-dale operating as an independent company are all in the past. The have managed
    their way into a deep hole. The only way out I see for them is to have a white knight lower a rope
    down to them.
    --
    Tom "never seen nothin' so sh!t-all stupid in all my born days" Purvis Salida, CO
     
  14. John Morgan

    John Morgan Guest

    > The best hope for the C-dale shareholders is that, once the frigging stoopid moto division is
    > liquidated, there will be some shred of value left in C-dale, such that they'll be an attractive
    > acquisition for Trek, Specialized, or even SRAM (or some other industry outfit). Their trade name
    > is worth something, and they do have some patents and technology that might be valuable to
    > somebody (like the lefty fork? there's a solution out looking for a problem to solve...)
    >
    > I think the days of C-dale operating as an independent company are all in the past. The have
    > managed their way into a deep hole. The only way out I see for them is to have a white knight
    > lower a rope down to them.

    Perhaps the sales rep was being a little optimistic... he works for the company after all. I still
    believe Cannondale will come back strong, though. The reason they branched out into other areas
    (wheelchairs, moto, etc.) is because they went public, and the shareholders were demanding that they
    diversify their interests. (The "don't put all your eggs in one basket" theory). Every quarter they
    needed to report what they were doing. The bottom line became important.

    Like you said, in this industry it's very difficult to turn a profit, so I doubt any bike company
    out there (Specialized, Trek, etc) has the cash to buy Cannondale. I predict that they will again
    become a privately held company, and get back to doing what they do best... making bicycles. The
    recovery may not be so easy, and it may not be so quick, but mark my words, Cannondale will
    return. =)

    With situations like these, I can understand the gut reaction is to assume the worst... but I think
    Cannondale is a little more resilient than you give them credit for.

    -John Morgan
    --
    To reply, please remove NOSPAM from the return address.
     
  15. Chris

    Chris Guest

    > Why, Boy Howdy, the hatred of Cannondale?

    I've seen more Cdale failures than any other mtb company (not counting bike-shaped toys from stores
    ending in -Mart) and thier proprietary parts don't perform in such a way that the sacrifices are
    worth it. Imagine if Macs weren't easy to use, and crashed a lot...they would be irrelevant. That's
    how I see Cannondale.

    >I've never owned one

    Smart move, IMO.

    > , but they're one of the few American bike companies who actually put their frames together in the
    > States. And while a some of their engineering seems more fashionable than functional to me,
    > they're ideas are all interesting, and some of them are bound to become part of the evolution of
    > performance bicycles (the oversize BB comes to mind). I think that if the bicycle division does go
    > under it'll leave a noticeable void in the marketplace.

    Yes, any innovation has the potential to be incorporated into a standard, but just like the
    fashion/function argument you used, Cdales stuff was way too different, for no good apparent reason.
    Though they got some props for the US made/assembled factor, but I took that away when they failed
    to write paychecks last week.

    Chris
     
  16. Jd

    Jd Guest

    [email protected] (supabonbon) wrote in message
    news:<[email protected]>...
    > I think that if the bicycle division does go under it'll leave a noticeable void in the
    > marketplace.

    Yeah, "void" is a good word to use when referring to crappyflail, especially since they have been
    selling "void" for so long.

    JD
     
  17. Peter

    Peter Guest

    Hey.

    Lay off of Cannondale. Their frames are incredible. For me - a 17 year old kid wanting to further my
    xc riding abilities with my parents' limited budget, the CDale frame was by far the best in the
    <$1000 CDN range. It was the only one made in the States (a key factor). Not some junk frame from
    Taiwan put together by a kid with no education (not saying all Taiwanese products are junk, but at
    that price, they are). CDale's innovations are also more innovative than the competition. Who else
    would have designed a one sided fork? NO ONE.

    Where does all of this hatred originate from?

    Peter - proud supporter of the American bike... and I'm Canadian...
     
  18. John Harlow

    John Harlow Guest

    > Lay off of Cannondale. Their frames are incredible. For me - a 17 year old kid wanting to further
    > my xc riding abilities with my parents' limited budget, the CDale frame was by far the best in the
    > <$1000 CDN range. It
    was
    > the only one made in the States (a key factor). Not some junk frame from Taiwan put together by a
    > kid with no education (not saying all Taiwanese products are junk, but at that price, they are).
    > CDale's innovations are also more innovative than the competition. Who else would have designed a
    > one sided fork? NO ONE.

    No one, eh?

    How about Vespa in 1967 http://www.sunpoint.net/~puoskaripekka/images/Vespa/vespavasen.jpg or in
    1951? http://www.vespafascination.com/50/specials/htm/51_siluro.htm

    Or maybe even in Sunbeam 1893?
    http://www.localhistory.scit.wlv.ac.uk/Museum/Transport/bicycles/Sunbeam.htm
     
  19. D_d

    D_d Guest

    John Harlow wrote:

    >> Lay off of Cannondale. Their frames are incredible. For me - a 17 year old kid wanting to further
    >> my xc riding abilities with my parents' limited budget, the CDale frame was by far the best in
    >> the <$1000 CDN range. It
    > was
    >> the only one made in the States (a key factor). Not some junk frame from Taiwan put together by a
    >> kid with no education (not saying all Taiwanese products are junk, but at that price, they are).
    >> CDale's innovations are also more innovative than the competition. Who else would have designed a
    >> one sided fork? NO ONE.
    >
    > No one, eh?
    >
    > How about Vespa in 1967 http://www.sunpoint.net/~puoskaripekka/images/Vespa/vespavasen.jpg or in
    > 1951? http://www.vespafascination.com/50/specials/htm/51_siluro.htm
    >
    > Or maybe even in Sunbeam 1893?
    >
    http://www.localhistory.scit.wlv.ac.uk/Museum/Transport/bicycles/Sunbeam.htm

    Then there is the use one that has a reason for only having one leg.
    <http://www.mtbreview.com/reviews/Front_Shock/product_78218.shtml>

    --
    D_D
     
  20. Jd

    Jd Guest

    "Peter" <[email protected]> wrote in message
    news:<[email protected]>...
    > Hey.
    >
    > Lay off of Cannondale. Their frames are incredible. For me - a 17 year old
    <snip right there>

    Come back in about five years, junior.

    JD
     
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