Trek Bicycle Corporation

Infobox_Company
company_name = Trek Bicycle Corporation.
company_
company_type = Private
company_slogan = American Bicycle Technology
foundation = 1976
location_city = flagicon|USA Waterloo, Wisconsin
location_country = USA
key_people = John Burke, President
industry = Bicycles
products = Bicycle and Related Components
revenue = US$200,000,000 (est.) (1995) [citeweb|title=Company History|url=http://www.fundinguniverse.com/company-histories/Trek-Bicycle-Corporation-Company-History.html|publisher=FundingUniverse.com|accessdate=2008-07-10]
num_employees = 1,600 [citeweb|title=Company History|url=http://www.fundinguniverse.com/company-histories/Trek-Bicycle-Corporation-Company-History.html|publisher=FundingUniverse.com|accessdate=2008-07-10]
parent = Intrepid Corporation
subsid = Fahrradhandel Gesellschaft GmbH (Austria); Bikeurope BV (Netherlands); Trek Denmark; Trek Bicycle GmbH (Germany); Trek Japan; Bike USA S.L. (Spain); Trek Fahrrad AG (Switzerland); Trek UK.
homepage = [http://www.trekbikes.com/ www.trekbikes.com]

Trek Bicycle Corporation is the United States' largest bicycle manufacturer, distributing bicycles and cycling products under the Trek, Gary Fisher, Bontrager, and Klein brand names through a network of over 1,700 independent bicycle dealers across the U.S. and Canada. Trek products are available through subsidiary offices in Europe and Asia and distributors in 90 countries worldwide. Trek is headquartered in Waterloo, Wisconsin, the site of the company’s domestic high-end frame production. Domestic bicycle assembly takes place at Trek’s Whitewater, Wisconsin facility. Trek also imports bicycles manufactured in Taiwan and mainland China. The name “Trek” comes from the South African word for “journey.”

History

1975-1979 The Early Years

In December, 1975, Richard (Dick) Burke and Bevel Hogg established Trek Bicycle as a wholly owned subsidiary of Roth Corporation, a Milwaukee-based appliance distributor. In early 1976, with a payroll of five, Trek started manufacturing steel touring frames in Waterloo, Wisconsin, taking square aim at the mid to high-end market dominated by Japanese and Italian made models. Trek built nearly 900 custom hand-brazed framesets that first year, each selling for just under $200 . Later that same year Trek Bicycle was incorporated. In 1977, Trek opened its first retail distributor, Penn Cycles in Bloomington, MN. Within three years, Trek sales approached $2,000,000.

1980-1984 Trek Becomes A Business

Hampered without additional manufacturing capacity, Trek sales plateaued in the late 1970s. In just a few short years Trek had outgrown its original “red barn” manufacturing facility—a former carpet warehouse. Recognizing the need for expansion, in 1980 Trek broke ground on a new 26,000 sq ft corporate headquarters on the outskirts of Waterloo. Company co-founder Dick Burke would later recall that “it wasn’t until we built the new factory that we became a business.” With more factory space available, Trek expanded its manufacturing to include complete bikes. In 1982 Trek entered the steel road racing bike market, introducing the 750 and 950 models, and in 1983 Trek build its first mountain bike, the 850. In 1984 Trek ventured into the aftermarket parts and accessories business, launching its Trek Components Group (TCG) department.

1985-1991 Technology Frontier

In 1985, borrowing technology from the space industry, Trek introduced it first bonded aluminum bike frame, the 2000. The introduction of bonded aluminum to Trek’s production line proved very problematic for a company that had built itself on manufacturing hand-brazed steel frames. Manufacturing ground to a halt as Trek worked to figure out how to build bonded frames in a production environment. A year later Trek followed up the success of the 2000 with a 3-tube carbon composite model, the 2500. Thus began Trek’s foray into carbon fiber. That same year, to keep up with rapidly growing sales, Trek added another 75,000 sq ft of manufacturing space to its Waterloo headquarters. In 1988 Trek introduced “Trek Wear,” marking the company’s entry into the cycling apparel business. A year later Trek expanded into foreign markets, opening subsidiary offices in Great Britain and in Germany. That same year Trek introduced its Jazz brand of bicycles, a collection of entry-level and kids’ bikes designed by Trek but manufactured in Taiwan. Jazz bicycles were discontinued in 1993.

1989 was a pivotal year for Trek, marking the year that the company unveiled its first molded carbon fiber frame, the Trek 5000. The 5000 frameset (monocoque carbon frame plus bonded aluminum fork) had an advertised weight of 3.3 lbs. Designed by Trek but built by an outside manufacturer, the 5000 suffered enough quality problems that it was discontinued after just one year. But the lessons learned from the 5000 would prove to be instrumental in driving Trek to develop its own carbon manufacturing capabilities in the coming years.

In 1990 Trek develop a new category of bicycle that combined the comfort features of a mountain bike with the quick ride of a road bike: MultiTracks, Trek’s first line of hybrid bikes, were born. That same year Trek also introduced its first line of kids’ bikes. In 1991 Trek opened its first company-owned [retailing|retail store] in nearby Madison, Wisconsin. In addition to showcasing a full-line of Trek products, the Trek Store served as a hands-on sales training center for Trek-headquarter employees lacking retail experience. The store also provided an outlet for Trek to test merchandising and marketing ideas before expanding them to its network of independent bicycle dealers.

1992-1996 OCLV and Acquisitions

In the early 1990s Trek’s director of technology, Bob Read, attended an aerospace industry trade show in Salt Lake City, Utah, eventually meeting up with a closed mold tooling company called Radius Engineering. That visit convinced Read that Trek’s future success depended on building frames from carbon fiber, a material he envisioned could be used to make the lightest, strongest frames the world had ever seen. Having lived through the troubled introduction of the 5000, Trek invested heavily in in-house carbon fiber manufacturing capabilities. In 1992 Trek unveiled it’s first home-grown, full-carbon framed bicycles, the 5500 and 5200, featuring OCLV Carbon frames. OCLV stands for “Optimum Compaction, Low Void” and refers to Trek’s proprietary process for creating carbon structures that exceed aerospace standards. Weighing only 2.44 lbs, the 5500 frame was the world’s lightest production road frame. To make room for its new OCLV manufacturing facility, Trek expanded its Waterloo headquarters again to a total of 140,000 sq ft. 1992 marked another first for Trek: it’s first full suspension mountain bike, the 9000-series, which featured Trek’s T3C (travel is three times compression) suspension system. Crude by today’s standards, Trek’s 9000-series was revolutionary at the time of its introduction.

Following on the heals of the wildly successful 5200 and 5500, in 1993 Trek introduced its first OCLV Carbon mountain bike frame, the 9900, which at 2.84 lbs was the world’s lightest production mountain bike frame. In 1993 Trek also acquired Gary Fisher Bicycles, named for one of the inventors of the mountain bike and one of the most popular names in off-road cycling. In 1994 Trek entered the growing home fitness arena, introducing Trek Fitness Exercycles. In 1996 Trek discontinued the Exercycle line, spinning off its fitness division into an independently-owned company, renamed Vision Fitness.

In 1995, Trek rocked the foundation of the cycling world by introducing its full suspension Y bike, a radical departure from traditional bike design. The Y bike was a blockbuster hit for several years and won an “Outstanding Design and Engineering Award” from "Popular Mechanics" magazine. Also in 1995, Trek made a number of business moves in order to diversify its product offering and gain market share, acquiring Klein Bicycles, a Chehalis, WA, manufacturer of premium aluminum-framed bicycles, as well as Bontrager Cycles, a Santa Cruz, CA-based manufacturer of bicycle components and hand built steel frames. Trek also signed a long-term licensing agreement with Greg LeMond—the 3-time Tour de France champion and the first American to win the Tour—to design, build, and distribute LeMond bicycles. 1995 was also the year Trek opened a state-of-the-art assembly facility in Whitewater, Wisconsin, leaving the Waterloo location free to focus solely on frame production.

1997-2005 The Armstrong Years And Further Expansion

In 1997, Trek helped sign testicular cancer survivor and former world road race champion (1993) Lance Armstrong to the Trek-sponsored United States Postal Service Pro Cycling Team. Armstrong won his first Tour de France in 1999 aboard a Trek 5500, becoming the first American to win the Tour on an American team riding an American made bicycle. Armstrong went on to win a record-setting seven-consecutive Tours de France, all of them aboard Trek bicycles.

In 1998, Trek established its Advanced Components Group (ACG), a collection of engineers and technicians dedicated to technologies development. The leading edge of Trek’s design and engineering efforts, ACG is perhaps best known for a number of innovative products introduced and used by Lance Armstrong during his historic Tour de France wins, including the original Trek Madone (2003)—named for the Col de la Madone, a 12K climb that starts in the French village of Menton and used by Armstrong to test his fitness—and TTX time trial bike (2005). That same year Trek opened its first European manufacturing facility, a frame and wheelassembly plant in Carlow, Ireland. The Carlow facility stayed open until late 2004, at which time Trek transferred its European production to a manufacturing facility in Hartmannsdorf, Germany.

Responding to the unique needs of female cyclists, in 2000 Trek introduced Women’s Specific Design (WSD) bicycle and accessories. WSD products are designed to fit women riders, and feature sizing and proportions appropriate for women riders. In October of 2001, Trek introduced a custom bike program named Project One, which gave customers the opportunity to customize their Trek bike by selecting the bike’s paint scheme and component mix.

Hoping to expand into a new market segment, Trek introduced Trek Travel in December of 2002, a provider of luxury and performance

cycling vacations in Europe and North America. Trek Travel operated as a wholly owned subsidiary of Trek Bicycle until January of 2007, when Trek spun off its interests in the company. Despite the split, Trek and Trek Travel enjoy a close working relationship and continue to partner on a number of joint ventures.

In 2003, Trek acquired Villiger, a Swiss bicycle company, and Diamant, the oldest bicycle company in Germany. The acquisition gave Trek a foothold in the Trekking bicycle market, an important segment in Europe. As part of the acquisition, Trek took over ownership of the Villiger-Diamant production facility in Hartmannsdorf, Germany. Trek’s global expansion continued in 2005, when Trek expanded into the Chinese market by opening two stores in Beijing and signing deals with 20 Chinese distributors.

For the third time in its history, in 2005 Trek again expanded its worldwide headquarters in Waterloo, adding another 43,000 sq ft to house its burgeoning engineering, R&D, and marketing departments. As part of the expansion, Trek included an atrium exhibit to display a number of historically significant bikes from Trek’s family of brands, including one of the first mountain bikes ever built by Gary Fisher, and seven bikes used by Lance during his historic Tour de France run (one from each year, 1999-2005).

2006-Present

2007 was a notable year for Trek’s cycling advocacy efforts. After years of behind-the-scenes support for the League of American Bicyclists and the Bikes Belong Coalition, Trek announced its 1 World 2 Wheels bicycle advocacy campaign at its annual Trek World dealer convention in Madison, Wisconsin. Central to 1 World 2 Wheels is its “Go By Bike” initiative, which urges Americans to ride their bikes instead of drive their cars for trips of two miles or less. Through 1 World 2 Wheels Trek also pledged $1,000,000 to help fund the League of American Bicyclists’ “Bicycle Friendly Community” program and committed $600,000 to the International Mountain Bicycling Association’s (IMBA) Trail Solutions Services.

In April of 2008, after years of mounting tensions between the two parties, Trek filed a motion in federal court to sever ties with Greg LeMond, citing multiple breaches of contract. 19 days earlier, on March 20, LeMond had presented Trek with a draft of his own summons against Trek, alleging breach of contract. The litigation is pending in Minnesota District Court.

Primary competitors in U.S. market

* Specialized Bicycle Components (USA)
* Cannondale Bicycle Corporation (USA)
* Felt Bicycles (USA)
* Cervélo (Canada)
* Colnago (Italy)
* Bianchi (Italy)
* Pacific Cycle (USA)
* Giant Manufacturing (Taiwan)
* GT Bicycles(USA)
* Fuji Bikes (USA&Taiwan)
* Raleigh Bikes (UK)
* Seven Cycles (USA)
* Schwinn (USA)

External links

* [http://www.trekbikes.com/ Trek official site]
* [http://johno.myiglou.com/yfoil.html Trek Y-foil site]
* [http://www.vintage-trek.com/ Vintage Trek site]
* [http://www.mombat.org/Trek.htm]

ee also

* LeMond Racing Cycles

Notes and references