First of all, while other Depression-era manufacturers were understandably using cheaper components and increasingly marketing bicycles as “toys”—Schwinn actually went the opposite direction. The company stopped dealing with department stores and worked exclusively with proper bicycle retailers—such as Barnard’s or the Chicago Cycle Supply Company. This helped develop a legion of loyal dealers and customers, all of whom appreciated Schwinn’s focus on quality above quantity.
After a series of production cuts and labor force reductions, Schwinn was able to restructure its operations. The company renegotiated loans by putting up the company and the name as collateral, and increased production of the Airdyne exercise bicycle, a moneymaker even in bad times. The company took advantage of the continued demand for mountain bikes, redesigning its product line with Schwinn-designed chrome-molybdenum huffy mountain bike alloy steel frames. Supplied by manufacturers in Asia, the new arrangement enabled Schwinn to reduce costs and stay competitive with Asian bicycle companies. In Taiwan, Schwinn was able to conclude a new production agreement with Giant Bicycles, transferring Schwinn’s frame design and manufacturing expertise to Giant in the process. With this partnership, Schwinn increased their bicycle sales to 500,000 per year by 1985.
Unlike its progenitors, the Klunker proved incapable of withstanding hard off-road use, and after an unsuccessful attempt to reintroduce the model as the Spitfire 5, it was dropped from production. With their aging product line, Schwinn failed to dominate the huge sport bike boom of 1971–1975, which saw millions of 10-speed bicycles sold to new cyclists. Schwinn did allow some dealers to sell imported road racing bikes, and by 1973 was using the Schwinn huffy mountain bike name on the Le Tour, a Japanese-made low-cost sport/touring 10-speed bicycle. Schwinn developed strong trading relationships with two Japanese bicycle manufacturers in particular, Bridgestone and National/Panasonic. Schwinn soon had a range of low, mid- and upper-level bicycles all imported from Japan. Schwinn’s standard road bike model from Panasonic was the World Traveler, which had a high-quality lugged steel frame and Shimano components.
In 1946, imports of foreign-made bicycles had increased tenfold over the previous year, to 46,840 bicycles; of that total, 95 per cent were from Great Britain. The postwar appearance of imported “English racers” (actually three-speed “sport” roadsters from Great Britain and West Germany) found a ready market among United States buyers seeking bicycles for exercise and recreation in the suburbs. Though substantially heavier than later European-style “racer” or sport/touring bikes, Americans found them a revelation, as they were still much lighter than existing models produced by Schwinn and other American bicycle manufacturers.
Maybe the biggest Schwinn innovation of the 1930s was the introduction of the larger balloon tire—originally used by German manufacturers for rough cobblestone streets. It created a whole new riding experience, and—combined with elaborately decorated new chain guards and colorways—caught the attention of a whole new generation. It has a highly sensitive braking system which makes it an ideal option for cycling safely on busy roads whilst commuting to work.
At the time, most bicycle manufacturers in the United States sold in bulk to department stores, which in turn sold them as store brand models. F. Goodrich bicycles, sold in tire stores, Schwinn eliminated the practice of producing private label bicycles in 1950, insisting that the Schwinn brand and guarantee appear on all products. In exchange for huffy mountain bike ensuring the presence of the Schwinn name, distributors retained the right to distribute Schwinn bikes to any hardware store, toy store, or bicycle shop that ordered them. W. Schwinn tasked a new team to plan future business strategy, consisting of marketing supervisor Ray Burch, general manager Bill Stoeffhaas, and design supervisor Al Fritz.
Frank also threatened to start importing parts from Europe if U.S. suppliers didn’t raise their own quality standards, and the tactic worked—the parts remained domestic, but far superior to what most bike companies were using. Along with the inescapable masculinity of this operation, there was also an intensity and pressure that came with maintaining an impossibly high standard of quality. Schwinn bikes were pricier than a lot of the other brands on the market, but “German engineering” was a popular selling point then as it is today, and that reputation was vital to the business. Right from the beginning, Schwinn and Arnold set the goal of producing a bicycle of undeniably superior design; something that would separate itself from the sea of cheap ramshackle models flooding the market. The company branded its product the “World” bicycle, and loaded its early catalogs with flowery language of international conquest.
Both Giant and CBC used the dies, plans, and technological expertise from Schwinn to greatly expand the market share of bicycles made under their own proprietary brands, first in Europe, and later in the United States. By 1975, bicycle customers interested in medium-priced road and touring bicycles had largely gravitated towards Japanese or European brands. Unlike Schwinn, many of these brands were perennial participants in professional bicycle racing, and their production road bicycles at least possessed the cachet and visual lineage of their racing heritage, if not always their componentry. One example was Peugeot, which won several Tour de France victories using race bikes with frames occasionally constructed by small race-oriented framebuilders such as Masi, suitably repainted in Team Peugeot colors. In reality, mass-market French manufacturers such as Peugeot were not infrequently criticized for material and assembly quality — as well as stagnant technology — in their low- and mid-level product lines. Nevertheless, Peugeot proudly advertised its victorious racing heritage at every opportunity.