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Still a Family Business After 90 Years : Schwinn Remains a Bicycle Giant

June 17, 1985|Associated Press

CHICAGO — If your great-grandfather bought a bicycle from Ignaz Schwinn 90 years ago, the warranty would still be good today.

And Ignaz's great-grandson will sell you a Schwinn tomorrow with the same warranty.

But, reflecting the contemporary problems of American industry, the Schwinn you buy today probably is made in Taiwan or Japan. The company whose name is practically synonymous with American bicycles imports 65% of its products.

Nevertheless, the Schwinn Bicycle Co. remains a rarity in an age of billion-dollar corporate takeovers. The Chicago company is in its fourth generation of Schwinn family stewardship.

Dedicated Dealers

Industry analysts believe that Schwinn's reputation stems both from the quality of its bicycles and a network of dedicated dealers, which today number about 1,800 from coast to coast.

Its strategy was developed in the 1920s when Ignaz Schwinn refused to increase the volume of production to appease chain store merchants.

With the best warranty in the business, Schwinn couldn't afford to sacrifice quality for quantity, said Edward R. Schwinn, president.

Schwinn also sells its product only through authorized dealers employing Schwinn-trained mechanics, an approach intended to enhance the reputation for reliability.

"You've never seen anything like the loyalty of Schwinn's dealers throughout the country," said Bill Quinn, publisher of the Bicycle Business Journal in Fort Worth, Texas.

But, Schwinn's reputation for durability had its drawbacks.

Its bikes were durable because they were heavy, said Nick Page, owner of Schaumburg Cyclery in the Chicago suburb of Schaumburg. "Schwinn has always had the reputation for building a tank," he said.

When the adult cycling craze began in the '60s, customers wanted fast, light bikes, and foreign manufacturers leaped in to fill the demand, he said. Today, imports account for more than 40% of the American bicycle market.

When Ed Schwinn took over the family business in 1980, the company also was saddled with antiquated factories and high labor costs, said Quinn.

Chicago Plants Close

In March, 1980, 1,400 Schwinn workers joined the United Auto Workers, and the following October, they began a three-month strike.

It was the beginning of the end for Schwinn's Chicago production, and gradually over the next three years the firm's four Chicago plants were closed.

Schwinn opened a non-union plant in Greenville, Miss., in 1981 and began importing bikes from Giant Manufacturing Co. of Taiwan, and National Bicycle Co. of Osaka, Japan.

Employees reacted bitterly to the closing of Schwinn's Chicago plants, some calling for a boycott of Schwinn products.

'Cadillac of Bicycles'

Thomas Leetch, who started at Schwinn at age 16 and "did a little bit of everything" over 30 years, said he was "mad, aggravated and hurt."

"To me, it was the Cadillac of bicycles," said Leetch. "I had a couple of them myself, and I'd recommend them to anybody. Today I wouldn't. I believe in American-made products."

Ed Schwinn said the decision to halt production in Chicago was emotionally difficult, "but we had to do it to be competitive."

"We've been on the site since 1906 or '07. There's a lot of history here," Schwinn said.

Schwinn now has about 600 workers in the United States, compared to a peak of 1,900 in the 1970s.

It all started in 1895 when Ignaz Schwinn, a German immigrant, rented a shop and built 25,000 bikes, which cost between $100 and $125 each.

By 1974, Schwinn was building 1.5 million bikes a year.

Schwinn's market share peaked at about 25% in the early '50s. Today it averages 10%, about 1 million bikes a year, to place third in the U.S. market.

Huffy Corp. leads the industry with about 35% of all bikes sold in the United States, and Murray Ohio Manufacturing Co. is second with about 30%. Schwinn has never been America's top seller.

The company has passed through the hands of Ignaz; his son, Frank W. Schwinn; his grandson, Frank V. Schwinn, and now Ed.

As Schwinn approaches its 90th birthday, the company remains the nation's largest distributor of bike parts and Ed Schwinn believes it is ready to regain whatever prestige it might have lost.

New Light-Weight Bikes

Customers don't care where the bikes are built, he said, as long as they have the Schwinn quality.

The firm's new line of seven light-weight 10-speed bikes, with the base model selling for less than $150 to compete with mass-merchandised bikes, has received high marks from dealers.

Jim Kozy, manager of Kozy's Cyclery in Chicago, said Schwinn is the leading seller this year in his shop, which carries seven brands.

And the top of Schwinn's line, the $2,800 Paramount that is hand-built in Wisconsin, has won six United States Cycling Federation events for the Schwinn National Team.

Schwinn also has launched an aggressive advertising campaign to help push its new line and, as Schwinn puts it, "to remind people that we've been around for 90 years."

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