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Dorel closes acquired US furniture factory despite promising not to - BikeBiz

Dorel closes acquired US furniture factory despite promising not to

The Carina furniture factory of Ohio, closed late last week with up to 300 job losses, was purchased "primarily for its sales, customer base and avenues of distribution," said an exec from Dorel. But when the factory was bought in September 2003, Dorel execs said the plant would be integrated into Dorel's ready-to-assemble furniture division, and all jobs were safe. So what? Because the new owner of GT, Schwinn and Mongoose could be accused of lining up the same fate for Pacific Cycle's US plants. But it would be a groundless accusation, says Pacific Cycle exec, because unlike Carina, Pacific Cycle is an importer, not a manufacturer.
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In Dorel's first press release concerning the $310m purchase of Pacific Cycle, Dorel president and CEO, Martin Schwartz, said: "Pacific's] business model is very similar to ours and provides numerous opportunities to significantly strengthen Dorel's position as a global consumer products company."

Jeff Frehner, Pacific Cycle's head of counsel and corporate development, told BikeBiz.com:

"Pacific's situation is very different from the Carina situation. The Carina management and other operational employees were retained. It was simply the manufacturing that was closed and moved to another Dorel facility. And the 300 Carina manufacturing facility employees affected were offered jobs in the other facililty."

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