Point Proof

Point Proof

The bike industry has endured a tough decade. Shops have closed in record numbers. Profits are down, and depending on to whom you speak, the average sale price of a bike is down as well. Still, good bike companies are making their way. There always seems to be room for quality.

However, the specter of tariffs on goods coming from China have rattled what is an already easily rattled market. It’s not hard to fathom how anyone would look at the prospect of a 25 percent tariff and think, “Oh, great! Just what we need.”

/sarcasm.

To my eye, the bike industry is less the victim than collateral damage. As more and more wealth gets concentrated in fewer and fewer people, there is simply less money moving through the economy, and like a river, to stay healthy, it needs to keep moving. The victims here are American workers who haven’t seen the bulk of the gains the economy has made since our last recession.

But that’s just a theme, not a verdict. People save up or sell old bikes to be able to buy new ones. It’s not like the entire bike industry has shut down.

Yesterday, though, Bicycle Retailer and Industry News published a piece that revealed how Huffy’s CEO Bill Smith plans to tell the U.S. Trade Representive and other members of the Section 301 Committee that tariffs should have happened long ago. In a statement filed with the USTR, Smith said, “The assumption the proposed 25 percent tariff provides competitive relief to a domestic industry is 20 years too late.”

Oh, I needed a good laugh.

Seriously, Chinese bikes aren’t why Huffy needs help selling their bikes. Their bikes are an antidote to cycling itself. Faced with riding a Huffy and taking up another sport … I wonder if I still have inline skates in my garage?

Huffy lost the race to the bottom more than 20 years ago. They actually lost that race sometime in the 1970s, by my reckoning. So Smith is wrong on that point. Huffy dug their own grave when they commissioned a study back in the 1990s that revealed how most of the bikes they make are ridden less than 100 miles during the entire life of the bike.

If that’s the sort of bell curve you aim for, you’re going to make a crap product. What Huffy appears not to have done is to ask themselves, ‘What can we do to inspire the purchasers of our bicycles to ride more?’ That question could have resulted in a different sort of product, one that might have encouraged people to ride more regularly.

Hell, in my days in retail I always told people to buy the best bike they could appreciate. That is, to buy the bike that wowed them. If in moving from the 105-equipped bike to the Ultegra-equipped one they didn’t notice a difference, then stick with 105. But if they noticed the difference in a test ride, that was the bike to buy for the simple reason that the more they enjoyed the bike, the more they’d dream about going for a ride after work and the more they’d ride, and as every cyclist knows, the more you ride, the more you enjoy it. I never once had someone come back to complain that I sold them too much bike; I did, however, have plenty of people come back and thank me for encouraging them to go with the better quality bike.

Smith’s comments are emblematic of the result of so many American companies making cost-cutting as a means to boost profit their biggest priority. If the only way to make a Huffy competitive is to tax Chinese imports 25 percent, maybe the product was never all that competitive.

Of course, it’s unlikely Smith would ever appreciate such a perspective.

The real rebuttal, the unimpeachable raspberry in the wind, is illustrated by companies like Seven Cycles, Co-Motion and Moots. And it is reinforced by carbon fiber manufacturing from Allied Cycle Works and now Ibis, who recently began making the size small Ripley LS in Santa Cruz. Think about that: a carbon fiber bike being made in one of the more expensive places on earth. And that’s the team behind the Ripley LS small in the image up above. The guy on the left is Preston Sandusky who was one of the founders of Kestrel, some 30 years ago. There’s really no substitute for expertise.

Manufacturing can happen in the U.S., and it is likely only to get better, no thanks to Huffy.

 

Images courtesy Ibis Cycles.

 


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7 comments

  1. Eric

    it would be interesting to hear from the other dhops you mentioned. Wouldn’t be nice if Cannondale had stayed here? Wouldnt it be nice if I could afford an American bike? I love Allied, but Im stuck buying second hand. Isn’t it nice that American Steel mills are beginning to reopen? Sure, steel prices jumped, give it a little time for our producers to spin up.

  2. AG

    Nicely written and I agree with you Padraig. Your premise can probably also be applied across many products that we all buy on a regular basis: tools, clothes, appliances, etc. There does seem to be a “race to the bottom” in many product categories. I have a question, though…why does Ibis only make the small size bike in Santa Cruz? Will they be expanding their manufacturing in SC, or is there some other logic that I’m not understanding?


    1. Author
      Padraig

      It’s worth dropping by the Ibis site to read their post all about it. The short version is that they hadn’t cut molds on the small Ripley LS because the original Ripley didn’t sell so well in the small. Many consumers think that you can’t do a good 29er in a small. This was a way to make the leap from prototyping to actual production without taking on a workload that would have overwhelmed their output. A pretty genius plan. The only part that doesn’t make sense is to scale up production in Santa Cruz, where the cost of living is tied to that of the Bay Area.

  3. Shawn

    If a bike shop employee this afternoon were to recommend that you buy the best bike you can afford, then you have to buy Asian … unless you can afford close to 5 digits for a bike. I don’t see a scenario where there’s a price equivalency between Asian and American bikes, given American wage expectations. And any scenario that approached that goal (absent arbitrary tarrifs) would likely remove the American worker from the equation. There really are no unicorns or rainbows, unfortunately.


    1. Author
      Padraig

      I’d encourage you to look at what a complete bike from Allied goes for. They aren’t the only option either. While it may not be easy to have an American-made frameset AND Dura-Ace and not spend $10k, it is totally doable with Ultegra or Force. And there are certainly options that can allow you to spend less than $5k.

  4. scottg

    Huffy doesn’t make bikes, they make bike shaped objects.
    BSOs are all Chinese. Great Wall Mart spent years driving suppliers offshore,
    while waving the flag, lets hear it for tariffs.

    If you want a carbon, AL, Ti or steel bike, there are a lot of choices,
    all made in USA, and have been since the 90s.
    Half the bikes on club rides are Waterfords and Lynskeys with a few Moots.
    10k$ Venges made in Taiwan or 10k$ Crumptons made here, your choice.


    1. Author
      Padraig

      First, BSOs, as you call them, are not all Chinese. More and more bikes are coming out of Vietnam and Myanmar. Factories are emerging in a number of locations throughout Southeast Asia.

      Second, to be perfectly accurate, a friend of mine who worked for one of the largest U.S. bike companies was responsible for dealing with Walmart. It was Walmart’s belief that products made in the U.S. would appeal to their customers. However, if there was any price premium over Asian products, they would default to the less expensive product. While it would be comforting to assign blame to a giant corporation, the simple fact is that the prevalence of Asian-made products has been driven by the American id’s desire for the cheapest workable product. Those of us who prefer quality, regardless of where it is made, are at the shallow end of the bell curve.

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