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While the past few years have provided a bumpy ride for Santa Ana-based manufacturer GT Bicycles Inc., the firm looks to be pedaling straight ahead in the wake of its purchase by Questor Partners Fund LP, the parent company of Colorado-based Schwinn Holdings Corp.
Since the deal closed Oct. 3, Questor, a Michigan-based turnaround specialist, hasn't shut down GT's 355,000-square-foot manufacturing, distribution, sales and headquarters facility. The 475 employees in Santa Ana are still selling and distributing 800,000 GT bikes annually, and making about 100,000 of them. And the nation's largest maker of BMX bicycles will continue producing the same top-of-the line products under the GT, Powerlite, Robinson, and Dyno names that have made it one of the world's best-known bicycle companies. BMX is roughly 30% of GT's sales, with mountain bikes, cruisers and road bikes making up the other 70%.
Tom Mason, Schwinn/GT's new president and chief executive officer, said Questor bought GT because it was a "perfect" fit with Schwinn, not because there were obvious cost savings from the usual post-merger measures like layoffs and spin-offs.
"If you're going to exert a leadership role in the bike industry, you need size," he explained. "Schwinn is strong in kids' and entry- to mid-level mountain bikes that cost $250 to $500. GT is very strong in BMX and the high-priced mountain bike market." (Its bikes sell for $100 to $4,000.)
Revenue-wise, CT and Schwinn are roughly the same size, with GT taking in $216 million in 1997 and Schwinn approximately $185 million. Major competitors include Huffy ($310 million in 1997 bike-related sales) and Cannondale ($180 million in 1997 sales).
Mason said the company is considering ramping up manufacturing in Santa Ana. "GT has a marvelous facility which has never been stretched," he said. "The capability of the plant is probably something like 600,000 bikes. Do I think we would ever manufacture that many here? No." But Mason said the firm plans to increase production to "several hundred thousand" in the next year, which would mean...