Mary Burke Addresses Trek Outsourcing 99.5% of Their Bikes: "Trek Does What it Can to Manufacture Bikes Here"

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Trek public relations manager Eric Bjorling says that out of the appoximately 1.5 million bicycles the company produces annually, about 10,000 are made in the United States. However, according to statistics from the National Association of Bicycle Dealers (NABD), because 99% of the bicycles sold in the United States are made in either China (93%) or Taiwan (6%), Trek does the have dubious distinction of being the leading manufacturer of "Made in USA" bicycles.

And, while most don't brag about being the cream of the sour milk, Democratic candidate Mary Burke does just that:

"It is the largest manufacturer of bicycles in the United States, it employs more people than any other bicycle company in the United States, so there's nearly 1,000 employees right here in Wisconsin and over the last 20 years the payroll has nearly doubled. So I think Trek works very hard to keep employment in Wisconsin."

Burke adds, "Trek does what it can to manufacture bikes here" and that bicycles "are a very competative industry," echoing Trek's public statements that they have outsourced simply to survive as a company. She also repeats the standard line that if Americans were willing to pay more for the product, they would produce bikes in the United Staes: "If there was a greater emphasis by consumers to buy American goods, I think that would also make sure that American manufacturers' products were able to garner a higher price that would reflect the increased cost,"

While it is true that free trade and the "Wal-Mart economy" have created a race-to-the bottom atmosphere that has devastated low-end and kids' bikes like the rest of American manufacturing, the same cannot be said for Trek. 

This is because 52% of the U.S. bicycle market share is not held by big box stores, but by bike shops that sell medium to high-end bikes. Trek sells exclusively in the bike shop market, and Trek dominates with 35% of all bike shop sales. These bike shops thrive on selling brand names that people connote with quality.

For a variety of reasons, including heavy self-protection, bike shops haven't experienced the price falling trends like the non-bike shop sector. Trek and other medium to high end brands sell for the same price or more than they did before the drive to move to cheap Chinese labor.

For example, Trek 520 is one of Trek's best known bikes that is been around almost as long as Trek has-- since the early '80s. In 1983, the Trek 520 sold for $318 which, adjusted for inflation to today's dollars, would be $903. Today, the Trek 520 actually sells for more than it did then, $1,490. The main difference is that in 1983, the Trek 520 was made in the USA and in 2013 it's made in China.

Trek and other high-end brands that sell in American bike shops could have been an example of how to resist sending American jobs to China while at the same time continuing a very healthy profit margin. But, they couldn't resist the temptation of going from a healthy profit margin to an obscene profit margin: Today, bike shop bikes have joined big box store bikes in going with the cheap Chinese labor route.

The industry seems destined for a day of reckoning. The head of the UCI --the international body that oversees competitive cycling-- has recently criticized the industry for selling unsafe "30-40 dollar" Chinese bikes for several thousand dollars. Meanwhile, an even larger issue is that the industry fails to grasp the Henry Ford rule of making money: You need consumers to buy the stuff you're making.

Which, brings back to Mary Burke. She also claims in the interview that she never made decisions to ship jobs overseas and that she is opposed to unfair trade deals, both claims which aren't truthful. Burke was a key family member in a family business. In his book, her brother calls her the "brains of the family." Burke can't on the one hand take credit for much of Trek's business success, but then somehow sell the notion that there was a firewall between her and Trek outsourcing thousands of American bike manufacturing jobs.  

Plus, Burke is one of Trek's private owners and currently sits on their board.  This is a real-time issue.   Did she object or do anything to stop Trek for sending jobs to China?  Is she doing anything right now to bring back the Trek jobs back? 

In addition, she has said in past interviews that when Trek bought Klein and LeMond bicycles, she was in-charge of "integrating" Klein and LeMond into Trek.  While it is unclear where LeMond bikes were previously made, their manufacturing was overseas at Trek and Klein bikes used to be made in Chehalis, Washington, but when Trek bought them, the plant was closed, and the manufacturing jobs were eventually outsourced overseas.

But, here's the kicker.  During her time at Trek, Burke served as a board member on the Bicycle Parts Suppliers Association (BPSA), a powerful trade association that, among other things, has lobbied for weakening tariffs and free trade.  In addition, they've defended Chinese manufacturing and fought regulations during the recent Chinese manufacturing lead paint scare.

So, while it is nice to hear Mary Burke bemoan unfair trade deals, the reality is that she in past has fought for them and personally profited from them. 


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