Alliance of Americans for America

Bike Production Shifts Gears and Rolls Back to the US

Detroit Bikes

By Harry Moser and Sandy Montalbano, The Reshoring Initiative

Wouldn’t it be nice to buy a bicycle made in the USA? Read this story from our friends at The Reshoring Initiative,, to learn about why some industries are coming back home to make their products and hire Americans.

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 12.6 million 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, (2016).

Bicycle Corporation of America (BCA) a Division of Kent International

Arnold Kamler’s family had been in the bicycle business for a century when, in 1991, he regretfully shuttered his New Jersey bicycle plant, Bicycle Corporation of America (BCA), and moved all of their production offshore. The USA factory had been producing 30% of their bicycles.

However, offshore costs began rising enough to make Kamler, now the chairman and CEO of Kent International, begin to consider reshoring some bike manufacturing to the U.S. In 2008, Arnold said, “It was a perfect storm. You had steel, aluminum, oil, plastics, ocean freight and currency – everything at one time going up. I spent about six weeks traveling all over Asia, asking myself, ‘If not China, then where?’ The answer seemed to be nowhere for bicycles. The idea in the back of my mind was that maybe one day we could do it here in the U.S.”

Then, in March 2013, at the Walmart U.S. Manufacturing Suppliers Summit for the Walmart 'Made in America' initiative, Arnold met with South Carolina Gov. Nikki Haley and began discussing the possibility of Kent opening a factory in South Carolina, but the numbers had to make sense.

With an annual employee turnover rate of 120% at his Shanghai factory and offshore costs soaring, Kamler turned to innovation and automation to close the total cost gap and return work to the U.S. It would take innovative ideas like thousands of feet of overhead conveyors, the latest wheel-building equipment and other process improvements for the reshoring transition to make economic sense. Kamler’s multi-dimensional approach also included a guarantee from Gov. Haley that Kent’s energy needs and training requirements would be filled.

Kent International operates with 115 employees at its South Carolina facility, where it assembles bikes at a rate that would require twice as many workers offshore. Today, Kent International, Inc. is a high-volume, mass-market bike supplier to Walmart, Toys “R” Us, Target and other retailers. This year they will roll out approximately 350,000 bikes produced in the Manning, S.C. factory.

For Kent, assembly has been the main focus since all of the parts are imported, but the next piece of the puzzle is manufacturing or sourcing the parts domestically. “It’s my intention to make the frames, forks and handlebars.” Kamler explains that there are substantial savings from sourcing domestically, like import duty savings and the savings on freight. Also labor costs in China are going up 10% to 15% a year in addition to the high turnover rate due to workers in China not wanting to work in factories anymore.

Kamler expects 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 1 million bicycles by 2020. They are developing an upscale line with bikes starting at $500 retail, which will be about half the cost of the other small American bicycle factories. Kent will also import 2.7 million bikes to the U.S. in addition to their domestic production.

The Motor City Turns to Bike Manufacturing

At least seven bicycle makers have chosen the Detroit metro area to manufacture or assemble bikes in the last several years. Some are high-end start-up shops with handcrafted, upscale bikes like the Detroit Bicycle Co., and others like Slingshot Bicycle have reshored production from overseas. 313 Bicycle Works was founded by Detroit firefighter Mike Sheppard and named after the Motor City area code. Shinola, best known for their fashion-forward watches and other products, assembles in their Detroit location bikes with forks and frames made by Wisconsin-based Waterford Precision Cycles. The largest Detroit bike maker is Detroit Bikes with future plans to produce as many as 50,000 bikes a year.

When Detroit Bikes first opened the doors in 2013, a lot of people “thought it was really goofy,” says founder Zak Pashak, who chose Detroit because it was “a good spot for urban revitalization to take hold.” Despite the fact that bicycle manufacturing had been disappearing as bike companies followed each other offshore to low cost countries, Pashak, a Canadian transplant, was fascinated with Detroit from childhood through popular TV shows and wanted to be part of its economic rebound. He thought a basic bike, perfect for urban areas, might have potential in the U.S. market.

Production began slowly until Pashak got his first big order from New Belgium Brewing in Fort Collins, Colo. The company was having trouble finding a U.S.-made bike. Pashak won the 2,500 bike order and was on his way.

In the spring of 2016 Pashak won a contract with Motivate, a company that runs bike-sharing programs in 12 metro areas, and uses Detroit Bikes’ assembled bicycles in New York, Boston, and Jersey City. A domestically produced bike gave Motivate a pivotal negotiating advantage when dealing with city governments, yet until finding Detroit Bikes, they struggled to find a U.S. manufacturer that could handle the quantity and specifications they needed.

The bikes are assembled in Detroit but the aluminum frames come from Asia. However, Detroit Bikes makes the wheels in-house because they are expensive to transport. According to Motivate’s CEO Jay Walder, manufacturing the wheels domestically enabled the company to reduce the number of shipping containers by two-thirds.

Detroit Bikes’ is set to produce 10,000 bikes this year and in doing so will create 50 jobs in a city with high unemployment.

HIA Velo

After acquiring the assets of Canadian Guru Cycles in Quebec, Tony Karklins, founder of HIA Velo, decided to relocate the factory to the U.S. Shifting production to Little Rock, Ark., would require government assistance, private investor backing, engineering acquisition and job training for the composite production, welders, painters and other professionals but Karklins knew what to expect after building the U.S. subsidiary for bicycle manufacturer Orbea in Arkansas in 2001.

Tony Karklins is passionate about manufacturing in the U.S. Bicycles are built in the HIA Velo factory from the ground up and he plans to produce steel, aluminum and composite bikes within the year. “For the last two decades, I have seen bicycle factory after bicycle factory close down and shift their production to Asia. We founded HIA Velo because we feel there is a real competitive advantage in having full control of the entire product development and manufacturing process under one roof, here in the USA. Our goal is to reshore best in class, high volume composite bicycle production and to create great American manufactured cycling brands,” says Karklins.

HIA Velo, founded in 2016, is set to launch its first brand, Allied Cycle Works, by early 2017 and is discussing other opportunities with industry insiders who believe in the benefits of a “local for local” business strategy.

Like this? Share it.

Related Posts