“Even if we built every bicycle in this country, you would probably build them with less than 10,000 people. And that’s not nearly as strategic as the automobile industry, which employs half a million people,” Schwinn said. Richard Schwinn said bicycle manufacturing isn’t and has never been a large enough industry in the U.S. to warrant government protection or subsidies like the automobile industry. However, one member of the Schwinn family remained at the helm of a U.S. bike company. Richard Schwinn ran Waterford Precision Cycles out of the same plant in southeastern Wisconsin previously owned by his family. [Ignaz Schwinn] was born in Hardheim, Baden, Germany, in 1860 and worked on two-wheeled ancestors of the modern bicycle that appeared in 19th century Europe. In 1895, with the financial backing of fellow German American Adolph Frederick William Arnold (a meat packer), he founded Arnold, Schwinn & Company. Schwinn's new company coincided with a sudden bicycle craze in America. Chicago became the center of the American bicycle industry, with thirty factories turning out thousands of bikes every day. This approach had some success inthe beginning but over time it began to take its toll on Schwinn. To meet this European competition, Schwinn developed a lineof middleweight bicycles. The top of theline middleweight was the Corvette, a name mimicking the popular sports car. The lightweight bicycles were still not sellingvery well and in 1954 middleweight bikes like the Corvette, Jaguar and Pantherfilled the void for older children and young adults. The company’s reputation earned it the business, according toSky Yaeger, an industry veteran and the design leader for Shinola. Most of the companies in the U.S.-basedgroup measure their annual production in the hundreds. Waterford produces about2,000 to 2,500 frames each year, and Schwinn cautiously reveals a total revenuefigure of $1 million to $2 million. The deal to fabricate 1,000 frames a yearfor Shinola adds to an already schizophrenic environment in the8,000-square-foot factory, surrounded by trees and farm fields on the edge ofWaterford, Wis. Trigger shifters offer faster (and often smoother) shifting, but they can be more confusing for kids to learn. The factory quickly cranked out a new line of bikes to satisfy what theyrightly anticipated would be a new bicycle craze. The Sting Ray was an instant hit 42 thousand were sold by 1964. Afteryears in the making, in the early 1960s the three legs of a strategy to improvesales were finally in place. These included investments in innovative marketingtechniques, strengthened manufacturing capacity, and improved efficiency of thecompany’s dealer network. Frank W. Schwinn had begun implementing all thesechanges ever since the 1930s. In the 1960s, they had come to fruition and Schwinnwas ready to “Let the good times roll” (Crown and Coleman 1996). Schwinn in the early 1950s had a 25 percent share of bicyclesales, a level higher than any other brand. During the ensuing years, competitorswould begin catching up with Schwinn. But with overall bicycle sales increasing,this was not a problem. Schwinn still increased its sales steadily from around fivehundred thousand bicycles in 1950 to over one million by the late 1960s. His partner Adolph Arnold could see that bicycles were no longer agrowth industry. In 1908, he agreed to sell all his shares in the company toIgnaz Schwinn. On his part, Schwinn never gave up on the bicycle side of hiscompany but he recognized that to survive his company would have to diversify. While the limited Paramount productionrepresents a reflection of the Schwinn and Waterford history, the launch ofShinola represents a significant opportunity for its future. Financed by TomKartsosis, the founder of Fossil watches, the company opened in Detroit two yearsago, making high-end watches and bicycles and focusing on the American-madeappeal. The AC Performance bike is Schwinn Triple Link™ pedal compatible. Triple Link Pedals accommodate Look, Delta and SPD style cleats to simulate an outdoor riding experience. They easily convert to accept traditional athletic shoes with the snap-in locking toe clips. Schwinnhad been making lightweight bicycles for decades without much sales success. Giventhis experience, they should have been well positioned to develop newlightweight models for adults. New models foradults called the Varsity and Continental had been developed in the early 1960sbut with their dropped bars were not very popular. In the first decade of the 1900s, the salesof bicycles to adults had eviscerated. After the death of Frank W.Schwinn, the three legs of the stool that had built Schwinn bicycles began to wobble.With catalogs featuring places like Disneyland and 20th Century Fox,marketing continued to be a Schwinn strong point. However, management had begunto ignore the need to retool its factory. Sales were still at all-time highs, but with themarket share declining, Swhinn’s dominance in the bicycle industry was on thewane. Frank W. Schwinn had built the company into a bicyclepowerhouse in over 30 years.