Serotta lays off 40% of workforce, planning shutdown

[Serotta_Carbon]

Originally Posted by sitzmark

A few weeks ago I was researching Ouzo Pro forks and came across this post by Mike Lopez describing the origin of Poway operations. I read elsewhere that Poway was set up to accommodate Mike's desire to continue living in California, while fulfilling Serotta's need for a carbon expert to join the company:

It makes sense to close the Poway facility, but would be odd not to relocate the intellectual property and production equipment to NY.

There's a very good reason they don't relocate the composites effort to NY. They don't own it...Never did... If you read what I said in that post it mentions that Serotta bought some production tooling. What they bought were some molds and mandrels used to produce the Serotta brand parts. They didn't buy my building full of equipment, the processes, or any IP. What they did do in addition to buying the molds was to lease a building that I set my equipment up in and made their parts. I think I may have mentioned that in another post sometime back.

For some reason or another the collective group in charge of Serotta has made the decision that they no longer need our services and have let us go. That was their choice and I'm sure they feel like they had a good reason to make it. It's not my place to question their decision. What's the point?

I'll continue to make composite products. It's what I've done my entire life and it's what I'll do in the future. The only question is will I stay in the same building that Serotta once leased or will I relocate.

Thanks for your support during my days with Serotta. I enjoyed working with Ben and the crew in Saratoga and will miss them all in the future.

Mike

[Louis]

Originally Posted by Serotta_Carbon

I'll continue to make composite products. It's what I've done my entire life and it's what I'll do in the future.

Mike, best of luck to you and the rest of your team.

[akelman]

What Louis said. Abstract discussions of business practices are bloodless, but the flesh-and-blood human dimension to this story makes my stomach hurt. Anyway, you've made a number of amazing products through the years, Mike, and I hope everything works out for you and yours.

[sitzmark]

Thanks for clarifying Mike. I misread and thought there was more Serotta-owned equipment involved.

Happy to know your operation is intact. Maybe a new (old) client is in your future.

[aptivaboy]

Very sad. I had hoped that Serotta would reintroduce something like their old tri-Colorado. The triathlete niche is one that I think Serotta could have done well in, as they once did. Keep things simple, build what sells. There are a number of small to midrange shops, like Waterford, that seem to survive if not thrive. Serotta could take a few lessons from them. What they are now, Serotta once was. If the Serotta brand survives, then they really need to look at their roots and and what others are doing, and then get back to that.

At least I have a steel Colorado II and a Davis Phinney model Serotta in the closet, both awaiting refinishing. And, there's always the Bay of Evil!

Bob

[skouri]

Selfishly one Of the most upsetting parts of the news was that I would not be able to purchase a serotta mid reach /fender fork for the spectrum i plan on purchasing this fall. I own an hsgit i dig, but the serotta forks were soooooo nice. Any plans to keep producing forks? Or are the molds gone for good? I know theyre expensive.

[BumbleBeeDave]

. . . is indeed underused. I've been in there many times and they have a lot of room. My understanding from private sources is also that the building was designed with Ben's expansion plans in mind and the company never came close to those numbers.

I understand from another local source who had been in the building (who has real-estate connections) that while the it's a nice building and was designed for light industrial/warehousing operations, the lack of an overhead crane or fixtures to support one limits the sales potential of the building.

My gut feeling with this announcement by Case/DCG is that they are putting the best face on a bad situation for them. Looks bad to turn tail and run--both for Saratoga community (who they probably don't give a hoot about)--and for other potential investors. Shutting down this place would be an admission they messed up.

Their only hope, IMO, to sustain the operation is to get somebody in to lead who has the business sense AND the cycling industry savvy to have the contacts to go get them some work they know how to do. Cycling is not that big an industry. It might be hard to find somebody who has what they need who has not heard already about this soap opera. What say you on this aspect, CharlesM?

BBD

Originally Posted by sitzmark

This concept of turning a custom house into a contract manufacturing operation for US companies wanting to reshore manufacturing, or foreign companies looking for "Made-in-America" labeling is inconsistent with my experience. Could work, but isn't immediately obvious where the business is going to come from.

In medical devices, we have turned to US domestic contract manufacturing companies for IC boards. Primarily because board population is now fully automated and an assembly robot can work as inexpensively in the US as it does in Asia. We don't reshore or contract for components requiring high labor content unless repeated attempts to find skilled labor that can deliver acceptable quality fail.

Unless I've missed something, it doesn't sound like high-throughput automation equipment was a cornerstone of Serotta operations. The Poway carbon facility probably had more automation than NY. That said, a press release at the time of DCG merger suggested that Serotta could handle 2-3x the volume (600-800 frames/yr) it was then producing.

[William]

Does Ben still wield a torch? I really don't know, but there certainly have been some very skilled folks current and past who have come out of the Serotta legacy.







William

[AngryScientist]

Originally Posted by William

Does Ben still wield a torch?

[Ahneida Ride]

Mike makes the best products in the Industry ...

Without the Serotta price attached,
mere mortals should be able to afford them.

[Charles M]

Originally Posted by BumbleBeeDave

. . . is indeed underused. I've been in there many times and they have a lot of room. My understanding from private sources is also that the building was designed with Ben's expansion plans in mind and the company never came close to those numbers.

I understand from another local source who had been in the building (who has real-estate connections) that while the it's a nice building and was designed for light industrial/warehousing operations, the lack of an overhead crane or fixtures to support one limits the sales potential of the building.

My gut feeling with this announcement by Case/DCG is that they are putting the best face on a bad situation for them. Looks bad to turn tail and run--both for Saratoga community (who they probably don't give a hoot about)--and for other potential investors. Shutting down this place would be an admission they messed up.

Their only hope, IMO, to sustain the operation is to get somebody in to lead who has the business sense AND the cycling industry savvy to have the contacts to go get them some work they know how to do. Cycling is not that big an industry. It might be hard to find somebody who has what they need who has not heard already about this soap opera. What say you on this aspect, CharlesM?

BBD

There are qualified people to try and step in and run a production business.

But it begs a few questions...

Can they build at a cost suitable for two step sales?

And in a world as small as cycling, where a high dollar bike purchase is as much about emotion and passion as it is quality, who would buy a two step bike sold by a marketing firm having their frame made by an investment group that cut the head off Ben Serotta?

If they do try and get back to custom roots, who buys a "Serotta" from the guys that "Removed" Ben when you could very likely buy a bike from Ben (or Kelly Bedford or any of a hundred smaller custom guys where you still have some feeling)?


Lastly, Serotta don't own carbon production and also dumped Mike, leaving them firmly planted in Metal bikes...

Metal frames are damn near 99% about passion, history, heart and soul.

In my mind, that means the value left at Serotta is @1%.

[pro12tc]

Originally Posted by Charles M

There are qualified people to try and step in and run a production business.

But it begs a few questions...

Can they build at a cost suitable for two step sales?

And in a world as small as cycling, where a high dollar bike purchase is as much about emotion and passion as it is quality, who would buy a two step bike sold by a marketing firm having their frame made by an investment group that cut the head off Ben Serotta?

If they do try and get back to custom roots, who buys a "Serotta" from the guys that "Removed" Ben when you could very likely buy a bike from Ben (or Kelly Bedford or any of a hundred smaller custom guys where you still have some feeling)?


Lastly, Serotta don't own carbon production and also dumped Mike, leaving them firmly planted in Metal bikes...

Metal frames are damn near 99% about passion, history, heart and soul.

In my mind, that means the value left at Serotta is @1%.

Agree 100%

I was about to order a custom Serotta when all of this blew up. I'll wait on Ben, once he gets back up and running he's got (at least) one order waiting for him.

[Climb01742]

A valuable business lesson to learn is...know what you're good at and know what you're not.

Personally, I have the business sense of a nat. I know creativity and something about human nature. The times in my career I've done best is when I had a strong business partner. I've struggled trying to be a one man band.

I think of this lesson when I think of Dario. I think Dario would be the first to tell you his strengths aren't in business. His genius is with a torch, his mind and his artists eye. I don't know the backstory of how Dario and Gorgio of Gitabike hooked up but the partnership over the years has benefited both greatly, I think. Dario is the artist and Gorgio is the businessman. Together, the Pegoretti brand is damn strong, vibrant and producing sought after bikes.

Maybe on their own, Ben and Bill could be such a team. Whatever Bens next act is, I hope he can find a partner who has the skills and connections to let Ben be the bike guy. 99.9% of us need a partner to be our best. I hope Ben finds his.

[dekindy]

If there is a market for titanium racing bikes and the average racer is keen on the racing Serotta racing heritage and is either not going to know or care about the drama, then Serotta has everything they need for that market.

Include a name brand carbon or Serotta steel fork, Mad Fiber wheels, and you are there. Use Blue's source for carbon frames. Metal made in USA and carbon made in Asia.

Also gives them time to implement strategy for building other folks designs.

Doubt if it will work but what the heck!

[BumbleBeeDave]

I appreciate your industry savvy and knowledge and whtever other insight you could ofer about the situation.

My next bike will likely be metal and will most likely be from Kelly. He is close to me geographically and his incredible skills embody the very best of what Serotta offered in metal, especially steel.

It would never be from this "new" Serotta or any other manufacturer associated with them.

BBD

Originally Posted by Charles M

There are qualified people to try and step in and run a production business.

But it begs a few questions...

Can they build at a cost suitable for two step sales?

And in a world as small as cycling, where a high dollar bike purchase is as much about emotion and passion as it is quality, who would buy a two step bike sold by a marketing firm having their frame made by an investment group that cut the head off Ben Serotta?

If they do try and get back to custom roots, who buys a "Serotta" from the guys that "Removed" Ben when you could very likely buy a bike from Ben (or Kelly Bedford or any of a hundred smaller custom guys where you still have some feeling)?


Lastly, Serotta don't own carbon production and also dumped Mike, leaving them firmly planted in Metal bikes...

Metal frames are damn near 99% about passion, history, heart and soul.

In my mind, that means the value left at Serotta is @1%.