This is the outcome the Schwinn family had desperately sought to avoid. But like many companies struggling to decipher how American production and service workers fit in a globalized market, Schwinn erred badly. Industry insiders say the family's dogged but ultimately flawed determination to stay American-made contributed to its doom.
"They did a lot of things right over nearly 100 years," said Gary Coffrin, an industry consultant. "But at the end, there were a lot of things that caught up with them."
Richard Schwinn, left, part of the last generation to run the company that bears his name, now runs a small custom bike factory in rural Wisconsin. At right is Marc Muller, co-founder.
(Darren Hauck For The Washington Post)
Building a Brand
The Schwinn factory jobs paid what in today's dollars would be around the national average of $17 an hour, with benefits -- the kind of job that has been getting increasingly difficult to find.
Many jobs disappear because their products or services become obsolete -- think buggy whips -- but the world still needs bicycle makers. Just not many American ones.
In 2002, 41.4 million Americans rode a bike six times or more. But 99 percent of the bikes sold in the United States today are imports. "It's still a going industry," said Michael Kershow, former counsel for the now defunct Bicycle Manufacturers Association of America. But in terms of U.S. employment, "it's really a shadow of what it used to be."
Imports held only a sliver of the market when Schwinn dominated the industry. It was founded in Chicago in the 1890s but rose to prominence through Depression-era innovation that redefined the bicycle as both durable and stylish. Its marketing genius was to cultivate a network of small dealerships run by people who knew bikes, and who were eager to promote the brand. Schwinn dealerships became a staple of downtowns, typically employing a manager, a full-time worker or two and perhaps a few teenagers in the summer.
As employment rose at Schwinn and other factories after World War II, so did the fortunes of the middle class. From 1947 to 1979, median family income more than doubled, from $21,201 to $45,989 in inflation-adjusted terms. The gap between rich and poor narrowed, as the middle 20 percent of families gained ground more rapidly than the top 5 percent.
Frank Greco's family was one that benefited . He started on the Schwinn assembly line at 25, grateful for the opportunity since he was just back from the service and lacked a college degree. "They paid good -- 80 cents an hour," he said.
Greco's fortunes improved with the company's. By 1950, Schwinns accounted for one of every four bikes sold in the United States. Buying a Schwinn became a sign of making it in the middle class, just like the picket fence and the station wagon.
Greco stayed for 40 years, rising to become a foreman. "I made a living. I bought my home. I raised my children. I got paid every week for what I did. I told [then-chief executive] Edward Schwinn when I retired, 'You don't owe me 2 cents,' " he said.