Serotta lays off 40% of workforce, planning shutdown

[RedRider]

,

[jlwdm]

Originally Posted by 1centaur

This is an interesting side note to the thread, because I think Serotta IS a lot like BMW or Lexus in that some people focus on the status aspect and some focus on the reality of the object. BMW puts a ton of effort (some see it as overengineering) into making cars with very specific driving characteristics that they view as superior. Lexus tries for incredible build quality and flawless service. They both attract people who want just what they're offering. And maybe some others who think they're status symbols. That sounds like Serotta to me.

I drive a BMW because I like driving it. Status wise it would be at the bottom of the cars in the market I work in. Twice I have test driven a Lexus and it just takes one block for me to realize I could never drive one. Different markets for sure.

I can't imagine a better bike than my Serotta. Six years and never a thought of wanting to replace it with another bike.

Jeff

[slidey]

I completely disagree. You've narrowed down your perception of Ferrari to include fast cars, and nothing else. If I follow your logic, you seem to be assuming that people who buy into this merchandise thing will expect superlative key fobs because err...they make superlative cars??!!

Originally Posted by pbarry

Buying a Ferrari key fob does not get you anything made by them.

Yes, I agree that Ferrari's marketing is fantastic. To a fan, the Ferrari mascot/logo on a key fob made in China, being sold through the Ferrari store online definitely means more than just a key fob. It gives some bragging/show-off rights, that's all. It attempts to evokes the same feelings as buying merchandise related to your favourite NFL/NBA/MLB/whatever teams.

What were you expecting? Skilled tailors giving up their designated jobs of stitching the leather seats on an F430 to stitch you a wallet made to your preferences? I think Sir is confusing excellence in automobiles to translate into gift shop items as well.

Originally Posted by pbarry

If you perceive that you are getting something more than a key fob made in China, then their marketing is successful. Schwag sales won't make or break a bike company.

[William]

Originally Posted by sitzmark

Labor quality and training isn't always the same. Automation generally is.

The problem I have experienced with Chinese , Indian, etc. manufacturing is that you can never guarantee anything. I've experienced work teams that opened the factory after hours and produced product without proper quality control, then sold it through alternate channels as being authorized product. Or, labels and packaging smuggled out of the plant and product manufactured on the cheap and again sold as legitimate product. How was this discovered? After fielding a rash of customer quality/warranty complaints and trying to determine what in our production process was responsible. Initially we spent a lot of money replacing product that we never actually saw any revenues on - just to keep customers happy. Then we figured it out.

There is little regard (or enforcement) for intellectual property in Asia. Improving because a number of companies have pulled out, or threatened to. Ten to fifteen years ago it was a nightmare.

Been there, done that. "Nightmare" is the right word.



William

[CunegoFan]

Originally Posted by BumbleBeeDave

Serotta has never done this successfully, IMO. They were getting a good start on it with the Pronto/Fondo, but perhaps way too late. I was originally optimistic about the merger with Blue, who I understood have Asian carbon experience. A $2000-2500 carbon Serotta, designed by Ben here and built in Taiwan, might not have been a bad thing to supply a lower end price-point.

What does carbon experience mean these days? I picked up a Blue catalog at an Ironman. It was filled with bars, stems, saddles, duffel bags, back scratchers, nose hair clippers, etc., all labeled with Blue's house brand. It looked like they had gone to a Taiwanese bike show and picked fifty products to slap a label on. I would not be surprised if their frames are the same.

[ultraman6970]

Thats what they do cunego... go to a bike shop, pick one manufacturer that have nice frames for the right price and can deliver them with the paint job needed, and ready to go. Technically speaking you can go to las vegas bike show, and get 200 frames shipped to your home and painted like you want w/o any problem. Same with the parts.

Is understandable that Serotta as a brand did not want to go that way, but... or you do or you end up closing... tiny builders doubt will have those problems ever.

[54ny77]

[BumbleBeeDave]

Originally Posted by 54ny77

. .. as a request for the big ole' thread padlock?

BBD

[FlashUNC]

At least let this get to 20 pages first.

[pbarry]

Originally Posted by slidey

What were you expecting? Skilled tailors giving up their designated jobs of stitching the leather seats on an F430 to stitch you a wallet made to your preferences? I think Sir is confusing excellence in automobiles to translate into gift shop items as well.

Agreed. You suggested that nothing Serotta had to offer was affordable, that even Ferarri (the brand) was affordable. Doesn't translate to the bike biz, imo. Trek/Giant/Cannondale schwag has no bling value. Never seen a Vanilla t-shirt, yet the frames are coveted.

Make good stuff, get great riders on the bikes, offer the bikes at a competitive price. Keep doing it. Minimal management at the top of small company is required. Building a reverse pyramid either with management/office staff or the inflated salaries of a few at the top will kill a small to medium size manufacturing endeavor. If you don't make the stuff, then you better be contributing significantly to sales...

That said, Bill and Ben were/are on track with the Pronto, especially with the full build kit price.

[Peter P.]

Originally Posted by Mark McM

How you can solve a problem if you don't know the root cause (i.e. the fault)? If you don't know the root cause, then you can't know if a proposed solution actually fixes the problem, or merely masks a symptom.

Finding a fault is not the same as blaming.

You're right. And in fact, what I've read ACTUALLY says American industry AND business spends it's energy on ASSIGNING BLAME for the problem while Japanese industry focuses on SOLVING the problem.

Pasted from Mark McM:
How you can solve a problem if you don't know the root cause (i.e. the fault)?


American business focuses the root cause on THE PERSON i.e., who made the decision? Who made the part? The Japanese are interested in fixing the problem it doesn't happen again.

Re: the comment about Japan's decade: That was the result of banking and financial issues, not business/manufacturing. And as we all know in America, once the financial train begins to run away it's not easy to stop.

[firerescuefin]

That may be the case in some places...but root cause analysis has been adopted by much of American Industry (It's entrenched where I work)...I think your thoughts may be a little dated.

Originally Posted by Peter P.

You're right. And in fact, what I've read ACTUALLY says American industry AND business spends it's energy on ASSIGNING BLAME for the problem while Japanese industry focuses on SOLVING the problem.

Pasted from Mark McM:
How you can solve a problem if you don't know the root cause (i.e. the fault)?


American business focuses the root cause on THE PERSON i.e., who made the decision? Who made the part? The Japanese are interested in fixing the problem it doesn't happen again.

Re: the comment about Japan's decade: That was the result of banking and financial issues, not business/manufacturing. And as we all know in America, once the financial train begins to run away it's not easy to stop.

[slidey]

Tell you what...together I think we've figured out one part of the problem. Serotta was never able to leverage its position as a "manufacturer" to become a "team".

Exorbitantly priced manufacturing excellence will never sell, however exorbitantly priced winning team memorabilia* just might.

The above leads me to believe strongly that Serotta should've never stopped sponsoring professional cycling teams. If they'd have never sponsored a team, that've been alright, but having done so in one era and then so conspicuously vanishing altogether from the scene today can be only perceived as a case of being past one's prime. Add to that the negligible marketing by Serotta in the present age, and one's suspicion is only confirmed..."Hmm! They must've been great at one time but not one peep from them today. Meh...why sped my money on yesterday's news! Now which do I buy? The S-Works Roubaix with Zertz stays or the Cannondale SuperSix with the Hi-Mod Technology. Do I want to be like pro1 or pro2?"

*memorabilia = everything...bikes, mugs, keyrings, tee's, caps, etc

Originally Posted by pbarry

Agreed. You suggested that nothing Serotta had to offer was affordable, that even Ferarri (the brand) was affordable. Doesn't translate to the bike biz, imo. Trek/Giant/Cannondale schwag has no bling value. Never seen a Vanilla t-shirt, yet the frames are coveted.

Make good stuff, get great riders on the bikes, offer the bikes at a competitive price. Keep doing it. Minimal management at the top of small company is required. Building a reverse pyramid either with management/office staff or the inflated salaries of a few at the top will kill a small to medium size manufacturing endeavor. If you don't make the stuff, then you better be contributing significantly to sales...

That said, Bill and Ben were/are on track with the Pronto, especially with the full build kit price.

[TopQuark]

I have a different view of all this since I started looking for a brand last year. I was bike dormant for over 20 years before deciding to dedicate myself riding bikes again. In the process of reviewing, evaluating, and finally, selecting the brand I will commit on, what turned me off on the Serotta brand other than their top end pricing is their outrageous claims on just about everything. I'm sure there is truth on some of it, but if they are not backed by convincing data at the moment of reading their claims, it didn't took me long to look for other brands.

Here are some of what I have in my notes. I am not sure if these are still in their website today:

• Fitting - we invented it!

• Serotta has built more custom frames, one at a time, than any other American builder.

• Serotta has more control over engineering and manufacturing than any other American bicycle company.

• Our proprietary materials provide more rider tunability options than any other bike company in the world. Serotta material costs are higher than our competitors’ because we demand the highest quality in carbon, titanium and steel and then modify them to meet specific rider needs.

• We are maniacal about frame tolerances. Serotta frames are the best aligned in the industry – period.

• Material properties of each tube and all components of each and every frame are 100 percent quality audited.

• We also offer an insane number of finish choices – over a billion options!

• A Serotta titanium frame, handcrafted in our U.S. facility, is straighter and more precise than any frame of any material you can buy.

Serotta lost 5 bike sales here just because of their sales pitch. Different strokes for different folks...

[happycampyer]

Originally Posted by TopQuark

I have a different view of all this since I started looking for a brand last year. I was bike dormant for over 20 years before deciding to dedicate myself riding bikes again. In the process of reviewing, evaluating, and finally, selecting the brand I will commit on, what turned me off on the Serotta brand other than their top end pricing is their outrageous claims on just about everything. I'm sure there is truth on some of it, but if they are not backed by convincing data at the moment of reading their claims, it didn't took me long to look for other brands.

Here are some of what I have in my notes. I am not sure if these are still in their website today:

• Fitting - we invented it!

• Serotta has built more custom frames, one at a time, than any other American builder.

• Serotta has more control over engineering and manufacturing than any other American bicycle company.

• Our proprietary materials provide more rider tunability options than any other bike company in the world. Serotta material costs are higher than our competitors’ because we demand the highest quality in carbon, titanium and steel and then modify them to meet specific rider needs.

• We are maniacal about frame tolerances. Serotta frames are the best aligned in the industry – period.

• Material properties of each tube and all components of each and every frame are 100 percent quality audited.

• We also offer an insane number of finish choices – over a billion options!

• A Serotta titanium frame, handcrafted in our U.S. facility, is straighter and more precise than any frame of any material you can buy.

Serotta lost 5 bike sales here just because of their sales pitch. Different strokes for different folks...

The marketing is brash and understandably off-putting but, aside from "inventing fitting," whatever that means, the rest of the claims are basically true. As others noted, however, the vertical integration necessary to make many of these claims true (owning their own carbon facility, cnc'ing all of their own parts, etc.), plus the obsessive manufacturing standards and testing, have contributed to a cost structure that is out of whack.