Schwinn did not spend loads of money on Cespel. They went there because it was CHEAP to buy into a suffering existing bicycle factory. They offered Schwinn a low-cost labor work force. Actually, an ideal situation for a company like Schwinn that had already closed the Chicago factories and needed Schwinn products to sell to their existing dealerships. IMO, the biggest draw on the Schwinn company was having the Schwinn employees stationed there to help with the changeover and start up issues. If I remember correctly Rudy Schwinn was sent to Hungary for the first few years.
How about a little credit. Giant was not only a Schwinn Vendor, but also a Schwinn Competitor in the U.S. market. Schwinn was trying to establish their own proprietary factory supply chain to supply their dealers with Schwinn products. The future was not with Murray or Giant, or even CBC (China Bicycle Company). The new Cespel, and Greenville Schwinn factories were starts. They each built totally different types of the model line. Just like Waterford (steel frames) and CCI Kestral (carbon) built different types of products. They also had Bowflex (in Vancouver, WA), and Frontline (El Toro, CA) that built different types of exerciser products. After 97 years tied to the Chicago factories, and not being able to make product changes quick enough they desired to have these smaller factories that could each focus on a smaller part of the very broad product line. At some point they would have needed another factory to build the profitable fitness line products for the fitness division. If you look into the Powersports industry, they do the exact same thing. Honda assembles Goldwings in Ohio, Kawasaki builds Utility, ATV's, and Jet Ski's in Nebraska, Suzuki builds ATV's in Rome, GA. in an old carpet factory.
So far, the only thing everyone seems to talk about is finished Bicycles. I do not hear much talk about the fact that Schwinn's Sales Distribution Centers were the largest bicycle parts distribution operation in the United States, and likely the world. Not just Schwinn replacement parts but almost every name brand part you could name from streamers and plastic wicker baskets to Campy and Dura Ace parts groups. Clement Sew-ups to the largest Bell Helmet distributor in the nation. Kryptonite Locks were a big dollar accessory for the dealers. We even sold Oakley, before it was a huge brand.
The cruiser models made in the Cespel factory were replacing models previously build by Giant. Unless you go back and check the import duty paperwork of what models and during which months it's going to be very confusing trying to figure out what, where, who, and when the sourcing change was happening. I think we all agree, it was happening, even if we are not certain of the dates today.
Sorry, GT, I'm not just picking on you but in reading all these old threads, I just have to snicker at some of the guessing, and generalized opinions I read about what, or why Schwinn did something.
Schwinn was not perfect, we had our challenges being a very large ship unable to turn quickly, but we also had a very large presence, and did some good things in the industry for a very long time. Many of the old time Schwinn dealers paid off mortgages on large properties by moving Schwinn boxes in their back door and sold bicycles out their front doors. In the last thirty years, since the Schwinn ownership change, I believe you have seen every company make major changes, and some completely change their distribution channels. Not even Scotts Sports Group backed with Sam Zell's money could make it work through dealer distribution. Pacific Cycle's current Schwinn ownership is just milking the brand of the 97 years of the Schwinn family efforts.
Off my soap box,
John