Re: [CR]Richard Burke & Trek's origins

(Example: Production Builders:Peugeot:PY-10)

Date: Wed, 09 Aug 2006 18:48:32 -0400
Subject: Re: [CR]Richard Burke & Trek's origins
From: "Craig Ryan" <c.ryan@insightbb.com>
To: <classicrendezvous@bikelist.org>
In-Reply-To: <44DA36A0.5060702@usc.edu>


My early Trek experience: After graduating from Beloit College in '77, I ordered a new Trek frame from Yellow Jersey in Madison. I remember visiting the factory, but had to order it from a store. So I bought the frame on special order. I remember there weren't many options, like colors or sizes... You had to make do. I ended up with a metallic brown 21 1/2 inch Columbus SL frame. My intentions were to move to Oregon and race on it as a second bike so I wouldn't mess up my Colnago. People out west weren't too fond of Trek and I remember traveling to races where my bike would be put on the bottom of the pile in the back of the van because it was a "Trek." People in Eugene were into the custom frame explosion and I saw a lot of early Bruce Gordons. I think Trek was viewed as a lesser quality mass produced product. I rode the heck out of that bike, but found it a bit squirmy compared to my other rides. I don't remember exactly, but I think it had fastback stays, and investment cast fork crown and bb. Can't remember the brazeons it had, but I'm thinking the basic stuff for the period. I do remember it was supposed to be silver soldered. My biggest disappointment was that I was sized between the 21 1/2 and the 23 inch and it was always a bit small... And the color! I pried off the headbadge and put a naked lady decal in it's place. I ended up selling the frame after riding it a year or so to a college kid back at Beloit. Wish I had that one...

Craig Ryan Noblesville, Indiana USA

On 8/9/06 3:25 PM, "Rich Pinder" <rpinder@usc.edu> wrote:
>
> I found info on the VintageTrek site for my TX 710 (probably) model.
> From 78 approx ? They were mostly sold as frame only, I believe.
> I think I read the TX 700 series were what Trek thought of as
> 'touring'. And they go back to the beginning... 1977.
> Steel / 531 - and they offered an option for cable braze on's for the
> top tube I read as well (as is the way mine came)
> I'm behind on my website, but I could send pics of mine.
> But similar model is seen at: http://www.vintage-trek.com/Trek_galleryRH.htm
>
> Rich Pinder
> Van Nuys, CA
>
>
> loudeeter@aol.com wrote:
>> Mordecia Silver provided the excellent "Origins of Trek" post. Below are the
>> steel models that I have for Trek in the Used Bike Buyers Guide. I'm sure
>> when I started gathering this data that I omitted their touring frames. If
>> anyone has more information to fill the gaps, I would appreciate them. Also,
>> does anyone know the role that Bevil Hogg, Mike Appel, and Tom French played
>> in the founding of Trek and when they joined the effort? Thanks. Lou
>> Deeter, Orlando FL, USA
>>
>>
>> Trek Models:
>> 630 531
>> 970 79 Columbus SL
>> 957 81 SL
>> 757 81 531
>> 759 81 531
>> 412 82 Ishiwata
>> 613 82 531
>> 614 82 531
>> 715 82 531
>> 736 82 531
>> 640 83 531C
>> 760 83 531C
>> 560 84-86 501 or 531
>> 720 84 531ST
>> 730 84 531
>> 770 84 531P
>> 400 85-88 Chromoly
>> Elance (T400) 87-88 531
>> main tubes
>> 410 85
>> 570 85 501
>> 660 85 531C
>> 520 85 501
>> T.S. Isaac Signature 753
>> 500 86 531
>> 700 86 531
>> 370 94-95 Chromoly
>> 470 95-96 Chromoly
>> 420 96-97 Chromoly
>>
>>
>>
>>
>>
>> -----Original Message-----
>> From: MSilver@iso.com
>> To: classicrendezvous@bikelist.org
>> Sent: Wed, 9 Aug 2006 12:32 PM
>> Subject: [CR]Richard Burke & Trek's origins
>>
>>
>> http://tinyurl.com/gutku
>>
>> Trek's Burke: How I did it
>> Tue Aug 8, 2006 9:17 AM ET
>>
>> By Leigh Buchanan
>>
>> (Inc.com) - The first Trek bikes, manufactured 30 years ago in a barn in
>> Waterloo, Wisconsin, were cult items, appealing to purists who would no
>> more ride their fathers' Schwinns than drive their fathers' Oldsmobiles.
>> But Trek had no brand strategy or money to advertise, and in the early
>> years it wobbled badly. Richard Burke turned things around by
>> positioning the company to ride the rising interest in competitive
>> cycling. Today Trek -- still in Waterloo, now employing 1,727 people
>> worldwide and producing annual revenue of $600 million -- is the largest
>> bicycle company in the United States and the second largest in the
>> world. The company is famous for its carbon fiber frames and really,
>> really famous for making the bikes Lance Armstrong pedaled to seven
>> victories in the Tour de France. Burke, 71, is chairman of the board and
>> Trek's majority shareholder. His son John became CEO in 1998:
>>
>> Here, Burke reveals how he built the bicycle giant:
>>
>> I was marginal in college. I had a 2.0 average at Marquette University.
>> They barely graduated me. But in 1956, the economy was booming. Everyone
>> had his pick of offers. I entered a training program in Caterpillar's
>> finance department. After 18 months I knew that large corporations were
>> not for me and I was not for them. Just before they fired me, I quit.
>>
>> I answered an ad in The Wall Street Journal for credit manager at a
>> small paint company in Madison. I lasted about 18 months. Just before
>> they fired me, I quit.
>>
>> I took a job as credit manager of an appliance distribution company in
>> Milwaukee, Roth Distributing. I was there a month when the president and
>> sole owner dropped dead of a heart attack. I figured I was out of a job
>> again. But some of the managers decided to try to reorganize the
>> company. I understood finance so I became treasurer and a shareholder.
>> If you go back in Trek's history, its original corporate charter was
>> that company's.
>>
>> In 1973 two things happened: the oil embargo and the first physical
>> fitness craze. That caused an enormous increase in bicycle sales. As
>> distributors we wondered, should we get into bicycle distribution? But
>> we decided that the boom would end and manufacturers would eventually
>> sell direct to retailers. So we passed.
>>
>> Later I met a fellow who had represented a French bicycle company in the
>> United States. He had married an American girl and wanted to stay here.
>> We decided it might be possible to make bicycles.
>>
>> In 1976, management gave me $25,000 to investigate manufacturing bicycle
>> frames. At first that's all we made: frames. We opened a small factory
>> in a red barn. I was president but low profile. Trek was still a
>> division of the distribution business. In fact, it was until 1997.
>>
>> At that time Schwinn was dominant in the domestic market. But the
>> Japanese were making major inroads, and Schwinn would not allow its
>> dealers to handle Japanese product. So we offered the dealers American
>> product.
>>
>> In 1978 I was a Sloan Fellow at MIT, which I think somewhat offsets my
>> miserable academic record. I got to work with Lester Thurow and Paul
>> Samuelson.
>>
>> We built our first real bike plant in 1980. By 1983 we were around $20
>> million. Some years we made money; some years we lost money. Everyone
>> looked on it as Dick Burke's Tonka toy.
>>
>> In 1984 we made some bad product. Then in '85 we introduced the first
>> bonded aluminum frame, but we didn't know how to build it in a
>> production environment. We went through a year of building bad frames
>> that came back to haunt us.
>>
>> I had to make a management change. On a Friday night I took out the
>> general manager. On Monday morning I was running a bicycle company, and
>> I didn't know a goddamn thing about manufacturing. We did a turnaround:
>> fixed the frame and got rid of that bad '84 product. We also executed a
>> major growth program. From 1986 to 1996 we took sales from about $30
>> million to more than $300 million.
>>
>> We've never been a great strategic planning company. I put down a
>> mission statement that's still in place today. It says we're going to
>> provide our customers with quality products at competitive value and
>> deliver them on time. We are going to create a positive environment for
>> our customers and employees. And we are going to make money. That's what
>> we did.
>>
>> All five children have worked in the business. It's a rule: If you're a
>> family member you're entitled to a job. My son John graduated from
>> Boston University in 1983. He was offered a marketing job at Procter &
>> Gamble, which I told him he should take. Instead he took over a Trek
>> sales territory. A couple of years later he became customer service
>> manager. He just knew that he wanted to sell bikes.
>>
>> We first backed a team in the Tour de France in 1998. In 1998 if you
>> asked 10 people on the street they wouldn't have heard of the Tour. If
>> you wanted to watch it you couldn't find coverage.
>>
>> No one had any idea in 1999 that Lance or the team would do so well.
>> When we realized that Lance might prevail I flew over. I get there three
>> days before the end. Our VP of marketing is there and he says, would you
>> like to ride in the team car? Johann Bruyneel, the team manager, is
>> driving. I'm sitting in the front seat with a stopwatch and a clipboard
>> to write down intervals. I'm not too good with the stopwatch. The
>> mechanic is in the back seat with another set of wheels in case Lance
>> goes down. This is my introduction to Lance, sitting in a car 50 yards
>> behind him listening to Johann talking to him on the radio and exhorting
>> him to that performance. The intensity was amazing.
>>
>> We have a separate long-term endorsement deal with Lance. If it had been
>> up to me we would have never signed him. I'm too cheap. I give all the
>> credit to young people like my son and Dick Moran, the marketing
>> manager. They said, "This is something we want to be a part of."
>>
>> I think now that Lance is retired we will just continue to push cycling.
>> He's a poster boy for us, but our focus is still technology, quality
>> products. We put a lot of emphasis on R&D.
>>
>> Global sales are 30 percent of revenue, 35 to 40 percent of profit.
>> We're losing money in China, but not a lot. Eventually the Chinese will
>> have the time and the money to take up cycling seriously.
>>
>> About four years ago Trek moved to S status. It's been good for my
>> family; everyone owns 3 percent to 4 percent. And it's been good for the
>> ESOP, which holds about 25 percent of the company's stock. We tie a lot
>> of direct and indirect compensation to company performance. If you're
>> making money you ought to share it.
>>
>> Family businesses are frustrating. Going from the first to the second
>> generation can be clear cut. But the third generation isn't far away. I
>> have nine grandchildren. Most people say half of them won't want
>> anything to do with the business. So which four or five might be
>> interested? And what will it take to run a billion-dollar company, which
>> we will be in five to seven years? It isn't a case of which kids will
>> have the opportunity. We don't have enough kids for all the
>> opportunities.=09
>> =09
>> (c) Reuters 2006.
>>
>> ------------------------------------------------
>>
>> Mordecai Silver
>> NYC=09