The Strada Sphere
We have selected our bicycle brands based on the following criteria:
1. History & Experience - we have chosen brands that have been producing road bicycles for several years and have unparalelled experience with both the design of frame geometries & tubing. Bianchi is the worlds oldest bicycle manufacturer (Est. 1885) and invented the two wheel bicycle as we know it today http://www.swide.com/style-fashion/super-luxury/bianchi-the-history-of-milanese-bike-legend/2012/9/13. Cinelli, LOOK & Wilier have made significant contributions to cycling over the past 75 years.
2. Style & Performance - each of our brands are engaged in the design of thier own bicycle frames. They are not marketing companies buying bare frames designed by others and simply decaling and painting them. Why does this matter? Well this is where history and experience come into play, decades of experience result in a better engineered frame for you. Looking for superior handling, incresed stifness, faster, lighter, comfort on difficult terrain – our brands offer a range of bikes that will accommodate your riding needs with no compromises on aesthetics.
3. Quality Control – consumers are now aware that almost all of todays bicycle companies subcontract their carbon frame building, in some cases even painting & assembly, to either Taiwain or China. We look to brands that have a proven track record when it comes to consistancy of workmanship along with a history of very few warranty claims. Taiwan continues to produce todays best frames and currrently our brands are producing thier carbon road frames there. Look for MADE IN TAIWAN.
The classic styling of a Cinelli Strato, trademark Celeste paint on a Bianchi Oltre or the cutting edge engineeering of a Wilier Zero 7, there is no denying that we have chosen some of the most significant brands in cycling, past and present. The history and culture embedded in these brands has drawn those passionate about cycling to seek out the unique and beautiful qualities these brands have to offer. These are not just brands – these are family names, the roots of the romaticism of cycling.
At Strada Cycles, we don’t allow major brands or distributors to leverage our store with terms and incentives that cloud our vision for selling what we love and choose to ride.
We have well equiped carbon road bikes available for demo; each includes a quick BIKE FIT before sending you out.
One day – $95.00
One week – $350.00 (5 days)
Contact Joey-Lee at firstname.lastname@example.org for details or to reserve your bike now.
Available road bikes - Bianchi Sempre, Bianchi Sempre Pro, Wilier Izoard Xp or Cinelli Saetta.
Thank you to everyone who attended this years group ride weekend in Westlake Village, CA. Here are some pictures of the group and the routes around Westlake, Malibu & Calabasas. An amazing opportunity to escape our winter and discover this area of California, made possible in part by Assos Cycling providing cyclists with the best technical clothing the industry has to offer.
“Bianchi has developed a Special Edition Oltre XR model in celebration of Felice Gimondi’s 70th Birthday. Only 70 units of this unique and exclusive Gimondi 70 bicycle will be produced; pricing expected to be between $18,000.00 and $20,000.00.
The 70 numbered units will be built and customized at Bianchi headquarter in Treviglio (Italy).
- Celeste Bianchi color which matches up the blue of the Bianchi jersey worn by Felice Gimondi in the 60′s and the blue of the Sapphire, the amulet stone distinguishing the people born in September.
-Multicolour stripes along the tubes to remind us of Gimondi’s leader jerseys of Giro d’Italia, Tour de France, Vuelta a Espana, World and Italian Championships.
-the names of Gimondi’s main victories on the down-tube, inside the Bianchi eagle graphic
-Gimondi 70 logo on the headtube
-Vintage Bianchi logo used in the late 60′s/early 70′s
We have arranged 3rd party financing for frames, bicycles & wheel-sets along with any accessories and clothing you may want to add at time of purchase.
Same day approval with rates as low as 6.99%, zero down and terms of up to 60 months.
Bicycle – $2,499.00
Accessories & Clothing – $500.00
Processing Fee – $49.00
HST – $365.76
Total Financed – $3,413.76
Term – 24 months
Rate – 8%
Monthly Payment – $154.40
Interest paid over term of loan – $291.72
In a time when all of the other manufacturers are looking to seperate themselves from the norm by increasing width, texture or shape, Lightweight simply chooses to leave perfection alone. If you have the means, then don’t comprimise…
Due to our official aeronautic certification for fibre-reinforced composites we at LIGHTWEIGHT do have access to extremely regularized kinds of carbon fibres and resins. So we use a good number of different materials that normally only can be found in aeronautic industry and build our “MEILENSTEIN C” wheels out of it. The reason why we do have this certification is the fact that we are part of the Wissler group – a strong and reliable partner for aeronautic companies like Airbus or ESA for years that guaranties us the access to such exclusive materials and technologies.
By using such exclusive and unknown carbon fibre materials – at least for the rest of the bike business – we are able to create the rim layup even more clincher specific than ever before. This new materials also changed the whole wheel building process dramatically. By using totally new technologies we at LIGHTWEIGHT reach an even higher control level of every second of the heating process. Thanks to this we are able to insert very specific temperatures to the different parts of the wheel at super exactly calculated time periods during the whole wheel building manufacturing.
This unique combination of new carbon fibre materials and an optimized production process that gets the best out of this materials leads to a superb daily driver sportive full carbon fibre clincher wheel – a “MEILENSTEIN C”. As one of the core results of all this new technologies heat resistance capacities now reach a temperature level that is way higher than every kind of temperature you could reach by braking if you use the wheels like it is ment to be. And because of much higher and more specific thermo setting we pushed temperature limits to a point where erosion of the braking surface by every day usage is extremely low.
This is a fable about emotion, but it starts as a business story. For the past half century the Italian component maker Campagnolo and its chief competitor, the Japanese conglomerate Shimano, have gone toe-to-toe in one of the great rivalries not just of the cycling world but of the entire business world. The elements intrigue those who study such things: Despite their near-comic contrast in size—Shimano’s bicycle-division sales were $2.1 billion last year, Campagnolo’s around $150 million—the companies have considered each the other’s greatest foe. Over the years, the spirit of that rivalry infected their customers. Road cyclists can be passionate about their choice of components, but none are more notoriously passionate than Campy freaks. They wax eloquently about the curves and swooping lines of new components, create personal museums of old parts, can be stunned into silence and immobility by the sight of a complete boxed Campy tool set.
Campagnolo traditionally had been seen as owning the top 1 percent of the cycling market, the high-end professional and custom-build customer, while Shimano was considered to dominate OEM (original equipment manufacturer)—its components, ubiquitous on mass-production bikes made by major players, at times have been found on as many as 70 percent of all bikes made.
Campagnolo was also traditionally acknowledged as the choice of champions. Eddy Merckx rode only Campy. Bernard Hinault rode Campy to all five of his Tour de France victories. So did Miguel Indurain. Of course the Italian champions Gino Bartali and Fausto Coppi rode Campy. But the last Tour winner to ride a Campagnolo gruppo under the Arc de Triumph was Italy’s Marco Pantani in 1998. (The inevitable asterisk of modern sports: Oscar Pereiro, who was declared the 2006 winner after a failed drug test negated Floyd Landis’s victory, rode Campagnolo.) Lance Armstrong won seven yellow jerseys on Shimano gear. When he retired in 2005, many insiders assumed Campagnolo would do whatever it took to make sure the next winner was on its componentry. But Shimano won in 2007 and 2008. Then things became really bleak for Campy: The upstart SRAM stole the crown. A Chicago company that found its first success by selling handlebar shifters for mountain bikes in the 1980s, SRAM didn’t put out its first road-bike group until 2005. But just four years later, in 2009, Spain’s Alberto Contador won the Tour on the company’s top groupset, Red. Contador and SRAM won again in 2010, before Shimano took over again in 2011, under Cadel Evans.
Campy’s problems aren’t limited to the Tour de France podium. Today’s younger generation of riders generally assume they can’t afford Campagnolo’s gear and aren’t impressed with its historic pedigree. Older, more affluent riders still covet the brand’s cachet, but, as one industry insider observes: “When all of us 50-year-old guys with $6,000 bikes get too old, fat, and lazy, what are they going to do?”
The rise of SRAM cuts to the heart of Campagnolo’s dilemma. When SRAM introduced its first road-bike groupset six years ago, Campagnolo ignored the American upstart. That was a mistake. Nimble and smart, SRAM rose quickly to challenge the Shimano-Campagnolo duopoly. SRAM’s engineers developed new products quickly and outsourced production to factories that could make the products at a lower cost. When I asked Michael Zellman, SRAM’s global marketing manager, if I could stop by and see the Chicago factory, he said, “Sure, but there’s not much here to see. We manufacture in 15 locations all over the world.”
About 95 percent of the bicycles and components sold today originate in Taiwan or China. But not Campagnolo’s. The company sticks stubbornly to its roots, manufacturing in its birthplace of Vicenza, Italy, a midsize industrial city between Venice and Milan. Campagnolo employs high-cost labor and hews to oldworld values. Red wine is served in the lunch room. A few years ago the company finally opened a second plant outside of Italy. It’s not in China or Taiwan. It’s in—get this—Romania.
Some industry observers and competitors see the future closing in on Campy. “In an international industry and an international world, they can’t survive strictly in Italy,” said Gary Coffrin, an industry consultant and former executive at Specialized. “Sometimes it seems like Campagnolo’s off in Vicenza in its own world,” said Matt VanEnkevort, managing director of FSA USA, the American distributor of Full Speed Ahead components. “They’ve failed to globalize as a brand, failed to respond to the market when the market’s shifted.”
Take VanEnkevort’s quote with a grain of salt. FSA is, after all, a competitor. But he raises a valid question. In an outsourced world, in which supply chains stretch around the globe and labor goes for a dime on the dollar in Asia, many wonder how long an old-school Italian company like Campagnolo can survive.
In the United States, Campagnolo officials are all too aware of the challenge. “We’re in a ‘What have you done for me lately?’ situation,” says Tom Kattus, head of Campagnolo North America,the company’s stateside subsidiary. Back in Italy, though, no alarm bells are ringing. Valentino Campagnolo, the inscrutable and elegant Italian gentleman who runs the family-owned company, acknowledges that SRAM is “a new player, a strong player, a clever player.” But Campagnolo, 63, appears undisturbed by the company’s position in the marketplace.
How does he plan to keep the company alive? By doing what Campagnolo has always done. He’s going to nurture and protect a mysterious force known around Vicenza as “the knowledge.” It’s an idea with deep roots in Italian culture. And while others in the bicycle industry predict doom for Campy’s business model, some forward-thinking economists believe the Italian company may be on to something. After a decade-long outsourcing rush, a number of businesses are beginning to rethink the wisdom of manufacturing on the cheap in Asia. Signore Valentino’s oldschool business model just might be the new new thing.
Drivers on the Milan-to-Venice autostrada know they’re passing Vicenza when they see the Campagnolo factory sign, a 120-foot, royal blue version of founder Tullio Campagnolo’s signature, one of the world’s most understated yet recognizable logos. The company’s headquarters and main manufacturingfacility are located in a sprawling three-story plant in the light-industrialzone on the outskirts of town. The compound was built in 1981, and the executive suites retain a cool late-1970s vibe: modern, dimly lit, low-ceilinged, and hushed. It was there I met Lerrj (pronounced “Larry”) Piazza, the company’s young marketing and communications manager, who agreed to show me around. Like everyone else at Campagnolo, Piazza dressed impeccably, in a fine Italian shirt, slacks, and a cashmere cardigan. A bicycle—a Colnago with Campagnolo Record components—leaned against the wall in his office.
“Welcome to Campagnolo,” Piazza said. “We have time to see the facility before your interview with Mr. Campagnolo.”
He said this as if I had booked time with the Pope.
On the day I visited, a Tuesday in early March, the factory was relatively quiet. “We are switching over from the 2011 production year to 2012,” Piazza explained. “So there are a number of workers here, but not everyone.” Campagnolo employs about 400 people in Vicenza. Like most Italian workers, they are strongly unionized and well paid. The average Italian metalworker makes about $43,000 a year. In Taichung, Taiwan, the world center of bicycle manufacturing, factory labor goes for about $7,250 a year. In China, it can be had for $3,700.
It wasn’t hard to be impressed by Campagnolo’s operation. The airy manufacturing complex could house a fleet of 747s, but it’s not driven by an assembly-line mindset. Campagnolo’s machinists ply their craft at autonomous tooling stations. Components are dropped into small-batch metal bins the size of laundry baskets, which are then hand-wheeled to the next station. The factory floor was clean enough to lick.
Piazza guided me to a progressive stamping die, a 30-foot monster that sent out a shudderingwhump! every two seconds. It felt and sounded like the company’s beating heart. I watched as steel tape was fed into one end. Newborn Campagnolo Super Record cogs emerged from the other. A machinist in blue coveralls picked a random cog and held it to his eye like a diamond cutter. There are almost no traditional assembly lines at the Campagnolo factory. Each machinist works like an artisan. There’s a bit of the Renaissance guild about the place. Which is no coincidence; the artisan-guild concept was created just a few hours south of here, in Florence, in the 12th century.
“The company is very strange and complex,” Piazza told me. “It’s a mechanical company and also a chemical company.” All the surfaces and finishes are produced here. “The knowledge is very complicated,” Piazza said. “It takes a lot of years to build up this know-how. It’s not impossible to make a product like this but you need the knowledge, born of experience, to solve problems, to always improve.”
The knowledge. Company officials speak of it like Obi-Wan spoke of The Force. It is something at once powerful and fragile. It is the reputation of the brand and the combined know-how of the engineers, designers, and machinists gathered under one roof in Vicenza. And it is guarded ferociously.
As we walked through the 11-speed-chain assembly room, I spotted a row of enclosed offices and asked what they housed. Piazza paused, then said, “Electronic gruppo development.”
My ears perked up. After more than a decade in development and of anticipation from cyclists, Campy’s battery-powered gruppo was about to hit the market. Few outside the company or the Movistar pro team, which had been selected to road-test it through the 2011 season, had gotten even a glimpse. Shimano, which began its electronics R&D years after Campagnolo, has been selling its Dura-Ace Di2 electronic groupset since 2009. Shimano’s Di2 gear goes for around $5,000, double the price of top-end Shimano, SRAM, and Campagnolo components. At Campagnolo, executives believe their gear has to be the absolute best—and work flawlessly—from day one. Otherwise the brand takes a hit. Piazza had no intention of letting me anywhere near the group’s development department, because the components hadn’t debuted to the public yet, but also because it was full of prototypes, earlier generations and, presumably, ideas that had failed along the way.
“It is not available to us,” he said with a smile, and led me away.
The knowledge must be protected.
The electronic gruppo problem illustrates a larger dilemma for Campagnolo. Its engineers must not only compete with a company more than 10 times its size. Their executives must not only find profit margins while paying 10 times the hourly wage of its competitors. In Vicenza, you get the distinct impression that Campagnolo executives feel as if they also must shoulder the burden of guarding the soul of cycling itself.
Certainly few companies are as steeped in the history of the sport. Founder Tullio Campagnolo’s handmade delivery bicycle, circa World War I, stands in the hallway outside the executive suites. The back cover of a lavish, 159-page corporate history published on the company’s 75th anniversary in 2008 proclaimed, “The history of Campagnolo is the story of modern cycling.”
That’s a bold claim. It also happens to be true. Tullio, a promising young racer in the 1920s, famously experienced one of cycling’s great epiphanies during a race in 1927. That spring he found himself riding up to Croce d’Aune, a mountain pass in Italy’s southern Dolomites. At the time, shifting gears—there were only two—required the rider to dismount, unscrew the rear wheel, flip it around so a different-size cog on the opposite side could be used, then reattach the screws. On the mountain that day Tullio’s freezing fingers proved no match for a stubborn wingnut. As he watched the race slip away, his frustration led to invention. Over the next three years, Tullio tinkered in his father’s shop to create the world’s first quick-release skewer—the taken-for-granted component that today lets cyclists remove a wheel with a single flip of a cam lever.
Campagnolo expanded into other components, establishing a reputation for innovation and unsurpassed quality. Tullio, a broad bull of a man with a powerful voice and piercing gaze, worked closely with top pro riders and with frame builders in the artisan towns of northern Italy: Faliero Masi, Edoardo Bianchi, and Ernesto Colnago. For a 30-year stretch—from 1968 to 1998— Campagnolo dominated the pro peloton. In the Tour de France, 27 of 31 winners rode Campy. In the Giro d’Italia, Campy won 26 of 31 titles.
The company’s DNA was established during those years. Tullio never wanted the mass market. His heart and soul were in the high-end stuff, the pro gear. During the bike boom of the 1970s, when every family in America kept a quiver of Schwinns in the garage, Campagnolo refused to expand to meet low-end demand.
“I went over to Vicenza to work with Tullio on developing some Schwinn pedals in 1973,” recalled Jay Townley, a bicycle-industryconsultant who worked for Schwinn during the boom years. “The U.S. Consumer Product Safety Commission was making manufacturers add pedal reflectors for safety. I showed Tullio a reflector we could put in the openings of those old rat-trap pedals. He looked at the pedal, frowned, and said ‘Brutto! Brutto!’” Ugly! Ugly!
Crude design offended the old man. Campagnolo’s designers strove for elegance in the engineering sense of the word: Finding the simplest, lightest, most efficient solution to the problem of human-powered propulsion. Given a choice between his own beliefs and the fortune to be made in the mass market, Tullio turned his back on the fortune. By the end of the 1970s, Campagnolo had abandoned all but the pro racing and very top luxury portion of the specialty retail market to Shimano and Suntour, Japanese companies that were happy to scale up production to meet the demand for less expensive chains, sprockets, and derailleurs.
That refusal to compromise quality moved Campagnolo from a company to a cause. Some call it a cult. It’s a symbol of old-world artisan craftsmanship, a refusal to compromise twinned with manly know-how, seasoned with a tinkerer’s curiosity and a dash of machismo. The classic filmBreaking Away captured the mystique in the character of Dave Stohler, a blue-collar Indiana kid enthralled by Italian cycling culture. His pride and joy was a Masi road bike equipped with Campagnolo gear.
Lorenzo Taxis, Campagnolo’s global marketing manager, described the power of the Campagnolo name: “It is a soul,” he said. “It is a soul contained by a brand.”
That’s a heavy burden. Perhaps that’s why, long after Campagnolo must have realized there was a market for electronic shifting, it continued to refine its product in those secret rooms while Shimano offered its version for sale. At Campagnolo, there is a sense that the company must weigh each product against the culture of cycling itself. “We must ask whether this product is notdemocratic, let’s say,” Lerrj Piazza told me. “It is a social thing. It’s not logical to put a product on the market which is not touchable by the people” because of its high price.
There’s also the risk of putting the Campagnolo imprimatur on a product that could pollute the purity of cycling. Officials in Vicenza are mum on this point, but at least one competitor is also struggling with the issue. Earlier this year officials at SRAM (which has no electronic shifter on the market) asked an ad agency to find a way to turn the absence of such a product to the company’s advantage. The essence of cycling, a SRAM official wrote to the ad shop, “has always been about the ‘Culture of Mechanical’—a.k.a. the raw, tactile connection of the human animal to a beautiful, efficient, analog machine.” Using a battery to power an essential part of the experience, the memo said, “just isn’t right.”
Campy must balance such fidelity to old-school principles with its need to stay cutting edge. “If you lose the quality and the innovation,” Piazza told me, “you lose the love for the brand.”
There’s no nameplate outside Valentino Campagnolo’s office. Tullio’s son, who took over the company at age 35 when his father died in 1983, can be found by entering an unmarked door that leads to a spare conference room. Before going to Vicenza I’d asked an American bike-shop owner for his impressions of the great signore. “Valentino, he’s, well, he’s a little strange,” the retailer said.
Valentino Campagnolo emerged from behind a plain wooden door, a thin, reserved, 63-year-old man dressed in slacks and a blue-striped dress shirt, with a bit of a Christopher Walken vibe. He moved slowly and deliberately, almost as if purposefully opposite the image that still endures of his bulldog old man.
When I asked about the company’s decision to stay in Italy while the world decamped to Asia, Campagnolo offered a frank answer. “It was a forced decision,” he told me. When he took over the company in 1983, he said, “I didn’t have any special strategy. I didn’t have any special management skills in how to handle the company outside of Italy.”
There’s deep history behind this cryptic answer—and some insight into Campagnolo’s willingness to trade high Italian labor costs for the knowledge. Valentino inherited the company two years after the opening of the massive new Vicenza factory, which was old man Tullio’s way of doubling down on Italy. In the early 1980s, Tullio and Valentinowatched as Schwinn, then the world’s leading bicycle manufacturer, closed its Chicago factories and moved production to Taiwan. An industry exodus ensued. “The bicycle industry has a history of chasing cheap labor,” said the former Specialized executive Gary Coffrin. “The industry migrated to Taiwan in the 1980s, and then to China in the 1990s.”
Everything was fine at first. Schwinn’s profit margin thrived on low-cost Asian labor. But in 1985, Schwinn ended its arrangement with its Taiwanese production partner, a company called Giant Manufacturing. What happened next is a lesson that Valentino Campagnolo has never forgotten. Giant turned around and used its newfound manufacturing expertise to produce bikes under its own brand that were better and cheaper than Schwinn’s. Though Schwinn bounced back several times, ultimately it never recovered and, by 1992, was bankrupt.
“We do everything inside the company,” Valentino Campagnolo told me. “This is something in which I strongly believe. If I know how to produce it, I can always improve my performance. If somebody else is doing it, my improvements are out of my control. This is a very strategic decision for us.”
Technology transfer—some would call it idea theft—is a concern in cycling just as it is in any industry that outsources. Imagine the electronic development room deep inside Campagnolo that Piazza wouldn’t even allow me a peek into—but situated thousands of miles away from those who care most about its integrity.
Security, proximity, and low labor costs spurred Campagnolo to open its first satellite factory in 2005 in Piteti, Romania, an industrial city in the center of the old Iron Curtain stronghold. Managers and engineers from Vicenza can drive to the plant in a day. Manufacturing wages aren’t China-cheap, but they’re low, about $14,000 a year. Italy’s strong metalworkers’ union doesn’t include Romanian workers, so Campagnolo can hire and fire more easily. Perhaps most crucially, it’s in Romania—a country famous for a man who drank blood and another whose name included the phrase “the impaler.” Its remote location and spooky cultural reputation act as their own barriers to technology transfer.
“We first develop new products and methods of manufacturing in Vicenza,” Valentino Campagnolo explained to me. “And when it has been perfected, then we can bring that activity to Romania. We have exactly the same machines, equipment, and methods in Romania and Vicenza.” The company has made huge investments in carbon-fiber components. “We didn’t want to take any risk by putting these components in the hands of somebody else,” Campagnolo told me. “They require a high degree of human labor, and we wanted to keep everything inside the company.” So the company perfects a manufacturing process with its longtime, highly skilled craftsmen in Vicenza, then teaches the intricacies to its employees in Romania.
“I think this was a big mistake that some Italian companies have made,” Piazza told me. “They chose to produce in the Far East, and they spread their knowledge. In the Far East, they produce a good product, but the innovation in Europe is different. If you take your knowledge elsewhere, it’s a big risk.”
Campagnolo can be called a lot of names. Stodgy. Insular. Arrogant. But nobody has ever called the company cheap or stupid. As bicycle-industry veterans wonder how long the company can survive, some of the world’s top economists and business strategists are taking a fresh look at the Campagnolo-style business model and finding it newly appealing. A combination of outsourcing fatigue (those long flights to Shenzhen for quality control take their toll), rising labor and transportation costs, and the let’s-rethink-this mindset of the recession have dampened the business world’s enthusiasm for Asian manufacturing.
One key is to understand that Campagnolo is a commodities company. It’s specialized and high-end, like an airplane manufacturer or a medical-device maker. Product failure is not an option. Quality is all.
“In high-end, small-batch manufacturing, where you’re making very exacting high-quality products, labor costs aren’t your major concern,” says Kathryn Shaw, PhD, a Stanford University economics professor who studies the expense of manufacturing. “The main costs are in product design, which you need to stay on the cutting edge.” A company like Campagnolo, she says, “is investing heavily in brand value. That’s one of their major assets. Maintaining that brand is part of the cost of doing business.”
A high-end company that dilutes its brand value by chasing cheap labor, she says, does so at its peril.
The airplane giant Boeing recently learned this lesson the hard way. In the early 2000s the company went full-throttle into outsourcing, pulling parts for its highly touted 787 Dreamliner from around the world: wings from Japan, floor beams from India, passenger doors and landing gear from France and Sweden, parts of the tail from South Korea and Italy. The whole thing would be assembled in Boeing’s factory in Everett, Washington.
Ten years later, a humbled Boeing has done an outsourcing about-face. The 787, finally set for release this year, has been dogged by years of delays and quality-control issues. The outsourced subs simply couldn’t come through with top-quality parts on deadline. Engineers and machinists making, say, a wing and fuselage that had to match exactly couldn’t correct problems by walking across the factory floor and talking. They had to sync time zones, catch overseas flights, overcome language and culture barriers, wait weeks for a corrected batch of parts to arrive. “We spent a lot more money in trying to recover than we ever would have spent if we’d tried to keep the key technologies closer to home,” Boeing CEO Jim Albaugh said in an interview earlier this year.
Quality control and technology transfer have always been problems with outsourcing, but cheap labor and transport made up for those deficiencies. Now, the economics are shifting. Labor costs, for instance, though still low, are rising. The average Chinese production worker made $1,740 a year in 2003. In 2008, that same worker made $4,140. “After factoring in the higher labor and freight costs, we find that the former offshore savings have turned negative,” a team of McKinsey & Company consultants concluded in a recent report titled “Time to Rethink Offshoring.”
Campagnolo’s strategy makes sense on another level. Phin Upham, PhD, a visiting scholar at the University of Pennsylvania’s Wharton School of Business, recently published a study of outsourcing in the bicycle industry. “Most people think you can outsource manufacturing and keep marketing and research and- development in house,” he said. “It doesn’t work like that. It’s almost impossible to have effective R&D without also being involved in the day-to-day manufacturing. R&D isn’t about a group of smart people sitting in a room thinking deeply about a new bicycle wheel. It’s a result of being so immersed in the details that you find a way to weld something a half-percent better.” Staying close to the ground has its value, too. Upham pointed out that years after Giant ate Schwinn’s lunch, the Taiwanese company established a facility in the Netherlands—partly to put its people in touch with new developments in European cycling.
Manufacturing at the highest-quality level, Upham says, “is not a dumb thing to do.” It requires skills that are difficult to attain and aren’t easily scalable. If the demand for Campagnolo’stop-level $2,500 carbon-fiber groupset, the Super Record, exploded tenfold, the company couldn’t simply hire 10 times as many skilled machinists and ramp up production. Those machinists don’t exist. “Highly qualified machinists know their worth,” says Upham, “and they won’t sell their labor cheap.”
Campagnolo executives have been known to go to extremes to defend the knowledge and the sanctity of the company’s brand. At a certain point, you wonder whether this obsession has something to do with their current slippage in the market. Case in point. In the company’s executive offices, I chatted briefly with Lorenzo Taxis, the company’s group marketing and communication director. A substantial man with ginger hair, Taxis wore a fine Italian vested suit and carried himself with the aspect of a duke. I mentioned that I hailed from Seattle.
“Very nice city,” he said. “I recently spent some time there.”
I wondered why a guy from Campagnolo would spend time in Seattle, so I threw out a guess. “Were you there on a patent issue?”
Taxis paused. “Something like that,” he said, then ended our conversation.
A little research solved the mystery. In 2007, the component company FSA ran a series of ads in cycling magazines (including this one) in which it claimed to make the world’s lightest crankset: 633 grams, compared with the Super Record crankset, which weighed 652 grams.
Campy engineers spend entire careers developing ever lighter and stronger gruppos. The company spent years developing its carbon-fiber technology. Its officials like to say its carbon fiber is more precious than gold. And now the U.S. branch of FSA—based in Mukilteo, Washington, a sleepy town north of Seattle—was claiming its cranks were better?
In Vicenza, umbrage was taken. Campagnolo flew its lawyers to Seattle to launch a federal lawsuit for false advertising.
“We were shocked,” said Matt VanEnkevort, managing director of FSA USA. “We could have handled this out of court. But we had zero conversation before they filed.”
These kinds of suits are usually settled quietly, especially with a small player like FSA USA. “We’re not even in Campagnolo’s weight class,” VanEnkevort told me. FSA’s annual American sales hover around $10 million, about 7 percent of Campagnolo’s worldwide revenues. But the lessons of history are remembered in Vicenza. Campagnolo paid dearly for ignoring SRAM in 2005, and would not overlook another challenge, no matter how small. In this instance, we’re talking about a difference in components of 19 grams. Find a very small egg. Boil it. Cut it in the middle and discard one half. The tiny bit that remains in your palm is about 19 grams.
During the two-week trial last summer, Campagnolo’s attorneys grilled FSA’s VanEnkevort about the methods used to compare the weights. By the time his testimony concluded, it was fairly clear that FSA had fudged a little on its weight comparison. But that wasn’t the end of the case.
When he took the witness stand, Campagnolo’s Taxis spoke about the brand equity he’d traveled halfway around the globe to defend. “It’s very easy to lose the image” that Campagnolo has established, Taxis said. “It’s very hard to recuperate it.” If FSA ran 18 pages, he said, “we need to run at least three times as many” to recover.
FSA’s lawyers threw a little cold reality on Taxis, though. “Do you know who Lance Armstrong is?” one asked.
“Yes, I do,” Taxis answered.
“He won the Tour de France seven years in a row, didn’t he?”
“He’s never used a Campagnolo product, has he?”
“He uses Shimano and he uses SRAM for his groupsets, his crankset, and his racing parts, correct?”
“Campagnolo parts don’t make any bikes go faster than a competitor, do they?”
As FSA’s attorney continued to needle Taxis about Campagnolo’s lack of recent Tour success, Campagnolo’s lawyer objected: What’s the relevance here?
“The testimony was from Mr. Taxis that Campagnolo is leading in innovation, and Full Speed Ahead is trying to piggyback on their reputation,” FSA’s lawyer explained. “I think the jury should understand that Campagnolo, to the cycling world, is not quite as painted.”
Campagnolo’s claim was denied. The Italian company appealed the case, despite expensive legal bills and long odds. (False advertising claims are difficult to prove. To succeed, Campagnolo would have to show that the ads actually converted its buyers into FSA buyers.) The verdict was eventually affirmed.
Campagnolo officials declined to comment on the litigation. At FSA’s Mukilteo headquarters—a warehouse and a tidy suite of offices staffed by young dudes and their dogs—Van Enkevort says, “I can’t help but feel this was a vendetta against us for having the gall to compare our product to Campagnolo’s. I have a feeling Valentino saw those ads and got very upset.”
The number of riders, bike-shop owners, and industry insiders who profess a love for Campagnolo are legion. Losing Campagnolo, they say, would be like the computer industry losing Apple. Or the auto industry without Porsche. An executive who was with FSA at the time it was being sued told me, “I sure hope Campagnolo survives.”
Peter Chisholm, owner of the high-end Vecchio’s Bicicletteria, is one of the deans of the cycling scene in Boulder, Colorado. He’s also a prime example of the kind of loyalty Campagnolo can count on. “I would rather walk than ride anything other than Campagnolo,” Chisholm told me when I strolled into his store recently. He hiked up the sleeve on his Italian sweater to reveal a Campagnolo winged wheel tattooed on his forearm.
“When I got into cycling in 1985, if you were a serious cyclist you used Campagnolo, period,” he said. “It’s still the premium componentry. It’s the best in form, function, durability, and maintainability.”
Vecchio’s deals in high-end custom bikes, the $6,000-and-up models that begin with a custom frame fitting. “If my customers take all that time and effort to build the right bicycle, they’re not going to skimp on components. They want the best. They want the Rolex, not the Casio.”
But Campagnolo’s problem isn’t with Chisolm or his customers, or even with Matt VanEnkevort. It’s with Sam Findley.
Findley is the prototypical rider all three high-end component makers—Shimano, SRAM, and Campagnolo—are courting. A 37-year-old college professor in Altoona, Pennsylvania, Findley commutes to work, competes in Tuesday-night “hammer rides,” and tackles a century now and then. If this were an election, Sam Findley would be the undecided voter in a swing state.
“I’m trying to get the best bang for the buck,” Findley told me. As a teenager he rode his father’s road bike: “A classic Bianchi with a group of perfect Campagnolo diamonds.” As a penny-pinching college student he rode what he could afford: a Schwinn Prologue with Shimano gear. Now in his thirties, he’s got a little coin in his pocket. He’s riding a Cannondale with SRAM Rival components.
Why SRAM? “It’s lighter than what I could otherwise get for my money, and the bike shop guys were really good about pointing that out. They like it and ride it,” Findley said. “I’ve done a few races where SRAM provided neutral support, which I liked. And, frankly, Campagnolo parts weren’t stocked locally. I could get a Campy group, but if the bearings went out I’d have to wait a week or two to get the parts shipped.”
Tom Kattus is the man charged with winning Sam Findley’s allegiance. Kattus, 48, has one of the toughest jobs in the American cycling industry: He’s the general manager of Campagnolo North America. It sounds like he commands an empire, but in truth Kattus has exactly five full-time employees. Five. They work out of a small office suite in Carlsbad, California. And they’re the second-largest subsidiary of Campagnolo worldwide.
Kattus is a realistic man. “The younger crowd saw Lance win seven Tours on Shimano,” he told me. “They just saw SRAM win the Tour, and SRAM has done an excellent job of marketing to the younger generation. Younger American riders haven’t seen Campagnolo out there. Plus we have this stigma that we’re very high-priced, almost out of reach.”
As a former Cannondale manager, Kattus knows how to fight in the retail trenches. “We’re outgunned in North America, we have limited resources, so we have to be creative. We have to take a grassroots approach. But we’re willing to push it and go for it.”
One of Kattus’s first initiatives is an industry discount program that gives employees of bike shops that carry Campy a reduced price—a perk the company had not offered in the United States. A lot of road-bike buyers like Sam Findley seek advice from the guys in the repair shop. And if the techs don’t like Campy, the sale goes to SRAM or Shimano. “Our first prerogative is to get shop employees to understand Campagnolo—to get them on the bikes, get them riding the gear,” Kattus said.
Sometimes it seems like Campy’s innovation and arrogance go hand in hand. And the latter can trip up the former. Last year the company introduced the Super Record groupset, which included the world’s first 11-speed cassette and a thinner, stronger chain. By most accounts, the gear is stellar. Cycling News readers voted it Best New Product of 2010. But fixing the new chain required a special, $299 tool—the most expensive chain tool ever produced. If you ask a bike mechanic making $12 an hour what he thinks of the new 11-speed gruppo, prepare to get an earful about the chain tool.
“Kattus is a very smart guy,” said Rick Vosper, a longtime bike-industry consultant now working as the director of Airborne Bicycles. “He knows who to go after: the key influencers. The hot young rider in town, who’s often an employee of the bike shop. If I’m selling those components, I want the fastest guy in the club, the sharpest guy in the shop. Those guys are going to change people’s minds about which components to buy for your next bike.”
Part of Kattus’s challenge is overcoming the perception that Campagnolo simply doesn’t care about North American riders. The United States represents only 14 percent of the company’s sales, and while Kattus scrambles to cover the country with a staff of five, SRAM continues to saturate American shops and races with its reps. “We ensure that racers, shop owners, consumers, everybody has a point of contact with SRAM,” said Michael Zellman, SRAM’s global marketing manager. “It’s in our company DNA. SRAM started with Stan Day and Mike Mercuri traveling around in a car, pulling parts out of their trunk, asking riders to give it a try. We’ve always been there at the races.”
That is, of course, a page right out of the Campagnolo playbook. It’s how Tullio Campagnolo established his Tour- winning gruppos 40 years ago. And it may be a piece of knowledge that the cardinals at the Vatican in Vicenza have forgotten.
Campagnolo has never wanted wealth or world domination. That goes for the family as it does the company. It could have ramped up for the Schwinn boom of the 1970s, sold its components on the cheap. It chose not to. The company could have chased low-cost labor in Taiwan in the 1980s, expanded to China in the 1990s, gone completely global in the 2000s. Instead, Campagnolo hunkered down in Italy. Valentino could have sold the company or gone public. He stubbornly kept it in the family.
This is a very Italian way to operate. More specifically, it’s the northern Italian way. Vicenza and the larger Veneto region are famous for nurturing artisanal manufacturers like Campagnolo. Luxottica, which produces Ray-Ban and Oakley sunglasses, is headquartered nearby. A few miles away, the Zamberlan family produces some of the world’s finest hiking boots. Diesel and Benetton are based in the region. Bottega Veneta, one of the world’s elite fashion brands, produces its famous handbags at a factory that’s literally across the street from Campy.
These companies survive by targeting the highest strata of the market. It’s the opposite of the economic model that dominates in the United States right now, which is to use cheap labor and scorched-earth tactics to gain massive market share. And it goes against the American exit strategy: selling out to reap a fortune.
At Campagnolo, there is no exit strategy. There is only, in the words of Lorenzo Taxis, the soul that is contained within the brand. It’s almost a fairy tale. What if there was a company that didn’t want to take over the world? What if there was a company that just wanted to make the best products it could possibly invent, and be satisfied with a little profit at the end of the day? The company wouldn’t betray its customers. It would be beholden to no craven shareholders or institutional investors. Perhaps most critically, the company would learn from history, value its institutional memory, and cultivate creativity on the factory floor. That is Campagnolo and the knowledge.
The hitch in this scenario is that Campagnolo may now be a prisoner of its own fairy tale. Competitors like SRAM and FSA are young. They can become anything, take risks, grow in any direction. Campagnolo does not have such freedom.
One final story. In the mid-1980s, just after Valentino took over, Campagnolo experienced a series of stumbles. In 1984 the company released its Delta brake, which featured a revolutionary triangular design. Still considered by many cycling design aficionados to be the most beautiful brake ever made, the Delta looks like it should be on display in the Museum of Modern Art. It was Campagnolo’s bid to leap ahead of Shimano, which had begun to challenge the Italian company in the high-end market. But Campy allowed form to outrun function. The Delta was heavy (all that beautiful steel) and lacked modulation—it gripped too forcefully, in the opinion of many riders.
Valentino learned a tough lesson, one that stays with him today. Sitting at a table in Vicenza, I asked him about the company’s reputation for producing beautiful products.
“Below our logo is written ‘Pure Performance,’” he told me. “That is there to underline the biggest part of our activity. Our focus is first on technical performance. Then development becomes a question of cost. Only at the very end, the final choices are addressed to allow the product to be nicer. This is the very last step. It cannot be differently.”
Valentino may disagree, but there is more to Campagnolo than the knowledge. There is deep beauty, as well. The question is whether the world is still willing to pay for it.