mrfish

This is easy to say in retrospect, but I have a feeling you're right. B-school educated Cannondale execs probably drew the chart showing that new product + new market = high risk. At the time they propbably did a bunch of analysis that convinced them that the motorbike market looked a better option to spend $s than the bike market, and reasoned that standing still was not really an option as this normally leads to slow erosion of profitability and later death / takeover.

In my experience, companies often do great strategic analyses of markets, then fail to analyse whether they are the right company to take that opportunity. Mistake #2 starts with the thinking that earnings are volatile so should be diversified by moving into a new product or market. This is terribly wooly thinking since investors can diversify risk simply by investing in other companies. Plus new motorbikes are a much sexier to play with than to spend time on investor relations calls with the CFO to talk about share buybacks. Maybe this is why Warren Buffet made so much money on deeply boring and unsexy things like beverages and shaving products.

zonatandem

A bit of a rant on 'business and government' practices. Skip it, if you're looking for tandem content.

Hey, it's business dude . . .
Well we go back a ways in time.
Rudy was a member of the International Typographical Union (printer's union) for many years and paid hefty union dues. No complaints, made some very good wages with great benefits to boot (can you beat 4weeks paid vacation? Insurance, sick days etc?) + great working conditions. No mismanagement; however it's penions (actually a "Fraternal Benefit") system folded due to diminishing membership and computerization of the trade (similar set-up to our Social Security system).
Next chapter: Switched trades/unions and became a US Postal worker when we moved to AZ. Again nice wage package/benefits, vacation, sick days etc., but bordering on abysmal working conditions (read: continual mismanagement and harassment and ever-changing rules/priorities). Comes to retiring, our government passed a law during the Reagan administration that if you collected a postal pension, you could not collect full social security (even though I had paid in for all quarters needed for a full SS pension). Thank you Congresmen/women . . .
Now I get the smallest postal pension (put in 16 years + 4 years military service, which counts as 'federal service'.) My social security pension, and Kay's spousal SS benefits, are cut by 40% because of new government laws instituted 'after' I went to work for them.
Hey, it's business dude . . .
The little guy pays in and gets the short end of the stick.
I sympathize with the Burley co-op workers, but it seems business and government, can change the rules as they wish when they become responsible for paying out $$.
Perhaps we are one of the lucky ones getting a reduced pension . . . for now. Seems many other big businesses are reneging on their contracts/pensions.
Don't get me going!
We'd rather talk tandem!!!

rjberner

[QUOTE=
Hey, it's business dude . . .

We'd rather talk tandem!!![/QUOTE]

I hear you man and I empathize with your experiences. It is truly a different [global - just what is that?] world to live in now and not easy by any means. I wish the good folks at Burley nothing but healing and good health going forward, believe me. I wish this whole thread never got started in the first place, but we didn't start it.

Enjoy your tandeming..........

zonatandem

Riberner in Holland, MI:
Stuff happens and we have to make do regardless of the broken promises.
Have dealt with the Burley folks for about 18 years; great outfit and hope they can re-construct their company so that the co-op members don't get 'stiffed' in the process.
"Global" = get things made as cheap as possible and maximize profit margins.
Tandem content: packing up our tandem and stuff today after a 3 month hiatus in the Cache Valley in northern Utah. A great place to ride TWOgether!

zronn

I would not blame them for moving some of the manufacturing off shore. Keep the custom stuff here, but the Asian frame factories seem to have a pretty good handle on consistancy.
However, they are having shipping issues. Our frame sponsor has been waiting for a shipment since April. They have all of their frames loaded, but the ship as of Aug 1 has still not left dock. That kind of delay can really kill a business.

Dr.Deltron

Thats FOR SURE!! I have worked in a semi-secret job populated by the top 10th of the top 1% of the wealthiest/most powerful republicans in the U.S.A. They want your money & are hesitant to do anything that doesn't make them MORE money. Most could buy Burley outright with about an hours compensation.
Then they'd close the place and send everyone packing, if there was profit in doing so. They wouldn't give a d@mn about the lives they may ruin if THEY made some money doing it. VERY SCARY!

Sorry, the quoted comment struck a chord from long forgotten experiences.

SOooo...after reading this whole thread, I'm gonna hook up my '92 Burley trailer to my '86 Cannondale and take the kids for a really nice RIDE!

p.s. About that job? DON'T ASK...I can't tell you....or they would have to kill me! (Trust me on this one)

fixyourbike

Workerbee got owned!

I know the answers to many of the questions below and I'll just say straight out what you're artfully hinting at and what no one seems willing to say:

Tom Wright-Hay. He destroyed Burley and the livelihoods of many for an attempt (failed) at his own personal gain. Those members that supported him are also to blame because they allowed it to happen, however, they were being manipulated and probably thought they were doing the right thing for the company and their own livelihood. They were sadly mistaken. Those who opposed him were heros (most lost their jobs) and while they were not able to save Burley, they resisted enough to thwart him.

Anything to the contrary is spin and the true story will come out.

$h@wN

Don't know where you're getting your info Fixyourbike but I tend to agree with you that the aforementioned "CEO" did much to insure Burley's failure.

Tweety

See the local paper's story on the latest Burley woes.
Don

fixyourbike

Interesting. Burley has a new owner. The article quotes the new owner as saying that the backorder is caused by Burley having to buy materials and parts with cash because they are not in the good graces of their suppliers anymore (owed too much money) and they just don't have the cash to do it. BurleyCary, it seems that the rumors weren't exaggerations after all and you were spinning this. The biggest problem wasn't demand; it was cash.

The article says Burley will stop making all bicyles and will only make trailers. 35 People are losing their jobs.

mikeschwine

A lot of questions have been answered since your post regarding the Burley situation; but, yes, a simple quotation from Mark Twain (by the marketing manager) was, in hindsight, a bit too much 'Enron':



Mr. Burley: It would be a great time to deliver a more reassuring and factual statement to the marketplace from the CEO. Burley's image is suffering and, unfortunately, we have all lived through the ENRON (who me?) era to believe a simple quotation from Mark Twain."


Sadly, too many framebuilders and sewers lost their jobs (with more to come) because of questionable and nasty business practices (and that does sound a bit like an Enron story).

rjberner

Requiem for a great brand…….

So, was it the job(s) lost, or the craft? Jobs are jobs; a craft, well, that is something else entirely.

The discontinuance of bicycle making at Burley was due to one of only two things:

1. The market couldn’t support it, or,
2. The company couldn’t support a decent market, for whatever silly reasons.

If the first is true, then it is futile to anguish over this death. It is merely one more affirmation of the classic engineering theorem: “If a frog had wings, it wouldn’t bump its ass on the ground when it walked.”

If the second is true, as is being vehemently and bitterly proposed by former employees, then there is the birth of an opportunity for the skilled brethren who built those bikes.

So, which is it? What did Burley really throw away -- a lousy market, or a good opportunity? Only those deep in sales in the industry can answer the question and the question must be answered.

There is enough talent on this forum to help you talented people get started building and marketing quality frames. There are enough good tandem-oriented shops across the country to hang parts on those frames, in “basic, good, better, and best” packages. There may be enough potential customers out there, like me, of the genre who would pay more for something made (and assembled) in America. Call it the REQUIEM frame company.

I’ll buy your first frame.

MarkIvanCole

Hear-hear! We were looking at tandems just as the company changed owners. Decided it was best to buy the best bike for us--even though the company was sold--especially considering the LBS had been selling Burleys for 8 years with ZERO warranty returns. We love the bike. Hope all those great folks are able to make tandems again. We love ours!

DogBoy

I suggest you re-read the Enron story. Enron was about intentional attempts to hide the degree to which the company was leveraged to keep capital flowing into the company, along with management puffing the strong financial status of the company while selling off their own shares at the same time. Burly's story (from what I can tell) just seems to be several poor decisions by managment that lead to cash flow problems. These are very different situations. Still...Sad news for both Burly's brand and those that lost their jobs.

zzzwillzzz

just got back from interbike and the burley booth had nothing but trailers... it was a pretty sad site to see

ronald jenkins

Sad indeed zzzwillzzz. And as much as it would be easy to place the fall on one person (above comments by fixyourbike about general manager Tom Wrong-Hays), there were clearly a small group leading the biz for the past two or three years giving each other the 'nod and wink' treatment when it came to how best to make as much money as they could from the ugly mess and demise of the cooperative. One can only hope that they get what they deserve in the end - maybe living life a bit like O.J., free but still imprisoned.
R.

zonatandem

Had occasion to speak to some present Burley folk; asked if they are 'permantly' out of the bike/tandem biz. I suggested possible off-shore production (their Zydeco frame was built in China, all others US made).
The anwer was a bit ambiguous. New owner is getting an earful of many calls questioning their decision. to drop tandems. He apparently stated: Never said th issue of bikes/tandem was completely off the table.
Glimmer of hope for the Burley brand name?
As for building in China, Santana revealed 2 new models at Interbike in the planning stage, to be built in China to sell at $2,499.

TandemGeek

Great suggestion Rudy... Why not see if they can't undermine the rest of the US tandem producers by low-balling with a complete line of cheap off-shore tandem frames instead of the ones they made in Eugene and sold at a loss. I'd no sooner buy a Burley made off-shore than I'd buy a Co-Motion made off-shore. It's hard enough buying the rest of the bits and pieces that go into a bicycle that are still made in the US, Japan, or non-communist and non-third world countries where workers are paid a fair wage in a system that fully embraces capitalism, not the profiteering on cheap labor nonsense that's eroding wages around the world: this bird will come home to roost.


For a frame that will cost Santana $150 - $300 FOB... Yeah, that's the ticket. Again, nothing like profiteering on cheap 3rd world labor. Hey, everyone's doing it, right?

Well, I guess if you go to Interbike instead of the North American Hand Made Bicycle Show you'd probably assume that everyone's doing it...

steelboy

as the guy who made the frames for burley, reading this stuff fills my heart with anger adn joy....im as confused now as i was on 9/9/06 when they led us upstairs, told us we where all "laid off" and then escorted like inmates out of the building....no whats even more sad, two weeks ago i crashed on my burley wolf creek and bent the rear seat stay into the rear wheel, so now not only am i without my dream job but i lost the one bike i built for my self while there that i really loved.....no sure about ever getting on or near a bike again...lots of bad mojo.....

steelboy

as the guy who made the frames for burley, reading this stuff fills my heart with anger adn joy....im as confused now as i was on 9/9/06 when they led us upstairs, told us we where all "laid off" and then escorted like inmates out of the building....no whats even more sad, two weeks ago i crashed on my burley wolf creek and bent the rear seat stay into the rear wheel, so now not only am i without my dream job but i lost the one bike i built for my self while there that i really loved.....no sure about ever getting on or near a bike again...lots of bad mojo.....

K&M

One of the greatest things about buying a bike from Burley was knowing that it was a cooperative and that the profits, if any, were being shared equitably among the people doing the work. It would be an insult to the memory of a once great company and a dishonor to the Burley name to stick it on a frame (wherever it's made) manufactured by underpaid and exploited workers.

TandemGeek

That would be the aluminum Zydeco they've been selling for a few years that replaced the in-house, chromo version.

zonatandem

Yes the Cromo Zydeco was Eugene-made, the alu was from China.
Yes, did suggest to continue building Burley tandems, and yes off-shore if they cannot be built in the US. I opine it is better to have that design/quality (hopefully) for lower end tandems than having to buy some of the other miserable stuff that is now available at some shops . . .
Yes, everyone is going off-shore, including Cadillac and BMW built in China, Ford pickups made in Mexico, and Shim components in non-Japanese/Taiwanese factories, which already were not USA made. Even some of the great Italian bike stuff comes from guess where? I don't have to like it, but it is fact.
Have you ever tried to build up an all-American tandem? We have.
While we can afford to buy an American made twicer, many folks can't. Fortunately have always had good paying jobs, and a union card.
Cheap 3rd world labor? The US pays how much for minimum wage? They all have health insurance/pensions/paid vacation? Most folks are working 2 jobs/no benefits and can't afford to buy stuff unless they shop for inferior products at WallyWorld.
The China/Santana syndrome effect does not make me jump with joy.
Check the labels in your clothing, how about that TV set, see where your tires are made and where your food is coming from . . . USA?
Enough of a rant . . .
Went tandem riding this morning and got caught in rain that turned into a downpour and then into a hailstorm . . . this is Arizona? Maybe it's global warming/cooling!
Sorry for the rant, but I feel better!

Pedal on!
Rudy

TandemGeek

Let's try and limit our rants to the subject at hand and not drag in solving "world hunger". We're talking about the survival of a very small and fragile, niche manufacturing trade that affords us the opportunity to buy high-quality, hand-made, domestically produced tandem bicycle frames. So, with that in mind, help me out here....

You maintain....

Yet, you also wrote...

So, while you're not happy about Santana considering a move towards a well-designed lower-end tandem, you're over at the Burley booth encouraging the new owner to do just because somehow a Burley designed lower-end tandem imported and marketed using the Burley name would be better than the other miserable stuff available at some shops? What miserable stuff are you referring to and why would a Burley-designed / made-in China $1,100 to $1,500 entry level tandem be "better" than any of the other Asian-made tandems now available at that price point? And, more importantly, why would a similar made-in-China Santana product be a bad thing if it's a good thing for Burley? Oh, perhaps because it would force Co-Motion to do the same thing....???

Slippery slope? Perhaps. How much market share has Kia gained over the past several years and just who did they take it away from? Now imagine what will happen when Daimler-Chyrsler begins to sell the Chery Automobiles produced in China under their Dodge brand next year....

Want to learn more about how "lower prices" can drive economic change on a massive scale? Although somewhat skewed to the AFLCIO point of view (which is to say, they aren't friends of Walmart), the story of the demise of Huffy's domestic production contained herein is an interesting read in light of the aforementioned discussion:
https://www.aflcio.org/corporatewatch...y%20walmart%22

rjberner

Boys, boys…………. let’s take it outside…….

I think we’re all in agreement that things are sadly out of whack. The Huffy debacle and many others like it are chronicled in Senator Byron L. Dorgan’s must read: ‘Take This Job and Ship It’. He also details how our (your’s and mine) government encourages the “giant sucking sounds” we’re hearing here and all over Europe. Please read this important work by a Senator from North Dakota who is as sick about it all as we are. But you’ll need a stiff lemonade or two or three before you’re finished.

Pure economic theory tells us that the ebb and flow of sound trade is a good thing – as long as there is a modicum of trade balance. It shouldn’t matter if Asia can make bicycles cheaper than we can as long as we can make an equal amount of stuff that they need cheaper and better.

But we are about as far from a trade balance as we can get due in to very lopsided trade agreements and sweetheart deals with multinational corporations. (It isn’t all about cheap labor.) Right now we’re “buying” about $80 billion more stuff per month than we are “selling”! The raw, U.S. currency owned by Asian countries should cause us no end of insomnia these days. We’ve encouraged the ex-patriation of corporate profits and when we decide to “re-patriate” those profits, our government decides to tax those profits at one fifth (one fifth!) of normal internal corporate tax rates. So it should come as no surprise that toilet seats made for $6 in Germany (or India) are actually booked as $1250 items by U.S. corporate subsidiaries in those countries. Under these rules, if I were the new CEO of Burley, I would be delighted to make $250 frames in China via my Cayman (post office box) subsidiary and claim them as $2500 goods sold here in America.

Even Warren Buffet, that icon of American capitalism, agrees that this slope has gone way past slippery and has turned into a hopeless cliff, with incalculable damage is to our children and our children’s children. In the book, Dorgan and Buffet have proposed the beginnings of a plan to turn this mess around.

So, when I say let’s take it outside, I mean let’s take it to our “representatives” in Washington and demand that the pigs be removed from the trough in our capital. Perhaps we could start by throwing all the bums out and starting fresh, with publicly financed campaigns, term limits, and free, equal media time for candidates so that our “representatives” are not owned by Lilly, Walmart, and Wall Street. For our children’s children sake………

Sometimes you gotta get off the bike and mow the lawn and take out the garbage……