With a name that’s synonymous with cycling in the United States, it’s no big surprise that Richard Schwinn ended up running a company that makes bikes.
But it didn’t start out that way, said Schwinn, whose great grandfather – Ignaz – started the brand that still bears the family moniker.
“My whole family’s been in the business, though I’ve probably spent more time outside of it than most (of them),” said Schwinn, who is now president of Waterford Precision Cycles, which makes custom bicycles in the southeast Wisconsin town of Waterford.
His first job was during high school – he graduated in 1971 – when he worked in the mechanic shop in the Schwinn factory on the north side of Chicago. Then, during college, he toiled on the assembly line and in the brazing (welding) shop sweeping floors because his elders thought it was important that he start at the bottom rather than be “royalty.”
“It was great and there were terrific people working there,” he said.
After college, he spent a decade outside the industry, working as an accountant and running the IT side of a finance firm.
Over time, his brothers invited him to rejoin the company to work with dealers, with the long-term goal of getting into management.
After 30 months or so, he moved to Greenville, Mississippi to help run the Schwinn plant there just as the company was going through financial difficulties.
“It was around 1990 – sort of like what started in 2007 – when banks stopped lending money,” he said. “The big issue at the time was the S&L crisis … that ended up precipitating a liquidity crisis for all banks and created problems for Schwinn.”
He said he had a “terrific experience working at the Greenville factory,” which only fueled his passion for building quality bikes in the United States.
“And that’s what Waterford is all about,” he said.
Schwinn is now run by Madison-based Pacific Cycle Inc., which is part of Dorel Industries, a large, publicly held Canadian company that markets several other bike brands including Cannondale, Mongoose and Roadmaster.
Schwinn said Waterford Precision Bikes emerged from the wreckage of his family’s company in 1993.
“Schwinn was sold off and and we took over the factory here in Waterford that had been used to make the Schwinn Paramount, the company’s premier bike line,” he said.
“It was sort of like selling off Chevrolet and someone kept control of the Corvette factory,” said Schwinn, who was joined by co-owner Marc Muller, who headed the research and development department at the Paramount plant.
Schwinn said flagship brand at the company he now heads is Waterford. Those bikes are fully customized to the rider – from the geometry of the frame to the type of tubing to the components to the cosmetic styling. The company also makes he more-standardized Gunnar brand. (It was named after a now-deceased dog). A third, relatively small brand is called Fleet Velo, which Schwinn said the firm uses to introduce “bikes of the future.”
In addition, he said Waterford supplies a number of other bike companies with what he called “private label” frames.
All of the frames are made of steel alloy, eschewing other materials such as carbon fiber, titanium, aluminum, magnesium and “pixie dust.”
Schwinn said he likes steel because it gives designers the “greatest opportunity to innovate … because steel is so much more flexible to work with. It gives us the opportunity to create new concepts in cycling.”
He said many brands simply “wrap their new bikes in a sexier skin. But with Waterford and Gunnar, we’ve brought more innovation to the marketplace in the last 20 years than most companies, who are basically chasing us.”
He said some of those innovations include the first modern, long-distance touring bike, which Waterford brought to the market in 1994 with the Waterford Adventure Cycle. It also created the first modern cyclocross bike and the first fixed-gear (single-speed) road and mountain bikes.
These custom bikes don’t come cheap, however.
The starting price for a Wisconsin-made Gunnar frame starts at $900, with a complete bike running between $2,200 and $2,600 – which he said is “quite competitive” with Asian-built bikes from Trek and Specialized.
For Waterford bikes, the sky’s the limit.
“We’ve done framesets that have exceeded $10,000,” he noted. “So the complete bikes are probably in the $16,000 to $17,000 range. These include what I would describe as ‘art’ bikes.”
Schwinn said Waterford and Gunnar bikes should last forever.
“As long as you take care of your toys, yes,” he said. “There’s no problem with keeping a bike as long as you want. We also do a restoration business, most notably the Schwinn Paramount because it is part of our heritage.
“And we’re working on bikes that go back to the 1930s. So anyone who thinks that steel is not durable has not been paying attention. These were the race bikes of the 1930s and were quite light. In fact, they were more obsessed with weight in those days and they didn’t have steel that is nearly as advanced as the steel we have today.”
Schwinn, who rides between 50 and 100 miles a week during good weather, said his company will make more than 2,000 frames this year – which he said rivaled numbers produced in the late 1990s.
The company suffered in the early 2000s when the BMX bike trend faded. Then, when the recession hit, cyclists who might have been saving for a Waterford or Gunnar bike delayed purchases.
“Now that the recession has ended in the last year or so, the demand clearly has been going up,” he said.
Schwinn said he’s not terribly worried about any long-lasting effects from Lance Armstrong’s downfall. He applauded efforts to clean up racing sport and said a new generation of American riders is rising, a group he hopes can stay clean.
A bigger trend is the continued mainstreaming of cycling, he said, with cities like Chicago, Minneapolis and New York investing in their infrastructure to promote commuter biking and recreational riding. (Milwaukee, not so much, he said.)
Politicians who invest in livability, which he said both young and old want, will see their communities grow.
“Cycling is part of that milieu,” he said. “And that’s good for our industry.”
— By Brian E. Clark
For WisBusiness.com
