Huffy Says It Will Stop Making Bikes in the U.S.
Huffy Corp., one of America’s best-known bicycle makers, said Monday that it will stop making bikes domestically because of competition from China.
The company will close its two U.S. bicycle plants--in Farmington, Mo., and Southhaven, Miss.--by the end of the year, eliminating about 600 jobs.
Huffy, which has been making bicycles in the United States since 1934, currently imports about 70% of its bikes from China, Taiwan and Mexico. The company holds 25% to 30% of the U.S. market, the largest single share. It plans to continue making bicycles with partners around the world.
Huffy said it has retainedPaineWebber Inc. to explore alternatives to boost its flagging stock prices.
“We’ll look at possible mergers, a sales of assets . . . whatever is the best use of the bicycle assets,” said Thomas Frederick, Huffy’s chief financial officer.
Bicycles account for about 45% of Huffy’s sales, which totaled $708 million last year. The company also sells lawn equipment.
The Miamisburg, Ohio-based company will take an after-tax charge of $42.4 million, or $2.64 a share, in the second half of the year as a result of the closures; it said it anticipates a full-year loss of $2.70 to $2.80 a share.
Several firms still make bikes in the U.S. A Schwinn subsidiary produces mountain and BMX bikes in Santa Ana and makes frames at various U.S. locations. Brunswick Bicycles makes mountain and BMX bikes at a plant in Olney, Ill.
Huffy’s share price has eroded from a 52-week high of $16.75 earlier this year; it hit a low of $8.50, down $1, on Monday on the New York Stock Exchange.
