Bike Forums

Bike Forums (http://www.bikeforums.net/forum.php)
-   Fifty Plus (50+) (http://www.bikeforums.net/fifty-plus-50/)
-   -   No Hands: The Rise and Fall of the Schwinn Bicycle Company (http://www.bikeforums.net/fifty-plus-50/939774-no-hands-rise-fall-schwinn-bicycle-company.html)

DougG 03-24-14 07:25 AM

No Hands: The Rise and Fall of the Schwinn Bicycle Company
 
This book was published in 1996, although I just recently became aware of it and managed to get a copy due to Michigan's excellent statewide library catalog and borrowing program. Although it was written by a couple of Chicago-area business writers and sometimes gets bogged down in business and backruptcy-related minutiae, I found it to be a really interesting read for its history of not only Schwinn, but essentially of bicycling in the U.S. Schwinn started during the original "bicycle boom" of the 1890s and made it just about 100 years under its original family ownership before going bankrupt in the early 1990s.

In addition to the Schwinn story, it also had some interesting history and anecdotes of the rise of various other players in the industry such as Giant, Specialized, Trek, and Shimano, plus other small brands such as Kestrel, along with the personalities who established them. For example, Schwinn was essentially responsible for the rise of Giant in this country and ended up being undersold when Giant took to marketing bikes to dealers under their own name instead of just building them for Schwinn.

Being from Detroit, I was also intrigued that Schwinn's old-school management made a lot of the same mistakes made by the U.S. automakers in the same time frame, such as failure to modernize production facilities, not recognizing emerging markets and trends (BMX, adult biking, lightweight road bikes, MTB, etc.), and not taking the Asian manufacturers seriously enough as competition.

I have only owned one Schwinn, which was a mid-70s LeTour 10-speed, and was surprised to find that my bike was actually imported from Japan simply because Schwinn's factory was unable to manufacture bikes with the "newfangled" lugged frame technology. It was the beginning of the end for them.

Also brought out was how difficult it is for a 100% family-owned business to succeed for many generations in a row with family members at the helm. Sooner or later you're going to get someone who gets the top position by entitlement over talent and wrecks it all. Again, I was reminded of how Bill Ford turned over the top spot of Ford to an "outsider" (Alan Mulally) and thereby saved his family's company from the fates that GM and Chrysler fell into.

Anyway, highly recommended for bicycling enthusiasts!

loky1179 03-24-14 08:37 AM

I recently read this as well - also by way of our inter-library loan system. It was interesting to me as well, especially having worked at a number of family owned businesses. I've seen first hand where one generation builds up the business, and the kids are unable to continue that success.

The other interesting thing was how it detailed the 1890s bike boom. What I had never known before was how fast the subsequent bike "crash" came. Sales of new bikes just fell off a cliff.

Anyone still selling bikes after the crash had to be a pretty good business person, which is a credit to Ignaz Schwinn (now I also know his name wasn't Arnold!).

Schwinn was able to reinvent itself once, after WWII, when it established itself and all the Schwinn shops nationwide. Making the Schwinn name synonymous with "bicycle". Re-inventing itself again was maybe a little too much to ask.

A good read.


Quote:

Originally Posted by DougG (Post 16605711)
This book was published in 1996, although I just recently became aware of it and managed to get a copy due to Michigan's excellent statewide library catalog and borrowing program. Although it was written by a couple of Chicago-area business writers and sometimes gets bogged down in business and backruptcy-related minutiae, I found it to be a really interesting read for its history of not only Schwinn, but essentially of bicycling in the U.S. Schwinn started during the original "bicycle boom" of the 1890s and made it just about 100 years under its original family ownership before going bankrupt in the early 1990s.

In addition to the Schwinn story, it also had some interesting history and anecdotes of the rise of various other players in the industry such as Giant, Specialized, Trek, and Shimano, plus other small brands such as Kestrel, along with the personalities who established them. For example, Schwinn was essentially responsible for the rise of Giant in this country and ended up being undersold when Giant took to marketing bikes to dealers under their own name instead of just building them for Schwinn.

Being from Detroit, I was also intrigued that Schwinn's old-school management made a lot of the same mistakes made by the U.S. automakers in the same time frame, such as failure to modernize production facilities, not recognizing emerging markets and trends (BMX, adult biking, lightweight road bikes, MTB, etc.), and not taking the Asian manufacturers seriously enough as competition.

I have only owned one Schwinn, which was a mid-70s LeTour 10-speed, and was surprised to find that my bike was actually imported from Japan simply because Schwinn's factory was unable to manufacture bikes with the "newfangled" lugged frame technology. It was the beginning of the end for them.

Also brought out was how difficult it is for a 100% family-owned business to succeed for many generations in a row with family members at the helm. Sooner or later you're going to get someone who gets the top position by entitlement over talent and wrecks it all. Again, I was reminded of how Bill Ford turned over the top spot of Ford to an "outsider" (Alan Mulally) and thereby saved his family's company from the fates that GM and Chrysler fell into.

Anyway, highly recommended for bicycling enthusiasts!


CommuteCommando 03-24-14 09:19 AM

It's now on my list. I am aware how the Schwinn name still exists as a "brand" that is bought sold and traded in the modern bike industry. I see a lot of Schwinn being marketed as the "premium brand" by big boxes like Target and Walmart. These "Schwinn's" are nicer than the super cheap bikes these places sell. I am sure the Schwinn name helps them charge a little more for them, usually about $150 to $250, to a less sophisticated public totally unaware of the Schwinn story.

OldTryGuy 03-24-14 11:10 AM

Did the book include any information about the 4 cars designed and built by Schwinn? First in 1896 and last in 1905.

The Japan made bikes were built by Panasonic and that was before the Giant agreement.

rydabent 03-24-14 11:56 AM

In a way is sad to see what has happened to Schwinn. My first good bike was a Schwinn Le Tour. I was amazed to see how light it was as compared to the cheap iron pipe bikes I had ridden when younger.

OldTryGuy 03-24-14 01:02 PM

Quote:

Originally Posted by rydabent (Post 16606690)
In a way is sad to see what has happened to Schwinn. My first good bike was a Schwinn Le Tour. I was amazed to see how light it was as compared to the cheap iron pipe bikes I had ridden when younger.

Schwinn had the Paramount that rivaled any frame made, but of course the price was beyond the affordable range of many people. Up to WW II, the 'Paramount' was the only all-American Racer used in the six-day races. ref. 50 years of Schwinn-Built Bicycles. (1945)

Alfred Letourneur rode a Paramount behind a race car on May 17, 1941 for 1 mile in 33.05 seconds for a speed of 108.92mph. A 57 tooth 1" pitch chain ring and 9 tooth sprocket. https://www.google.com/search?q=alfr...ur%3B500%3B399

Cycle Babble 03-24-14 01:06 PM

Quote:

Originally Posted by DougG (Post 16605711)
Also brought out was how difficult it is for a 100% family-owned business to succeed for many generations in a row with family members at the helm. Sooner or later you're going to get someone who gets the top position by entitlement over talent and wrecks it all. Again, I was reminded of how Bill Ford turned over the top spot of Ford to an "outsider" (Alan Mulally) and thereby saved his family's company from the fates that GM and Chrysler fell into.

I have seen some great companies fail due to this one issue. A perfect example of why certain people do not belong in management.

John S

Zinger 03-24-14 01:22 PM

Quote:

Originally Posted by Cycle Babble (Post 16606924)
I have seen some great companies fail due to this one issue. A perfect example of why certain people do not belong in management.

John S

Without having read the book I'd say they were late in jumping on the bike boom with more sportier models and just had a "varsity" kind of reputation at the outset of that era that they were late shaking off. That's just plain incompetent management.

By the mid '80s they had some good stuff but unless you were in some midwestern town where Schwinn was the only dealer that's not what people were generally buying. Most of my riding partners were on Super Sports or Le Tours by then but that wasn't typical nationwide.

Jim from Boston 03-24-14 01:26 PM

See this recent thread on Fifty-Plus, “Schwinn Varsity Alumni,” in particular this post with a link to some Schwinn history.

Biker395 03-24-14 02:11 PM

I love Schwinns. I have 4 Schwinn road bikes. My old 2001 Fastback is a great bike ... I still like riding it.

Schwinn continued to make great bikes long after the Schwinn family left. They even continued to make some nice bikes after they were bought out by Pacific. Doral has pretty much killed them, though. :-(

DiabloScott 03-24-14 02:41 PM

When I was a really small kid, Captain Kangaroo would do a Schwinn promo and say "Schwinn bikes, the quality bikes, are best" I totally ate it up.

Then a few years later, Captain-11 (local cartoon host) showed the convertible girl/boy bike with the top tube that installed with just a twist and I thought "That's the stupidest thing anyone has ever invented".

My last Schwinn was about a 1973 Le Tour... not bad, got stolen. Next bike was a Raleigh.

Wouldn't it have been incredible though, if someone in the 70s had invented the basic bomb-proof MTB?

tcs 03-24-14 04:21 PM

Quote:

Originally Posted by loky1179 (Post 16605934)
Schwinn was able to reinvent itself once, after WWII, when it established itself and all the Schwinn shops nationwide. Making the Schwinn name synonymous with "bicycle". Re-inventing itself again was maybe a little too much to ask.

Frank (Ignaz' son) Schwinn rescued/revitalized the American bicycle industry and American bicycling in the early 1930s with the balloon tire (No Hands pages 31-35, also this). It's usually forgotten/overlooked in American bicycle history, but by the outbreak of WWII, more bicycles were being sold each year in the USA than any year in the 1890s bike boom.

tcs 03-24-14 04:35 PM

Quote:

Originally Posted by DougG (Post 16605711)
For example, Schwinn was essentially responsible for the rise of Giant in this country and ended up being undersold when Giant took to marketing bikes to dealers under their own name instead of just building them for Schwinn.

...which Giant didn't do until Schwinn attempted to undercut them by additionally sourcing bikes from Eastern Europe.

Tony Lo (head honcho @ Giant) has said in interviews that when they were first putting the deal together he was willing to give Schwinn a percentage ownership in Giant and sign a non-compete agreement to get their lucrative sub-contract manufacturing business - but nobody on the Schwinn negotiating team asked!

BTW - Giant is considered to be the world's largest bicycle manufacturer today.

dazevedo 03-24-14 04:47 PM

I had to laugh at this part - imported from Japan simply because Schwinn's factory was unable to manufacture bikes with the "newfangled" lugged frame technology. It was the beginning of the end for them.
If that is really in the book then who ever wrote it was lacking in research.Maybe he should have looked here

Paramount ? The Early Years

In 1938, Frank W. Schwinn officially introduced the Paramount. In its introductory catalog, Schwinn dedicated Paramount to the production of world competitive bicycles. High strength steel alloys were just becoming available as bicycle tubing and Paramounts from the outset were made with the new Chrome-Molybdenum formulas using brass lug-brazed construction. The lugs were carefully carved to improve strength and achieve a clean look.

So it would seem they knew about the "newfangled" lugged frame technology a few years before the mid 70's when they started farming frames out.

Dudelsack 03-24-14 05:04 PM

Quote:

Originally Posted by dazevedo (Post 16607551)
I had to laugh at this part - imported from Japan simply because Schwinn's factory was unable to manufacture bikes with the "newfangled" lugged frame technology. It was the beginning of the end for them.
If that is really in the book then who ever wrote it was lacking in research.Maybe he should have looked here

Paramount ? The Early Years

In 1938, Frank W. Schwinn officially introduced the Paramount. In its introductory catalog, Schwinn dedicated Paramount to the production of world competitive bicycles. High strength steel alloys were just becoming available as bicycle tubing and Paramounts from the outset were made with the new Chrome-Molybdenum formulas using brass lug-brazed construction. The lugs were carefully carved to improve strength and achieve a clean look.

So it would seem they knew about the "newfangled" lugged frame technology a few years before the mid 70's when they started farming frames out.

When the legend becomes fact, print the legend.

Biker395 03-24-14 06:22 PM

Quote:

Originally Posted by tcs (Post 16607516)
...which Giant didn't do until Schwinn attempted to undercut them by additionally sourcing bikes from Eastern Europe.

Tony Lo (head honcho @ Giant) has said in interviews that when they were first putting the deal together he was willing to give Schwinn a percentage ownership in Giant and sign a non-compete agreement to get their lucrative sub-contract manufacturing business - but nobody on the Schwinn negotiating team asked!

BTW - Giant is considered to be the world's largest bicycle manufacturer today.

That was after the Schwinns, though, wasn't it? I thought they were owned by some outfit outta Colorado at the time.

trackhub 03-24-14 06:47 PM

Interesting article. I agree that certain people DO NOT BELONG in management. Another example: Polaroid. Once one of the jewels of MA high tech, the company was ruined by out of control internal politics, and people with severe ego problems.

We must remember though, that sometimes, good stuff rises from the ashes of failure. In this case, Richard Schwinn got to keep that small factory in Waterford, WI, that had made the great Schwinn Paramounts. And from that, comes Waterford bikes, and Gunnar. Okay, I'm a tad biased. I've been riding a Gunnar since 2000. Yes, I would buy another.

The Schwinn name has value, as has already been pointed out. People, mostly people in my age group, will buy a Schwinn, because "that's the kind I always had!". Of course, they have no idea that it is not the same, Chicago based company at all.

JanMM 03-24-14 08:25 PM

I think the point was that while Schwinn was fully capable of building world class and expensive lugged framed bikes, they didn't have it together to build less-expensive lugged frame bikes until later than the '70's.
My Made in Japan '76 LeTour was great fun after I replaced the steel-rimmed wheels with aluminum wheels from Bike Warehouse.
My 'upgrade' to a Made in Mississippi '79 Super LeTour was fun until the seat tube broke (this was after thousands of miles of touring, commuting, baby trailer pulling, etc.) The original straight gauge hi-ten frame was replaced by Schwinn with a much-improved butted cromo frame.

loky1179 03-24-14 08:41 PM

Quote:

Originally Posted by tcs (Post 16607480)
Frank (Ignaz' son) Schwinn rescued/revitalized the American bicycle industry and American bicycling in the early 1930s with the balloon tire (No Hands pages 31-35, also this). It's usually forgotten/overlooked in American bicycle history, but by the outbreak of WWII, more bicycles were being sold each year in the USA than any year in the 1890s bike boom.


Thanks - I'm off on my timeline. And I guess maybe Schwinn did re-invent themselves more than once - first with the balloon tires, then with the spread of the dealerships and the marketing strategy to make Schwinn an exclusive, premium brand.

It was especially interesting to me, when they made the decision to stop selling their re-badged bikes in hardware stores and department stores. I have a pre-war rebadaged schwinn girls bike. The only thing that isn't Schwinn is the headbadge!

tcs 03-24-14 10:10 PM

Quote:

Originally Posted by Biker395 (Post 16607814)
That was after the Schwinns, though, wasn't it? I thought they were owned by some outfit outta Colorado at the time.

Giant began producing bikes for Schwinn in 1977. The Hungarian debacle was around 1988. Schwinn's bankruptcy was in 1992.

tcs 03-24-14 10:29 PM

In the summer of 1978 I was working as a draftsman/student engineer for the Austin Company in Houston, Texas. I rode my bike - a red Schwinn LeTour - to work every day and locked it up in the stairwell.

One day Mr. Big came to my drafting table and asked if that was my bike. I told him it was and said I'd be happy to move it if it was in the way. He said, "No, bring it to the conference room." !!!

Unknown to me, the Austin Company had inked a huge deal with Schwinn to design and build a new, modern factory in Tulsa, Oklahoma. (The facility was eventually built in Greenville, Mississippi.) They used my bicycle in discussions between the production guys and the architects about factory layout and flow. I spent the second half of that summer drafting plumbing and HVAC for that building, and I still remember explaining to the other guys about the little, walled off area in the middle of the factory labeled 'Paramount Room'.

So anyway, the bike boom of the 1970s happened fast*, and while Schwinn knew high quality lugged steel frame bicycle construction very well, they didn't have the equipment or skilled workers to build appreciable numbers of bikes with that construction technique. By the time they were able to, aluminum frames were what was making headlines and carbon fiber was being explored by the industry avant garde.


*In 1970, ~200,000 adult derailleur geared road bikes (a.k.a. 'ten speeds') were sold in the US market. In 1972, annual sales rose to ~8,000,000.

Zinger 03-24-14 10:50 PM

Quote:

Originally Posted by dazevedo (Post 16607551)
I had to laugh at this part - imported from Japan simply because Schwinn's factory was unable to manufacture bikes with the "newfangled" lugged frame technology. It was the beginning of the end for them.
If that is really in the book then who ever wrote it was lacking in research.Maybe he should have looked here

Paramount ? The Early Years

In 1938, Frank W. Schwinn officially introduced the Paramount. In its introductory catalog, Schwinn dedicated Paramount to the production of world competitive bicycles. High strength steel alloys were just becoming available as bicycle tubing and Paramounts from the outset were made with the new Chrome-Molybdenum formulas using brass lug-brazed construction. The lugs were carefully carved to improve strength and achieve a clean look.

So it would seem they knew about the "newfangled" lugged frame technology a few years before the mid 70's when they started farming frames out.

Yeah but Paramounts weren't actually built in house either. I would imagine it was more a matter of not wanting to retool and take on a different manufacturing technique with the retraining that goes with it. Perhaps too much consideration for the cost in manufacturing and not enough for the end product......A fatal blow by mismanagement.

I've always been a little leery of welded bottom brackets anyway after having seen a strong friend tear one out of his Huffy after only about a couple thousand miles or so. Perhaps just that particular weld quality but I've never seen a brazed BB separate just from riding yet.

Zinger 03-24-14 10:55 PM

Quote:

Originally Posted by tcs (Post 16608453)
So anyway, the bike boom of the 1970s happened fast, and while Schwinn knew high quality lugged steel frame bicycle construction very well, they didn't have the equipment or skilled workers to build appreciable numbers of bikes with that construction technique.

There ya go.....What I just said but you beat me to it.

dazevedo 03-24-14 11:52 PM

Quote:

Originally Posted by Zinger (Post 16608496)
Yeah but Paramounts weren't actually built in house either. I would imagine it was more a matter of not wanting to retool and take on a different manufacturing technique with the retraining that goes with it. Perhaps too much consideration for the cost in manufacturing and not enough for the end product......A fatal blow by mismanagement.

I've always been a little leery of welded bottom brackets anyway after having seen a strong friend tear one out of his Huffy after only about a couple thousand miles or so. Perhaps just that particular weld quality but I've never seen a brazed BB separate just from riding yet.

Granted from 38 to 58 the Paramounts were built at Emil Wastyn's shop under contract but in 59 they were built on site in the Cage room.I have no idea if they didn't build lugged lower cost frames from lack of skilled workers , or they stuck with a 3 class tier so to say first class lugged Paramounts, second class fillet-brazed Sports Tourers ,Super Sports and third class electro-forged the Varsity's, Continental's.

The whole point was that Schwinn did build lugged frames on site when they claim Schwinn's factory was unable to manufacture bikes with the "newfangled" lugged frame technology. Which wasn't so new.

Anyways this link The Classic Era ? 1958-79 tells what Frank Schwinn did to get the Paramounts in house.

Zinger 03-25-14 12:13 AM

Quote:

Originally Posted by dazevedo (Post 16608567)
Granted from 38 to 58 the Paramounts were built at Emil Wastyn's shop under contract but in 59 they were built on site in the Cage room.I have no idea if they didn't build lugged lower cost frames from lack of skilled workers , or they stuck with a 3 class tier so to say first class lugged Paramounts, second class fillet-brazed Sports Tourers ,Super Sports and third class electro-forged the Varsity's, Continental's.

The whole point was that Schwinn did build lugged frames on site when they claim Schwinn's factory was unable to manufacture bikes with the "newfangled" lugged frame technology. Which wasn't so new.

Anyways this link The Classic Era ? 1958-79 tells what Frank Schwinn did to get the Paramounts in house.

Thanks for the link. Kinda makes me appreciate the old Paramounts even more than I did (even though I didn't own one).

It's a shame the management was so late in converting the manufacturing process for the mid range bikes and upgrading the tubing. Really backasswards thinking considering what was being imported for them to compete with. They just rested on their laurels and were complacent to rely on their dealership until it was too late. The mid '80s mid range was great but I wasn't alone in wanting something different than a Schwinn before then. They should have had an answer to the imports and Trek long before they finally did.

Hey I've still got a tube of Schwinn white lithium grease though :)


All times are GMT -6. The time now is 10:08 AM.