schwinn logo type subsidiary founded 1895 founder ignaz schwinn parent dorel industries pacific cycle website http www.schwinnbikes.com the schwinn bicycle company was founded by german born mechanical engineer ignaz schwinn 1860 1945 in chicago in 1895 . it became the dominant manufacturer of american bicycles through most of the 20th century . today after declaring bankruptcy in 1992 it is a sub brand of pacific cycle owned by the multi national conglomerate dorel industries . contents 1 history 1.1 founding of schwinn 1.2 depression years 1.3 industry dominance 1.4 marketing and anti trust issues 1.5 child and youth markets 1.6 the sting ray 1.7 the ten speed 1.8 the bicycle boom 1.9 bmx bicycles 1.10 mountain bikes 1.11 factory and retooling issues 1.12 labor troubles bankruptcy and demise 1.13 sale to pacific and nautilus 2 models 3 scooters 4 gear 5 see also 6 references 7 external links history edit the classic schwinn headbadge founding of schwinn edit ignaz schwinn was born in hardheim baden germany in 1860 and worked on two wheeled ancestors of the modern bicycle that appeared in 19th century europe . schwinn emigrated to the united states in 1891 . in 1895 with the financial backing of fellow german american adolph frederick william arnold a meat packer he founded arnold schwinn & company . schwinn s new company coincided with a sudden bicycle craze in america . chicago became the center of the american bicycle industry with thirty factories turning out thousands of bikes every day . bicycle output in the united states grew to over a million units per year by the turn of the 20th century . the boom in bicycle sales was short lived saturating the market years before motor vehicles were common on american streets . by 1905 bicycle annual sales had fallen to only 25 % of that reached in 1900 . many smaller companies were absorbed by larger firms or went bankrupt ; in chicago only twelve bicycle makers remained in business . competition became intense both for parts suppliers and for contracts from the major department stores which retailed the majority of bicycles produced in those days . realizing he needed to grow the company ignaz schwinn purchased several smaller bicycle firms building a modern factory on chicago s west side to mass produce bicycles at lower cost . he finalized a purchase of excelsior motorcycle company in 1912 and in 1917 added the henderson company to form excelsior henderson . in an atmosphere of general decline elsewhere in the industry schwinn s new motorcycle division thrived and by 1928 was in third place behind indian and harley davidson . 1 depression years edit schwinn aerocycle in longmont museum & cultural center at the close of the 1920s the stock market crash decimated the american motorcycle industry taking excelsior henderson with it . arnold schwinn & co. as it remained until 1967 was on the verge of bankruptcy . with no buyers excelsior henderson motorcycles were discontinued in 1931 . 1 ignaz son frank w. f. w. schwinn took over day to day operations at schwinn . putting all company efforts towards bicycles he succeeded in developing a low cost model that brought schwinn recognition as an innovative company as well as a product that would continue to sell during the inevitable downturns in business cycles . after traveling to europe to get ideas f. w. schwinn returned to chicago and in 1933 introduced the schwinn b 10e motorbike actually a youth s bicycle designed to imitate a motorcycle . the company revised the model the next year and renamed it the aerocycle . 2 3 for the aerocycle f. w. schwinn persuaded american rubber co. to make 2.125 inch wide 54.0 mm balloon tires while adding streamlined fenders an imitation gas tank a streamlined chrome plated headlight and a push button bicycle bell . 2 4 the bicycle would eventually come to be known as a paperboy bike or cruiser and soon became an industry standard as other makers rushed to produce imitations . schwinn was soon sponsoring a bicycle racing team headed by emil wastyn who designed the team bikes and the company competed in six day racing across the united states with riders such as jerry rodman and russell allen . in 1938 frank w. schwinn officially introduced the paramount series . developed from experiences gained in racing schwinn established paramount as their answer to high end professional competition bicycles . the paramount used high strength chrome molybdenum steel alloy tubing and expensive brass lug brazed construction . during the next twenty years most of the paramount bikes would be built in limited numbers at a small frame shop headed by wastyn in spite of schwinn s continued efforts to bring all frame production into the factory . on 17 may 1941 alfred letourneur was able to beat the motor paced world speed record on a bicycle reaching 108.92 miles per hour 175.29 km h on a schwinn paramount bicycle 5 riding behind a car in bakersfield california . industry dominance edit by 1950 schwinn had decided the time was right to grow the brand . 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 . schwinn decided to try something different . with the exception of b. f. goodrich bicycles sold in tire stores schwinn eliminated the practice of rebranding in 1950 insisting that the schwinn brand and guarantee appear on all products . in exchange for 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 . in 1952 f. 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 . in the 1950s schwinn began to aggressively cultivate bicycle retailers persuading them to sell schwinns as their predominant if not exclusive brand . during this period bicycle sales enjoyed relatively slow growth with the bulk of sales going to youth models . in 1900 during the height of the first bicycle boom annual united states sales by all bicycle manufacturers had briefly topped one million . by 1960 annual sales had reached just 4.4 million . 6 nevertheless schwinn s share of the market was increasing and would reach in excess of 1 million bicycles per year by the end of the decade . 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 . 7 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 . 8 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 . imports of foreign made english racers sports roadsters and recreational bicycles steadily increased through the early 1950s . schwinn first responded to the new challenge by producing its own middleweight version of the english racer . the middleweight incorporated most of the features of the english racer but had wider tires and wheels . 9 the company also joined with other united states bicycle manufacturers in a campaign to raise tariffs across the board on all imported bicycles . 10 in august 1955 the eisenhower administration implemented a 22.5 % tariff rate for three out of four categories of bicycles . however the most popular adult category lightweight or racer bicycles were only raised to 11.25 % . 10 the administration noted that the united states industry offered no direct competition in this category and that lightweight bikes competed only indirectly with balloon tire or cruiser bicycles . the share of the united states market taken by foreign made bicycles dropped to 28.5 % of the market and remained under 30 % through 1964 . 11 despite the increased tariff the only structural change in foreign imports during this period was a temporary decline in bicycles imported from great britain in favor of lower priced models from the netherlands and germany . in 1961 after a successful appeal by bicycle importers the eisenhower tariffs were declared invalid by the court of united states customs appeals and president kennedy imposed a new tariff rate at 50 % on foreign made bicycles a rate which remained in place until 1964 . 10 while every large bicycle manufacturer sponsored or participated in bicycle racing competition of some sort to keep up with the newest trends in technology schwinn had restricted its racing activities to events inside the united states where schwinn bicycles predominated . as a result schwinns became increasingly dated in both styling and technology . by 1957 the paramount series once a premier racing bicycle had atrophied from a lack of attention and modernization . aside from some new frame lug designs the designs methods and tooling were the same as had been used in the 1930s . after a crash course in new frame building techniques and derailleur technology schwinn introduced an updated paramount with reynolds 531 double butted tubing nervex lugsets and bottom bracket shells as well as campagnolo derailleur dropouts . the paramount continued as a limited production model built in small numbers in a small apportioned area of the old chicago assembly factory . the new frame and component technology incorporated in the paramount largely failed to reach schwinn s mass market bicycle lines . another change occurred in 1963 following the death of f. w. schwinn when grandson frank valentine schwinn took over management of the company . marketing and anti trust issues edit by the late 1950s schwinn s exclusive marketing practices were well entrenched in the united states practices that had ensured a dominant position in the united states bicycle market . 12 in order to prevent competition among its wholesalers schwinn assisted them by dividing up the national market . 13 schwinn also strengthened its dealer network shrinking the number of authorized dealers . since schwinn could decide who got their bikes and who didn t the company rewarded the highest volume dealers with location exclusivity as well as mandating service standards and layouts . 14 in response the company was sued by the department of justice in 1957 for restraint of trade . 15 in a ten year legal battle many of schwinn s practices were upheld by the courts judges ruled they had the right to have their bicycles sold by retailers equipped to service the bikes as well as sell them . however in a ruling by the supreme court of the united states in 1967 u.s. v. arnold schwinn & co. schwinn was found guilty of restraint of trade by preventing distributors shipping bicycles to unapproved dealers . 16 though the arnold decision would be essentially overturned in later rulings the company stopped working solely through independent local distributors and constructed four regional warehouses from which bicycles would legally be sent to shops . while this solved the problem of unfair trade practice with the courts the new warehouses and distribution system cost millions of dollars at a time of rising competition from foreign manufacturers . 17 it also made it more difficult for the company to stay informed of customer complaints regarding manufacturing or assembly problems . child and youth markets edit 1968 schwinn sting ray orange krate 5 speed during the 1960s schwinn aggressively campaigned to retain and expand its dominance of the child and youth bicycle markets . the company advertised heavily on television and was an early sponsor from 1958 of the children s television program captain kangaroo . the captain himself