#614 – Bike Production Shifts Gears and Rolls Back to the US

Agracel’s first major industrial project was a 72,000 sf manufacturing facility constructed in 1993 in Effingham, Illinois, for Roadmaster, a leading bicycle manufacturer the 1990’s. As with many low-priced, mass-produced items in the United States at the time, production was no longer viable in the face of intense foreign competition. By 1999, Roadmaster, now Pacific Cycle, closed their Effingham operation, and began importing bicycles from Taiwan and China. We are happy to see the tables turning a bit with some bicycle production returning to the United States. Following is an excerpt from a recent post by IndustryWeek that highlights this effort.

Bike Production Shifts Gears and Rolls Back to the US
Harry Moser, Founder/President, Reshoring Initiative and Sandy Montalbano, Consultant to the Reshoring Initiative, 2016-12-08

From hand-crafted boutique brands to high-volume manufacturing and assembly, dedicated U.S. bicycle makers are reshoring bike production to the U.S. A confluence of factors including rising offshore costs, the benefits of a “local for local” business strategy, the growing popularity of bikes in expanding urban areas and patriotism are giving rise to new opportunities for an “old” mode of transportation.

The move of American-made bicycles offshore began with industry leader Schwinn shifting manufacturing to Asia in the 1980s. In an effort to take advantage of low wages, other large bicycle manufacturers like Huffy and Trek soon followed, at least in part. “By 2015 only 2.5 percent of the estimated 12.6million bikes sold in the U.S. (not including those for children) were made here, according to the National Bicycle Dealers Association.” However as offshore wages began to rise, bicycle manufacturers began to rethink their offshore manufacturing and sourcing decisions. Driven by rising offshore costs, the cost savings of automation and innovative processes, and the benefit of “Made in USA” branding, reshoring bike manufacturing and assembly began to make good economic sense.

According to the International Bike Organization, the U.S. was in the top five for bicycle production in 1990 at 5.6 million units. As more offshoring occurred, U.S. bike production fell to a low of 200,000 units in 2015 but the trend is looking up. The U.S. is on track to produce over half a million bikes this year.

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