Schwinn Bicycle Company
Encyclopedia
Germans
The Germans are a Germanic ethnic group native to Central Europe. The English term Germans has referred to the German-speaking population of the Holy Roman Empire since the Late Middle Ages....
-born mechanical engineer
Mechanical engineering
Mechanical engineering is a discipline of engineering that applies the principles of physics and materials science for analysis, design, manufacturing, and maintenance of mechanical systems. It is the branch of engineering that involves the production and usage of heat and mechanical power for the...
Ignaz Schwinn (1860–1945) in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
in 1895. It became the dominant manufacturer of American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
bicycle
Bicycle
A bicycle, also known as a bike, pushbike or cycle, is a human-powered, pedal-driven, single-track vehicle, having two wheels attached to a frame, one behind the other. A person who rides a bicycle is called a cyclist, or bicyclist....
s through most of the 20th century and today it is a sub-brand of Pacific Cycle
Pacific Cycle
For the Taiwan-based folding bicycle company see: Pacific CyclesPacific Cycle, Inc. is an American bicycle importer and distributor founded in 1977 by Chris Hornung. The company owns the following brands; Schwinn, Mongoose, Roadmaster DYNO , InSTEP, Pacific Outdoors, Powerlite and Cannondale....
, owned by the multi-national conglomerate
Conglomerate (company)
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate structure , usually involving a parent company and several subsidiaries. Often, a conglomerate is a multi-industry company...
, Dorel Industries
Dorel Industries
Dorel Industries Inc. is a Canadian company, based in Montreal, Quebec, which designs and manufactures for three areas: juvenile, home furnishings and recreational/leisure. It was formed in 1987 as a result of a merger between Dorel Co. Ltd., founded in 1962 by Leo Schwartz and Ridgewood...
.
Founding of Schwinn
Ignaz Schwinn was born in HardheimHardheim
Hardheim is a town in the district of Neckar-Odenwald-Kreis, in Baden-Württemberg, Germany. The town is twinned with Müntschemier in Switzerland and Suippes in France. Its existence is first mentioned in written form in 1050. The township consists of Hardheim, Ruedental, Schweinberg,...
, Baden
Baden
Baden is a historical state on the east bank of the Rhine in the southwest of Germany, now the western part of the Baden-Württemberg of Germany....
, Germany in 1860 and worked on two-wheeled ancestors of the modern bicycle that appeared in 19th century Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
. Schwinn emigrated to the United States in 1891, where he found similar difficulties. In 1895, with the financial backing of fellow German American
German American
German Americans are citizens of the United States of German ancestry and comprise about 51 million people, or 17% of the U.S. population, the country's largest self-reported ancestral group...
Adolph Frederick William Arnold (a meat packer), he founded Arnold, Schwinn & Company. Schwinn's new company coincided with a sudden bicycle craze in America. Chicago became the center of the American bicycle industry, with thirty factories turning out thousands of bikes every day. Bicycle output in the United States grew to over a million units per year by the turn of the century.
The bicycle boom was short-lived, as automobiles and motorcycles quickly replaced bikes on American streets. By 1905, bicycle annual sales had fallen to only 25% of that reached in 1900. Many smaller companies were absorbed by larger firms or went bankrupt; in Chicago, only twelve bicycle makers remained in business. Competition became intense, both for parts suppliers and for contracts from the major department stores, which retailed the majority of bicycles produced in those days. Realizing he needed to grow the company, Ignaz Schwinn purchased several smaller bicycle firms, building a modern factory on Chicago's west side to mass-produce bicycles at lower cost. He finalized a purchase of Excelsior Motorcycle Company
Excelsior Motor Manufacturing & Supply Company
Excelsior Motor Manufacturing & Supply Company was a U.S. motorcycle manufacturer operating in Chicago from 1907 to 1931. It was purchased by Ignaz Schwinn, proprietor of bicycle manufacturer Arnold, Schwinn & Co. in 1912. The Henderson Motorcycle Company became a division of Excelsior when...
in 1912, and in 1917 added the Henderson Company
Henderson Motorcycle
Henderson produced 4-cylinder motorcycles from 1912 until 1931. They were the largest and fastest motorcycles of their time, and appealed to sport riders and police departments. Police favored them for traffic patrol because they were faster than anything on the roads...
to form Excelsior-Henderson. In an atmosphere of general decline elsewhere in the industry, Schwinn's new motorcycle division thrived, and by 1928 was in third place behind Indian
Indian (motorcycle)
Indian is an American brand of motorcycles. Indian motorcycles were manufactured from 1901 to 1953 by a company in Springfield, Massachusetts, USA, initially known as the Hendee Manufacturing Company but which was renamed the Indian Manufacturing Company in 1928. The Indian factory team took the...
and Harley-Davidson
Harley-Davidson
Harley-Davidson , often abbreviated H-D or Harley, is an American motorcycle manufacturer. Founded in Milwaukee, Wisconsin, during the first decade of the 20th century, it was one of two major American motorcycle manufacturers to survive the Great Depression...
.
Depression years
At the close of the 1920s, the stock market crash decimated the American motorcycle industry, taking Excelsior-Henderson with it. Arnold, Schwinn, & Co. (as it remained until 1967) was on the verge of bankruptcyBankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
. With no buyers, Excelsior-Henderson motorcycles were discontinued in 1931. Ignaz' son, Frank W. "F.W." Schwinn, took over day-to-day operations at Schwinn. Putting all company efforts towards bicycles, he succeeded in developing a low-cost model that brought Schwinn recognition as an innovative company, as well as a product that would continue to sell during the inevitable downturns in business cycles. After traveling to Europe to get ideas, F.W. Schwinn returned to Chicago and in 1933 introduced the Schwinn B-10E Motorbike, actually a youth's bicycle designed to imitate a motorcycle. The company revised the model the next year and renamed it the Aerocycle. For the Aerocycle, F.W. Schwinn persuaded American Rubber Co. to make 2.125 inches (54 mm) balloon tires, while adding streamlined fender
Fender (vehicle)
Fender is the US English term for the part of an automobile, motorcycle or other vehicle body that frames a wheel well . Its primary purpose is to prevent sand, mud, rocks, liquids, and other road spray from being thrown into the air by the rotating tire. Fenders are typically rigid and can be...
s, an imitation 'gas tank', a streamlined, chrome-plated headlight, and a push-button Bicycle bell
Bicycle bell
A bicycle bell is a bell mounted on a bicycle for warning pedestrians and other cyclists. They are a required piece of equipment is some jurisdictions. They usually mounted on the handlebars and thumb activated...
. The bicycle would eventually come to be known as a paperboy bike or cruiser
Cruiser bicycle
Cruiser bicycles, also known as beach cruisers, combine balloon tires, upright seating posture, single-speed drivetrains, and straightforward steel construction with expressive styling...
, and soon became an industry standard as other makers rushed to produce imitations.
Schwinn was soon sponsoring a bicycle racing team headed by Emil Wastyn, who designed the team bikes, and the company competed in 6-day races across the United States with riders such as Jerry Rodman and Russell Allen. In 1938, Frank W. Schwinn officially introduced the Paramount series. Developed from experiences gained in racing, Schwinn established Paramount as their answer to high-end, professional competitive bicycles. The Paramount used high-strength steel chromoly alloy tubing and expensive brass lug-brazed construction. During the next twenty years, most of the Paramount bikes would be built in limited numbers at a small frame shop headed by Wastyn, in spite of Schwinn's continued efforts to bring all frame production into the factory.
On 17 May 1941, Alfred Letourneur
Alfred Letourneur
Alfred Letourneur was a professional cyclist. He is known for setting the motor-paced world speed record...
was able to beat the motor-paced world speed record on a bicycle, reaching 175 km/h (108.7 mph) on a Schwinn bicycle riding behind a car on the Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
freeway.
Industry dominance
By 1950, Schwinn had decided the time was right to grow the brand. At the time, most bicycle manufacturers in the United States sold in bulk to department stores, which in turn sold them as store brand models. Schwinn decided to try something different. With the exception of B.F. Goodrich bicycles, sold in tire stores, Schwinn eliminated the practice of rebranding in 1950, insisting that the Schwinn brand and guarantee appear on all products. In exchange for ensuring the presence of the Schwinn name, distributors retained the right to distribute Schwinn bikes to any hardware store, toy store, or bicycle shop that ordered them. In 1952, F.W. Schwinn tasked a new team to plan future business strategy, consisting of marketing supervisor Ray Burch, general manager Bill Stoeffhaas, and design supervisor Al Fritz.In the 1950s, Schwinn began to aggressively cultivate bicycle retailers, persuading them to sell Schwinns as their predominant, if not exclusive brand. During this period, bicycle sales enjoyed relatively slow growth, with the bulk of sales going to youth models. In 1900, during the height of the first bicycle boom, annual U.S. sales by all bicycle manufacturers had briefly topped one million. By 1960, annual sales had reached just 4.4 million. Nevertheless, Schwinn's share of the market was increasing, and would reach in excess of 1 million bicycles per year by the end of the decade.
In 1946, imports of foreign-made bicycles had increased tenfold over the previous year, to 46,840 bicycles; of that total, 95 per cent were from Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
. The postwar appearance of imported 'English racers' (actually three-speed 'sport' roadsters
Roadster (bicycle)
A roadster, aka English roadster, is a type of utility bicycle once common in Britain and still very common in Asia, Africa, Denmark and the Netherlands, however, during the past several years, traditionally styled roadster bicycles have gained considerable popularity in the United States and...
from Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
and West Germany
West Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....
) found a ready market among U.S. buyers seeking bicycles for exercise and recreation in the suburbs. Though substantially heavier than later European-style 'racer' or sport/touring bikes, Americans found them a revelation, as they were still much lighter than existing models produced by Schwinn and other American bicycle manufacturers. Imports of foreign-made 'English racers', sports roadsters, and recreational bicycles steadily increased through the early 1950s. Schwinn first responded to the new challenge by producing its own middleweight version of the 'English racer'. The middleweight incorporated most of the features of the English racer, but had wider tires and wheels.
The company also joined with other U.S. bicycle manufacturers in a campaign to raise tariffs across the board on all imported bicycles. In August 1955, the Eisenhower administration implemented a 22.5% tariff rate for three out of four categories of bicycles. However, the most popular adult category, lightweight or 'racer' bicycles, were only raised to 11.25%. The administration noted that the U.S. industry offered no direct competition in this category, and that lightweight bikes competed only indirectly with balloon-tire or cruiser bicycles. The share of the US market taken by foreign-made bicycles dropped to 28.5% of the market, and remained under 30% through 1964. Despite the increased tariff, the only structural change in foreign imports during this period was a temporary decline in bicycles imported from Great Britain in favor of lower-priced models from Holland and Germany. In 1961, after a successful appeal by bicycle importers, the Eisenhower tariffs were declared invalid by the Court of U.S. Customs Appeals, and President Kennedy imposed new a new tariff rate at 50% on foreign-made bicycles, a rate which remained in place until 1964.
While every large bicycle manufacturer sponsored or participated in bicycle racing competition of some sort to keep up with the newest trends in technology, Schwinn had restricted its racing activities to events inside the US, where Schwinn bicycles predominated. As a result, Schwinns became increasingly dated in both styling and technology. By 1957, the Paramount series, once a premier racing bike, had atrophied from a lack of attention and modernization. Aside from some new frame lug designs, the designs, methods and tooling were the same as had been used in the 1930s. After a crash-course in new frame-building techniques and derailleur technology, Schwinn introduced an updated Paramount with Reynolds 531
Reynolds 531
Reynolds 531 is a brand name, registered to Reynolds Cycle Technology of Birmingham in the United Kingdom, for a manganese-molybdenum, medium carbon steel bicycle tubing....
double-butted tubing, Nervex lugsets and bottom bracket shells as well as Campagnolo
Campagnolo
Campagnolo is an Italian manufacturer of high-end bicycle components with headquarters in Vicenza, Italy. The components are organised as groupsets and are a near-complete collection of a bicycle's mechanical parts. Campagnolo's flagship components are the Super Record, Record, and Chorus...
derailleur dropouts. The Paramount continued as a limited production model, built in small numbers in a small apportioned area of the old Chicago assembly factory. The new frame and component technology incorporated in the Paramount largely failed to reach Schwinn's mass-market bicycle lines. Another change occurred in 1963 following the death of F.W. Schwinn, when grandson Frank Valentine Schwinn took over management of the company.
Marketing and anti-trust issues
By the late 1950s, Schwinn's exclusive marketing practices were well entrenched in the United States, practices that had ensured a dominant position in the US bicycle market. In order to prevent competition among its wholesalers, Schwinn assisted them by dividing up the national market. Schwinn also strengthened its dealer network, shrinking the number of authorized dealers. Since Schwinn could decide who got their bikes and who didn't, the company rewarded the highest volume dealers with location exclusivity, as well as mandating service standards and layouts. In response, the company was sued by the Department of Justice in 1957 for restraint of trade. In a ten-year legal battle, many of Schwinn's practices were upheld by the courts: judges ruled they had the right to have their bicycles sold by retailers equipped to service the bikes as well as sell them. However, in a ruling by the US Supreme Court in 1967, U.S. v. Arnold, Schwinn & Co., Schwinn was found guilty of restraint of tradeRestraint of trade
Restraint of trade is a common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. In an old leading case of Mitchell v Reynolds Lord Smith LC said,...
by preventing distributors shipping bicycles to unapproved dealers. Though the Arnold decision would be essentially overturned in later rulings, the company stopped working solely through independent local distributors and constructed four regional warehouses from which bicycles would—legally—be sent to shops. While this solved the problem of unfair trade practice with the courts, the new warehouses and distribution system cost millions of dollars at a time of rising competition from foreign manufacturers. It also made it more difficult for the company to stay informed of customer complaints regarding manufacturing or assembly problems.
Children and youth markets
During the 1960s, Schwinn aggressively campaigned to retain and expand its dominance of the child and youth bicycle markets. The company advertised heavily on television, and was an early sponsor (from 1958) of the children's television program, Captain KangarooCaptain Kangaroo
Captain Kangaroo is a children's television series which aired weekday mornings on the American television network CBS for nearly 30 years, from October 3, 1955 until December 8, 1984, making it the longest-running children's television program of its day...
. The Captain himself was enlisted to regularly hawk Schwinn-brand bicycles to the show's audience, typically six years old and under. As these children matured, it was believed they would ask for Schwinn bicycles from their parents. By 1971, U.S. government councils had objected to Schwinn's marketing practices. In response, Schwinn had Captain Kangaroo alter its format. The Captain no longer insisted that viewers buy a Schwinn, but instead made regular on-air consultations of a new character, 'Mr. Schwinn Dealer'.
In 1962, Schwinn's designer Al Fritz heard about a new youth trend centered in California for retrofitting bicycles with the accoutrements of motorcycles customized in the Bobber
Bobber (motorcycle)
A bobber is a custom motorcycle that usually has had the front fender removed, the rear fender "bobbed" or made smaller, and all superfluous parts removed to make it lighter.- History :...
or Chopper
Chopper (motorcycle)
A chopper is a type of motorcycle that was either modified from an original motorcycle design or built from scratch to have a hand-crafted appearance. The main features of a chopper that make it stand out are its longer frame design accompanied by a stretch front end...
style, including high-rise, ape hanger handlebars and low-rider banana seats. Inspired, he designed the first such mass-production bike for the youth market as Project J-38. The result, a wheelie bike
Wheelie bike
A wheelie bike, also called a muscle bike, high-riser, or banana bike, is a type of stylized children's bicycle designed in the 1960s to resemble a chopper motorcycle and characterized by ape hanger handlebars, a banana seat with sissy bar, and small wheels. Notable examples include the Schwinn...
, was introduced to the public as the Schwinn Stingray in 1963. For a mass-production bike, the new model was a revelation, with its requisite high-rise handlebars, banana seat, and 20" tires. Sales were initially slow, as many parents desiring a bicycle for their children did not find the Stingray appealing in the least. However, after a few appeared on America's streets and neighborhoods, many youth riders would accept nothing else, and sales took off. By 1965, a host of American and foreign manufacturers were offering their own version of the Stingray.
The Ten Speed
An increasing number of teens and young adults were purchasing imported European sport racing or sport touring bicycles, many fitted with multiple derailleur-shifted gears. Schwinn decided to meet the challenge by developing two lines of sport or road 'racer' bicycles. One was already in the catalog - the limited production Paramount series. As always, the Paramount spared no expense; the bicycles were given high-quality lightweight lugged steel frames using double-butted tubes of Reynolds 531Reynolds 531
Reynolds 531 is a brand name, registered to Reynolds Cycle Technology of Birmingham in the United Kingdom, for a manganese-molybdenum, medium carbon steel bicycle tubing....
and fitted with quality European components including Campagnolo
Campagnolo
Campagnolo is an Italian manufacturer of high-end bicycle components with headquarters in Vicenza, Italy. The components are organised as groupsets and are a near-complete collection of a bicycle's mechanical parts. Campagnolo's flagship components are the Super Record, Record, and Chorus...
derailleurs, hubs, and gears. The Paramount series had limited production numbers, making vintage examples quite rare today. Starting in 1960, for the rest of the market, Schwinn offered the Schwinn Varsity and Continental, now equipped as multi-geared sport bikes (10-speeds), and designed to imitate the style of the new narrow-tired 'racing' and sport bikes from Europe, though not their performance. The 1960 Varsity was introduced as an 8-speed bike, but in mid-1961 was upgraded to 10 speeds. Other road bikes were introduced by Schwinn in the early and mid 1960s, such as the Superior, Sierra, and Super Continental, but these were only produced for a few years. The Varsity and Continental sold in large numbers through the 1960s and early 1970s. By the mid-1970s Schwinn's heavy Varsity and Continental lines were falling out of public favor, although they would still be produced in large numbers into the 1980s.
The bicycle boom
Despite a huge increase in popularity of lightweight European sport or road racing bicycle
Racing bicycle
A racing bicycle, also known as a road bike, is a bicycle designed for competitive road cycling, a sport governed by according to the rules of the Union Cycliste Internationale...
s in the United States, Schwinn adhered to its existing strategy in the lightweight adult road bike market. For those unable to afford the Paramount, this meant a Schwinn 'sports' bike with a heavy steel electro-forged frame along with steel components such as wheels, stems, cranks, and handlebars from the company's established U.S. suppliers. Though weighing slightly less, the mid-priced Schwinn Superior or Sports Tourer was almost indistinguishable from Schwinn's other heavy, mass-produced models, such as the Varsity and Continental. While competitive in the 1960s, by 1972 these bicycles were much heavier and less responsive in comparison to the new sport and racing bicycles arriving from England, France, Italy, and increasingly, Japan.
Another problem was Schwinn's failure to design and market its bicycles to specific, identifiable buyers, especially the growing number of cyclists interested in road racing or touring. Instead, most Schwinn derailleur bikes were marketed to the general leisure market, equipped with heavy "old timer" accessories such as kickstand
Kickstand
A kickstand is a device on a bicycle or motorcycle that allows the bike to be kept upright without leaning against another object or the aid of a person. A kickstand is usually a piece of metal that flips down from the frame and makes contact with the ground. It is generally located in the middle...
s that cycling aficionados had long since abandoned. More and more cyclists, especially younger buyers, began to insist on stronger steel alloys (which allowed for lighter frames), responsive frame geometry, aluminum components, advanced derailleur shifting, and multiple gears. When they failed to find what they wanted at Schwinn, they went elsewhere. While the Paramount still sold in limited numbers to this market, the model's customer base began to age, changing from primarily bike racers to older, wealthier riders looking for the ultimate bicycle. Schwinn sold an impressive 1.5 million bicycles in 1974, but would pay the price for failing to keep up with new developments in bicycle technology and buying trends.
With their aging product line, Schwinn failed to dominate the huge sport bike boom
Bike boom
Bike boom or bicycle craze refers to several different times when, for a period of a few years, many people in many parts of Europe and North America wanted to buy and ride a bicycle. In brief, they occurred in 1819, 1868, the decade of the 1890s, and the 1970s...
of 1971-1975, which saw millions of 10-speed bicycles sold to new cyclists. Schwinn did allow some dealers to sell imported road racing bikes, and by 1973 was using the Schwinn name on the Le Tour, a Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese-made low-cost sport/touring 10-speed bicycle. Schwinn developed strong trading relationships with two Japanese bicycle manufacturers in particular, Bridgestone
Bridgestone
The is a multinational rubber conglomerate founded in 1931 by in the city of Kurume, Fukuoka, Japan. The name Bridgestone comes from a calque translation and transposition of ishibashi, meaning "stone bridge" in Japanese....
and National/Panasonic
Panasonic
Panasonic is an international brand name for Japanese electric products manufacturer Panasonic Corporation, which was formerly known as Matsushita Electric Industrial Co., Ltd...
. Though these met initial dealer resistance as "imports
Not Invented Here
Not invented here is a term used to describe persistent social, corporate, or institutional culture that avoids using or buying already existing products, research, standards, or knowledge because of their external origins. It is normally used in a pejorative sense, and may be considered an...
" and were not included in the Schwinn consumer catalog, it was soon realized that the Panasonic and Bridgestone 'Schwinn' bicycles were fully the equal of the American-made versions in quality and performance. Schwinn soon had a range of low, mid- and upper-level bicycles all imported from Japan. Schwinn's standard road bike model from Panasonic was the World Traveler, which had a high-quality lugged steel frame and Shimano
Shimano
Shimano, Inc. is a Japanese multinational manufacturer of cycling components, fishing tackle, and rowing equipment.In 2005, the company had net sales of US $1.4 billion. Bicycle components provided 75% of its sales income...
components. Schwinn also marketed a top-shelf touring model from Panasonic, the World Voyager, lugged with butted Tange
Tange International Co.
Tange International Co. is a major manufacturer of high quality steel tubing for bicycle frames. They are a rival to the British based tubing manufacturer Reynolds. Where the defacto standard of bicycle tubing from European Bike Boom bikes is Reynolds steel the Japanese defacto standard is Tange...
chromoly tubing, Shimano derailleurs, and SunTour bar-end shifters, a serious challenge to the Paramount series at half the price.
By 1975, bicycle customers interested in medium-priced road and touring bicycles had largely gravitated towards Japanese or European brands. Unlike Schwinn, many of these brands were perennial participants in professional bicycle racing, and their production road bicycles at least possessed the cachet and visual lineage of their racing heritage, if not always their componentry. While not as prominent at the winner's podium, Japanese brands such as Fuji
Fuji Advanced Sports
Fuji Bikes, is an American distributor of bicycles built in Taiwan, China, and Poland. The company is a descendant of , a bicycle manufacturer originally established in Japan in 1899. The company took its name and logo from Mount Fuji, a Japanese symbol of strength and endurance...
and Panasonic
Panasonic
Panasonic is an international brand name for Japanese electric products manufacturer Panasonic Corporation, which was formerly known as Matsushita Electric Industrial Co., Ltd...
offered consistently high quality, reasonable prices, and state-of-the-art-derailleur, crankset, and gearing design. Unlike Schwinn, most Japanese bicycle manufacturers were quick to adopt the latest European road racing geometries, new steel alloys, and modern manufacturing techniques. As a result, their moderately-priced bicycles, equipped with the same Japanese-made components, usually weighed less and performed better than competitive models made by Schwinn. Schwinn brand loyalty began to suffer as huge numbers of buyers came to retailers asking for the latest sport and racing road bikes from European or Japanese manufacturers. By 1979, even the Paramount had been passed, technologically speaking, by a new generation of American as well as foreign custom bicycle manufacturers.
BMX bicycles
Schwinn also largely failed to capitalize on a new trend: BMX racingBMX racing
BMX racing is a type of off-road bicycle racing. The format of BMX was derived from motocross racing. BMX bicycle races are sprint races on purpose-built off-road single-lap race tracks. The track usually small a starting gate for up to eight racers, a groomed, serpentine, dirt race course made of...
. After first claiming it to be a dangerous sport, management changed their tune—too late—when they introduced the Scrambler in 1975, which evolved into a BMX design in the late 1970s, but it was heavier than designs from other manufacturers. The Stingray based Scrambler spawned the light weight, fully competition capable, chromolly-tubed Competition Scrambler in 1977, Scrambler 36/36, the Mag Scrambler in 1981, and the Sting with full Reynolds
Reynolds Cycle Technology
Reynolds Cycle Technology is a manufacturer of tubing for bicycle frames and other bicycle components based in Birmingham, England established in 1898.-History:...
, double butted
Butted tubing
Butted tubing is a bicycle construction design component. It is used to increase the thickness at the joints of the frame while allowing thinner metal or polymer everywhere else...
chromolly frame that was made in the same assembly area as the Paramount road racing
Road bicycle racing
Road bicycle racing is a bicycle racing sport held on roads, using racing bicycles. The term "road racing" is usually applied to events where competing riders start simultaneously with the winner being the first to the line at the end of the course .Historically, the most...
frames.
Schwinn followed the Scrambler line with the Predator in 1982, their first competitive step into the modern BMX market. A latecomer, the Predator took just eight percent of the BMX market. Schwinn also had a very successful BMX racing team made up of some of the best riders in the day. They were even used for an episode of the TV show CHiPs
CHiPs
CHiPs is an American television drama series produced by MGM Studios that originally aired on NBC from September 15, 1977, to July 17, 1983. CHiPs followed the lives of two motorcycle police officers of the California Highway Patrol...
.
Mountain bikes
By the late 1970s, a new bicycle sport begun by enthusiasts in California had grown into a new type of all-terrain bicycle, the mountain bikeMountain bike
A mountain bike or mountain bicycle is a bicycle created for off-road cycling. This activity includes traversing of rocks and washouts, and steep declines,...
. Originally based on Schwinn balloon-tired cruiser bicycles fitted with derailleur gears (called 'Klunkers'), a few participants had begun designing and building small numbers of mountain bikes with frames made out of modern butted chromoly steel. When the sport's original inventors demonstrated their new frame design, Schwinn marketing personnel initially discounted the growing popularity of the mountain bike, concluding that it would become a short-lived fad. The company briefly (1978–79) produced a bicycle styled after the California mountain bikes, the Klunker 5. Using the standard electro-forged cantilever frame, and fitted with five-speed derailleur gears and knobby tires, the Klunker 5 was never heavily marketed, and was not even listed in the Schwinn product catalog. Unlike its progenitors, the Klunker proved incapable of withstanding hard off-road use, and after an unsuccessful attempt to reintroduce the model as the Spitfire 5, it was dropped from production.
The company's next answer to requests for a Schwinn mountain bike was the King Sting and the Sidewinder, inexpensive BMX-derived bicycles fabricated from existing electro-forged frame designs, and using off-the-shelf BMX parts. This proved to be a major miscalculation, as several new U.S. startup companies began producing high-quality frames designed from the ground up, and sourced from new, modern plants in Japan and Taiwan using new mass-production technologies such as TIG welding. Schwinn's new competitors such as Specialized
Specialized Bicycle Components
Specialized Bicycle Components, more commonly known simply as Specialized, is a major American brand of bicycles and related products. It was founded in 1974 by Mike Sinyard and is based in Morgan Hill, California-History:...
and Fisher MountainBikes were soon selling hundreds of thousands of mountain bikes at competitive prices to eager customers, setting sales records in a market niche that soon grew to enormous proportions.
Factory and retooling issues
By this time, Schwinn's bicycle factory was completely outmoded in comparison to modern bicycle manufacturing centers in JapanJapan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
and Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
, who had continually invested in new and up-to-date manufacturing techniques and materials, including new joinery techniques and the latest lightweight chromoly steel (later, aluminum) alloys. The company considered relocating to a single facility in Tulsa
Tulsa, Oklahoma
Tulsa is the second-largest city in the state of Oklahoma and 46th-largest city in the United States. With a population of 391,906 as of the 2010 census, it is the principal municipality of the Tulsa Metropolitan Area, a region with 937,478 residents in the MSA and 988,454 in the CSA. Tulsa's...
, Oklahoma
Oklahoma
Oklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...
, but financing the project would have required outside investors, perhaps even foreign ones. Schwinn's board of directors rejected the new plant in 1978.
Labor troubles, bankruptcy and demise
In October 1979 Edward R. Schwinn Jr. took over the presidency of Schwinn from his uncle Frank, ensuring continuity of Schwinn family in the operations of the company. However, worker dissatisfaction, seldom a problem in the early years, grew with steep increases in inflation. In late 1980, the Schwinn Chicago factory workers voted to affiliate with the United Auto WorkersUnited Auto Workers
The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, better known as the United Auto Workers , is a labor union which represents workers in the United States and Puerto Rico, and formerly in Canada. Founded as part of the Congress of Industrial...
. Plant assembly workers began a strike for higher pay in September 1980, and 1,400 assembly workers walked off the job for thirteen weeks. Although the strike ended in February 1981, only about 65% of the prior workforce was recalled to work. By this time, increasingly stiff competition from lower-cost competition in Asia resulted in declining market share. These problems were exacerbated by the inefficiency of producing modern bicycles in the 80-year-old Chicago factory equipped with outdated equipment and ancient inventory and information systems. After numerous meetings, the board of directors voted to source most Schwinn bicycle production from their established bicycle supplier in Japan, Panasonic
Panasonic
Panasonic is an international brand name for Japanese electric products manufacturer Panasonic Corporation, which was formerly known as Matsushita Electric Industrial Co., Ltd...
Bicycle. As Schwinn's first outsourced bicycles, Panasonic had been the only vendor to meet Schwinn's production requirements. Later, Schwinn would sign a production supply agreement with Giant Bicycles of Taiwan.
Schwinn later moved remaining U.S. bicycle production to a new plant in Greenville
Greenville, Mississippi
Greenville is a city in Washington County, Mississippi, United States. The population was 48,633 at the 2000 census, but according to the 2009 census bureau estimates, it has since declined to 42,764, making it the eighth-largest city in the state. It is the county seat of Washington...
, Mississippi
Mississippi
Mississippi is a U.S. state located in the Southern United States. Jackson is the state capital and largest city. The name of the state derives from the Mississippi River, which flows along its western boundary, whose name comes from the Ojibwe word misi-ziibi...
, where bicycles could be assembled at lower cost using parts sourced from Asia. The Greenville plant was not a success, as Asian manufacturers could still produce and assemble high-quality bicycles at a far lower per-unit cost than Schwinn at its plant in Mississippi, which had to source component parts from Asia, then assemble them using higher-priced U.S. labor. The Greenville manufacturing facility, which had lost money each year of its operation, finally closed in 1991, laying off 250 workers in the process.
After a series of production cuts and labor force reductions, Schwinn was able to restructure its operations. The company renegotiated loans by putting up the company and the name as collateral, and increased production of the Airdyne exercise bicycle
Exercise bicycle
An exercise bicycle or bike, or stationary bicycle, or Exercycle is a device with saddle, pedals, and some form of handlebars arranged as on a bicycle, but used as exercise equipment rather than transportation...
, a moneymaker even in bad times. The company took advantage of the continued demand for mountain bikes, redesigning its product line with Schwinn-designed chromoly steel frames. Sourced from manufacturers in Asia, the new arrangement enabled Schwinn to reduce costs and stay competitive with Asian bicycle companies. In Taiwan, Schwinn was able to conclude a new production agreement with Giant Bicycles, transferring Schwinn's frame design and manufacturing expertise to Giant in the process. With this partnership, Schwinn increased their bicycle sales to 500,000 per year by 1985. Schwinn annual sales soon neared the million mark, and the company turned a profit in the late 1980s. However, after unsuccessfully attempting to purchase a minority share in Giant Bicycles, Edward Schwinn negotiated a separate deal with the China Bicycle Co. (CBC) to produce bicycles to be sold under the Schwinn brand. In retaliation, Giant introduced its own line of Giant-branded bikes for sale to retailers carrying Schwinn bikes. Both Giant and CBC used the dies, plans, and technological expertise from Schwinn to greatly expand the market share of bicycles made under their own proprietary brands, first in Europe, and later in the United States.
By 1990, other U.S. bicycle companies with reputations for excellence in design such as Trek, Specialized
Specialized Bicycle Components
Specialized Bicycle Components, more commonly known simply as Specialized, is a major American brand of bicycles and related products. It was founded in 1974 by Mike Sinyard and is based in Morgan Hill, California-History:...
, and Cannondale had cut further into Schwinn's market. Unable to produce bicycles in the U.S. at a competitive cost, by the end of 1991 Schwinn was sourcing its bicycles from overseas manufacturers. Seeking to increase its brand recognition, Schwinn established additional company-operated shops, a move that alienated existing independent bike retailers in cities where the company stores had opened. This in turn led to further inroads by domestic and foreign competitors. Faced with a downward sales spiral, Schwinn went into bankruptcy in 1992. The company and name were bought by the Zell/Chilmark Fund, an investment group, in 1993. Zell moved Schwinn's corporate headquarters to Boulder
Boulder, Colorado
Boulder is the county seat and most populous city of Boulder County and the 11th most populous city in the U.S. state of Colorado. Boulder is located at the base of the foothills of the Rocky Mountains at an elevation of...
, Colorado
Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...
.
In 1993 Richard Schwinn, great-grandson of Ignaz Schwinn, with business partner Marc Muller, purchased the Schwinn Paramount plant in Waterford, Wisconsin
Waterford, Wisconsin
Waterford is a village in Racine County, Wisconsin, United States. The population was 4,048 at the 2000 census. The village is located mostly within the Town of Waterford...
, where Paramounts were built since 1980. They founded Waterford Precision Cycles
Waterford Precision Cycles
Waterford Precision Cycles is a small bicycle manufacturer based in Waterford, Wisconsin. Waterford produces high-end, custom, hand-built, steel-alloy frame bicycles, particularly road, criterium, stage, track, and cyclocross racing bicycles, that range in price from about $2,500 to $8,500...
, which is still in operation. In 2003 they employed 18 workers building lightweight bicycles.
Sale to Pacific
In September, 2001September
September is the 9th month of the year in the Julian and Gregorian Calendars and one of four months with a length of 30 days.September in the Southern Hemisphere is the seasonal equivalent of March in the Northern Hemisphere....
, Schwinn Company, its assets, and the rights to the brand, together with that of the GT Bicycle, was purchased at a bankruptcy auction by Pacific Cycle
Pacific Cycle
For the Taiwan-based folding bicycle company see: Pacific CyclesPacific Cycle, Inc. is an American bicycle importer and distributor founded in 1977 by Chris Hornung. The company owns the following brands; Schwinn, Mongoose, Roadmaster DYNO , InSTEP, Pacific Outdoors, Powerlite and Cannondale....
, a company previously known for mass-market brands owned by Wind Point Partners
Wind Point Partners
Wind Point Partners is a private equity firm focused on growth capital investments in middle-market companies across a range of industries.The firm, which is based in Chicago, Illinois and Southfield, Michigan, was founded in 1984...
. In 2004, Pacific Cycle was in turn acquired by Dorel Industries
Dorel Industries
Dorel Industries Inc. is a Canadian company, based in Montreal, Quebec, which designs and manufactures for three areas: juvenile, home furnishings and recreational/leisure. It was formed in 1987 as a result of a merger between Dorel Co. Ltd., founded in 1962 by Leo Schwartz and Ridgewood...
.
Models
Schwinn sells essentially two lines of bicycles. One is a line of discount bikes offered through mass-merchandisers like Wal-Mart, Sears and Kmart. The other line, featured on the website, are higher end models sold through specialty shopsLocal bike shop
A local bike shop or local bicycle shop is a small business specializing in bicycle sale, maintenance and parts. The expression distinguishes small bicycle shops from large chains and mail-order or online vendors is abbreviated LBS...
. Schwinn produces the following types of bicycles:
- CruisersCruiser bicycleCruiser bicycles, also known as beach cruisers, combine balloon tires, upright seating posture, single-speed drivetrains, and straightforward steel construction with expressive styling...
- Bike Path/Comfort
- Mountain
- RoadRoad bicycleThe term road bicycle is used to describe bicycles built for traveling at speed on paved roads. Some sources use the term to mean racing bicycle...
- HybridHybrid bicycleA hybrid bicycle is a bicycle designed for general-purpose utility and commuting on a wide variety of surfaces, including paved and unpaved roads, paths and trails...
- Urban includes foldersFolding bicycleA folding bicycle is a bicycle designed to fold into a compact form, facilitating transport and storage. When folded, the bikes can be more easily carried into buildings and workplaces or onto public transportation or more easily stored in compact living quarters or aboard a car, boat or plane...
- Kids
- ElectricElectric bicycleAn electric bicycle, also known as an e-bike, is a bicycle with an electric motor used to power the vehicle. Electric bicycles typically cost between and , use rechargeable batteries and can travel up to...
Gear
Schwinn also produces the following gear: HelmetBicycle helmet
A bicycle helmet is a helmet intended to be worn while riding a bicycle. They are designed to attenuate impacts to the skull of a cyclist in falls while minimizing side effects such as interference with peripheral vision...
s & Pads, Pumps, Saddle
Saddle
A saddle is a supportive structure for a rider or other load, fastened to an animal's back by a girth. The most common type is the equestrian saddle designed for a horse, but specialized saddles have been created for camels and other creatures...
s, Lights, Storage, Extras, Repair, Bike trailers, and Jogging stroller
Baby transport
Baby transport consists of devices for transporting and carrying infants. A "child carrier" or "baby carrier" is a device used to carry an infant or small child on the body of an adult...
s.