Bikes and the Big Big Money Behind

BSA logo

Once upon a time there was a company called BSA, Birmingham Small Arms Company. BSA was founded in 1861 partly to help with the war effort during the Crimean War against Russia and their allies.

Throughout the years BSA would eventually bicycles, motorcycles, power tools and worked and produced goods for both the auto and mining industries.

Eventually things got rough for BSA, as it did for many British companies during the seventies, and BSA was bought by Manganese Bronze Holdings and was eventually swallowed by Zhejiang Geely Holding Group Co., Ltd. 

Geely also now owns Volvo and The London Taxi Company.

BSA as we knew it, ceases to exist but it is emblematic of the fate of the rise of the modern investment consortium.

A little while ago a buddy of mine posted something concerning Bain Capital (Mitt Romney’s investment company) and one of the most storied names in BMX, GT Bicycles.

To be honest with you I hadn’t realized there was a connection between was any connection between GT and Bain Capital but chances are you didn’t either.

Bain Capital’s involvement with bicycles extends beyond a single brand name and reaches into the realm of charitable organizations such as Community Bikes in Hamilton NY.

As Matt Tiabbi was keen to point out in his 2012 Rolling Stone article “Greed and Debt: The True Story of Mitt Romney and Bain Capital” that Bain Capital had a long history of buying troubled companies in the guise of rescuing them from ruin only to systematically dismantle them and selling them for scrap.

That seems to be a bit of the case when Bain Capital came in to acquire the ailing
 Scott Sports Group / Zell/Chilmark Fund who was, up to that point, was holding onto the severely crippled Schwinn, GT and Yeti names.

Zell/Chilmark Fund then in turn seems to have been kicked around for a while with a company listed on the stock exchanges as TRB:US then by another company called TRCO (or Tribune Media Corp) then in turn bought by some one else, then by another company after that.

Or some sort of bullshit.

At a certain point the Schwinn and GT brands were eventually brought under the umbrella of a large Canadian company called Dorel. Dorel, in turn, also owns Cannondale, Caloi, Mongoose, Guru, Sugoi and a handful of others.

As it turns out Schwinn and GT aren’t the only names that are owned by bigger companies Bianchi is owned by a larger company called Grimaldi Industri.

Grimaldi Industri also holds the Monark, Everto, Puch, Peugeot and Gitane names.

Cervelo and Santa Cruz are both owned all or in part, by a large Dutch company called Pon. Pon also owns BBB Cycling clothing and accessories and Raleigh.

Not well know, however, Pon has holdings in tires and axles, commercial vehicles, earth moving equipment, and cars, including VW, Bentley, Bugatti, and Lamborghini.

Good, bad or indifferent this is the face of the modern bike industry.

I suppose the plus side about these name brands being owned by such mammoth companies is they are able to leverage their weight in a way to bring you the highest quality bikes for the lowest possible prices.  They have industrial resources that are simple out of reach of smaller companies so their r and d is generally top notch and with their tie ins to the shipping industry the can get price breaks that few others can get.

That said, I do question their commitment to cycling especially when it comes in conflict with the company’s ties to the auto industry or mining companies.

I’m sure there are guys and gals that are extremely dedicated in the cycling division of Pon or whoever but If companies are bought and sold with the same regularity as junk bonds, hedge funds, or derivatives there may not be much hope for an industry that tries to be ecologically sensitive or proactive when it comes to advocacy efforts.

Then I think of BSA.

And of Zell/Chilmark Fund.

Or  a dozen of other companies.

And I think it’s just a matter of time before these companies are again put on the chopping block.