Pop N Wood

The Schwinn Collegiate to be produced in Detroit ... and available as early as next month through Walmart.com. “Walmart is our No. 1 retailer,” Birkicht said. The price is higher than other Schwinn models, one way the Canadian-owned Schwinn brand can assess demand for future, higher-priced American-made Schwinn products.

jlmonte

I saw a similar one at the LBS, it was $28.00 and I thought it wouldn’t look right on the bike. There is a larger story, to my original post. It all starts with my brother donating the bike to me, a friend wanting it for his daughter, and I’m trying to pay it forward costing me $70 and growing. No good deed goes unpunished.

Koyote

I'm guessing that I am the first actual economist to respond to this thread. And because I am an actual economist, I know that the answers to your questions are a little too complicated to be fully answered in a forum post.

However, I will note that, as indyfabz explained, you can indeed get a bike (at least, a frame + many parts) manufactured in the US, if you are willing to pay enough - I'm guessing his bike cost north of $10k. By the same token, my most recently-purchased bike has several components that were built in the US by small, high-end manufacturers -- for example, the stem was made in Indiana, and cost more than some entire bikes that are sold at Wal-Mart. And my bike's frame was built in Wisconsin, at a small firm owned by a guy named Richard Schwinn, who set up shop there after losing control of his family's company in the early '90s...they went belly up because they couldn't profitably produce relatively affordable bikes in the US. He can profitably produce relatively expensive bike frames on a very small scale, though I'd bet he's not getting rich.

I think there is an answer in the preceding paragraph.

General Geoff

First world wages/benefits, OSHA protections, environmental protections, all add up to a very expensive manufacturing base in America, compared to Southeast Asia. Modern consumerism favors cheap, disposable items over expensive, heirloom quality items, and planned obsolescence reinforces the disposable mindset. There is rarely a huge market for heirloom quality durable goods, because by definition a consumer only ever has to buy such a thing once. Businesses thrive on repeat business, not building indestructible machines that last generations for slightly above cost.

UniChris

LOL, Nope.

It helps to know enough about technologies to readily recognize what they are are not good for.

UniChris

Chasing a very unique and temporary market quirk is a great way to lose a lot of money.

Long before you get tooled up and staffed, it will be winter. There's a market for Christmas bikes for kids in some parts of the country, but those aren't going to be profitable with domestic costs.

By next spring's buying season, the incumbent industry overseas will have sorted itself out and adapted. To an extent, the more pandemic conditions are ongoing, the greater the advantage manufacturers in areas with fewer worker protections will have (though arguably "areas with fewer worker protections" now includes the US, at least for meat packing workers, etc).

An incumbent domestic builder with flexibility could maybe bring on some temporary help and free their experienced staff for the more challenging aspects to up capacity 20-30%, but this is not an opportunity to start a new bike-building business.

There are maybe some interesting possibilities for distributed (as in "distanced") boutique cottage industry at the high end - eg, premium wheel building and final assembly could potentially be farmed out to people working out of home shops, especially near the ultimate retailers. But that's a rounding error in terms of industrial capacity.

genejockey 

I don't think the US would win in a race to the bottom on production costs. Even if you automate heavily, labor costs will STILL be a lot higher in the US, and because our standard of living is composed of higher wages, cheaper goods, breathable air and drinkable water, we can't really cut production costs without essentially giving up a whole lot.

In the late 19th Century, the American watch industry was the envy of the world. NOBODY else was turning out watches of such quality, at prices even working men might afford, by the millions. By 1950, we were down to 3 American watch companies. By 1965, only 1 was still making the movements in the US, and by 1970, they'd stopped and been bought out by the Swiss, because we couldn't compete on labor costs.

We may be able to rebuild a manufacturing base when labor costs are equal all over, but that probably won't be because everyone rises to our level.

70sSanO

I’m not sure you’re going to find a 22.1mm stem regardless of where it is made. Traditional beach cruiser stem is 21.1mm or traditional 1” quill stem is 22.2mm. There are tons of stems on eBay.

Sorry to interrupt the the decades old discussion; unfortunately that ship has left.

My honest answer to your question is when the US is no longer a viable world market.

John

PDKL45

I don't know about the US, but there is a shift towards manufacturing closer to consumers by some brands. Giant, the Taiwanese company, is backing away from mainland China, while opening a new factory in Hungary. The former eastern bloc has quite a bit of bike manufacturing going on now, helped by shorter transportation times to western Europe, as well as reduced transport costs. Mexico may play a similar role with the US, with some new facilities being built there, as companies eye the US market in the wake of tariffs on China.

You may see some made in the USA stuff at some stage in the future? Companies are terrified of US labor costs, though, and it's the same everywhere. Once thriving industries in then-developing countries that took over manufacturing a few decades ago are now seeing whole industries offshored to countries that are still developing and have dirt-cheap labor and fewer environmental protection regulations etc.

jlmonte

Thanks Koyote, as a fan of Freakonomics, the NPR, podcast, I learned of “I, Pencil”. Growing up the gold standard was the Schwinn Stingray. I grew up humble and got a Sears Spyder ($20 plus tax). So I hear you saying that American bicycle manufacturing is alive, just different from times past. “A little too complicated”, yet bikes are as accessible as a No. 2 pencil.

I later corrected myself in a reply. I meant 7/8”, I went to public school in the 1970’s when I failed to learn the metric system. I guess the rest of the world still insists on specifying in metric. 🤔

70sSanO

Sorry I didn’t pick that out. Too much to read. Threads like these re-affirm why I don’t hang around older people.

John

Drew Eckhardt 

It's already possible.

There are lots of very nice $1500+ American made frames.

You're just not going to get a $2000 complete bike with gears made in America.

scott967

I don't think you see much in the way of integrated manufacturing these days, so you have the problem of developing all the infrastructure you need to assemble a complete end item. Producing the frame is just one aspect of making a bike. In East Asia you can easily source every part you need with competitive sources. A company making saddles for a dozen different brands has the scale to turn out what you want much more cheaply than trying to develop a saddle in-house.

scott s.
.

Koyote

I've not read "I, Pencil," but having been force-fed the television series "Free to Choose" in middle school during the '70s, I am familiar with the genre - and it's generally a bunch of libertarian fantasy claptrap. If you want to understand how a complex global economy operates, complete with the unprecedented market power and other distortions that we face today, such books are not very useful.

If you want to read a book which uses one product to flesh out modern global economic relations, try "The Travels of a T-Shirt in the Global Economy."

jlmonte

I cheated, and watched the author speak about the book and her research on YouTube. Now I’m compelled to read the book.

@70sSanO
I found the stem in a bike shop in Ojai, California!

So when all is said and done, I put just under $80 into a rescued bike; $28 forks, $21 stem, $15 chain, $13 tax and shipping. My labor free. Economically should have recycled the metal, given the bike was originally about $150-$200. Thanks all for the economic lesson.



New fork, stem, chain

Frozen step had to be cut off.

TiHabanero

Place the burden on the consumer. They make the choice to be cheap and support foreign manufacturing. In 1971 with my paper route money I paid $100 for a sierra brown Schwinn Varsity. It was $104 with tax. Today that same bike in 2020 dollars is about $650. In 71 it was perfectly acceptable to spend that much money on a bike that was made to last the lifetime of the user. Today it is not so. The consumer has been trained to expect more for less even if it kills them.

As previous posters have commented, the answer to the problem is much more complicated than what has been presented, and a whole lot of things have to change to bring manufacturing back to the country. The world is flat and the consumer is but one piece of the puzzle, but a very important piece at that.

Koyote

Getting "more for less" is what some call progress. Case in point: today, $650 will buy a bike which is far better than your Schwinn Varsity. How is that a bad thing?

FiftySix

zen_

The supply chains all being located in Asia is the first big hurdle to manufacturing elsewhere, then there is the technical deficit (engineers, skilled labor), and finally the cost of labor + regulatory compliance. I wish more was made in the USA too, but the best you're going to do if you want something built here now is a handmade steel frame with a hand built wheelset that has hoops and hubs that are still made in the USA (there are some).

Big picture though, most of the money you spend cycling stays right here even if your equipment was manufactured overseas. Most of the calories going in your body were grown here, the roads you ride on were built, and are maintained by American workers, the money you spend at cafes and such on rides supports those businesses. Bike shops and online retailers that mostly sell goods made overseas also employ people; in fact there is more added value (money) in the retail part than manufacturing.

MDS61

The US would manufacture more bikes if for example, the US dollar weakened substantially and for a sustained period against Asian currencies, or there were significant tariffs on Asian manufactured goods but not on basic materials such as imported steel.

As others have noted, Asian manufacturing centers have lower production costs (though the gap with China is decreasing) as well as economies of scale and established supply chains.

It is for the moment rational for high cost countries to focus on higher end products, whether German cars, Swiss watches or American bicycles.

MassCommuter

Better in some ways but not others. Weight, speed, comfort? Perhaps. But in terms of overall robustness and long-term reliability/repairability, no way.

Another point, that Varsity would have been considered rather entry level in its day; a good first bike costing little more than the cheapest models available back then. But today's mass consumer who's looking to spend $650 on a new ride would be expecting something more than that. Why? Because it's about three times the cost of a Wally World bike. Many recreational riders would even consider it high-end, even if most of us on these types of forums know better.

We've been increasingly conditioned over the years to be content living in a throwaway culture, where consumer- and even some mid-level products cost more to repair than replace. I wasn't even born yet in 1971, but I've seen enough overall change in manufacturing quality in recent decades to see that this unfortunate phenomenon has now become the norm.

unterhausen

After about 1973, a Varsity cost more than any entry level bike from Europe or Japan. In its end times, a Varsity, which was an overweight piece of junk, cost just as much as some really nice mid-range Japanese bikes, some of which were sold by Schwinn. It cost $1000 in today's money. If they had properly exploited the name recognition they had, I'm convinced they would still be around. But that was how American companies of that era practiced their craft.

I'm not sure how anyone can say a Varsity was made for long term use. It had a lot of European parts on it that were too crummy to be used by Europeans. And when they had the chance to switch to Japanese parts, they didn't for some reason. I can't tell you how many non-shifting Huret derailleurs I have replaced with Shimano Eagle derailleurs, which will still be usable when the cockroaches take over the planet.

MilfordJohn

You might be on to something here. Wages of Asian manufacturing workers have been on a steady uphill climb over the past decade (that includes China). At some point the world is going to stop allowing America to consume far more than it produces, and that will be the moment when mid-range manufacturing takes off in this country again. We have the market, we have the skills (even though those have been eroded over the past 20 years), all it takes is a bit of imagination on the part of the managers of large companies.

genejockey 

I believe in the language of international trade that makes us a desireable market, and the rest of the world will keep "allowing" us to do so as long as it makes them money.

But I think the basic premise is correct - that we might rebuild manufacturing in the US when either the rest of the world climbs up to our level of labor costs, or we slip down to theirs, or we meet in the middle. We really, REALLY don't want the second possibility.

Koyote

​​Since you weren't around in 1971, you may be forgiven for not knowing that the Schwinn Varsity was a piece of junk, as unterhausen has explained. Take it from someone who has actually ridden one.

Like many people, you are missing one fundamental fact: here in the US, wage costs are high because we have a relatively highly-skilled labor force -- more skilled workers, who have access to more sophisticated capital, are more productive and hence get paid higher wages. And it would be a waste to devote all of those resources to producing goods which can be easily produced by less-skilled (and hence lower-paid) workers in countries that are a bit less developed. This is why, in the US, as the production of lower-value added manufactured goods has declined, the production of more highly-valued goods and services (which can't as easily be produced in lower-wage, lower-skilled countries) have increased. And this is what has made us richer. (Well, it's made the country, as a whole, richer; the gains have been increasingly distributed in a tremendously lopsided manner, with actual workers getting declining shares for about 50 years now. But, contrary to popular belief, relatively little of the problems affecting the "working class" are caused by international trade.)

And if you really think tariffs are the answer, check out how Trump's tariffs on China have worked out: our trade deficit with China is now larger than before the tariffs went into effect.