From Guns to Bicycles
By ROBERTO LOVATO
This sidebar is a supplement to Could Co-Ops Solve Income Inequality?
Customers at Thomas Crenshaw’s full-service bike shop, Frame Up Bikes in Pleasant Hill, California, know a lot more about Orbea bikes and its global competitors than they do about the legendary bike company’s cooperative business model.
“We know Orbea is a co-operative and worker-owned, but most of our customers don’t,” says Crenshaw. “What they care about is that Orbea is an established solid brand worldwide, that they have bunch of pro teams in world road and mountain races.”
That most of its U.S. customers have no clue about Orbea’s cooperative way of working is less a marketing problem than it is a sign of how cooperatives are able to compete globally in high-tech, dog-eat-dog global markets like the bike industry. Technology and competition gave rise to the Orbea bike legend ever since peace descended on Europe in the interwar years.
In 1842, the Hermanos Orbea (Orbea Brothers) started out as gun manufacturers; once the demand for guns declined, they turned their expertise in manufacturing tubes for guns in Eibar (once the world renowned “City of Guns”) to manufacture finely finished steel tubing for bikes, like those that Maria Retegui and her family have ridden for almost a century. During the better part of that century, the Orbea Bicycle company gained a reputation as a world-class manufacturer, thanks, in no small part to Tour de France champion Mariano Cañardo and other riders. Then, with the economic crisis of the late ’60s, the company’s fortunes plummeted, pushing the Orbea family to the edge.
Facing a loss of their livelihoods as the company prepared to declare bankruptcy in 1969, Orbea’s workers decided to draw on the ancient cooperative tradition of Basque country, forming a workers’ co-op with the help of the Spanish government. Since then, technological and marketing innovation, along with cooperativism, seem to have created a powerful combination that has made Orbea a serious global competitor.
Orbea’s worker-owners were among the first of the major bike manufacturers to introduce customization. The company’s website, My O(rbea) allows customers to choose their bike model, color, tires, handlebars, crankset, and other customized features usually found in smaller, local, more artisanal bike manufacturers.
Orbea’s factory, headquartered in the hills of Mallabia, combines a state-of-the-art painting production line with the more traditional manual labor techniques of the bike-making craft. Plain frames are put onto the production line and run through the facility at one end; then robots give them the first coat of paint. Live workers then apply the specific touches requested by customers. Bikes are put through a strict quality-control process and tested before being assembled and shipped off to retailers around the world.
All of this has led to some remarkable success: Orbea’s first quarter sales in 2018 saw a 26 percent increase over the same period in 2017.
“We chose to sell Orbea over other options because they offer a wide selection, including kids bikes, pro bikes and everything in between,” says Crenshaw. “Their customization allows our customers to customize paint and choose from about twenty colors. We get customization without having a paint booth. This gives us the ability to have a customer get a bike that’s completely different from somebody else’s. For most manufacturers there’s only one type of bike and you get two color combos. That’s one of the reasons Orbea is a cutting-edge company.”
Unbeknownst to Frame Up’s customers, one of the other reasons is the cooperative model that makes their innovation and customization possible.