The Business Cycle, Part 1

Illustration by Nate Otto

Worksman Cycles is the oldest American bicycle manufacturer that still makes its products in the U.S. Founded in New York in 1898, Worksman has outlasted the demise of American cycle manufacturing by focusing on a niche category: heavy duty tricycles that factory workers use for hauling equipment and getting around industrial plants. And Worksman’s president is determined to keep the company in the U.S., even as that commitment has been tested through the years.

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This is the first of a two-parter about Worksman. The next episode will be out in two weeks, so make sure you’re subscribed to The Distance via Apple Podcasts (nee iTunes Podcasts) or the podcatcher of your choice so you don’t miss it!

Transcript

WAILIN WONG: There are times when a name seems like destiny. Like Thomas Crapper, a famous English plumber from the 19th century, or Usain Bolt, the Olympic sprinter from Jamaica. These names are called aptonyms, and here’s another real-life example, from Queens, New York.

WAYNE SOSIN: The name Worksman is a family name, even though people think we named it because we make work bikes. It’s really a family name.

This is our mover industrial trike. This is the kind of tricycle that you will see in factories like Ford Motor or Michelin Tire, any large, large facility, these are a staple for getting people around. Our industrial trikes and bikes have to be strong. If you’re riding around General Motors carrying a 200-pound tool box on our tricycle, it’s gotta be durable and heavy duty.

Is there a stigma about riding a tricycle? Do you look like grandma? Well, first you can see that a tricycle like this one, that doesn’t look like Grandma’s trike. So in a factory, I think that stigma is going away. It used to be really a negative point that people say I’m not riding that. They want to ride a golf cart or “I’d rather walk than ride a tricycle.” But it’s become more mainstream. So the stigma seems to be disappearing, but it’s been a long uphill battle.

WAILIN: That’s Wayne Sosin, the president of Worksman Cycles, a company that’s faced quite a few uphill battles since it was founded in 1898. It’s the oldest American bicycle manufacturer that’s still making bikes in the U.S. Welcome to The Distance, a podcast about long-running businesses. I’m Wailin Wong. We’re going to bring you the story of Worksman Cycles in two parts. On today’s show, how Worksman, a company with deep roots in New York, committed both to a niche product and to the lonely challenge of making that product in America.

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BRUCE WEINREB: The original industrial trike was designed to take the place of horse drawn wagons ’cause horses were expensive to buy, expensive to maintain, and they left unwanted byproducts. Today, we’re replacing powered carts because they’re expensive to buy, expensive to maintain, and leave unwanted byproducts, so it really is circular but the answer is identical — it’s a bicycle, it’s a tricycle.

WAILIN: That’s Bruce Weinreb, who handles sales and marketing for Worksman Cycles. When the company was started in 1898, opening a factory in Manhattan where the original World Trade Center would later be built, the idea was that the three-wheeled cycle was superior to a horse and wagon. Today, the company’s core business is making tricycles for factory workers to haul equipment and get around large plants. If there’s a golf cart being used somewhere, Worksman wants to replace it with a tricycle.

BRUCE: You can imagine a factory that’s building 747s. McDonnell Douglas has a factory outside of Dallas that’s two miles long, a building. So obviously, it would take you a half an hour to walk from one end to the other.

WAILIN: Wayne’s family is also from Queens and was friendly with the Worksmans. In the 1970s, at the behest of his father, who had spotted a Worksman folding bike in a store and wanted to get one for Wayne’s mother, he visited the factory. By then, Worksman had moved from Manhattan to Greenpoint, Brooklyn.

WAYNE: They seemed to have a nice little business over there and they said, “You know, we’re really good at making these bikes. We’re really bad at selling them, and we understand you’re working in sales, you have a good education. Maybe you want to sell bikes?”

WAILIN: But that’s not what Wayne wanted to do. He already had a job he liked in sales for Memorex, the consumer electronics company, and he was going to business school at night.

WAYNE: At the time, I was very young, I was in my 20s, early 20s and I thought I’m gonna be the next big star at Memorex Corporation. They were Fortune 500 company and they were based out in California, and I’d never even been to California. I really wanted to get in their marketing department because I was studying my MBA in marketing and I thought there was a nice little fit there, so for a year every month I typed a report and sent it to the marketing manager at Memorex of my ideas of things that we can do. And I really worked hard at it to try to make a name for myself in the company.

WAILIN: Shortly after his visit to Worksman, Wayne flew out to California for a business trip. It looked like it was going to be his big break.

WAYNE: I’m going to meet the people in top management and I’d just gotten married and I told my wife, I said, “Get ready because I think we’re gonna end up moving to California because when they meet me, this is all gonna happen.” Anyway, I went to this meeting in California and the marketing manager did not even know my name, had never read one of my reports, and there were probably 75 people like me doing the same job I was throughout the country and I really left there kind of down in the dumps and realizing that this wasn’t as easy as I thought it would be, to make a name for myself. And I really thought I had good ideas. And I came back and I started thinking about Worksman Cycles and I said, “Gee, if a big company doesn’t even know who I am, maybe a little company, I could put my ideas to work.” I decided to accept the position at Worksman Cycles and walk away from the Fortune 500 company, and I think most people I know thought I was crazy, but I didn’t. I liked what the company was making, I loved the idea of, you know, tricycles being used in factories. I saw opportunities to take it to the consumer, that there were products that can go to a consumer market, and I saw the fact that they were really willing to give a very young person a lot of rope to work with in terms of ideas.

WAILIN: It wouldn’t be the last time Wayne made a decision that caused others around him to scratch their heads. But his move to Worksman set his career in a new, promising direction. He headed up sales and became a part owner of the company in 1987 alongside the founder’s granddaughter and her husband. And he had early success with his idea to push into the consumer market.

WAYNE: We started making adult recreation tricycles. As a matter of fact, at the time, we were able to get into the Sears catalog and that was a big deal, and so the business was growing, slowly but surely at a very conservative path.

WAILIN: As the company grew through the 1980s, Wayne learned of a factory in Brooklyn that made children’s bicycles, which would be a new market for Worksman. The plant was available to lease and had updated equipment like an automated paint system and robotic welding. Wayne jumped at the opportunity.

WAYNE: We started a brand called Spiral USA and these bicycles were 12 inch, 16 inch and 20 inch children’s bicycles. We’d get into the mass business and it was very exciting because all of a sudden, companies like JC Penney and Sears and Montgomery Ward were really interested in who we were and taking meetings with us. And it was exciting; you’re seeing the buyer from Sears and Roebuck, the biggest bike seller in the world at the time, and they’re interested in what you have. Toys R Us, Child World, we met with all of them.

WAILIN: But after the initial excitement wore off, Wayne got worried. Children’s bikes were a commodity and the big retail chains were interested only in getting the lowest price possible. During a business trip to Chicago, one of Wayne’s sales reps told him a story.

WAYNE: He said, I used to be in the plush business and I was a rep, and I used to rep plush for three factories to all the big guys, and we sold a lot of stuffed animals. I made a comfortable living and I had a good life. And one day, one of the factories told me they were looking to retire and they thought I’d be a good fit to buy the factory and be the whole nine yards: Make it, sell it, box it, ship it, you know, have a real company. It became so tempting I decided to do it. And he goes, to the whole world I was this big shot. I was out there, selling product to Sears and trade shows with big booths and I was this big deal. But my wife knew better. I’d come home at night crying, knowing that I was in financial problems, why did I do this, this is more than I can take on. I was making a good living as a rep. What did I need this responsibility for? He said, I sort of feel, Wayne, that that’s what you’re doing with children’s bikes. Do what you’re good at. You don’t have to be the biggest. And that was a really good piece of advice that I got. I knew in his heart he was right. We closed down the children’s bikes factory and got back to what we’re good at, making industrial grade bikes and trikes, making niche products for consumers. It was one of those things where we had to come to the realization that we’re in a market that’s never going to become huge. We understand that. We’re not gonna become the next Apple or IBM. We’re just Worksman Cycles and in our own little world, we do a great job and we have a great reputation, so we don’t have to be the next great thing.

WAILIN: Here was what Worksman was good at: industrial cycles and certain kinds of consumer cycles, like sturdy two-wheel cruisers for adults and tricycles for riders with balance issues. And there was a third niche category, one that linked Worksman with New York and American food history. Here’s Bruce Weinreb.

BRUCE: In the 1930s, a new ice cream company called Good Humor had an idea that they would sell ice cream from tricycles with an insulated cabinet so they went to Schwinn and they said could you make this? And they said no, not really, but there’s a company in New York that can.

WAILIN: At the time, Worksman was still being run by its founder, Morris Worksman.

BRUCE: And he had a very heavy Russian accent and he was a little—he was a little uneasy in communicating with corporate types, so he brought in his young son, who was in high school, but he put him in a suit and said, “This is my vice president.” And they asked for a lot of tricycles, way more than they could make and the son, who was Irving Worksman, was smart enough not to translate it correctly for his father and he said, “No problem, no problem, just give us the contract and we’ll get it done.” and the father was like, don’t worry about it, and they did and that became an iconic American product, the Good Humor ice cream tricycle.

WAILIN: Worksman made the Good Humor carts for several decades, starting in the 1930s. That primed the company for an important expansion in the 1990s. One of Worksman’s customers was a local company called Admar, another long-running business with deep roots in New York.

WAYNE: Back in the day, they were the original stainless steel hot dog cart manufacturer. Virtually every cart you saw in the street in New York in the 50s and 60s was made by that company. And that company is owned by the Beller family. Mr. Beller, the father, senior Beller, he was looking to retire and his son Jack was taking it over and it was a challenging business and then we were talking more and more with Jack and we decided to buy out that company and bring that in. So we expanded our business by getting into that end of the business in the 1990s, so it kind of made us a more well rounded company and also didn’t put all our eggs in one basket, so we’re not just in the bicycle business.

WAILIN: Unlike Worksman’s foray into kids bikes, food vending carts turned out to be a good business. Buying Admar in 1996 put Worksman in a position, years later, to take advantage of New York’s burgeoning food truck scene.

BRUCE: Still to this day, the guy who comes in just to buy a hot dog cart, is usually a newly arrived immigrant. But he knows how to cook and he has the food from his nation. It used to be hot dogs. Now you go on the streets and you see literally every ethnicity selling from carts and the food, the best food, absolutely the best food. The food truck people come in here and they have a 50-page business plan and they’re Columbia MBAs and they have investors and backing and it’s a totally different type of person.

WAILIN: As the mobile food scene’s evolved from ice cream and hot dog carts to fancy trucks, Worksman has also adapted. It can take a van and build a professional kitchen inside, everything from freezers to grills to deep fryers. And the expertise in making vending carts and food trucks translates into other kinds of mobile businesses.

BRUCE: We also just did a truck that’s a rolling barber shop, and what he wanted to do is have a huge picture window on the side so people could see, and it’s brilliant because he’ll go to a busy spot by a subway in the Bronx and he’ll park his truck at 5:30 and people line up to get haircuts.

WAILIN: The new vending division added diversity to a portfolio that was under threat from global economic forces. Chinese-made bicycles entered the U.S. and brands like Schwinn, Huffy, Murray and Roadmaster couldn’t compete with the cheaper imports. During the 80s and 90s, these iconic American bicycle makers packed up and moved to China. Their suppliers relocated overseas too. In Worksman’s factory in Ozone Park, Queens, where it’s been since 1979, you’ll see a bicycle on display that serves as a reminder of what the domestic industry once was.

BRUCE: We were cleaning up a few years ago and we found these two boxes, three boxes that were buried. And it was new, unused bikes from 1984 and so we decided to keep one. You see there are things here…the famous Hunt Wilde finger grips, they have little grooves for your fingers. The Bendix brake, Bendix Company, so it’s kind of a little museum of things that are no longer available so we decided we’re not gonna sell it, we’re just gonna put it on display.

WAYNE: We had made a decision and it was a hard decision that we believed in making bikes in America. We believed in our workforce, we believed that you could still do it here. We were in a niche market, so it wasn’t a high volume market. We didn’t want our fate controlled in China. And as a result, we made a very difficult and at the time questionable decision that the whole industry kind of laughed at us, and we just said no, we’re staying here, and we’re gonna make it happen here. Well, we did do that, but we had to really expand our import at that point. Otherwise, we’re out of business.

WAILIN: Worksman had a few advantages. Unlike other American cycle companies making commodity products at mass scale, Worksman had found success and sustainability in making a specialty product at a lower volume. But they couldn’t buy all of their components domestically.

WAYNE: The supply chain strategic decisions were difficult. You had to go to Asia to get things. You had no choice. At a certain point, Japan became a real powerhouse in bicycle manufacturing and components. Mr. Worksman, shortly after World War II, started traveling abroad to look for better bicycle parts than he could find in the U.S.

WAILIN: That’s Irving Worksman, the son of the founder.

WAYNE: And he forged a very dear friendship like brothers with a Japanese agent. Now if you think about that, following World War II, and now we’re talking we’re only in the 1960s, so there was not a lot of time separating these events. We were importing certain products pretty early in the game, which helped us down the road because we forged really good relationships in Asia and let’s face it, once the U.S. closed its manufacturing, we needed those relationships.

We do try to support as much domestic as we can, so things like our handlebars, our seat posts we make. Our solid tires are made in the United States. Our cabinets, our platforms are all made here. The frames are welded here. But the tires, the rims, the spokes, the chain, and seats, they’re imported but we hope one day if the American industry does come back, that so will the suppliers that make the product.

WAILIN: Worksman’s stake in the health of American manufacturing goes beyond just bicycles or bicycle parts.

WAYNE: Look, here’s the truth. If there’s no manufacturing in America, we’re out of business. Who are our customers? They’re manufacturers. One of the reasons we didn’t go to China like everybody else is we hoped, and I think it’s come to be true, that the factories that were still here using our tricycles would appreciate the fact that they’re made in America as opposed to being imported from China like every one one of our competitors does, so we felt that that was important. And we’d be hypocritical because we’re counting on the fact that the automotive industry, the steel industry is strong in the U.S. Because the stronger they are, the bigger their factories are. The bigger their factories are, the more tricycles they need. It’s the ripple effect if you’ve ever seen it.

WAILIN: For the last 40 plus years, since Wayne joined Worksman, he’s taken the necessary steps to ensure the company’s growth and stability. He pushed into consumer cycles, got out of making kids bikes and become the supplier of the food cart, a staple of New York life. And in 2015, he made one of his biggest moves yet to secure the future of a company that’s been in New York since its founding in 1898.

WAYNE: So here we are, um, at the Worksman Cycles company in South Carolina.

WAILIN: Worksman moved to a town called Conway in South Carolina, 650 miles away from Queens. On the next episode of The Distance, you’ll hear about the event that drove a wedge between Worksman and its hometown, and what the new factory means for the company’s future. That’s coming up in two weeks.

The Distance is produced by Shaun Hildner and me, Wailin Wong. Our illustrations are by Nate Otto. Make sure you are subscribed to The Distance on Apple Podcasts, Google Play Music, or wherever you get your podcasts, so that you don’t miss the second part of our story on Worksman Cycles. And special thanks to listener Jared Chadwick for suggesting Worksman as a subject for The Distance. If you know of a business we should cover on the show, email me at tips@thedistance.com or tweet at me @distancemag, that’s @distancemag. The Distance is a production of Basecamp, the app for helping small business owners stay in control of projects and reduce email clutter. Try Basecamp free for 30 days at basecamp.com/thedistance.


The Business Cycle, Part 1 was originally published in Signal v. Noise on Medium, where people are continuing the conversation by highlighting and responding to this story.



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