The return of bicycle manufacturing to American shores might seem improbable with nearly 99 percent of all bikes sold in the U.S. now made in China, Taiwan or other low-wage Asian countries. But two bicycle industry veterans are among those who believe that conditions are right for some of that manufacturing to come home.
The U.S. bicycle industry began moving to Asia in the early 1980s, and there has been a gradual shutdown domestically, from about 15 million bikes manufactured annually in the U.S. to about 350,000 today. Most of the bikes built in the U.S. now are by small, high-end niche builders.
Jay Townley, a former long-time executive with the iconic brand Schwinn and now a bicycle industry consultant, believes factors are converging to bring significant bicycle manufacturing back to the U.S. He cites two major reasons: the three to four weeks of shipping time from Asia to the U.S., and the decreasing attractiveness of China as its labor rates increase.
“There are no barriers to entry other than the capital cost of the plant,” Townley says. “The next big thing is the know-how, which moved offshore as manufacturing moved offshore. The people who are most knowledgeable about bicycle manufacturing are in other countries right now.”
Townley spent 24 years with Schwinn, and was a senior executive involved in the shutdown of the Chicago-based company’s 1 million sq. ft. (92,900 sq. m.) of U.S. manufacturing space in the early 1980s. He says he is not aware of any plans by any of the major bike builders to bring production back to the U.S. But he says some smaller manufacturers believe they can be more nimble if they produce a portion of their bikes in the U.S. Proximity to markets and available labor would be deciding factors in where to locate a new production site, he says.
“The decision would be balanced by both the logistics requirements and by what short- and long-term tax benefits are available,” Townley says. “Typically, from the distribution side, you would look for something in the middle of the country. I would look for something around St. Louis or southern Illinois or Kansas, areas with available labor. I would even consider Detroit. The auto industry has left a lot of facilities and infrastructure and a lot of quality labor.”
Townley speculates that Trek or Cannondale could be companies that would consider opening a U.S. manufacturing operation. Trek produces about 50,000 high-end bikes annually at its plant in Waterloo, Wis. Cannondale and Schwinn are owned by Montreal-based marketing company Dorel Industries.
Bicycle industry veteran Kevin Wren was a sales executive with Cannondale and with suppliers Shimano and Bell Sports. He is now director of supplier relations for The Bike Cooperative, an organization serving bicycle retailers.
“I honestly believe the industry can come back,” Wren says. “Freight is such a major cost now. Maybe you don’t need the same players. Technologies are changing. The fact that we have let the industry leave the country to the extent it has is disgraceful.”
But Wren says if the industry comes back, it will be for reasons such as proximity to market, not quality. He says Asian bike builders are highly automated and produce top-quality bikes.
“You cannot buy a better quality bike than what comes out of Asia,” Wren says. “You will not out-design or out-engineer a product.”
Wren cites the example of Thule, a Sweden-based manufacturer of bike and cargo racks which has manufacturing operations in all of its markets and employs about 400 in Connecticut.
“They have a huge manufacturing operation in Seymour, Connecticut,” Wren says. “Is there a less likely environment to manufacture? They make 100 percent of everything they sell in North America. It isn’t the unions or the lack of labor. If you can do it in Seymour, you can do it anywhere. With the economy the way it is and people desperate for jobs, it can happen if local communities get involved.”
Bike Havens
The League of American Bicyclists, a non-profit organization based in Washington, D.C., ranks states and communities for their “bike friendly” qualities. States are evaluated with a comprehensive questionnaire completed by state DOT coordinators. The program also measures the combined performance of legislators, law enforcement, and state cycling advocates and promoters.
Washington led all states in the most recent survey released in May. And Minneapolis earned the League’s top community award for 2011, the gold-level award. The city was lauded for its investments in bike lanes, bicycling safety education, and encouragement programs. Silver designations went to Boston, New York City, Washington, D.C., and Sisters, Ore., just northwest of Bend.
Minneapolis has doubled its number of bicycle commuters over the last nine years, placing it behind only Portland, Ore., among the largest cities in the U.S.
“Bike friendly areas are where we see higher ridership,” Townley says. “These states are the leading edge of change for the market. It’s well known that we are no longer a homogenous market in the U.S. Not only do regions vary, but there is disparity within regions.
“Bike friendly communities,” he says, “are where bicycles become part of the community culture.”