Firms Find Niche to Fight Foreign Competition : U.S. Bike Companies Peddle Acrobatic Cycles

Bicycles have come a long way from sissy bars and banana seats, with more and more children mounting stubby little “freestyle” bikes that domestic manufacturers hope will regain ground lost to foreign competition.

At a time when even the basic bicycle has become a vehicle for self-expression, Murray Ohio, the nation’s second-biggest bicycle manufacturer, is riding the wave of interest in freestyle bikes that began on the West Coast.

The new two-wheelers allow the riders to go beyond popping an occasional wheelie and riding without hands.

“It’s kind of like gymnastics mixed with break-dancing and ballet,” said Tom Hannon, vice president of marketing for Murray Ohio Manufacturing.

New Line of Bikes

The company introduced a new line of the acrobatic bikes last year at the American International Toy Fair in New York.

“We’ve got to keep stimulating the youth market,” said John Anderson, the company’s president and chief executive.

Murray Ohio used to spend most of its energies chasing Huffy of Dayton, Ohio, the nation’s No. 1 bike builder. Today, however, the competition is mostly from other countries, particularly Taiwan.

“The imports are really giving us fits. They’ve gone from a 17% share of the U.S. market in 1969 to over 42% in 1984,” Hannon said.

In one year alone, between 1983 and 1984, the foreign share of the American market increased 12 percentage points, he said.

Murray and other U.S. producers recruited lawmakers to reintroduce legislation in April aimed at bolstering the domestic bike industry. Congress never acted on similar proposals that were introduced last year.

“Currently, we have free trade, but it’s not fair trade,” Anderson said.

Anderson said prices of foreign-produced goods are low because they do not have to meet the high costs of U.S. labor and government manufacturing regulations.

Wants to Impose Quotas

He wants the government to impose quotas and raise foreign import duties from 5% to 19%--which, he said, is the average cost to domestic manufacturers exporting overseas.

The quality of U.S. bicycles already beats the foreign crop, primarily because they are safer, Anderson contends.

Most foreign companies are new to the industry, he said, but U.S. producers “are more conscious of quality because we’ve been in the market for decades . . . and know what can happen.”

For Murray Ohio, the market began in 1937 when its first Mercury bicycles came off the line. It has since built 46 million bikes--just short of enough to loop the world twice if stretched from end to end.

The company has its roots in the automobile industry, though. Its founder, J. W. Murray, opened a plant in Cleveland in 1909 as a parts supplier for the Detroit assembly lines.

Its production line expanded over the years, ranging from electric fans to weapons during World War II. In the mid-1950s, it moved its production center to Lawrenceburg, Tenn., and opened a 2.5 million-square-foot plant.

Bike production increased in Tennessee, with Murray Ohio supplying major retailers such as Western Auto, Sears, J. C. Penney and K mart.

Sophisticated Toys

Bicycles initially were considered sophisticated toys for youngsters, but an exercise-conscious adult market emerged in the late 1960s. And the bicycle business boomed during the energy crunch of the early 1970s, with Murray Ohio experiencing a 50% increase in sales between 1971 and 1972.

But the picture is not as optimistic today. The company’s profit in the first quarter dropped 21% to $3.4 million from an operating net of $4.3 million a year earlier. Sales slipped to $149 million from $156 million.

That followed a 37% drop in earnings for all of 1984. However, the success of the firm’s power-mower line, begun in 1968, softened the blow and signaled a possible new direction for Murray Ohio.

“We want to stay in the bike business. We like the product . . . But we’ll do what it takes to keep our people working,” Anderson said.

One of the company’s biggest hits has been moto-cross bicycles, which comprise 40% of its sales. It remains the sales leader for BMX bicycles--a pedal-powered version of a cross-country motorcycle.