Thermo1
Stainless
- Joined
- Dec 18, 2004
- Location
- Falls Church, VA
The following is excerped from an article that appeared on the front page of the Saturday/Sunday edition of the Wall Street Journal.
"A Legend's Bumpy Ride"
This is about the state-owned company that made the "Flying Pigeon" bicycle.
In its heyday, the Flying Pigeon bicycle "was so prized that workers forked over a month's salary just to join a waiting list."...
"These days, Fyling Pigeon is struggling to stay aloft. The government is promoting cars and building highways. And Flying Pigeon has been almost destroyed by homegrown Chines entrepreneurs who respond quickly to trends and slash labor and production costs...."
"While many U.S. company feel squeezed by faster, cheaper Chinese rival, Flying Pigeon shows how a similar battle is playing out here in China. Relentless cost-cutting, coupled with fierce competition for domestic and foreign orders has created a hothouse environment where only the nimblist companies survive..."
"Flying Pigeon was one of the original state enterprises set up after the Communist revolution in 1949....
During its heyday in the late 1980s Flying Pigeon produce about 4 million bikes a year and employed over 10,000 workers."
"... in 1993 bicyles were still king of the road. In that year, China produced 41 million bikes, and just 223,000 cars. Flying Pigeon and two other state firms--Phoenix and Forever controlled the market."
The domestic market for recreational and racing bikes took off, and customers wanted them in a variety of colors, with fashions in frames and accessories changing monthly. "...Flying Pigeon resisted change, and kept churning out black roadsters based on a 1930s Japanese design. It failed to modernize its old, iflexible production lines."
The rest of the article details how entrepeneurs began making bikes, and propering. Eventually Flying Pigeon had to lay off almost all its workers. Workers laid off by Flying Pigeon were frequently hired by the new bike makers.
One of the managers of Flying Pigeon did a partial buyout of the firm, essentially buying little more than the trademark. Competition is so stiff that the new Flying Pigeon is considering outsourcing production to Indonesia and Sudan. In China they use contract laborers. The employees of the companies do not have medical insurance or retirement benefits.
The profit situation is interesting. The free market bike builders say they earn 3% on a mountain bike that wholesales for $35, that is $1 per bike in profit. The US importer earns a profit of about $8, and the retailer earns a profit of at least $17.
So even the Chinese are not getting rich making bikes.
The whole article was in the weekend edition of the Wall Street Journal. It may be available on their website, which is available by subscription only.
Thermo1
"A Legend's Bumpy Ride"
This is about the state-owned company that made the "Flying Pigeon" bicycle.
In its heyday, the Flying Pigeon bicycle "was so prized that workers forked over a month's salary just to join a waiting list."...
"These days, Fyling Pigeon is struggling to stay aloft. The government is promoting cars and building highways. And Flying Pigeon has been almost destroyed by homegrown Chines entrepreneurs who respond quickly to trends and slash labor and production costs...."
"While many U.S. company feel squeezed by faster, cheaper Chinese rival, Flying Pigeon shows how a similar battle is playing out here in China. Relentless cost-cutting, coupled with fierce competition for domestic and foreign orders has created a hothouse environment where only the nimblist companies survive..."
"Flying Pigeon was one of the original state enterprises set up after the Communist revolution in 1949....
During its heyday in the late 1980s Flying Pigeon produce about 4 million bikes a year and employed over 10,000 workers."
"... in 1993 bicyles were still king of the road. In that year, China produced 41 million bikes, and just 223,000 cars. Flying Pigeon and two other state firms--Phoenix and Forever controlled the market."
The domestic market for recreational and racing bikes took off, and customers wanted them in a variety of colors, with fashions in frames and accessories changing monthly. "...Flying Pigeon resisted change, and kept churning out black roadsters based on a 1930s Japanese design. It failed to modernize its old, iflexible production lines."
The rest of the article details how entrepeneurs began making bikes, and propering. Eventually Flying Pigeon had to lay off almost all its workers. Workers laid off by Flying Pigeon were frequently hired by the new bike makers.
One of the managers of Flying Pigeon did a partial buyout of the firm, essentially buying little more than the trademark. Competition is so stiff that the new Flying Pigeon is considering outsourcing production to Indonesia and Sudan. In China they use contract laborers. The employees of the companies do not have medical insurance or retirement benefits.
The profit situation is interesting. The free market bike builders say they earn 3% on a mountain bike that wholesales for $35, that is $1 per bike in profit. The US importer earns a profit of about $8, and the retailer earns a profit of at least $17.
So even the Chinese are not getting rich making bikes.
The whole article was in the weekend edition of the Wall Street Journal. It may be available on their website, which is available by subscription only.
Thermo1