Building a Better Bike : Costa Mesa Company Is Getting It Together and Taking It Off the Road
The four men weren’t deterred by the conventional wisdom that you can no longer afford to build things in Southern California. When they decided 12 months ago to make a new kind of racing motorcycle, they ignored pessimists who complained that Southern California is too expensive, too restrictive and unfriendly to business.
The trick, they determined, was to use the vast network of automotive and aerospace parts makers, suppliers and fabricators that already exists in this region.
Instead of worrying about the manufacturing details, the four--all with hefty motorcycle industry credentials--spent their time perfecting the design and engineering of an off-road racing bike that has 50% more power yet weighs the same as most of the motorcycles it will compete with. They called on a willing cadre of outside vendors from Orange, Los Angeles and San Bernardino counties to craft the parts and supply the materials that went into the prototype.
“It’s the kind of work we would have turned away five years ago because we were so busy with aerospace stuff,” said Gary Vandal, owner of Vimco Engineering in Corona. “But now that aerospace is dwindling, it’s the kind of job we’ll gladly take.”
Using outside vendors to avoid the crippling costs of establishing a new manufacturing plant is “exactly what you have to do to get started,” said Jon P. Goodman, a USC management professor and director of the university’s entrepreneur program. “All of IBM’s original personal computers were made that way. It can be really cost-effective if done right.”
For motorcycle makers William Kniegge, Ove Hasselberg, William Thomas and Bjorn Elvin, everything has worked out right so far. Within a 50-mile radius of the Costa Mesa office of their company, MCM Group has found more than a dozen vendors to manufacturer or order all 1,500 parts their cycle would need. Some were willing to work seven-day weeks to meet tight design schedules.
As it was, time almost ran out last fall as MCM--which stands for Motorcycles Costa Mesa--raced to get its prototype finished: In October, a frantic Kniegge actually stuffed 285 pounds of dismantled motorcycle into seven large suitcases and checked it all onto an Air New Zealand flight as excess baggage so he could get it to Germany in time for the biannual European motorcycle show in Cologne.
Although the bike has not yet been raced and there are no performance figures for it, the prototype received a favorable review for its engineering and power-to-weight ratio from Cycle News, a Long Beach-based magazine for the dirt bike enthusiast. MCM now is in the process of raising $650,000 to go into production.
“It’s a difficult business to get into,” said Chris Jonnum, who covers the industry for Cycle News. The Japanese motorcycle makers dominate with high-quality bikes that are mass produced and sell for relatively low prices. MCM expects to sell a race-ready motorcycle for $8,500, while the less powerful Japanese racing bikes start at about $5,000.
But the extra power that will make MCM distinctive on the racing circuit also could help it carve out a niche in the marketplace, Jonnum said.
By late this summer, if efforts to secure the funding are fruitful, MCM Group will join two other boutique dirt bike makers--ATK America near Salt Lake City, Utah, and American Dirt Bike in City of Industry--as the nation’s only domestic racing motorcycle makers.
In the process the company will have provided a ready example for the business retention organizations that abound these days in recession-weary Southern California.
As MCM’s story shows, you can build it here.
Timing for a new racing motorcycle company couldn’t be better, said Don Brown, an independent motorcycle industry consultant and analyst based in Irvine.
U.S. motorcycle sales peaked in 1984 when sales of all types of motorcycles, scooters and all-terrain vehicles, or ATVs, hit 1.3 million units, including 150,000 dirt bikes. But a constantly strengthening yen drove up the price of Japanese motorcycles and consumers turned to the used bike market. By 1991, only about 430,000 new motorcycles were sold across the country. Dirt bike sales had dropped to just 74,000 units.
Last year, U.S. consumers bought 535,731 motorcycles, and dirt bike sales climbed to almost 80,000 units. The industry’s nearly 10% annual growth--about 7% a year for dirt bikes alone--is expected to continue for some time, Brown said.
The domestic dirt bike industry is so small as to be almost negligible: Cycle News estimates total production of less than 1,000 motorcycles from the three U.S. companies this year.
The other domestic motorcycle makers, Wisconsin-based Harley Davidson Inc. and its Buell Motorcycle Co. affiliate, jointly sold about 67,000 bikes last year, most for street use.
By comparison, the Japanese cycle giants--Honda and Kawasaki, both of which build motorcycles in this country, and Yamaha and Suzuki--marketed about 80% of all motorcycles sold in the United States last year, including all but about 1,400 of the dirt bikes.
MCM plans to make about 280 motorcycles during the last half of this year and 700 in all of 1996. Kniegge said the company hopes to sell about half of the anticipated production in Europe, where off-road racing is a major sport.
The bike’s debut in Cologne--at the world’s largest motorcycle show--generated enough interest, Kniegge said, that MCM has signed agreements to provide bikes to motorcycle distributors throughout most of Western Europe and the Scandinavian countries. “The demand from European distributors could take all of our production if we wanted to send all the bikes overseas,” Kniegge said.
The decision to build a new off-road motorcycle for the European and North American racing markets was made in mid-1993 while the four men were working with ATK on product development and decided they could use a new engine design from Sweden to make a better bike of their own.
The motor was built by Folan AB, the same company that worked with renowned off-road motorcycle maker Husqvarna Motorcykla AB to develop a more powerful off-road racing engine in the early 1980s. Folan also makes engine parts for several other Swedish auto and motorcycle companies. Its new design, the Folan V-Twin, evolved from the company’s work for others, said MCM partner Bill Thomas.
While the engine has never been used in production, Kniegge and his partners saw its weight-saving design as a way to pack more horsepower into a dirt bike than any other manufacturer. The 100-horsepower, 948-cubic-centimeter Folan V-Twin weighs in at 85 pounds and the completed MCM motorcycle weighs 275 pounds. By comparison, Kawasaki’s KLX650, a single-cylinder dirt racer with only 60 horsepower, weighs 276 pounds.
In Europe, some off-road bikes are as powerful as MCM says its Folan-equipped motorcycle will be. But the competitors weigh 400 pounds or more--including engines of 140 to 180 pounds, giving MCM a tremendous weight advantage that is critical in a sport that requires competitors to physically manhandle bikes through muck and tortuous terrain.
MCM was just a month-old partnership when Kniegge, Thomas, Elvin and Hasselberg flew to Sweden last January to negotiate a deal with Folan. “We had the idea that, with long-term support from the engine maker, we four had all of the expertise necessary to develop and market a new bike,” said Kniegge, the group’s marketing specialist.
They secured exclusive North American rights to use the Folan V-Twin engine and its smaller, less powerful single-cylinder version for production motorcycles and to distribute the engines for after-market use by individuals and racing teams.
Armed with that, the four plundered their savings accounts, sold spare motorcycles, took out loans on their houses, sold a minor stake in the company to an outside investor and came up with about $300,000 in seed money.
The project started with the engine and Elvin, who was co-owner of a Swedish dirt bike manufacturer. He designed the frame and engineered the suspension, brakes and other components of the new motorcycle--now dubbed the MCM Cross Country.
Then the partners pooled their years of Southern California motorcycling experience and went hunting for specialists to help them build their prototype.
First stop was in Santa Ana, where free-lance designer Philippe de Lespinay was hired to design the cycle’s bodywork. “They got hold of me through a good friend who was approached to do the design and turned them down because he did not have time,” de Lespinay recalled. The Newport Beach designer knew of the MCM partners because of their motor sports backgrounds, and after discussing the project with them agreed to take it on.
The motorcycle’s frame, built in Placentia on a fixture made by a Corona company, uses a series of triangular shapes--a so-called pyramidal frame developed in the 1980s for endurance racing that has never before been used on dirt bikes. It makes the bike pretty rugged but “also makes the aesthetics difficult because it is not easy to get a pretty body line from it,” de Lespinay said.
He was asked to design the bike’s detachable body panels and come up with a full-size model in 20 days. De Lespinay spent one day sketching and then, when the MCM partners approved the basic design, commissioned Costa Mesa metalworker Bryan Warmack to build the body parts.
The production bikes will use molded plastic body panels, but the prototype is skinned in Warmack’s handmade aluminum pieces, which will also serve as master molds for the plastic parts.
Not everything on the prototype was made from scratch: MCM bought a disc brake system from a Paramount company; the shock absorbers, lights and ignition are off-the-shelf components, and the muffler--which must be government-certified for noise and spark-arresting capabilities--came from an Anaheim company.
Tubing of light, high-strength chrome molybdenum alloy--or chrome moly--that was used for the frame was supplied by a pair of Southland companies that specialized for years in supplying the race car, aerospace and defense industries.
USC’s Goodman said the company’s tale underscores what she has been preaching in the university’s entrepreneurship program.
“I’ve been screaming for 5 1/2 years about the modernity of the aerospace and defense industry job shops in Southern California,” she said. “These are state of the art and when they discover new opportunities they can produce the best products in the world. The span of what they can do is total. Absolutely anything you need done can be done here, including fabricating rare metals.”
The key to successfully using the system, Goodman said, is to “make sure you have a hammer to hold over your suppliers. You don’t want to be in the position that there is only one source for what you need. But unless you are dealing with some proprietary process that you can’t let anyone else in on, it is rarely cost-efficient or necessary to set up your own manufacturing operation. Why the hell build a plant that will be obsolete 12 minutes after you open it when there are all these job shops out there already?”
Kniegge said MCM has no plans to actually manufacture its own bikes when it begins production later this year. Instead, the company expects to lease a building no larger than 10,000 square feet, he said, and hire a dozen or so workers to do final assembly of parts fabricated by outside jobbers like frame maker Bassani Manufacturing in Placentia and Mike Hamm Engineering in Anaheim, which designed the exhaust system.
“It’s the only thing that makes sense,” Kniegge said. “It’s why we can do this here.”
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Revving Back Up
Over the past decade, total motorcycle sales have ridden a bumpy road, declining almost 60% overall. Since hitting bottom in 1991, however, the figures have turned upward. Totals sales includes scooters and ATVs; all figures in thousands:
Total Sales (1994): 536
Off Dual Year Highway highway highway 1984 485 150 55 1985 405 145 45 1986 305 125 30 1987 285 100 27 1988 220 85 25 1989 172 70 18 1990 166 77 18 1991 161 74 16 1992 168 75 17 1993 185 76 16 1994 194 79 18
Who Runs the Company
MCM Motorcycles is operated by four men who represent various aspects of the motorcycle industry. All are experienced motocross racers who worked in the industry before forming MCM.
BJORN ELVIN Born: Sweden; came to U.S. in 1983 Education: Machine Technical Institute, Sweden; engineering Professional History: * Husqvarna Motorcykla: Test engineer, research and development, motocross team manager * Husaberg Motor: Founder, new product research and development, testing, production and race team management * ATK America: New product marketing WILLIAM KNIEGGE Born: Iowa Education: Palomar College, San Diego; liberal arts Professional History:* Husqvarna USA: Marketing and sales director * Bell Helmets: Vice president sales and marketing * Accuride: Marketing and sales director * ATK America: Dealer development director OVE HASSLEBERG Born: Sweden; came to U.S. in 1967 Education: Technical Institute of Trolhatten, engineering Professional History: * Saab Scania: new product R&D; and testing * Saab USA: Test engineer, dealer Service, R&D; * Created a “mid-engine” Saab WILLIAM THOMAS Born: Colorado Education: University of Colorado, engineering Professional History: * National Motocross: Event promoter and track designer * ATK Motorcycles: R&D;, dealer technical service * Bill Thomas Motorcycles Inc. in Denver
Source: Motorcycle Industry Council, MCM Motorcycle Group
Researched by VALERIE WILLIAMS-SANCHEZ / Los Angeles Times