Malloy peddles $3 million to Cannondale to move to Wilton

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Gov. Dannel P. Malloy opened the bank of Connecticut to Cannondale this week, providing the bicycle maker with a $3 million loan, $2 million of which will be forgiven, if the company creates 75 jobs when it moves from Bethel to Wilton.

While plenty of people are down on Connecticut, it ranked for the sixth worst place to do business according to a recent survey of CEOs, Malloy has been willing to put the state’s money where his mouth is and give it to companies to stay and expand here.

(Malloy likes to say Connecticut is open for business.)

Cannondale, a division of Montreal-based Dorel, plans on using the money to purchase office equipment and IT systems when it moves 145 employees to the new office in Wilton.

The bond commission will have to approve the deal, which provides the loan over 10 years at 2 percent interest. But, if Cannondale creates 75 new jobs over the next four years, the state will forgive $2 million.

Dorel, Cannondale’s parent corporation, reported on Thursday net income of $22.3 million for the first quarter of this year. Bad weather hurt bicycle sales and cut into revenue the company reported. Besides Cannondale, Dorel owns several prominent bike brands, including Schwinn and Mongoose.

Categories: Economy
Rob Varnon

30 Responses

  1. Pete says:

    So, if they create 75 more positions (on top of the existing ones), they get the free loan.
    How long do these positions need to be a part of the company for?
    Also, you just created more sales in gasoline and more traffic on Rte 7. Those that were driving from the Norwalk area were driving against the traffic. Most are from this area, so they will need to go the Rte 7 path and spend more on their commute.
    Additionally, Bethel now loses an asset to them that was part of their growth plan! They gave up a prime location in Bethel up for Bethel Cycle “for free” to build on making Bethel a “bike town”. Their plan was for people to come from NYC and ride their bikes there. Cannondale in Bethel was a big selling point! I had no problem with the plan, but you need to make sure all your ducks are in a row before you sell your town on an idea.
    Horrible job! I doubt Mr. Malloy will be back in Bethel to speak again! Then again, he could always respond with the famous “Let me get your information, and I’ll get back to you on that!”

  2. bob 2 says:

    frankly, I’m still confused on why the governor would loan a 800+ million company any money at all? Where are the conservatives? Shouldn’t they be up in arms about now? Is this a bicycle company bailout? Seems that the company made enough money in Q1 that they wouldn’t need free money from the gov’t to finance the move. If the CEO lives in Greenwich and all the employees live around Bethel, they were never leaving the state to begin with. Seems like Malloy got schooled on this deal. Then again maybe all the money is being made at Pacific Cycle off Walmart sales and they told Cdale they wouldn’t fund the move.

  3. D. Sanchez says:

    Mr. Karl’s comments highlight the ignorance if the nation when it comes to where our stuff is made. Perhaps Malloy would have been better suited dumping money into something a bit more practical and a little less polarizing. I’d be into seeing money like this used where a panel chose the company with the best proposal. That will never happen without the corruption of gov wiping our upper lips.

  4. Karl Hot says:

    Wow, this business is pretty screwed up. I’ll bet Malloy wishes he did some more due diligence. I thought all cannondale a were made in USA still.

  5. Jamie says:

    I have a question. How many people will Cannondale loose when they move? Will filling those positions count towards the 75 in 4 years? I’ve worked for two companies that have relocated and both times they lost a lot of people (myself included) who either didn’t want to move, drive further, etc. I live in CT and know that the distance between the bethel location and Wilton location may only be 15 miles, but with inclement weather could mean a 2 hour drive!

  6. Neddy O says:

    Who knew the mighty Financial Mines of CT would become such a pleasure to browse during the doldrums of normal life in the bicycle industry? I am thrilled to see little bits of slop flung on the walls, the drama is delicious, please Ronny baby, Bob, and Steve keep that humor coming! HR must be taking meds to get through this.

  7. Dan says:

    Looks like there may be some issues within the walls of Cannondale. I can’t comment on those, but will say that I was an investor of Dorel (TMX: Dii.b) and dumped all of my shares after they reported their first quarter earnings which were down 4.3%. Their bicycle division had been keeping them in the black while their core business has been significantly underperforming. I had strong suspicions that something other than “poor weather” was causing the financial slide and the insider comments below confirm it. Cannondale is likely looking for the handout from the state because their owners aren’t willing to pony up to move them while their business is on the rocks. In my opinion, a well run business wouldn’t be thinking of relocating while their not doing well. The disruption will only further cripple an ailing organization.

  8. Frank says:

    You know what is really going on here is that the primary brothers Schwarz at Dorel can’t even get their principal payments back on this faulty Cannondale purchase they made in 2008. They were high on the hog with Schwinn GT Mongoose, and the CDale purchase was a poor decision. The interest payments are being paid, but what bank ever likes a partial payment? Not many, and the Schwarz’s want out.

  9. Dirtstar says:

    News Flash…Ron is leaving Cannondale to work at Specialized. So he can throw bombs on the way out..class act. And by the way Specialized “makes crap in China and tricks peoiple into thinking its premium product” just like every other bike company in the world… so good luck over there…and FTR that “Cheap China Crap” is way better than the so called “premium product” made in that junkshow Joe rigged up in Bedford…and Ron better get his butt into shape cuz they do not f around on their lunch ride in Morgan hill…they drop you…they fire you…

  10. Ron says:

    Three reasons Bob2. 1. The CEO lives in Greenwich and is sick of driving to bethel. 2. We’re moving closer to JFK to make it more convenient for potential buyers who will be fling in from Europe. 3. As Maria says, the Wilton/Norwalk area is snooty patooty and has facilities that portray the same. Perfect ambiance to woo buyers.

  11. Bob 2 says:

    Seems strange that a company that has such a strong brand history in Bethel would pick up and move 25 miles south. Wonder why they picked that location? Anyone have any ideas?

  12. Rob Varnon says:

    The mines has removed a couple posts. They were personal attacks and didn’t add anything to the conversation or debate. Sorry they got through to begin with. That is all.

  13. Onixs says:

    Yeap, agree with John, Malloy tossing public money.. I think nobody will vote him in the next election..

  14. Steve says:

    Ron called it. As shocked as I am that he’d use his real name, I suppose I’ll follow suite. I work with Ron at Cannondale and confirm everything he said about the company. Are leaders at Cannondale are fools and have successfully killed the culture of this once great company. Malloy thinking this “loan” will create CT jobs is like believing Lance Armstrong never doped.

  15. Bob says:

    I am an employee at Cannondale and am ashamed that all of these negative comments towards the gov Malloy. It is a terrific opportunity for the state to attract talented engineers and designers and product managers. We are a great American brand and feel it is a good partnership with CT. THe gov is a great guy and we are happy to partner with him!

  16. Ron says:

    We can all blame people like JimmyP333 for getting brain-dead Malloy into office! Guess what Jimmy, I work at Cannondale and the company is a house of lies. The “world class” company you speak of doesn’t exist. We make china made garbage and pawn it off on suckers like you as premium product. Many of us here know that this move to Wilton (which is actually Norwalk, by the way) is nothing more than window dressing to sell the company to a European conglomerate. There’s no intention of creating jobs in CT. The motivation here is to get the window dressing for free (thanks CT tax payers) to maximize the financial return when we’re sold. Who’s the fool now Jimmy?

  17. Rosemary says:

    Jimmy, it’s folks like you that bring down the logic and common sense of a relevant topic. No wonder you voted for Malloy. There should be a one way ticket to Siberia so you can all take these brilliant ideas and have had it – and we don’t have to pay for it! Why not – you have the green to support Malloy, right? Or are we supporting you too?

  18. Uwe says:

    I’m having some difficulty understanding the logic to spend taxpayer dollars to help a company move from one town to another town within the same state. The fact that this state has to “entice” companies (with taxpayer funds) to stay or move here seems to me to indicate that the state does not offer a very business conducive environment and is not a “go to” state.

    If 75 jobs are created over four years, the 2 million dollars of taxpayer money will have created 75 jobs paying ~$26K per year. Maybe they would prefer to create 10 high level jobs making $200,000 per year. At least those employees might be able to afford to live in Wilton.

    The state may be better off applying the 3 million total amount to its large funding gap for state pensions. The Pew Center for the States indicated that Connecticut was in the top four states in the worst shape when it comes to state pension funding shortfalls (2010 data). In their June 2012 report, Pew indicated that Connecticut pensions were only 53% funded. Unless this improves, if I was a state worker expecting a retirement check, I’d consider an early retirement option and get some of the gravy before the gravy train leaves the station for good. Connecticut will continue to bond (borrow) and tax until it can’t.

  19. JimmyP333 says:

    I applaud Governor Molloy for taking the reins in keeping a world-class company like Cannondale in our great state. He and the Dems are trying to fix the horrible mess that subsequent inept, crooked republobags left this state in.
    If all you selfish and greedy teabaggers don’t like it here why don’t you pack up and move to other states that embrace your skewered belief system? The truth is that CT. has some of the best care and services for its citizens than anywhere else in the country. The trouble with you fools is that you want your cake and eat it too without paying one red cent for it. In the real world things don’t work that way. Wise up and grow up for god sake.

  20. Maria says:

    Why move jobs from an area filled with blue collar hardworking people to snooty patooty Wilton? Keep stepping on the poor people!!!

  21. Stephanie says:

    I’m sure the tax payers of Connecticut would love to know that one of Malloy’s ex-employees works at Cannondale. Malloy even showed up there as a favor to his former employee for the grand opening of a property Cannondale leased. Yes, a RENTAL property that remains uninhabited to this day. I’m sure there’s no favoritism involved though. Hey Malloy, if your willing to dish out low interest lones to a company preparing to be sold, you deserved to be recalled Your lucky this UN-Constitutional state of CT doesn’t allow for recalls. Want a better idea? Open your low interest loans up to CT residents who are under water with their mortgages. Make them available for small businesses. How about anything other than giving money to a struggling bicycle company that’s attempting to put lipstick on the pig to sell it.

  22. Stephanie says:

    I’m sure the tax payers of Connecticut would love to know that one of Malloy’s ex-employees works at Cannondale. Malloy even showed up there as a favor to his former employee for the grand opening of a property Cannondale leased. Yes, a RENTAL property that remains uninhabited to this day. I’m sure there’s no favoritism involved though. Hey Malloy, if your willing to dish out low interest lones to a company preparing to be sold, your as dumb as a sack of rocks and deserved to be recalled Your lucky this UN-Constitutional state of CT doesn’t allow for recalls. Knucklehead. Want a better idea? Open your low interest loans up to CT residents who are under water with their mortgages. Make them available for small businesses. How about anything other than giving money to a struggling bicycle company that’s attempting to put lipstick on the pig to sell it.

  23. DS says:

    We deserve it. The losers in this state continue to vote for these tax tax tax democrats. Its going to get worse and never better. Since coming to office, Malloy has elimianted the death penalty, supported the legalization of marajuana and continued to tax everything he possibly can. He is a piece of **** that needs to be voted out

  24. Ellen O says:

    Democrats are the only people who have to bribe companies (with other people’s money) to open businesses in Connecticut. Maybe if they weren’t so in love with unions and taxes, manufacturers would be happy to move here. Every time they come up with an idea, they open OUR wallets.

  25. MovingtoFlorida says:

    I’m surprised CT was #6. I’d have thought it would be #1. Seems the only way to do business in CT is to make a payoff in Hartford, and only the well heeled need apply.

  26. drive fast take chances says:

    Trash Can Dan pissing our tax dollars away again.

  27. JBoyd says:

    $3 million tax payor funded load to move within state? Is this a joke? CT has the highest dead load in the US per taxpayor.

    Who voted for Malloy in the last election?

    Who’ll vote for this guy in the next?

  28. Rosemary says:

    I’m so disgusted by Malloy. You know we went to the Carolina’s for vacation and we were laughed at by the amount of taxes and financial stress this State, and our CT town creates for the average family. This discussion while sitting on 7 acres, clear view of our beautiful country from their back porch for a fraction, literally, of what we pay up here. We can’t move yet, but as soon as my husband can retire we are taking the first ride out. It’s a shame that our governor doesn’t seethe trees trough the forest. I honestly don’t give about Cannondales well being and a measly 75 entry level positions. Who the hell is in the market to buy $2000 bikes anyway enough to keep them alive? Wasted bailout money. Why not give back to the families that work their butts off to give this blank checkbook to Malloy to do as he pleases? There’s a place in hell for people like Malloy.

  29. Ed sorry to live here says:

    Here we go again. Let’s just give it all away. Lousy governor thinks he owns bank of Ct. Whats the purpose and how can I get a loan at 2% for 10 years. And forgive 1/3 if I create some miracle out of my magic a#s. He’ll probably give them a tax break for 10 years to sweeten the deal like other companies he lures to the state. They can hire employees only part time and that counts as a job. Probably like the orange box stores or the red bulls eye store that hires part timers and gives them only 8 hrs a week. What good is that. President says unemployment down, they count part timers and don’t count people who have given up on finding jobs. Malloy seems to follow that plan. Lets just make it look good. After 10 yrs they’ll just get up and leave. You all voted for him, now suffer his wraith. Same with the President and same with all the elected officials.

  30. PresterJohn says:

    Again, we se Malloy tossing around public money as though it were his own…Cannondale went into bankruptcy not all that long ago. It is owned by a perfectly healthy Canadian company and their products, almost exclusively, are made in China.They are already located in Connecticut.
    And so we shower them with millions of bonded money?
    Dan’s largesse is about Dan…we get to pay, with interest.