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I need some help with a LARGE project relating to bicycle and component production.

Hey guys, here's the deal. Some friends and I have started working on a plan to move bicycle production from Taiwan/China to Detroit, MI. I'm going to Interbike to pitch it to people, but I need some numbers to be pitching. What I need is some fairly solid numbers as to the cost of producing a bicycle in Taiwan, and the same bicycle in Detroit. There are obviously tons of factors that can't be accurately estimated, but a rough picture should be possible.

please hit me up with anything you come up with. Treechunk@gmail.com

http://www.retroit.org/blog/

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Thanks for all the info about the tooling, I really appreciate what you said, and I will now be taking that into account in my plans. In regards to the "cheapest is best" thing, I fully intend to attack that as part of the "re-valuing of the bicycle" Ad campaign I want to do. Part of the sweeping plan to re-introduce manufacturing into our society is a re-valuing of the jobs required to do that manufacturing, which may take a little time, but really, will work out pretty well for everyone I think. I'm aware of the current social stigma of working with your hands, but I also think that our country is not filled with idiots, and a government-backed push to get our economy to a sustainable place will be likely to get people interested in getting involved in stuff. Also, the vast unemployment crisis our country is in the middle of will, I believe, help us get people to figure out that maybe we as a country, and they as people, need to try out some different careers.

notoriousDUG said:
Nothing will cross over except, maybe, a small amount of the tube manufacturing and cutting lines but most of those are still in pretty active use for the auto industry and not geared for anything as thin wall as bikes see.

you have to keep in mind that much of bike production, or any production work these days, while hand handled is very much an automated process and the machines required to do the work are very, very dedicated to the task at hand and adaptation from what application to the other is, if even possible, far from cost effective.

Getting people to do the manufacturing work itself, and even the more skilled work of maintaining the plant equipment is also going to be an issue for you. As a society we have fucked ourselves by pushing people away from high skill blue collar jobs to low skill white collar jobs that require a degree but very little specific knowledge or skill. This has resulted in a stigma around real blue collar work when in many cases it requires more intelligence and skill then many white collar jobs. even with decent pay you may have a hard time getting people to move to manufacturing jobs when white collar stuff is 'what they are supposed to do to get ahead.' I see people all the time who are smart and skilled enough to make a killing as a plumber become wage slaves in an office for 50% less because they don't want to be a plumber...
One thing to remember is that the bicycle industry has nothing to do with the 'quality crisis' you see in low end bikes as much as the consumer does; unless you are able to create a new mindset in a society that has been trained by advertising for years that cheap is the best value then you are never going to be able to pay a decent wage to produce a decent bike that will actually sell in any kind of volume because it will always be passed up for the cheaper alternative by the average American consumer.

Sam Van Dellen said:
One of the reasons Detroit calls for this so strongly is that there is so much left over from the big auto, although not everything will transfer over. One of the many reasons that I think this or something like it MUST happen is that quality standards are plummeting in the bicycle industry. If companies and employees had as their primary goal to provide every customer with an awesome bike, knew their labors were valued, and that it was worth taking the time, I really believe we could turn around the QC problem. Also, my goal is not merely to produce bikes in the US, but to give Detroit a way to once again be an integral part of the US economy. One of my goals is to give Detroit the tools it needs to transform itself, with jobs for everyone who wants one. If real money is flowing into Detroit, the city can revitalize, rebuild, and have infrastructure that will be people friendly, not just car friendly. I see this not just as an opportunity for Detroit, but a model for lots of rust-belt cities. I see a future where youth are trained in manufacturing, not just burger flipping and paper pushing. Any of the aspects of my plan taken on their own would fail. The broader vision is why I see this as a real possibility, as something that can and will alter the way we operate in this country.
notoriousDUG said:
Best of luck but to be very honest with you the only real thing I think you may accomplish is raising the price of bicycles...

However if you have any questions regarding the tooling and machinery moving costs associated with set up or the set up of full scale production please feel free to contact me. One of the largest hidden costs of a project like this is the cost of tooling that everyplace else already has in place. Often times this can be offset by purchasing used equipment but due to the fact that so much is done overseas the cost of transport will be a massive issue.
You give a lot more credit to people then I do.

I do not think even for a second that any kind of program, regardless of what it is backed by, is going to undue years of people being trained that white collar is where it's at and that blue collar is 2nd rate. As soon as you try to push people into those fields you are going to see cries of discrimination based on race, socio-economic status, education, etc, etc... because after so many years of hearing that college and a job in an office where the only path to success when we try and steer people away form that path they will respond by feeling that you are 'holding them back' or 'putting them down' by pointing them to a career in the trades.

I think it's an interesting and ambitious idea and really do wish you luck but I think you may be tilting at windmills; however if you have any questions I can answer or require any info I may be able to provide feel free to ask.

Sam Van Dellen said:
Thanks for all the info about the tooling, I really appreciate what you said, and I will now be taking that into account in my plans. In regards to the "cheapest is best" thing, I fully intend to attack that as part of the "re-valuing of the bicycle" Ad campaign I want to do. Part of the sweeping plan to re-introduce manufacturing into our society is a re-valuing of the jobs required to do that manufacturing, which may take a little time, but really, will work out pretty well for everyone I think. I'm aware of the current social stigma of working with your hands, but I also think that our country is not filled with idiots, and a government-backed push to get our economy to a sustainable place will be likely to get people interested in getting involved in stuff. Also, the vast unemployment crisis our country is in the middle of will, I believe, help us get people to figure out that maybe we as a country, and they as people, need to try out some different careers.

I was, for many many years, a very cynical person, with no belief that people could ever change, but the transformations I have had in my own life really make me believe that ANYTHING is possible. I am done giving up on people, seeing them as dumb or whatever, I am now seeing everyone I come into contact with as an intelligent, awesome person, who really is doing the best with where they are at and what they've got. My point is that all the training they have gotten about white collar work is exactly that, training. People can be re-trained. As to the hue and cry over race and whatnot, my intention is to make jobs, not just in the bicycle industry, but in the transformation of the city of Detroit from a ruined mini-state to a powerful force in the world economy, from a wasteland into a bicycle and pedestrian paradise, and all of the jobs and the training required will be available to anyone who is willing to take it on. I'm aware that I seem naive and idealistic, and that, in part, is because I am, because I kinda have to be to believe in this enough to make it work, but really, I believe that it MUST work if we are to survive. If you look at what the US did in WWII in terms of production, in terms of uniting for a common goal because we believed our back was against the wall, the problems in the way of my idea seem pretty small. The bigger problem is really showing everyone that our backs are actually against the wall in just as final and extreme a fashion as they were then, just with a longer time table. We are, basically speaking, an entirely service based economy, producing VERY little that the rest of the world needs. THIS IS NOT SUSTAINABLE. Seriously, if we don't export anything, and we import everything, how do we expect to pay for what we're importing? Our society has been running under the assumption that more money is going to make everything better, so the jobs that provide the most money are the ones everyone wants, but the jobs that ALLOW for the high paying ones are just as important! We, as a people, are holding ourselves down, making ourselves into sad shells of what we once were, and what we can be again if we just stop holding back!

The real reason I am taking on this project is that IT WILL NOT HAPPEN if someone does not do it. Sounds obvious, right? But seriously, if nobody does anything, we're straight doomed. We write our own future. If we say it can't happen, you better believe it can't happen. If, on the other hand, we take things on, say they can work, and do what is required to make them happen, ANYTHING is possible.

I'm going to shut up before I rant for another two pages, but before I do, I will tell you that I spent 20+ years viewing myself as a failure, setting myself up for failure because of that view, and inevitably failing. For me to take on any project at all is very unlike me, because if I do something public and fail, everyone will know that I'm a failure, and I sure wouldn't want that. FUCK THAT! I can accomplish what I set my mind to, but I CANNOT do it on my own. I very much appreciate all the offers of help, I WILL be taking you up on them:)

notoriousDUG said:
You give a lot more credit to people then I do.

I do not think even for a second that any kind of program, regardless of what it is backed by, is going to undue years of people being trained that white collar is where it's at and that blue collar is 2nd rate. As soon as you try to push people into those fields you are going to see cries of discrimination based on race, socio-economic status, education, etc, etc... because after so many years of hearing that college and a job in an office where the only path to success when we try and steer people away form that path they will respond by feeling that you are 'holding them back' or 'putting them down' by pointing them to a career in the trades.

I think it's an interesting and ambitious idea and really do wish you luck but I think you may be tilting at windmills; however if you have any questions I can answer or require any info I may be able to provide feel free to ask.
Taiwanese bikes are also cheaper because of their vertical integration in the market. A majority of bike components are also made in Taiwan, which lowers the cost of complete bikes since the components from the factory next door are all partially installed before boxing and shipping across the Pacific. On the other hand, if you are manufacturing frames in Detroit while sourcing components from Taiwan, the U.S. distributer will inevitably take a cut....

Bike manufacturing in Taiwan is actually slowly being moved to China, as more and more Chinese factories become ISO 9001 compliant.

Along those lines, would you consider approaching Giant Bicycles (who actually does make most of the bikes in the world for various brands) and discuss with them the possibility of moving some of their manufacturing (at least for the US market) to Detroit? Similar to how Toyota opened plants in the U.S. last year. Maybe even talk to Toyota to discuss their rationale and business strategy behind their move and see if it applies to the bike industry.
Good call on Toyota, I'll look into that. Just to be clear, I am not talking about just bicycles, what I am intending is bikes, components, and accessories being manufactured in Detroit.

yellow jello said:
Taiwanese bikes are also cheaper because of their vertical integration in the market. A majority of bike components are also made in Taiwan, which lowers the cost of complete bikes since the components from the factory next door are all partially installed before boxing and shipping across the Pacific. On the other hand, if you are manufacturing frames in Detroit while sourcing components from Taiwan, the U.S. distributer will inevitably take a cut....

Bike manufacturing in Taiwan is actually slowly being moved to China, as more and more Chinese factories become ISO 9001 compliant.

Along those lines, would you consider approaching Giant Bicycles (who actually does make most of the bikes in the world for various brands) and discuss with them the possibility of moving some of their manufacturing (at least for the US market) to Detroit? Similar to how Toyota opened plants in the U.S. last year. Maybe even talk to Toyota to discuss their rationale and business strategy behind their move and see if it applies to the bike industry.
Sam, I recommend that you read No Hands: The Rise and Fall of the Schwinn Bicycle Company, an American Institution by Judith Crown and Glenn Coleman. Not to bring you down, but to learn lessons from what Schwinn did successfully for so long, and to avoid how they tripped up. One particularly interesting part is when Schwinn was, in essence, competing with its own suppliers. Schwinn was importing complete bicycles made by Giant in Taiwan (WorldSport, Sprint) while at the same time struggling to get its newly-built factory in Greenville MS on its feet. (by this point, Schwinn had moved its domestic manufacturing from Chicago to Greenville to reduce production costs). Not only did they have trouble establishing a supply chain to Greenville and train a new workforce, but they pissed Giant off so much that Giant started selling bikes under their own brand.

Best of luck to your endeavor.
Mr. Van Dellen, Have you ever been to Detroit? Have you ever ridden a bike in Detroit? Your stereotypical (and often offensive) generalizations show your understanding of the city is limited to surfing a couple web sites -- with Wikipedia not being one of them.
Mr. Scott, my generalizations are not intended to offend, they are intended to get people moving. I appreciate the feedback, and I sincerely apologize for any offense given. I would be VERY happy if you would help me edit what I have to say so that I can inspire the bicycle industry to move without offending the people of Detroit. Please feel free to email me at Treechunk@gmail.com

Todd Scott said:
Mr. Van Dellen, Have you ever been to Detroit? Have you ever ridden a bike in Detroit? Your stereotypical (and often offensive) generalizations show your understanding of the city is limited to surfing a couple web sites -- with Wikipedia not being one of them.
Small minds hate big ideas.

Sam Van Dellen said:
Mr. Scott, my generalizations are not intended to offend, they are intended to get people moving. I appreciate the feedback, and I sincerely apologize for any offense given. I would be VERY happy if you would help me edit what I have to say so that I can inspire the bicycle industry to move without offending the people of Detroit. Please feel free to email me at Treechunk@gmail.com

Todd Scott said:
Mr. Van Dellen, Have you ever been to Detroit? Have you ever ridden a bike in Detroit? Your stereotypical (and often offensive) generalizations show your understanding of the city is limited to surfing a couple web sites -- with Wikipedia not being one of them.
So here's the deal guys. I am invested in making this happen, and I am invested in getting as many people from as many communities excited and helping as I possible can, and I NEED FEEDBACK! I need the negative as well as the positive, and I am committed to listening and honing what I have to say from it. Also, I respectfully request that this thread be kept as a place for positivity, NOT defensiveness. NOTHING will be gained from defense, EVERYTHING will be gained from working together to make this a reality.

thanks,
Sam
Back in the mid 90's when I owned a bike shop in Oregon, the dollar number being bandied around for a low end mountain bike from China Bike, was roughly $34.00. Complete ready to ride. Inferior steel, entry level spec, cheap labor, bad quality was all one could expect for that price, but Trek, Bianchi, Giant, Barracuda (remember them?), etc didn't care. They merely had a price point to hit. We were retailing these bikes at about $180.00.
I understand the price point mentality, and it's one I am working on addressing. Our nation is currently set up in such a fashion that price point IS the priority, and we are suffering as a result. What I really need is a slogan/catchphrase that will sum up simply that cheapest is not best. One of the things that is difficult to balance is that research and innovation are not cheap, and the best way to pay for them is to charge more for a product. After the initial design is in place, other people can come up behind and take advantage of the research and innovation and figure out how to more cheaply produce it, but the originator still needs to be compensated for what they have contributed to the idea.

Don said:
Back in the mid 90's when I owned a bike shop in Oregon, the dollar number being bandied around for a low end mountain bike from China Bike, was roughly $34.00. Complete ready to ride. Inferior steel, entry level spec, cheap labor, bad quality was all one could expect for that price, but Trek, Bianchi, Giant, Barracuda (remember them?), etc didn't care. They merely had a price point to hit. We were retailing these bikes at about $180.00.

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