Edelbrock Closing Torrence CA HQ

According to Daily Breeze:

Edelbrock Group, a Southern California-based manufacturer and distributor of aftermarket auto parts, will soon be shuttering its Torrance headquarters which employs 270 workers.

In a recent notice sent to the state Employment Development Department, the company said employee layoffs would begin Jan. 15 and end March 31. The closure will affect 217 hourly workers and 53 salaried employees.

The Torrance facility includes executive offices as well as sales, advertising and marketing departments. The facility also has a state-of-the-art research and development department, testing facilities and manufacturing operations.

Neva Burke, Edelbrock’s vice president of human resources, didn’t give a reason for the Torrance shutdown in her letter to the EDD, although she said some of the operations will be relocated to the company’s casting foundries in San Jacinto.

She didn’t reveal how many displaced workers, if any, might be shifted to that location. Edelbrock is owned by Evanston, Ill.-based Industrial Opportunity Partners, which also declined to discuss the Torrance closure.

Edelbrock designs, manufactures, distributes and markets a wide range of aftermarket products, including intake manifolds, carburetors, camshafts, cylinder heads, exhaust systems, shock absorbers and other components designed for most domestic V8 and select V6 engines.

Edelbrock’s website lists six company locations, including the headquarters in Torrance, two casting foundries in San Jacinto, a distribution center in Olive Branch, Miss., a carburetor factory in Sanford, N.C. and the Edelbrock Race Center in Mooresville, N.C.

In February 2020, Industrial Opportunity Partners acquired COMP Performance Group, whose automotive brands include COMP Cams, TCI Automotive, FAST, ZEX and Inglese.

This looks like another example of a PE firm buying a healthy company, sucking it dry and leaving the workers out in the cold. "Operations focused" is just corporate speak for cost cutting. 

https://www.iopfund.com/meet-the-team/

San Jacinto  is 100 miles from Torrance ,  it is inland and HOT in the summer , Torrance is near the coast , 

So  no one is going to commute between the 2  plants ,  and the people at Torrance will probably be offered a job  at another factory and paid a lot less !

Sad to see it go , 

There is unconfirmed word that Edelbrock's company HQ will be merged with Comp Cams et al back east. Comp and Edel are already under the same umbrella.

Neither are going away as some people have speculated on elsewhere. However, the types of products they have been making are less popular now than in days past. So at least part of the consolidation is based on the market for those products.  

CrustyRedXpress (Forum Supporter) said:

This looks like another example of a PE firm sucking it dry

Where we work our owners are PE.  We had some lead time issues and basically it's because they leaned us out the past 3 years.

Reading something like that - other than thinking "great, less aftermarket choice again" - is how healthy and viable fairly large aftermarket companies are these days, especially in light of the vast improvements in factory parts. And the "competition" that knocks off your parts faster than you can get them to the distributors. The latter killed a bunch of JDM aftermarket companies, for example, and I would be very surprised if that didn't have any impact on companies like Edelbrock.

I'm not saying that this is a good thing - far from it - but news like that makes me think if we're at the stage where mostly really small aftermarket companies are actually viable, and if we're slowly getting back to where it started, basically people in sheds modifying factory parts.

In reply to BoxheadTim (Forum Supporter) :

No doubt the market is changing. Edelbrock's response should be pouring money into rapid innovation of new products along with some sort of digital strategy. Unfortunately it looks like the PE company isn't doing any of that-they're just leaning things out and taking a cut of the gross revenue for themselves- thus draining resources away from much needed R&D and innovation centers.

The automotive aftermarket is 375B has a 4% CAGR. There is plenty of money to be made, especially with a brand as powerful as Edelbrock.

https://www.grandviewresearch.com/industry-analysis/aftermarket-automotive-parts-market 

Yes, all of this is speculative without seeing balance sheets, but we've seen this play out again and again.

L5wolvesf said:

There is unconfirmed word that Edelbrock's company HQ will be merged with Comp Cams et al back east. Comp and Edel are already under the same umbrella.

Neither are going away as some people have speculated on elsewhere. However, the types of products they have been making are less popular now than in days past. So at least part of the consolidation is based on the market for those products.  

There's parallels to the beer business here. Say it's the '70s and '80s and everybody drinks Bud and has Edlebrock parts on their car. Then all these smaller companies pop up and start selling parts more specific to each application in the '90s and people start buying import beers and microbrews. Well then just merge the companies! Now it's 2000 and you buy a part that has one brand on it that is owned by a company you've heard of that also owns a bunch of other brands. And your beer says whatever on it but is owned by Bud. Then the internet takes over and now everybody buys parts that are super specific to each application that are produced and handmade by a company with 1-10 people working at it. It's 2010 and Bud sales are down even though they already bought those other companies that had 50-100 people working at them. And Bud isn't even owned by Bud; It's owned by an even bigger conglomerate that you've never heard of. Those companies that have 1-10 people working at them don't sell a whole lot of beer or parts on their own but you add them all up and they're selling a lot of beer and parts at the expense of the huge conglomerate. They are too small for Bud or Firesale Capital Management to bother with. It is now 2021.

When I think of Edelbrock I think of  intake manifolds for three two barrel carbs or dual quads, aluminum cylinder heads and other add on hardware. I know the company is much more then that from all the  other high performance equipment companies they have acquired. The car hobby is changing fast from the days guys would swap a big V8 into a light prewar car and build a hot rod. Although that still goes on the guys those cars appeal to are getting old. If you go to car shows you can see the changes from old cars to the popularity of muscle cars and now on to eighties cars and the factory performance Camaros, Mustangs, Dodges, Corvettes, etc. You can add more horsepower to some of these cars with a few key strokes on the key board then major hardware (manifolds, heads, etc.) changes of the past. 
 

Also folks want more out of there cars then just something that goes fast in a straight line. Auto cross, track days are all changing the car hobby. The popularity of imported cars has also changed the car hobby but seemed to be forgotten by companies like Edelbrock who seemed mostly invested in American iron. I do give credit to Edelbrock for maintaining their aluminum foundry in the US and also manufacturing products in the US. I'm sure manufacturing in China like so many other companies do would have cut their costs significantly. Anyway all this to say it's easy to see why there are consolidating and cutting costs measures being taken.

In reply to pirate :

Edelbrock has parts for these "funny furrin'" cars as well, like CARB legal superchargers for Toyobarus.

Maybe Edelbrock is just getting out of California, like a lot of other companies are choosing to do these days.  

Also note that it is a California plant they are closing. If you are going to close one plant, it will be California. 

68TR250 said:

"some of the operations will be relocated to the company’s casting foundries in San Jacinto."

San Jacinto is in . . . California

CrustyRedXpress (Forum Supporter) said:

This looks like another example of a PE firm buying a healthy company, sucking it dry and leaving the workers out in the cold. "Operations focused" is just corporate speak for cost cutting. 

https://www.iopfund.com/meet-the-team/

Also shiny happy people like performance products and jegs sending an edelbrock intake to china and copying it to sell for half because they stole all the R+D that the legit company did.  

As someone who competed directly with Chinese made goods I can tell you if you had anything made in China it has been reverse engineered and only a matter of time before it shows up for sale here no matter how simple or complicated. 

In reply to TurnerX19 :

It's not only a regular plant, IIRC that's also their R&D center. Makes you wonder where they're going to do that now, or if they're just riding the elevator all the way down...

Patrick (Forum Supporter) said:

CrustyRedXpress (Forum Supporter) said:

This looks like another example of a PE firm buying a healthy company, sucking it dry and leaving the workers out in the cold. "Operations focused" is just corporate speak for cost cutting. 

https://www.iopfund.com/meet-the-team/

Also shiny happy people like performance products and jegs sending an edelbrock intake to china and copying it to sell for half because they stole all the R+D that the legit company did.  

Intellectual property is only as strong as your patents and the lawyers you have to defend them.... if you have no patents then you have nothing.. it's trade secrets...

is it E36 M3ty.. sure.. but it's also reality.

In reply to 68TR250 :

The future isn't hot rods. At best this is the last generation doing hot rods. Look at the specs of a Tesla S 450 mile range. top speed 199mph.  0-60 in 1.9 seconds! 
That old push rod V8 car is of almost zero interest to kids. Roads are jammed with traffic. Gas, insurance, purchase price all lose out to cell phones, student loans, and video games. 

spacecadet (Forum Supporter) said:

Patrick (Forum Supporter) said:

CrustyRedXpress (Forum Supporter) said:

This looks like another example of a PE firm buying a healthy company, sucking it dry and leaving the workers out in the cold. "Operations focused" is just corporate speak for cost cutting. 

https://www.iopfund.com/meet-the-team/

Also shiny happy people like performance products and jegs sending an edelbrock intake to china and copying it to sell for half because they stole all the R+D that the legit company did.  

Intellectual property is only as strong as your patents and the lawyers you have to defend them.... if you have no patents then you have nothing.. it's trade secrets...

is it E36 M3ty.. sure.. but it's also reality.

That would be true if the Chinese played by the rules, but they don't. They will steal designs brazenly and their government won't do a thing to stop it. I had an interesting discussion with a guy who worked for a well known model train manufacturer. They've perfected design theft to a new level. Even a company (his) that hires them to make a design will sell the blueprints out the back door to someone else.

L5wolvesf said:

68TR250 said:

"some of the operations will be relocated to the company’s casting foundries in San Jacinto."

San Jacinto is in . . . California

San Jacinto is significantly cheaper to live in than LA. It's hot as hell and not nearly as nice. You could probably buy 2 to 3 houses in San Jacinto for the price of one near Torrance. Might as well be a different state. 

yupididit said:

San Jacinto is significantly cheaper to live in than LA. It's hot as hell and not nearly as nice. You could probably buy 2 to 3 houses in San Jacinto for the price of one near Torrance. Might as well be a different state. 

YEP , 

I do not think you will see many new products from Edelbrock in the future ,  

sure they will milk what they have now , or adapt  to never models but the future is EVs and "Green"

At one time they were the only local shop that would balance an engine for you , and I took a lot of parts over to the El Segundo shop :)

But , there will be a lot of automotive talent around the area , and you can be sure a few of them will open shops  and make some "NEW"  neat stuff.

yupididit said:

L5wolvesf said:

68TR250 said:

"some of the operations will be relocated to the company’s casting foundries in San Jacinto."

San Jacinto is in . . . California

 

San Jacinto is significantly cheaper to live in than LA. It's hot as hell and not nearly as nice. You could probably buy 2 to 3 houses in San Jacinto for the price of one near Torrance. Might as well be a different state. 

The business regulation climate is the same though.

In reply to L5wolvesf :

Yeah I knew that.  I posted that on a different forum and thought I had done it here also.

I would like to point out that Edelbrock is currently releasing new head castings (gen 3) for Oldsmobile Big Block with Small Block Oldsmobile specific castings to come in the next few months. That's anything but downsizing the company or products to making new releases for what the aftermarket considers a nitch platform.

A year ago Edelbrock Acquires COMP Performance Group (onallcylinders.com)

I believe this is an exit California strategy in the works. The first article I read didn't say this was a press release. More like they were trying to do it quietly while focusing on moving operations. Just speculating here but if Edelbrock packed up everything and everyone to relocate to TN they just might drop their bottom line enough to get way more competitive on pricing with cheaper brands without compromising their product. Can assume a massively more business favorable tax bracket in TN vs CA, plus there's no income tax in TN and much lower cost of living...employees could move and be paid less but still take more home at the end of the day. 

If you ask the right person you don't even have to have it reverse engineered the factory will sell it to you as-is with the cast in brand ground right off.