Schwinn Bicycle to Lay Off 160 of Its Employees

Financially troubled Schwinn Bicycle Co. announced Friday that it will lay off 160 employees, half its U.S. work force, between now and February.

The company filed for protection from creditors under Chapter 11 of the federal bankruptcy code last month, citing a huge debt and sluggish sales.

Schwinn is scheduled to appear in court on Monday, at which time it will ask the judge to approve severance packages for the workers, spokesman Doug Kramer said.

Sixty jobs will be eliminated at the company’s corporate headquarters in Chicago, he said. Schwinn’s distribution center in the Los Angeles area will be closed, putting 36 people out of work.

The remaining layoffs will come from the company’s two other distribution centers, in suburban West Chicago and in the Newark, N.J., area.

Most of Schwinn’s bicycles are built in Asia, where labor is cheaper and suppliers are located. Its only U.S. bike-making plant, in Waterford, Wis., is not affected by Friday’s announcement.

“While we deeply regret the necessity of this action, the reorganization process demands that we re-evaluate our corporate structure and make productive changes,” said Edward Schwinn, company president and chief executive.

The layoffs were expected, said Tory Roher, publisher of the trade publication Bicycle Dealer Showcase in Culver City.

In its bankruptcy filing, the company declared $117 million in assets and $82 million in liabilities.