Serotta lays off 40% of workforce, planning shutdown

[sitzmark]

Originally Posted by Climb01742

Bill wasn't the one I was referring to.

What is intriguing is that CEO positions aren't typically filled by Presidents (Ben), but by BODs and owners (Brian Case). So either Bill's position became redundant in the merged organization(s), or he was perceived to be in agreement with Ben on how best to steer Serotta's future. Could be Ben and Bill both decided to walk and play the game their way ... who knows.

[pbarry]

Originally Posted by Charles M

Hopefully, in the case Ben was fired, it also voided any potential conflict with his doing something on his own and smaller.


Saratoga Cycles?

+1

Originally Posted by Charles M

Business wise, with as many missteps as have happened over the past decade or so, it's VERY hard to argue that Ben's forte is in business management.

But product quality wise, from steel to Ti to Carbon/metal and full carbon, it's hard to argue that he didn't have a passion for making a very good product from multiple materials.


I would think a smaller operation with less grand intent would work. I think it's been 3 tries with overly optimistic direction that were simply never going to pay off...

That is the most practical solution in this thread.

Originally Posted by Charles M

But I would buy a bike from Ben.

Well said, Charles.

[#campyuserftw]

Originally Posted by Climb01742

kelly is a class act. and his post raises an interesting irony...

when kelly was laid off in 2008, after 22 years of loyal and remarkable and one could argue indispensable service, i wonder who did the laying off? one of the two men who were 'laid off' today? karma maybe?

i wonder if the same words were heard, seven years apart, 'nothing personal. it's just business.'

I don't believe in karma, though I wish it existed. The universe's energy has no awareness of things said, unsaid, or done wrong. I do believe in time, and over time, the flush hand one had, can turn, fold, and be flushed down the drain, creating the perception of cosmic intervention. Karma can be induced by humans, through revenge, and the best revenge is success; if Ben was done wrong, let him learn, and then succeed, as Mr. Bedford has displayed. Business is a b*tch. Life can be, too.

Take the pink slip/Dear John letter, sing about it and make millions (on Christmas no less):

http://www.youtube.com/watch?v=DTIdojkgivs

[BumbleBeeDave]

Originally Posted by bironi

Now that was a painful trip back in time.

. . . my 21 seconds back. That's all I could stand. (insert puking smilie face emoticon here).

BBD

[William]

Originally Posted by BumbleBeeDave

. . . my 21 seconds back. That's all I could stand. (insert puking smilie face emoticon here).

BBD

William

[BumbleBeeDave]

Not a very spectacular chow-blow, but it'll do!

BBD

[1centaur]

First, a few pages back, the private equity blog piece? Completely clueless author.

As for this denouement, I wonder about Bill's role vis a vis Bradway. If Bradway bought Serotta thinking it might be a turnaround, then brought in Bill as a consultant to help that, then decided it was never going to work so the only deal to be done was to capitalize on the real value - the production capacity of Saratoga - at what point did Bill get on Ben's side of the table? And when Bill said that DCG told Bill and Ben to "go for it" (the business plan) and then never came through with the capital, who said go for it and why would they bother? In a productive capacity scenario, Bill and Ben were never part of the equation (unless they'd use some of that capacity for their new bike brand).

The stories read like Bill/Ben were doing the deal, but Bradway did the deal with DCG. Bill/Ben were just hired help already and had no seat at the deal table.

As for the productive capacity concept, I'm dubious of the need. That's a lot of margin to give away to compete with other credible made in the US brands with brand power. The most obvious user: Ben. Then Merlin. Then...?

[William]

Originally Posted by BumbleBeeDave

Not a very spectacular chow-blow, but it'll do!

BBD

Sorry, it was just a vurp.





William

[dekindy]

Do I understand correctly that the California carbon operations have been closed permanently? Least valuable part of Serotta?

[Keith A]

Originally Posted by dekindy

Do I understand correctly that the California carbon operations have been closed permanently? Least valuable part of Serotta?

I think that is what I read too.

[572cv]

Originally Posted by dekindy

Do I understand correctly that the California carbon operations have been closed permanently? Least valuable part of Serotta?

Gee, I think this would be far from the least valuable part of Serotta. The forks particularly are brilliant and more refined, by which I mean versatile and tunable to a rider and frame, than almost anyone's product. It would seem that it might be the most useful part of the company to another bike maker. But that's just my thought.

[Charles M]

Regarding Carbon, I'm not sure that Serotta own that production / facility / labor as most think.

I don't think that's rolled into trying to produce for others (though it could be).

[Charles M]

Originally Posted by alembical

I had not seen this here before:
http://serotta.com/new-management-to...atoga-springs/

SARATOGA SPRINGS, N.Y. (AUGUST 6, 2013) – Serotta, one of the world’s premier manufacturers of handcrafted high-performance bicycles, aims to expand production at its Saratoga Springs factory by seeking contracts to build bikes for other cycling brands.

Under a plan to restructure the business, Serotta’s industry leading manufacturing capabilities in Saratoga Springs will be offered to cycling brands interested in providing their customers with bikes built in the U.S.

“We have two distinct assets in Saratoga Springs,” said Brian K. Case, a director at Serotta’s parent company, Divine Cycling Group (DCG). “The first, of course, is the Serotta brand and its 41-year history. The second, and equally important asset, is the entire team in Saratoga. In addition to making Serotta’s bikes so great for so long, they have the skills and capacity needed to offer unparalleled craftsmanship to other brands looking to source the highest quality American-made bikes.

“We have no plan to close the Saratoga Springs factory,” Case said. “In fact, contract manufacturing represents a significant profit opportunity for the company, which in turn may support the future of the Serotta brand.”

Patrick O’Farrell, Serotta’s director of operations, will oversee all production at the Saratoga Springs facility, including the fulfilment of current Serotta orders. A 23-year Serotta veteran, O’Farrell has been involved in every aspect of the company’s manufacturing and manages its production staff. He will report to DCG’s board of directors.

The restructuring will involve putting in place a management team that is aligned with DCG’s expanded production strategy. As a result, Serotta CEO Bill Watkins and founder and President Ben Serotta have left the company. “We wish them well in their future endeavors,” Case said.

Litespeed / Lynskey... BUT


The story is VERY different... Almost opposite. Successful company sells out, new company makes some money and grows product lines, the founders that sold leave and start a separate company that does well.



Once the non-compete agreements at litespeed passed, Lynskey took the vision and the core skilled labor group (I remember standing in a group of 7 people in Tennessee and they had a combined 130 years of cycling fabrication skills) with them. They went small scale custom and then bumped up to larger scale production...

Wanna start with a massively competent foundation, build very good custom then grow into larger scale production? You start like these guys:
http://www.pezcyclingnews.com/lynske...ce-titanium-2/



"Serotta" is left with only a few people and a building of machines that produce a product with a quality level never greater than the skill of the operator, now run by a couple of guys with good business skills but with the collective bike frame building talent found in Kelly Bedford's toenail clippings (left foot only).

While I've said repeatedly that there is a plenty large market for $5-6-7-8K custom frames, I'm thinking the number of companies with brand recognition that can't build and need someone else to is... not large.

If I were in that market, I would call directory assistance for Chattanooga and ask for the number of anyone named Lynskey.

[sitzmark]

Originally Posted by Charles M

Regarding Carbon, I'm not sure that Serotta own that production / facility / labor as most think.

I don't think that's rolled into trying to produce for others (though it could be).

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:

Originally Posted by Serotta_Carbon
It is true that Reynolds no longer makes forks. When I first heard this rumor I called my former partners there to verify and they confirmed they were done with that part of the business.

It is also true that Serotta did not buy out Reynolds. Jim Pfeil and I were the founding partners of Reynolds Composites and we sold it to MQC. Several years later I left Reynolds and went to work for Serotta and we purchased the production tooling which we now use to make the parts.

Jim went to Edge where he works with Jason and some of the other folks who were once involved with Reynolds & MQC.

In our Poway CA facility we're still making forks for Serotta, and others, with the same crew that created and produced the Ouzo Pro and have built hundreds of thousands of parts since then.

We do it well, we do it here, and we'd love to build one for you!

Thanks!

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

[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.