BUSINESS

Inside Giant's Taiwan bicycle factories

At its bicycle factory in Taiwan, Giant deals with a skills shortage, offshoring and 'smart' manufacturing

Tony Lo says he has the solution for traffic- and smog-choked Los Angeles: Get people to hop on bikes.

For Lo, it’s a convenient proposal to make. He’s chief executive of Giant Manufacturing Co., a Taiwan-based company with U.S. headquarters in Newbury Park that calls itself the world’s largest bicycle producer by revenue.

Such concerns weigh heavily on the small island nation, which is trying to reduce its reliance on fossil fuels as smog drifts across the strait separating Taiwan’s western coast from China.

In recent years the Taiwanese have embraced cycling culture as never before, Lo told a group of American journalists last week.

“In the past 10 years, Taiwan has turned from a biking desert into a biking island,” he said at Giant’s original manufacturing and assembly plant in the Dajia District of Taichung City. “If Taiwan can do this under not very favorable conditions, there’s no place where it cannot happen.”

The number of motorcycles and scooters in the country is declining, he said. Increased demand for bikes allowed Giant to launch a hotel that caters to cyclists, a public bike rental system with more than 5,000 bicycles and a brand dedicated to women called Liv.

Last year, Giant said, it sold 6.6 million bikes and generated $1.9 billion in sales. Cycling enthusiasts in Southern California can expect to pay thousands of dollars for one of Giant’s ultra-light carbon fiber models.

Lo and his wife own 18 bikes.

The company has nine factories across Taiwan, China and Europe. Its Dajia facility, the size of nine football fields, pumps out 5,000 bikes daily.

The site is a telling example of the changes in modern Taiwanese manufacturing.

Giant launched in 1972 making bike parts for companies such as Schwinn Bicycle Co. but introduced its own brand in 1981 after losing orders to China.

Not long after, Giant and its Taiwanese rivals decided to focus on high-end bikes to distinguish themselves from the cheaper models churned out by Chinese competitors.

Today, Giant attempts to balance careful craftsmanship with efficient operations. Nearly 90% of the manufacturing process is completed by hand. But the warehouse is almost completely automated, relying on a computerized system that tracks shipments and inventory and allows Giant to keep its storage space slim.

Lo said that many of the so-called advanced manufacturing techniques were copied from Toyota Motor Corp., a fact often repeated by executives at other factories in the region.

About 2,000 people work in Giant's Taichung complex. Roughly 20% of them hail from Vietnam and Thailand and are housed in dormitories.

Like many other major economies, Taiwan is facing a disconnect between employers and the workforce. Many companies have positions to fill but can’t find the needed applicants locally.

“We don’t have enough labor in Taiwan,” Lo said. “Young people don’t want to go into manufacturing.”

Twitter: @tiffhsulatimes

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