SirMike1983
Riding a '38 Autocycle Deluxe
There is a famous dialogue in The Sun Also Rises: How did you go bankrupt? Two ways - gradually and then suddenly. Schwinn's demise was that way.
The red flags went back at least to the bike boom period, when the market was shifting to lugged, imported bikes. Schwinn buying and re-branding lugged, Japanese-made frames was a band aid. Schwinn's ability to sell masses of Varsities provided cash but the market shift was a red flag that the plant and welded frames were falling badly out of step. By the time later on when new plant and lugged production was being explored in earnest, the damage was largely done.
Schwinn's reputation was transformed gradually from that of a premium bike builder to a seller of kids' bikes and entry-level road bikes. The fillet brazed models were better but hand-building frames in that older way was not the answer long-term in a changing market. It also did not help that even mid-level models were being equipped with parts that were considered down market (e.g., one-piece cranks on Super Sport bikes). The early years of Trek bikes ultimately filled the role that Schwinn could have played, of a middle to premium level builder of lugged bikes in the US. What was done at Waterford with the high-end stuff at least saved a sliver of the old business.
But as long as you're selling huge numbers of kids' bikes and Varsities, the cash keeps flowing in and the underlying capital problem is masked. It also does not help that family dynasty trusts tend to be poor at running businesses. Trusts tend to be cash-centric and very conservative in those times when you need capital improvements on the business side.
I have a differing opinion on early mountain bikes and Schwinn. This is often portrayed as a huge, lost opportunity. There was something of an opportunity lost, but I think it is overstated. Early mountain biking was deeply rooted in a west coast counterculture that was at odds with the corporate, middle-America background a brand new Schwinn represented. I'm sure some people would have welcomed a Schwinn-made mountain bike, but so much of the early mountain bike scene valued the do-it-yourself, mish-mash, gonzo type bike element. Stingrays started as a west coast thing, but the cultural hostility to "corporate" and "sellout" was much more pronounced in the mid and late 1970s than anything that existed in the early 1960s. The stronger path for Schwinn would have been into that early Trek type role of mid-level and high-quality all purpose touring and road frames.
The red flags went back at least to the bike boom period, when the market was shifting to lugged, imported bikes. Schwinn buying and re-branding lugged, Japanese-made frames was a band aid. Schwinn's ability to sell masses of Varsities provided cash but the market shift was a red flag that the plant and welded frames were falling badly out of step. By the time later on when new plant and lugged production was being explored in earnest, the damage was largely done.
Schwinn's reputation was transformed gradually from that of a premium bike builder to a seller of kids' bikes and entry-level road bikes. The fillet brazed models were better but hand-building frames in that older way was not the answer long-term in a changing market. It also did not help that even mid-level models were being equipped with parts that were considered down market (e.g., one-piece cranks on Super Sport bikes). The early years of Trek bikes ultimately filled the role that Schwinn could have played, of a middle to premium level builder of lugged bikes in the US. What was done at Waterford with the high-end stuff at least saved a sliver of the old business.
But as long as you're selling huge numbers of kids' bikes and Varsities, the cash keeps flowing in and the underlying capital problem is masked. It also does not help that family dynasty trusts tend to be poor at running businesses. Trusts tend to be cash-centric and very conservative in those times when you need capital improvements on the business side.
I have a differing opinion on early mountain bikes and Schwinn. This is often portrayed as a huge, lost opportunity. There was something of an opportunity lost, but I think it is overstated. Early mountain biking was deeply rooted in a west coast counterculture that was at odds with the corporate, middle-America background a brand new Schwinn represented. I'm sure some people would have welcomed a Schwinn-made mountain bike, but so much of the early mountain bike scene valued the do-it-yourself, mish-mash, gonzo type bike element. Stingrays started as a west coast thing, but the cultural hostility to "corporate" and "sellout" was much more pronounced in the mid and late 1970s than anything that existed in the early 1960s. The stronger path for Schwinn would have been into that early Trek type role of mid-level and high-quality all purpose touring and road frames.
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