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Oregon Companies Keep Production Local

Published December 30, 2008

EUGENE, OR (BRAIN)—In an industry where outsourced production is more often the rule than the exception, two small Oregon companies have bucked the trend by building their brands based on local manufacturing.

Bike Friday manufactures about 3,000 folding single, tandem and triple bikes per year at its facility in Eugene, Oregon and exports 95 percent of its product out of the state. Less than five miles away, the 16 employees at Co-Motion Cycles craft about 1,300 high-end tandem and single bikes each year.

“We don’t farm anything out,” said Dwan Shepard, who co-founded Co-Motion two decades ago, as he walked through his company’s production facility pointing out the welding, brazing and finishing stations.

Co-Motion is best known for its tandem bikes, but single bikes have gained momentum and now make up 40 percent of the company’s business.

In 1988, Shepard and a business partner bought the company from a small local framebuilder who had taught Shepard his trade.

“For $3,000 we got a crusty welder, an ancient lathe, a handful of files and a few other things,” he said.

In the beginning, Shepard wondered if he’d ever make 100 frames a year, but the company grew every year.

“It’s really surpassed anything I ever expected,” he said.

Despite the slow economy, orders are strong for 2009, and although he doesn’t feel recession-proof, Shepard believes the company will continue to do well next year.

Bike Friday has also seen success by staying local.

Brothers Alan and Hanz Scholz (Alan Scholz founded another longtime Eugene bike company, Burley Design, in 1978) founded Bike Friday in 1991 with the mission to create a high quality folding, travel bike. The concept caught on quickly in Europe, but was slower on the uptake in the U.S. Alan Scholz has seen that start to change with the introduction of Bike Friday’s Tikit commuter bike in 2007.

In the Tikit’s first year, Bike Friday saw interest from dealers in typically strong markets like the Northwest and Northeast. The buzz continued to build and after last Interbike, there was a huge influx of dealer inquiries about the Tikit, which now accounts for about half of Bike Friday’s total sales.

Bike Friday still sells direct, but now sells through about 60 U.S. dealers—a 50 percent increase since the Tikit was introduced. The company also hired 11 people and created another production cell to build the Tikits.
But with the growth has come some growing pains. After posting a profit for several years, the company expects a loss in 2008.

Last summer’s commuter craze boosted sales, but business dropped 30 percent in October 2008 from the year before due to the country’s financial meltdown, Scholz believes, leaving the company with too much inventory. As a result, Bike Friday employees are working shorter shifts and will build to demand next year instead of trying to project the number of units that will sell in the spring.

Despite this year’s hiccup, Scholz sees plenty of potential for Bike Friday to continue to grow, perhaps following a sort of franchise model in the future.

“This is a good size business for the West Coast. It’s not that hard to duplicate. It would lend itself to being a larger business with satellite facilities,” Scholz said.

—Nicole Formosa

Photo: Bike Friday co-founder Alan Scholz shows one of his company's folding bikes

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