Tag Archives: BCycle LLC

TREK Thrives Even Under Adverse Conditions

Steve Malchow, Trek Bicycle’s Vice President of Operations, Engineering and Sourcing, had to move fast in the last three years to avoid hitting—or being hit—by three “black swans”:  Tariffs on Trek’s principal supplier of bicycles, from China; the pandemic, which shut down production facilities; and the combination of these two factors to create a third swan, the exploding demand for bicycles.

Trek is a billion dollar a year company with 4,000 employees, business in over 100 countries; race teams; comprehensive analysis of market share; and nimble, aggressive adjustment to the retail side of the business. 

Trek is also an enlightened company headquartered in Waterloo, Wisconsin, that is committed to healthy lifestyles for customers and employees.  Facing rising health insurance costs, it built its own clinic in 2014 and has not raised insurance costs since and serving 4,000 visits last year.  Trek’s chef serves its Waterloo employees healthy three meals a day.

600,000 bikes per year manufactured in China had to be relocated to non-tariff sources, including parts (about 300 in each bike), manufacturing supply chains, and delivery.  Trek used to back order 73,000 bikes, now 3.9 million as new orders jumped from 1.5 million to 3.8 million per year.  Even the ship that blocked the Suez Canal still contains a large order of undelivered bicycles.

And yet Trek thrives, aggressive on the elements of manufacturing and delivery, moving plants out of China to a total of 7 different countries world-wide including Taiwan and Cambodia, and expanding their BCycle city program to dozens of American cities.

Trek is also a leader in its largest market, E-bikes, a fleet of which are being tested in Madison now, even as the universal shortage of digital chips presents the latest delay.

Steve considers Trek successful and lucky under the circumstances.  Most of us would say “not lucky, just really good”.

Our thanks to Steve Malchow for his presentation this week and to Ellsworth Brown for preparing this review article.  If you missed our meeting this week, you can watch it here:  https://youtu.be/PNS0-1ZSRjM.