Posted by Josh Reid (Contributor) on November 22nd, 2017 at 11:14 am
This article is by Josh Reid, a journalist from the U.K. who recently toured several Oregon bike companies. This is the first in a series that’s being published in conjunction with BikeBiz.com.
What would become Burley grew from a bike shop founded in 1969 in Fargo, North Dakota, by 17-year-old touring cyclist Alan Scholz.
I’ve been using Burley’s bicycle products since I was a tot. Photographic proof of this was emailed to me when, earlier this year, I visited the company’s HQ in Eugene, Oregon. There I am, seated in a 1997-vintage Burley Lite trailer, pulled by my 1965-vintage dad, editor-at-large of BikeBiz. A few years later I progressed to a Burley Piccolo trailercycle. Today, I often ride my dad’s 2002-vintage Burley Runabout steel-framed commuter bike – he long ago added an Xtracycle attachment, creating a cargobike.
What would become Burley grew from a bike shop founded in 1969 in Fargo, North Dakota, by 17-year-old touring cyclist Alan Scholz. Al’s Bike Shop took over the basement and garage of his parents’ house. This was just before the start of the American “bike boom” of the early 1970s which took almost everybody by surprise, and most especially the bicycle industry, which couldn’t keep up with demand. Thanks to health concerns, cycling had been building in popularity throughout the 1960s, and when baby-boomer ecological concerns merged with a fitness kick the American market for bicycles doubled within a couple of years.
During the boom, American “biketivists” founded such companies as Cannondale, Trek and Specialized. Cannondale was born in 1971 above a rural pickle shop in Wilton, Connecticut. Co-founded by Joe Montgomery, it made backpacking gear as well as the Bugger, a backpack-on-wheels for towing behind bicycles. In the foyer at Specialized’s high-tech headquarters in Morgan Hill, California, there’s a replica of the Volkswagen campervan that founder Mike Sinyard sold to fund the European bike tour that would lead to the foundation of his business. Sinyard started in 1972 by selling hard-to-get European bicycle parts to US bike shops. Famously, he schlepped the first parts in a bicycle trailer: a Cannondale Bugger. Richard Burke cofounded Trek in 1975 from a red barn, a former carpet warehouse in Waterloo, Wisconsin.
In the middle of the boom, and fuelled by the same entrepreneurial zeal as Montgomery, Burke and Sinyard, Scholz changed Al’s Bike Shop into Dakota Nomad, a business specialising in kit for long-distance touring, including robust bicycle pannier bags sewn by his cycle racing girlfriend, Beverly Anderson. Cycle touring in Dakota was possible in the spring and summer months, but the Great Plains state has brutal winters – Fargo has been billed as “America’s Toughest Weather City” by The Weather Channel.
In 1974, for milder winters and hence more cycling, Scholz and Anderson moved to Cottage Grove, Oregon, 25 miles from Eugene. Beverly’s nickname was “Burley” so they named the new and relocated business Burley Bike Bags. They set-up home in a yurt, and made bicycle pannier bags through the week, selling them at the weekend from a market stall in Eugene.
When their daughter Hanna was born they had to find a way to get their stock, and a baby, to Eugene. Cannondale’s Bugger trailer was for carting cargo; Scholz designed his first trailer for carting kids and cargo. The first Burley Lite was made from parts upcycled from an old swing set.
Cycle tourist customers noticed how Alan and Beverly arrived at the market and, those who were also starting families, asked for child-lugging trailers of their own. The trailer side of the business started to blossom, and the pair hired fellow cyclists – on piecework – to help make the firm’s growing number of products. In 1978, seven of these employees partnered with Alan and Beverly to create the Burley Design Cooperative, based in Cottage Grove. During difficult times for the firm in the 1982 recession, Alan and Beverly left, along with some of the other founding members. However, the cooperative kept going without them. It relocated to Eugene, and more members joined. By the end of 1985, the cooperative had 15 members.
As well as jointly owning the company the worker-owners were also inspired by the idea that the products they were making in ecologically-aware Eugene were reducing the world’s dependence on oil.
As well as jointly owning the company the worker-owners were also inspired by the idea that the products they were making in ecologically-aware Eugene were reducing the world’s dependence on oil. The firm made rainwear, pannier bags, cross country ski wear, tree-planting bags, and yurt covers. Its iconic product, however, remained the Lite child trailer, now with distinctive blue and yellow covers. In 1987 the worker’s cooperative – in partnership with Scholz’s new company Advanced Training Products – started making steel-framed bikes, including tandems and recumbents.
(Alan and his brother Hanz later went on to found Bike Friday performance travel bicycle brand which is based in Eugene and still fabricates its suitcase-packable bikes in the town. It’s just three miles east of Burley’s HQ. Hanna Scholz – the inspiration for the Burley child trailer – is the company’s president.)
By 1989, membership had mushroomed to 39, and management of the firm was still by consensus.
“[The] cooperative … faced its share of organizational and financial struggles, and they made some modifications, both to Burley’s original product line and to its organizational structure,” wrote sociologist Joel Schoening in 2010, who studied Burley’s cooperative roots for his PhD.
“Through it all, the cooperative’s worker-owners made every attempt to remain true to its fundamentals – making bicycling products under conditions of equal pay, equal ownership, equal distribution of profits, and equal voice in management, while retaining a social and environmental conscience. Grounded in these fundamentals, Burley grew to become a model of successful workplace democracy and one of the United States’ largest manufacturing cooperatives, with one hundred full, voting members and nearly $10 million in annual sales.”
However, as more and more members joined the cooperative became increasingly difficult to run. Demand for the firm’s products remained high, but production regularly ground to a halt – it could take hours just to get consensus on a new paint colour for a bike. Furthermore, as a cooperative it was difficult to get bank loans to fund expansion, and Burley began having trouble meeting its delivery targets. After more than two profitable decades, the cooperative began losing money. In 2001 it posted its first loss, and by 2003 the losses deepened. By 2005, it was losing $1.5m a year, reported a cooperative magazine at the time. Members of the cooperative had to start putting their own money into the business, with increasing likelihood it would go up in smoke.
The following year Burley was on the brink of collapse – it was making too many products, too slowly, and they were being produced at too great a cost compared to their competitors, most of whom had moved production to Asia some years previously.
“Burley [had] wallowed in the inefficiencies of its own democratic process, rendering it blind to the vicissitudes of the market,” pointed out Schoening.
“The vibrant democracy and commitment to social causes that once characterized Burley had eroded. The core commitment of the membership had changed from putting democracy and social causes in front of the business to putting the financial needs of the business first. Even an interest in bicycles was no longer enough to unify cooperative members.”
In 2003, cooperative membership was closed, with all subsequent workers being hired as employees only. By attrition and addition, half of the workers at Burley were non-members by 2006.
In June of that year Burley’s management team recommended changing the firm’s status from co-operative to a worker-owned corporation, with cooperative shares converted to stock shares, saying that this represented “nothing less than a last-ditch attempt to save Burley – the jobs it provides for members, the contribution it makes to the community, and the excellence in product design and manufacturing that it represents.”
The managers warned that “without dramatic changes … we fear we will have to close Burley’s doors – for ever.”
The vote was won, but change had come too late – the business had a backlog of orders it couldn’t fulfill thanks to not having the cash to pay suppliers. Burley was on the brink. An attorney acting for Burley told a local businessman that the co-op was a month from bankruptcy but that he would be a perfect fit to turn its fortunes around.
“I’d known about Burley,” Mike Coughlin told a local newspaper. “They were a great brand, I knew that, but I didn’t know the details. I thought, ‘Well, I think I can fix this.’ They’re a great little company to have in Eugene – and keep in Eugene.”
In September 2006, he bought the company from the remaining member-owners of the cooperative for a reported $2m. Upon taking control, he trimmed back to what the brand was best known for: child trailers. Manufacturing of loss-making rainwear, tandems, cyclocross bikes, commuter bikes and recumbents was halted. Staff were laid off. To much angst the manufacturing of the profitable trailers was outsourced.
Burley contracted with Chinese factories that paid fair wages, provided a safe working environment, and didn’t use child labour. Five years after buying it Coughlin returned Burley to profitability.
Sales, marketing – including product photography and website work – and product design are all done in-house, as is testing.
Burley trailers are sold world-wide and have to comply with a variety of global safety regulations, some more stringent than others. For example, the company has to use a wooden “test-crash dummy” to pass European standards, but for the US tests it uses a child-shaped bean bag.
Drum, push-pull, crush, drop, rollover and curb tests are all done in-situ. The drum tester simulates a trailer going over a bump 10,000 times, which is three times more than amount required by the ASTM safety standard. The drop test ensures the integrity of the child-restraint system, the rollover tests the frame’s strength in a bike-only crash (anecdotally, Burley trailers have been hit by cars and yet protected the children within), the push-pull test makes sure the critical hitch connection to the bike lasts for more than 100,000 journeys. There’s also a tip-over test which confirms that the trailer won’t flip when cornering, even when unweighted.
Coughlin is still CEO but is gradually weaning himself away from the business. Mind you, there’s still a Coughlin in charge. His daughter, Allison, 27, took over as president in September 2016. Prior to that she worked as events director for a local nonprofit group, and has a finance degree from the University of Denver. She started at Burley in 2013, working in the accounts department. She has also had sales management roles, and was the sales and marketing manager before taking over the reins completely.
“I didn’t buy Burley in 2006 so that one of my children could eventually run it,” said Mike Coughlin in a 2016 press statement. “But Allison’s go-getter mentality, passion for the business and eagerness to learn convinced me otherwise.”
In the same statement Allison said:
“I knew the most efficient way to learn the business was to shadow my dad. His passion for Burley is contagious.”
Allison’s older brother, Nick, 29, also works for the company. He has an economics degree from Colorado College, and worked for Oregon’s Department of Energy. He started working for Burley in 2012, and is now the company’s marketing manager, in charge of photography, videography and the website.
“I definitely felt self-conscious about (coming to Burley),” Nick told the Register Guard in 2016.
“You don’t want people to think you’re there because it’s a family thing. You want to feel like you’re qualified for what you’re doing.”
It was Nick who showed me around Burley’s HQ. I was most impressed by Burley’s company museum – it’s an array of all the products, especially the trailers, that the business has made down the years. I was also impressed by the company raft – Oregon is an outdoorsy place so of course Burley has a corporate white-water raft. And the forest behind the HQ is soon going to sport some corporate singletrack. Sweet.
As I’ve been a user of Burley products for the whole of my life it was instructive to see up close how the company has evolved and improved over the years. I’m a little too big to go in a trailer nowadays – it wouldn’t be fair to my old man.
— Josh Reid
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