He would retain the title of chairman and
chief executive until he died in 1988 but Ed Schwinn, Jr. would take over day-to-day
management of the company. Frank V. Schwinn had a more relaxed management style and
relied heavily on seasoned managers such as Al Fritz and Ray Burch. Frank V.
Schwinn reasoned that the existing schwinn mountain bike crop of managers had met decades of earlier
challenges and there was no reason that this trend could not continue. Thus, during
the rest of the 1970s, the company was in the hands of Frank W. Schwinn, a
non-confrontational manager that tried hard to accommodate opinionated managers
and shifting family alliances.
Frank W. Schwinn had begun implementing all these
changes ever since the 1930s. In the 1960s, they had come to fruition and Schwinn
was ready to “Let the good schwinn mountain bike times roll” (Crown and Coleman 1996). During this fresh start, Schwinn turned its energy towards marketing
during this period of growth of consumerism.
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Schwinn was able to squeak out a 7 to 8 percent market share
of BMX bicycles by 1980 but this was too little and too late. By then, other
upstart manufactures of BMX bikes had captured the market and established their
names. Skip Hess, the founder of Mongoose, was quoted as saying
“The (Schwinn) people in Chicago only heard the echo” of this new Trend (Crown
and Coleman p. 109, slightly reworded).
In time, the Paramount came in a variety of models but remained expensive to produce and purchase. Both Edward Jr. and Frank V. Schwinn felt betrayed by the
workers. When approached to negotiate a contract with the new union, Schwinn
management stonewalled. The strike was settled in 1981 and the union made modest
gains in salaries and benefits. The vote to unionize had reinforced Schwinn’s desire to close
the Chicago factory. The factory was closed in 1983 but it would be a pyrrhic
victory for Schwinn (Crown and Coleman 1996).
By 1975, bicycle customers interested in medium-priced road and touring bicycles had largely gravitated towards Japanese or European brands. In reality, mass-market French manufacturers such as Peugeot were not infrequently criticized for material and assembly quality — as well as stagnant technology — in their low- and mid-level product lines. Nevertheless, Peugeot proudly advertised its victorious racing heritage at every opportunity. By 1979, even the Paramount had been passed, technologically speaking, by a new generation of American as well as foreign custom bicycle manufacturers. By the late 1970s, a new bicycle sport begun by enthusiasts in Northern California had grown into a new type of all-terrain bicycle, the mountain bike.
The Air-Dyne was an innovative machine relying on specially
designed fan blades instead of a traditional wheel to provide resistance to
pedaling. Schwinn sold a high of 67,000 Air-Dynes in 1986
with a high price tag of $595. The profits
from the Air-Dynes helped keep Schwinn afloat during a time of declining bicycle
sales. The first trouble for Schwinn came in the early 1980s with a
factory strike in Chicago.
For the children of the 1950s, bicycles were more than just
a toy. For them, the bicycle was a critical means of transportation and gave
them the first taste of freedom from their parents. Children could independently
ride around their neighborhoods, to a friend’s house, to pick up baseball
games, or to just hang out. With the increasing suburban sprawl creating longer
distances but safe low traffic volume streets, bicycles became something of a childhood
necessity. Selling bicycles through smaller shops meant that that
Schwinn had to develop its own marketing strategy. Schwinn boldly stepped out
of its engineering comfort zone and recruited many of Hollywood’s top stars to
promote their innovative bicycle lines.