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Big news simmering at Mountain Cycle

Posted by Jonathan Maus (Publisher/Editor) on March 17th, 2006 at 2:44 pm

A few hours ago, an employee of Portland-based bike manufacturer, Mountain Cycle left a suspicious comment on my recent post about the Specialized/Stumptown Saga. The employee wrote, "I don’t think Specialized will be bothering Mountain Cycle any longer. More news to follow…" Then, after being prodded by another commenter, he added, "I have not been given permission to make an official statement."

Now, I notice there is a post on a popular mountain biking forum site that says Mountain Cycle employees have been given notices and that "there is no more Kinesis USA, or Mountain Cycle."

None of this is official yet, but if it's true, the timing is very unfortunate. The company was in the midst of a major upswing and had a lot of exciting new energy around it. And, as many of you know, Mountain Cycle is also currently entangled with Specialized Bicycle in a trademark disagreement over the use of the name "Stumptown".

I will keep you updated on this story as it develops.

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Comments
  • Ayleen March 17, 2006 at 4:09 pm

    Come on Jonathan, you've got the hookup. When you get the insider scoop and let us know something a little more concrete!

    Thanks,
    Ayleen

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  • joshua March 17, 2006 at 4:47 pm

    way to go specialized! another win for egregious labor practices and environmental destruction in the name of cheap bikes. your frivolous lawsuit has sunk yet another bike company, taken jobs from portland and furthered the possibilities of making a living wage in the bicycle industry.
    may your stumps be bloody.

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  • Jonathan Maus March 17, 2006 at 4:52 pm

    Calm down Joshua. I appreciate your sentiment but I don't think the Specialized/Stumptown situation has anything to do with this.

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  • joshua March 17, 2006 at 5:11 pm

    actually, you'd be surprised. ask kim arca about it?

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  • josh m March 17, 2006 at 11:50 pm

    I doubt it will take jobs?
    I mean, eff. all they have to do is change the name if it's going to cost the company jobs.

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  • ellis March 18, 2006 at 12:34 pm

    actually josh, the jobs have already been lost. done deal. its not as easy as just changing your name, rewriting your literature, dealing with frames that have been laser etched, brand recognition, a bit larger than i think you realize

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  • patrick March 18, 2006 at 2:16 pm

    I hate to make assumptions but (yes I am going to make an assumption any way)

    I'll assume Kinesis looked at the numbers and needed to make some cutbacks among their "divisions". I'll also assume whether they say it in their "offical statement" or not; that having to factor in the money to fight a potential legal battle with Specialized was part of this decision.

    I've been told my EPIC is no longer welcome in Stumptown..........

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  • Dan Porter March 18, 2006 at 5:51 pm

    Patrick,

    My sources tell me that this is exactly what happened. Kinesis USA moved from PDX about 3 months ago (now there is only Kinesis Taiwan). As part of the Mountain Cycle aquisition, they gave MC some seed money to get their new bike lines going, advertising, etc. Basically allowing them to function as an independent company with a venture backing from the parent. On the actual business side, MC was doing really well. Unfortunately, an extended litigation did not fit into the budget and Kinesis decided that it did not make financial sense.

    IMHO, I'd also be willing to speculate that Kinesis did not want to risk bad blood with Specialized since they have in the past been a pretty big supplier of OEM parts.

    The only 'major' bike brand. A lot of good people lost their jobs because of this. It really really sucks.

    Specialized will never get a dime from me again.

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  • Patrick March 18, 2006 at 7:47 pm

    My wife just took the sharpie to my Shoes covering up the evil S's. I've got a lot of dough tied up in that Specialized crap......

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  • Chriss Pagani March 18, 2006 at 7:51 pm

    Personally, I think Specialized products should be banned from all Oregon events. Since they declared economic warfare that cost Oregon jobs, it seems like the LEAST we can do.

    The bad guys always win unless the good guys fight back.

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  • Roberto March 18, 2006 at 9:48 pm

    Well if this is true, that really sucks. Where are we going to have our Cross Crusade party now? I bet local teams like GS Cam. are not very psyched to have the big red S on their jerseys now.

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  • Dave Forestein March 19, 2006 at 8:20 am

    BOYCOTT BOYCOTT BOYCOTT BOYCOTT ALL SPECIALIZED PRODUCTS AND KINESIS FORIEGN products. The right thing to do for our bike culture, our local Oregon economy, the environment and for fair labor practices is to very systematically shut them out of our economy by simply not buying ANYTHING. We have amazing power to affect Specialized business.

    I agree with Joshua, Ayleen, Patrick. And Ellis.

    Sorry Jonathan Maus. First please don't tell people to calm down, that is so damn patronizing And secondly, this is classic capitalism at work, not some nice coincidence.

    I have people at Mountain Cycle who had no idea this was happening until the very day they received word not to show up the following day. FU Specialized. FU corporate Kinesis.

    I plan to see if we can make little 1/4 page signs with little rubber bands to put on bikes all over PDX informing the public about the situation and a boycott.

    I asked others to join in crafting the flyer and we can get the ball rolling today.

    ORGANIZE:
    I am organizing a meeting right across the street from the actual Mountain Cycle factory on N Williams and N Failing at the NE PIX Patisserie coffee and dessert location. ( It is real close to NE Fremont as I recall. For tonight Sunday night at 8 PM. I am riding from SE so hopefully I can rememebr right where they are at, been there before a while ago. Iam sure the building already says it for sale!!!.

    Hope see you all there tonight.

    I believe in PORTLAND. And that takes a strong committement to DIY culture, our local environmentally friendly economy, and our way of life. This is not NYC this is not any city in California. THIS IS PORTLAND. It is our unique place and we can do it our way and support our culture.

    People are living here from Oregon and everywhere else to help make things happen with ...

    Portland People Power.

    Now I wonder if we can get our civic leaders and Potland Development Commission to help support the workers starting their own company to continue a STUMPTOWN banded bike to shuve in the faces of Specialized.

    See you all tonight.
    David

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  • Jonathan Maus March 19, 2006 at 9:32 am

    David, I agree with your sentiment...I am merely saying that I think some of you are jumping to conclusions about the extent to which the Specialized situation influenced the suspected closure of Mountain Cycle.

    I have some very close sources to the situation that lead me to believe the Specialized situation has absolutely nothing to do with the closure of Mountain Cycle.

    Hopefully this will all be officially cleared up very soon.

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  • Dave Forestein March 19, 2006 at 9:46 am

    Jonathan,

    Kinesis will clearly keep good blood with Specialized so that they can avoid burning any bridges to do sub-contractor work for Specialized in all the rest of their operations abroad.

    I will wait to hear from the employees and the owner likes myself who were impacted by loyalty to a local production facility.

    Offical word from a corporation moving jobs abroad does not hold weight for me and my fellow Portlanders out on the unemployment line.

    Jonathan, thanks for giving us all a place to voice our opinions and have a positive dialog about a very shitty situation.

    Dave

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  • Chriss Pagani March 19, 2006 at 12:33 pm

    I've come up with my own little rebellion.

    What I did was, I made up a nice colorful sticker that says STUMPTOWN on it. I'm going to put in on my bike, take a picture of it, and then send the picture to Specialized Corporate offices with a note that says, "Hey, I just decided to name my bike STUMPTOWN. Go ahead and sue me. I dare you."

    It should annoy them, big time. But it takes a lot more than just me - I want to see an army of Stumptown...

    I encourage everyone else to do the same. You don't have to dare them to sue you if you are feeling timid, just put the name on your bike, take a picture of it, and send it to Specialized. Fuck 'em.

    You can use masking tape and write on it, anything. If you own a Specialized bike, I'd encourage you to at least put masking tape over the name in protest.

    If you want something prettier than hand writing, I made a sticker for my own use on cafe press.. you know, colorful and a suitably distressed type. If you want one, I put it up for use by anyone who wants to do it. There is no markup on any item in this section except the t where there's a one dollar markup cuz it was drawn from another part of my site. It isn't for money, it's to PISS OFF Specialized.I want them tearing their hair out and cussing at their attornies.

    It isn't THEIR name, it's OUR name. I guess they are just going to have to learn this the hard way.

    Oh, if you want a no-profit sticker you can click here I guess. Or like I said, make your own. I'd just like to see Specialize receive HUNDREDS of these photos in the mail.

    Maybe then they will get the point. So let 'em have it!

    Who is with me?

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  • erikv March 19, 2006 at 4:00 pm

    I would think all the Specialized copyright/trademark fiasco did was BENEFIT Mountain Cyles. They got a lot of free press and got a lot of folks talking about the brand.

    To bad Specialized didn't send them notice earlier, it might have given them more sales for cross season and been enough to keep them around.

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  • Jim F. March 19, 2006 at 7:15 pm

    The Specialized lawsuit had absolutely nothing to do with MC closing, if that is what in fact has happened.

    Specialized didn't sue MC. They did not obtain a judgment against MC. All they did was ask them to change the name of a bike. As of now, the Specialized "incident" had not cost MC a dime.

    What -- do you think that MC were sitting around with a profitable company with a rosy outlook, and along comes a cease and decist letter and they decide to close instead? That is not how business works. This kind of cease and decist letter happens to hundreds of businesses every day. It is very routine.

    If MC didn't want to fight Specialized, it could easily have just changed the damn name of one bike, and the cost would have been minimal. Specialized would have even let them sell out existing inventory. Whether Specialized was right in that deal or not, it had nothing to do with MC closing (if that is, in fact, what happened).

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  • josh m March 19, 2006 at 11:38 pm

    wow, a voice of reason...
    that's nice.

    I thought the media was all in here, looking at something, knowing nothing about it, but assuming they do and jumping to conclusions.

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  • John Q Public March 20, 2006 at 12:28 am

    Chriss-
    I'm down - I'll Stumptownize my bike in the next few days and send a pic to Specialized.

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  • Chriss Pagani March 20, 2006 at 7:10 am

    I'm really pissed off that this big corporation has the unmitigated gall to claim that they OWN "Stumptown" - my favorite nickname for Portland. In fact, I'm sick of corporate bullying in general. I wanted Mountain Cycle to fight them.

    I'm sure Specialized INTENDED to put Mountain Cycle out of business, that's their style. But even if they got their wish another way, someone still has to stand up against the bullying BS.

    Corporate bullying never stops and only gets worse until someone stands up to them. I guess that's going to be me.

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  • ellis March 20, 2006 at 10:14 am

    how about when transition bikes sent specialized a cease and desist letter for using transition as their name for their tri line-up. specialized rebuffed, stating that the bikes were obviously different and there was no reason that they couldn't peacefully coexist. f - u mike sinyard

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  • Anonymous March 20, 2006 at 11:56 am

    Lets look at this for what it is, or what I see it to be....
    Specialized has not actually started a lawsuit yet, but has definately dangled it in front of Mtn Cycles. While Mtn Cycles has not been the healthiest company in the last several years, Kinesis (very profitable) has done just fine allowing MC the ability to keep going. As the magazines have stated, Mtn Cycles/Kinesis forgot they had their own brand for many years while they were building everbody elses' bikes. So, Kinesis gives Mtn Cycles the go ahead to start marketing themselves heavily to bring the brand name recognition back. At the same time Kinesis leaves the US, so they are no longer sharing manufacturing expenses, which makes keeping MC even more expensive. MC hires several new employees to get things rolling and are given the opportunity to work at a loss for a couple of years to revamp the brand. It turns out this thing Specialized did couldnt have been better for MC and worse for Specialized in terms of marketing. I can tell you first hand it gave MC a decent bump in sales and recognition. Unfortunately timing wasnt perfect considering MC wasnt yet back on its feet. Kinesis wasnt prepared to run the business at a loss AND have to take on an extra responsibility of handling a lawsuit be it large of small. While they werent being sued yet, if they planned to uphold their name, it was going to cost MC good money to get prepared for a case or even do some real scientific marketing research to legitimately argue their case directly with Specialized. Many will say MC should have just changed the name. Perhaps... but why dilute your brand name just because some big bully comes along and does an egregious powerplay on you? If it hadnt been MC's most popular model things might have been different. If cross wasnt so deeply imbedded in the Portland scene, if MC wasnt as proud to be a Portland based manufacturer it mightve been simpler. If MC changed the name it would be the little guy admitting defeat not because they didnt have a good argument, but because they didnt have the money to uphold it. It happens all the time some will say, but it sucks either way. Even if they didnt change the name it wouldnt be as easy as just changing the name. They just release their 2006 brochures, just placed many ads, etc. Furthermore it would make them look weak by caving in and be a let down to Portland and other small biz's.
    So, with Kinesis snug at home in Taiwan now, they decide to drop the line because they dont want to stand up to Specialized and continue dumping money into the US for something they dont know will for sure pay off for them. Do I think Specialized timed this argument at a very strategic time? yes, they are insiders and have the scoop. Are they bullyish, intimidating and letigious? yes, they will sue anyone they think is even remotely treading on them, but not answer to anyone who they tread on. As Ellis mentioned earlier, Transition (an Oregon based small manufacturer who was using the name prior to Specialized) sent Specialized a cease and desist letter for using the name "Transition" for their triathlon bike line. Specialized didnt even respond to the letter. It wasnt til months later when Specialized was asked by an industry magazine, that Specialized stated: "the bikes are obviously different and there was no reason that they couldn’t peacefully coexist". Sounds familiar, huh? except this time it was the EXACT same name, not just a variety.
    Well, we cant blame Specialized for MC's financial inability. However, we can blame Specialized for their frivolity in the legal scene, we can blame them for claiming they have a stake on our city's name, we can blame them for (in my opinion) intentional timeliness on bringing up the argument against MC. Its another fine example of how big corporate America is trying to squeeze out friendly competition using any tactic they find necessary. This is the bike biz... I didnt think their was need for this kind of unsportsmenship.

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  • [...] The news is no longer simmering, it is boiling over. Kinesis, the Taiwanese parent company of Mountain Cycle has decided to chart a new course for the local bike brand. The future of the brand is still up in the air, but my sources tell me that it will not include Portland. So that’s the end of Mountain Cycle as we know it. [...]

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  • organic brian March 20, 2006 at 3:02 pm

    List of local bike makers... help? I know these few... there must be others? Let's build a list of local companies to patronize.

    Burley Design Cooperative (Eugene)
    http://www.burley.com/

    EcoCycle (Corvallis)
    http://www.ihpva.org/com/Ecocycle/

    Northwest Chopper Bicycles (Battle Ground, WA)
    http://www.northwest-chopper-bicycles.com

    Pedalcraft (Corvallis, Richard Rau very nice fellow previously of BikeE and builds arm-and-leg powered cycles)
    http://www.ihpva.org/com/Pedalcraft/

    Strawberry Bicycles (Portland, frames and components)
    http://www.strawberrybicycle.com/

    Vanilla Bicycles (Portland)
    http://www.vanillabicycles.com/

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  • Jonathan Maus March 20, 2006 at 3:05 pm

    Brian, check out my list. It focuses only on companies in the Portland Metro area but it's pretty comprehensive (I think).

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  • Robert Crispin March 20, 2006 at 3:33 pm

    I am going to wait for more facts. I own a few Specialized bikes, one an old school Sequoia, sweet old tourer that took me from Pacific to Atlantic. If the facts show that Specialized caused the crash of Mnt Cycles, then I will put "Stumptown" stickers over the Specialized decals. If not, I will just leave all as is. About the Specialized tatoo I have since the days when THEY were the smaller guy, don't know what to do about that if it turns out that they crashed our local company. Above all though, I will wait for the facts, conspiracy theories and over reactions are no different than what our fed gov did with 911, over react and do the wrong thing. So foks, lets wait a bit and react to the FACTS. - Tankagnolo Bob

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  • organic brian March 20, 2006 at 4:20 pm

    Heck! I don't know how I forgot to mention Ahearne and ByCycle. I did think of Chris King but in my mad rush to look up all those websites forgot to include it. So, uh, anyone with any more to add maybe they'll put them on the "links" page.

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  • patrick March 20, 2006 at 8:20 pm

    I did a Mountain Bike race yesterday in Washington on Whidbey Island. There was a coffee shop on the island called: The ROCKHOPPER. It was hilarious, my freind snapped a pic on his phone camera. I wish I had a camera.

    Honestly, I think it is easy to boycott stuff when you don't own a bunch of their stuff already. I mean seriously what am I to do, build a big bonfire and torch all my stuff?

    I've got Joseph Ahearne building a custom rack and powdercoating an old Rockhopper I have for my townie (started this project way before this fisaco).

    Don't get me wrong, I'll not buy Specialized again. It's just that in some ways its easier said than done.

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  • patrick March 20, 2006 at 8:24 pm

    The other thing I'll add here is I feel like I've put my money where my mouth is so to speak by supporting the local guys. Ahearn (custom rack) and IRA RYAN (custom fixie)

    In the big scope of things I want everyone to be able to ride and let's face it, not everyone can afford to have a custom frame built.

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