MONTREAL _ Dorel Industries Inc. has moved to satisfy growing demand south of the border for American-made products by fabricating the Montreal-based company’s first stroller in the United States in years.
“We have the facilities in the U.S. and we wanted to get back into some more manufacturing in the U.S.,” CEO Martin Schwartz said Tuesday after Dorel’s annual meeting.
The Safety 1st RIVA Travel System, made from recycled resin and car seats, will be assembled at Dorel’s car seat manufacturing facility in Columbus, Ind., hometown of U.S. Vice-President Mike Pence.
About 50 jobs have been created in the process.
Dorel said it believes the strollers, which will sell exclusively at U.S. Walmart stores, are the only ones in the industry currently assembled in the United States.
The decision to market a U.S.-made stroller comes as President Donald Trump pushes for the repatriation of jobs from Asia.
The company moved stroller production a number of years ago to China, where lower production costs allowed it to remain competitive with rival manufacturers.
Making a stroller in the United States has always been a challenge given higher production costs than in Asia, said Dorel’s chief financial officer Jeffrey Schwartz.
“I don’t think we could be competitive with metal or aluminum like all the other strollers that you see, so it had to be something different,” he said in an interview.
“An all-plastic one seemed to make sense and then once we did all plastic, it could be recycled.”
The device also fits with Walmart’s “Made-in-America” initiative, a US$250-billion program it says will create one million new jobs, including about 250,000 direct manufacturing positions, Schwartz added.
“They wanted the ‘Made-in-America’ and we said we could also get a green angle to this and use up some of the used plastic.”
Walmart said the system “gives parents a new quality, eco-friendly option that supports American jobs.”
“Our customers have told us that second to price, where products are made influences their purchase decisions,” stated Cindi Marsiglio, Walmart’s vice-president of U.S. manufacturing.
Like other manufacturers of children’s products, Dorel has been caught up in the liquidation of Toys “R” Us in the United States.
It took a US$12.5-million charge in the first quarter that reduced the company’s profitability.
Dorel CEO Martin Schwartz said he expects sales from the toy-and-baby goods chain will be picked up by other mass retailers, particularly Target, along with Walmart, Buy Buy Baby Inc.
“It started already. We’ve seen some of the product already migrating to some other retailers,” he said.
Toys “R” Us accounted for about three per cent of Dorel sales.
Schwartz said the transfer of kids’ bike sales will take a little longer.
He said the industry was surprised by the sudden decision to close stores in the U.S. because the chain supposedly had received financing after declaring Chapter 11 bankruptcy.
“We redid our terms with them and everybody was ready to help them in survival mode and all of a sudden they announced they were closing up.”
Schwartz said the Sears closure in Canada has had no impact on Dorel, but it has been very cautious about the future of Sears U.S. and its discount Kmart banner.