If You Love A Good Bike Story, Read This Book Report --"No Hands"

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Goldenrod

Wore out three sets of tires already!
Mar 14, 2016
515
74
Schaumburg
BUSINESS BOOKS
July 1, 1997 / Third Quarter 1997 / Issue 8 (originally published by Booz & Company)

No Hands: The Rise and Fall of the Schwinn Bicycle Company, an American Institution by Judith Crown and Glenn Coleman
No Hands: The Rise and Fall of the Schwinn Bicycle Company, An American Institution by Judith Crown and Glenn Coleman (350 pages, Henry Holt & Company, 1996)
by Barbara Presley Noble
When companies talk about going global, they often justify their business decisions by expressing what amounts to a regret about the success of the American economic system: American workers have become so well paid that they can't compete with low-wage workers in developing countries, who can do the job, if not as well, close enough as not to matter.
nohands.gif
The sentiment would be easier to accept if the recent history of corporate capitalism weren't replete with examples of obtuseness. Think of the big American auto makers in the early 1970's, who blamed their troubles on labor costs, trade policy and deluded consumers, on anything, that is, except their own miscalculations and resistance to innovation.
That sort of overweening arrogance is always riveting and so, therefore, is No Hands: The Rise and Fall of the Schwinn Bicycle Company, An American Institution. For nearly a century — between 1895, when Ignaz Schwinn and his partner, Adolph Arnold, incorporated Arnold, Schwinn & Company to make, buy and sell bicycles and other vehicles, and 1993, when Ignaz's great-grandson, faced with bankruptcy, presided over the company's humiliating dismemberment-by-corporate-raider — the name Schwinn came to represent the totemic American story.
Ignaz, an immigrant from Germany, turned his technical know-how and talents into a long-running family franchise. He resisted efforts to undermine his independence, rode out the vagaries of the public's interest in cycling and diversified into motorcycles. Year after year, Schwinn ruled the market in bicycles.
But in the manner of many immigrant families, later Schwinn generations were less lean and hungry than Ignaz. Only his son, Frank, known as F.W., seemed to have the patriarch's appetite for business. Ignaz retained the presidency until the late 40's, when he was in his 80's, but F.W. captained Schwinn through the rough seas of the Depression as well as through the more placid, extremely profitable, postwar period of the 50's.
Unfortunately, because the talented heir, Edward, died relatively young, F.W. turned the family business over to another of his sons, Frank, a colorless introvert, at the moment it most needed a visionary to lead it into a changing world. The company survived more on its reputation and the loyalty of distributors and the public. But not to worry. The final Schwinn, Edward Jr., not only had Frank's lack of business sense, but managed in a few years to alienate his employees, distributors, suppliers and bankers, not to mention supposedly trusted colleagues and family members.
When the Huns appeared at his door, in the form of gleeful bottom fishers Sam Zell and David Schulte, Edward Jr. faced them alone, apparently still holding out hope for a white knight. None appeared, and Edward Jr. became the Schwinn who killed Schwinn.
As the two authors, who are financial journalists, point out, Edward Jr. did not kill Schwinn singlehandedly. Not even he could have sunk the venerable company in the few years he ran it. It says a lot about the solidity of Schwinn that its demise took some 30 agonizing years, beginning with the failure of Frank, F.W.'s son, to update his plants and equipment at a critical juncture in the late 1950's. Schwinn slouched into the bicycle revolution of the last 25 years or so — with its rapid changes in technology and materials — with plants and plans left over from the 30's.
Ironically, that revolution germinated with Schwinn's own bikes. Schwinn managed to hold onto a share of the market in the late 60's and early 70's by bringing out a 10-speed model to compete with the increasingly popular European racing bikes. But in California's Marin County, a group of proto-Extreme Games bikers were combing garages and used-bike shops for clunkers, the heavy, balloon-tire Schwinn bikes of the late 30's — good for screaming suicidally down the local peak, Mt. Tamalpais, in relative safety.
Thus was born the mountain bike, just one of several trends in cycling that Schwinn considered irrelevant. Foremost, company executives had trouble imagining that any adult would spend money on what they thought of as a toy. Mountain bikes, which sell for anywhere from $500 on up through the stratosphere, now dominate the industry, and were instrumental in pushing up the prices of all bikes, not just at the high end.
The need for stronger but lighter-weight material hugely accelerated the technology of bike-making, but Schwinn's aging Chicago facility could not accommodate the new processes. Gradually, the company began importing bikes from Japan, Taiwan and China, eventually becoming more a marketer than a maker of bikes.
When Edward Jr. finally built a new plant in 1981, to restore the "American-made" label to some of Schwinn's bikes, he situated it not on the West Coast, where his Asian materials suppliers would have easy access, but in Greenville, Miss., two bad connections away from Chicago by air and far from the Western ports by rail. The nearest railroad station was 60 miles from the plant. Schwinn apparently decided to locate in a "right-to-work" state after a brush with unionization at the Chicago plant. Greenville also had a shortage of the skilled workers the bicycle company needed. Greenville lost money until Edward Jr. finally shut it down in an attempt to stave off liquidation.
The final days of Schwinn would be almost laughable if they weren't so tragic. Strong companies are resources that should be nurtured, not bungled to death. Schwinn was done in not just by intergenerational incompetence — the blood thins audibly from Ignaz and F.W. to Frank and then Edward Jr. — but by the family's insularity as well. No one but a Schwinn would ever run Schwinn, and few not named Schwinn ever came close to real power in the company. F.W. started a tradition of keeping daughters out of the business, which narrowed the potential leadership pool. Dulled by dividend checks and a sense of entitlement, several Schwinns minor and tertiary wandered aimlessly through their youths, failing to finish college or accomplish much other than taking up their sinecures at headquarters.
In the end, Edward Jr. tried to blame the company's woes on overseas competition, but the real problem was in his own backyard.

Me-Goldenrod tried to recommend the reading of this book and then I got a brainstorm. The book may be in your library or on Amazon for about $25. It is my favorite.
 
Last edited:

SirMike1983

Cruisin' on my Bluebird
Jun 27, 2008
3,120
United States
I read the book and I think it oversimplifies the decline of Schwinn as being primarily the product of business shortcomings on the part of leadership rather than larger forces. It's a good read, but it has a recurring, sort of "tabloid" type feel to it at times. It's a good read and I would say it's a fairly "light" read - not a lot of heavy data, more stories and accounts from the Schwinn company. There are some very good nuggets and insights from Schwinn insiders. I just think the book played-up some of the more tabloid elements more than those incidents weighed on the company in the end.

I think it's unnecessarily harsh on some of the individuals, particularly Frank V. Schwinn. It hammers Frank V. Schwinn on being a somewhat anxious introvert who was not suited to running the company. Yet during his period of leadership, Schwinn had some major success stories that emerged from its dealers and designers. It bites in especially hard on Schwinn missing out on the BMX and mountain bike ideas, but basically the book was saying Schwinn needed to be spot-on basically every time a new trend emerged - no room for error. That's a tall order in any industry.

Edward Jr. is made out to be somewhat of an arrogant villain sort of character, which is also a bit harsh. Schwinn declined at the same time as many other US-based manufacturers did, and for many of the same reasons, personal failings of leadership aside.

The most interesting part, aside from some of the old-school bicycle history, is the relationship between Schwinn and the Chinese and Taiwanese manufacturing partners (China Bicycle and Giant mainly). This, I think, is where there is real meat to the story, and it's a story that repeated itself across many US industries - getting into bed with a foreign (usually Asian) manufacturer, only to have that foreign manfucturer end up with the better side of the bargain. Here we are 30+ years later, and we're still talking trade problems with China.

The book also describes the relationship between Schwinn and its eastern European partners. It's a somewhat comical account of former communist officials trying to convert to more free market manufacturing. It's probably a bit of a cartoonish portrayal of the relationship, if not a bit humorous.

It's just that if Schwinn's management was as bad as the book makes out, then why did so many other US companies suffer the same fate in the same era? Did they all have rotten management? Maybe some did, but I'm skeptical about the more tabloid elements destroying the business. I think it's more a matter of cold, hard mass economics.

That's my take at least.
 

Goldenrod

Wore out three sets of tires already!
Mar 14, 2016
515
74
Schaumburg
I agree with everything you said but the dealer complains were not acted upon swiftly. The union wanting the wage of auto workers. "People want lighter bikes. Are they going to ride them or carry them." Americans stoped shop classes and sent too many kids to college. The pride that those dirty workers had has been lost in too many corners of America. Most of these workers are dead but we have their bikes as their memorial. We have a throw away society that stays indoors with their noses in a cell phones. We restorers continue the pride that those old school workers took with them. See why this book is great?
 

Artweld

Finally riding a big boys bike
Sep 4, 2015
189
BUSINESS BOOKS
July 1, 1997 / Third Quarter 1997 / Issue 8 (originally published by Booz & Company)

No Hands: The Rise and Fall of the Schwinn Bicycle Company, an American Institution by Judith Crown and Glenn Coleman
No Hands: The Rise and Fall of the Schwinn Bicycle Company, An American Institution by Judith Crown and Glenn Coleman (350 pages, Henry Holt & Company, 1996)
by Barbara Presley Noble
When companies talk about going global, they often justify their business decisions by expressing what amounts to a regret about the success of the American economic system: American workers have become so well paid that they can't compete with low-wage workers in developing countries, who can do the job, if not as well, close enough as not to matter.
The sentiment would be easier to accept if the recent history of corporate capitalism weren't replete with examples of obtuseness. Think of the big American auto makers in the early 1970's, who blamed their troubles on labor costs, trade policy and deluded consumers, on anything, that is, except their own miscalculations and resistance to innovation.
That sort of overweening arrogance is always riveting and so, therefore, is No Hands: The Rise and Fall of the Schwinn Bicycle Company, An American Institution. For nearly a century — between 1895, when Ignaz Schwinn and his partner, Adolph Arnold, incorporated Arnold, Schwinn & Company to make, buy and sell bicycles and other vehicles, and 1993, when Ignaz's great-grandson, faced with bankruptcy, presided over the company's humiliating dismemberment-by-corporate-raider — the name Schwinn came to represent the totemic American story.
Ignaz, an immigrant from Germany, turned his technical know-how and talents into a long-running family franchise. He resisted efforts to undermine his independence, rode out the vagaries of the public's interest in cycling and diversified into motorcycles. Year after year, Schwinn ruled the market in bicycles.
But in the manner of many immigrant families, later Schwinn generations were less lean and hungry than Ignaz. Only his son, Frank, known as F.W., seemed to have the patriarch's appetite for business. Ignaz retained the presidency until the late 40's, when he was in his 80's, but F.W. captained Schwinn through the rough seas of the Depression as well as through the more placid, extremely profitable, postwar period of the 50's.
Unfortunately, because the talented heir, Edward, died relatively young, F.W. turned the family business over to another of his sons, Frank, a colorless introvert, at the moment it most needed a visionary to lead it into a changing world. The company survived more on its reputation and the loyalty of distributors and the public. But not to worry. The final Schwinn, Edward Jr., not only had Frank's lack of business sense, but managed in a few years to alienate his employees, distributors, suppliers and bankers, not to mention supposedly trusted colleagues and family members.
When the Huns appeared at his door, in the form of gleeful bottom fishers Sam Zell and David Schulte, Edward Jr. faced them alone, apparently still holding out hope for a white knight. None appeared, and Edward Jr. became the Schwinn who killed Schwinn.
As the two authors, who are financial journalists, point out, Edward Jr. did not kill Schwinn singlehandedly. Not even he could have sunk the venerable company in the few years he ran it. It says a lot about the solidity of Schwinn that its demise took some 30 agonizing years, beginning with the failure of Frank, F.W.'s son, to update his plants and equipment at a critical juncture in the late 1950's. Schwinn slouched into the bicycle revolution of the last 25 years or so — with its rapid changes in technology and materials — with plants and plans left over from the 30's.
Ironically, that revolution germinated with Schwinn's own bikes. Schwinn managed to hold onto a share of the market in the late 60's and early 70's by bringing out a 10-speed model to compete with the increasingly popular European racing bikes. But in California's Marin County, a group of proto-Extreme Games bikers were combing garages and used-bike shops for clunkers, the heavy, balloon-tire Schwinn bikes of the late 30's — good for screaming suicidally down the local peak, Mt. Tamalpais, in relative safety.
Thus was born the mountain bike, just one of several trends in cycling that Schwinn considered irrelevant. Foremost, company executives had trouble imagining that any adult would spend money on what they thought of as a toy. Mountain bikes, which sell for anywhere from $500 on up through the stratosphere, now dominate the industry, and were instrumental in pushing up the prices of all bikes, not just at the high end.
The need for stronger but lighter-weight material hugely accelerated the technology of bike-making, but Schwinn's aging Chicago facility could not accommodate the new processes. Gradually, the company began importing bikes from Japan, Taiwan and China, eventually becoming more a marketer than a maker of bikes.
When Edward Jr. finally built a new plant in 1981, to restore the "American-made" label to some of Schwinn's bikes, he situated it not on the West Coast, where his Asian materials suppliers would have easy access, but in Greenville, Miss., two bad connections away from Chicago by air and far from the Western ports by rail. The nearest railroad station was 60 miles from the plant. Schwinn apparently decided to locate in a "right-to-work" state after a brush with unionization at the Chicago plant. Greenville also had a shortage of the skilled workers the bicycle company needed. Greenville lost money until Edward Jr. finally shut it down in an attempt to stave off liquidation.
The final days of Schwinn would be almost laughable if they weren't so tragic. Strong companies are resources that should be nurtured, not bungled to death. Schwinn was done in not just by intergenerational incompetence — the blood thins audibly from Ignaz and F.W. to Frank and then Edward Jr. — but by the family's insularity as well. No one but a Schwinn would ever run Schwinn, and few not named Schwinn ever came close to real power in the company. F.W. started a tradition of keeping daughters out of the business, which narrowed the potential leadership pool. Dulled by dividend checks and a sense of entitlement, several Schwinns minor and tertiary wandered aimlessly through their youths, failing to finish college or accomplish much other than taking up their sinecures at headquarters.
In the end, Edward Jr. tried to blame the company's woes on overseas competition, but the real problem was in his own backyard.

Me-Goldenrod tried to recommend the reading of this book and then I got a brainstorm. The book may be in your library or on Amazon for about $25. It is my favorite.
Great book about the schwinn family and the good times and bad times the company went through

Sent from my LG-TP260 using Tapatalk
 
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schwinnlax

Finally riding a big boys bike
Jun 14, 2016
120
52
La Crosse, WI
What I found as the best part of the book was the story of F. W. Schwinn. To me, he’s the hero by far of Schwinn’s story. Without him the company would have gone under in the 1930’s or shortly thereafter. In my opinion, he allowed the company to last about 50 years longer than it would have without him.
 
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