Many U.S. bicycle manufacturers began to offshore production in the late 1980’s. Now, however, from hand-crafted boutique brands to high-volume manufacturing and assembly, some U.S. bicycle makers have begun to reshore bike production to the U.S. Harry Moser, founder/president of Reshoring Initiative, says a confluence of factors including rising offshore costs, the benefits of a “local for local” business strategy, growing popularity of bikes in expanding urban areas and patriotism are behind the reshoring efforts.
The move to offshore bicycle production began with industry leader Schwinn shifting manufacturing to Asia in the 1980s. To take advantage of low wages, other large bicycle manufacturers, such as Huffy and Trek, also began to offshore some production. By 2014, more than 99 percent, or 17.8 million bicycles, were imported into the U.S. each year, according to the National Bicycle Dealers Association.
Manufacturers of all types have begun to reshore. Government incentives, ecosystems/localization, proximity to customers and skilled workforce are all contributing factors, says Moser. At the same time, companies cited lower quality, supply interruption, high freight costs and delivery as leading problems with offshore production. Indeed, driven by rising offshore costs, the cost savings of automation and innovative processes, and the benefit of “Made in USA” branding, bicycle manufacturers in particular have begun to rethink their offshore manufacturing and sourcing decisions because reshoring bike manufacturing and assembly—in many cases—now makes good economic sense, Moser continues.
Consider the case, for example, of Bicycle Corporation of America (BCA), a division of Kent International. in 1991, BCA closed its New Jersey bicycle plant, which had been producing 30 percent of its bicycles, and moved all production offshore, Moser wrote in a recent blog. In recent years though, facing an annual employee turnover rate of 120 percent at its Shanghai factory and labor costs rising 10 percent to 15 percent annually, Arnold Kamler, chairman and CEO of Kent International, began to consider reshoring some bike manufacturing to the U.S., Moser reports.
In March 2013, at the U.S. Manufacturing Suppliers Summit for Walmart’s ‘Made in America’ initiative, Kamler met with South Carolina Governor Nikki Haley and began discussing the possibility of Kent opening a factory in South Carolina. A guarantee from Haley that Kent’s energy needs and training requirements would be filled sealed the deal, Moser reports.
The company did reshore to South Carolina, and Kamler says Kent—a high-volume, mass-market bike supplier to Walmart, Toys “R” Us, Target and other retailers—expects to roll out approximately 350,000 bikes produced in the Manning, S.C. factory this year, Moser reports. The plant operates with 115 employees assembling bikes at a rate that would require twice as many workers offshore. Kamler expects the company to produce about 500,000 bikes in the U.S. by 2017, add an additional 30 workers and has set a target to ramp up to more than one million bicycles by 2020, Moser writes. Kent will also import 2.7 million bikes to the U.S. in addition to their domestic production.
Interestingly, at least seven bicycle makers have chosen Detroit metro area locations to manufacture or assemble bikes in recent years. As Moser reports, some are high-end start-up shops with handcrafted, upscale bikes, such as the Detroit Bicycle Co., while others, like Slingshot Bicycle, have reshored production from overseas. 313 Bicycle Works was founded by Detroit firefighter Mike Sheppard and named after the Detroit area code. Shinola, best known for its watches and other products, assembles bicycles in its Detroit location using forks and frames made by Wisconsin-based Waterford Precision Cycles. The largest Detroit bike maker is Detroit Bikes, which is set to produce 10,000 bikes this year and has plans to produce as many as 50,000 bikes a year, Moser writes.
What are your thoughts on bike manufacturers reshoring production? Secondly, research shows that a growing number of consumers are willing to pay a higher price for products made in the U.S. Are you willing to pay slightly more for a bicycle made in the U.S.?