I’ve developed a hate/love relationship with Google. I resent the company’s invasion of my privacy, and I perceive that its management would sell out America in a heartbeat. I’m not alone on the latter point. Peter Thiel, a billionaire tech investor any time as smart and ruthless as Elon Musk, years ago called on U.S. intelligence officials to investigate Googe for its “seemingly treasonous” relationship with China.
Despite my disdain, I’m impressed with how well Google truly knows me. Google feeds me news stories 24/7 with near 100% accuracy that are of great interest to me. The company even knows my moods: Whenever I’m feeling down or discouraged, I watch TikTok videos of Golden Retrievers to pick up my spirits. Google always includes at least one in my updated feed, but when I develop a case of the blues, suddenly my feed contains multiple Golden Retriever clips.
This morning, I thought Google entirely missed the mark. Included in my feed was this FOX News story about an Indiana-based company called Guardian Bikes investing $19 million to build a factory to manufacture its frames. I didn’t initially watch the clip, but I was curious about why Google thought I’d be interested. I was once an avid cyclist, but I gave up the sport years ago because the proliferation of pickup trucks and SUVs made riding on city roads too dangerous.
Upon quick investigation, I quickly learned why Google flagged the FOX clip. The story of Guardian Bicycles is one that gives me the warm and fuzzies and restores my faith in Millennial entrepreneurs.
Guardian Bikes, which markets bicycles for children, was founded in 2013 by a then twentysomething entrepreneur named Brian Riley whose grandfather had a head-over-handlebar accident after grabbing his front brake too hard, resulting in several broken vertebrae. To prevent this sort of accident, Riley developed SureStop bicycle brakes, which he was able to bring to market after appearing on Shark Tank and receiving funding from entrepreneur Mark Cuban.
In 2022, Riley opened a bicycle factory in Seymour, Ind., shifting production of his Guardian Bikes brand to the U.S. from China. Seymour is about 52 miles southeast of Bloomington, where the 1979 coming of age movie Breaking Away featuring competitive bicycle racing was filmed. The movie ranks among my favorites, and I’ve associated Indiana with bicycle racing since watching it.
According to this Wall Street Journal story, Riley chose Seymour to build a plant because it was close enough to most places in the U.S. for two-day shipping and it was near steel mills where the company could source material when it eventually made its own frames. That moment has arrived.
Guardian earlier this month announced it secured $19 million in financing from JPMorganChase to launch what it billed as “the first large-scale bicycle manufacturing operation in the U.S.” The company hailed the deal as “a pivotal step” in reshoring a critical industry that was once the cornerstone of American manufacturing but was outsourced to China decades ago.
“This collaboration with JPMorganChase is helping launch a new era of American high-tech manufacturing and working-class job creation,” Riley said in a news release. “We’re not just building bikes—we’re building an industry. And we’re doing it with cutting-edge automation, good-paying local jobs, and an unwavering commitment to safety, quality, and resilience.”
Riley, who the Wall Street Journal reported in January was 37, said the benefits to U.S. manufacturing will extend beyond his company’s operations.
“Guardian’s move is not just about frames,” Riley said “It’s about catalyzing a full-scale domestic bicycle supply chain—from handlebars to hubs—anchored in the Midwest. With distribution centers in California, Pennsylvania, Indiana, and ones planned in Texas and Florida, the company is poised to transform the way bikes are manufactured and delivered to American families.”
America’s bicycle manufacturing is even more tragic than what’s become of American automotive manufacturing. According to Guardian and other sources, over 97% of all bicycles sold in the U.S. are imported, often subsidized by non-market economies. Guardian aims to reverse that trend, reshoring production and reducing reliance on overseas supply chains and ensuring quality and safety.
Many bikes sold at Wal-Mart and other stores are delivered unassembled to the retailers, so manufacturers can’t even assure the quality of their products. Guardian has a direct-to-consumer model.
A typical bicycle is made of 30 to 40 parts, most of them from different Chinese manufacturers, the Wall Street Journal reported. As of two months ago, components from China represented about 90% of the total cost of Guardian’s parts. Riley told the Journal that figure would fall to about 20% by the end of next year. In addition to manufacturing its own bike frames, the company is working to source parts such as grips and reflectors stateside.
As a result of Guardian’s new manufacturing capabilities, American-made parts could represent about 60% of the cost, Riley told the Journal.
“Guardian Bikes’ mission is to make the safest kids bikes, sold direct to customers’ doors, with an incredible customer experience,” Riley said in a news release. “We do that through first principles innovation across a variety of areas —from our patented award winning SureStop brake system, to our RideSizer software, to our proprietary packaging and 99% assembled home delivery.”
WSJ reported that Guardian’s factory staff of 250 persons can assemble up to 2,700 bikes a day and has achieved the scale required to begin contracting with U.S. parts manufacturers. The bike maker has asked its Brazilian rim supplier to consider a facility in Indiana near Guardian’s factory. Guardian is also considering making rims itself. The bike maker has approached U.S. suppliers that could provide grips and reflectors. Other labor-intensive parts such as hubs or cranks may be harder to source in the U.S., Riley told the Journal.
To be sure, Riley isn’t the only bicycle manufacturer looking to repatriate one of America’s lost industries. Jim Vinoski, a manufacturing consultant who has written extensively about the reshoring of U.S. bicycle manufacturing, in 2019 profiled Zak Pashak, the founder of Detroit Bikes, whose factory is located in a city dominated by auto manufacturers opposed to mass transit and other modes of transportation.
“My background had nothing to do with manufacturing,” Pashak told Vinoski. “I got into it because I believed in urban cycling.” The Detroit Bikes motto is, “We believe that streets are best explored on two wheels.”
Pashak in 2022 sold his company to Cardinal Cycling Group of Little Rock, Arkansas, another U.S. company looking to reshore U.S. bicycle manufacturing.
“I’ve been in the cycling industry for 35 years,” Cardinal CEO Tony Karklins told Vinoski. “I’ve been on a similar path of reshoring with Zak for the past few years. We met at a show in Taiwan and kept up with each other. It was back in 2018 that I first started thinking about buying Detroit Bikes, and a few months ago it became a possibility.”
Pashak told Vinoski that Cardinal shared his mission to revitalize U.S. manufacturing.
“I’ve known Tony for years, and always enjoyed talking to him,” said Pashak. “We decided we would look at how his group could come in. They love American-made, and they love keeping jobs here.”
What’s noteworthy about the efforts of the entrepreneurs leading the formidable charge to reshore American bicycle manufacturing is the lack of government funding and support. Riley, the founder of Guardian Bikes, got his funding from Mark Cuban and other private investors. Vinoski reported that Detroit Bikes founder Pashak got his funding from friends and family, as well as his personal savings.
Cardinal unlocked critical funding agreeing to a sale and leaseback deal with Ascension Advisory, which specializes in these sorts of transactions.
Yet, U.S. taxpayers have been funding GM’s and Ford’s operations for years with billions in grants and subsidies, despite these two automakers being hell bent on offshoring jobs to Mexico, China, and in the case of Ford, also to India.
Just prior to last year’s presidential election, former Energy Secretary Jennifer Granholm donated $500 million in taxpayer funds to GM to retool an aging Michigan plant, which she claimed would save 650 factory jobs and create 50 new ones.
By my back-of-the-envelope calculations, supported by a ChatGPT analysis, $500 million could create more, and possibly better-quality, jobs by investing it in U.S. bicycle manufacturing rather than spending it to possibly preserve 700 jobs at GM. Supporting smaller and entrepreneurial manufacturers would create more competition, innovation, and resilience compared to wasting billions in taxpayer monies on two moribund auto manufacturers with very precarious futures.
Apologies for belaboring a point, but if GM invested $22 billion in U.S. bicycle manufacturing instead of squandering it on stock buybacks these past 15 months, the returns would likely far exceed the automaker’s investments in its flailing EV business, and maybe even exceed returns on its gas guzzling trucks and SUV business.
Bicycle sales have fatter profit margins than automotive vehicle sales. Instead of fashioning itself as a technology company, GM perhaps could achieve far greater success and better serve the public good refocusing itself as an integrated zero emission transportation company.