By Chris Meehan | Nov 02, 2020
Grand Junction, Colorado (HQ: Biel Switzerland)
Bicycle spokes, wheels, and components
While DT Swiss is officially a quarter-century old, its roots as a wire manufacturer are much deeper: Vereinigte Drahtwerke dates back to a mill on the Schüss River near Biel, Switzerland, that started operating in the 14th century.
"Hundreds of years ago, there was a need for wire that you can trace back, funnily enough to things like chainmail and protective vests for European fighters," says Chip Barbieri, CEO and general manager of the company's U.S. manufacturing division.
Bicycle components were not a focus for the first five centuries. "It just kind of evolved really over the last hundred years or so," says Barbieri. "They had a few different bike related products -- some spokes, although not what you see today, the high-end, purpose-built spoke. It was just your standard, middle-of-the-run spokes. They were making wire and doing assemblies of baskets and things like that for bicycles."
That all changed in 1994, when Frank Böckmann, Maurizio D'Alberto, and Marco Zingg spun off a new company, DT Swiss AG, from Vereinigte Drahtwerke. The trio started with the spoke manufacturing piece of the former parent company. From there, DT Swiss has branched out to making some of the best wheels, rims, and other bicycle components available today, and now has nearly 700 employees worldwide, including 55 in Colorado.
Soon after launching the company, the new owners decided to expand manufacturing. "A target to come into the U.S. was driven by, at that time, larger bicycle manufacturers that were still producing their bikes in the United States," notes Barbieri. "These companies were relying heavily on DT Swiss spokes, amongst a few others at the time. For DT Swiss to compete and still retain those clients in the U.S., they had to start putting inventory of spokes in the U.S so that those companies could draw off of it for their production facilities."
He continues, "They zeroed in on Colorado and zeroed in on Grand Junction. Most people think that it had a lot to do with the cycling that goes on in Grand Junction today." That wasn't the case; rather, the company was looking for a solid workforce in a place less expensive than the East and West coasts.
In 1995 and 1996, the company brought in spoke machines and began manufacturing in Grand Junction. "At that point, they were able to cater to the larger bicycle manufacturers and produce the spokes that they needed, and rather than lead times of months and months and months of ocean transit times, they could produce it and it was on a truck right away," Barbieri says. "If they did it today, it's hard to say whether they would be in Grand Junction or not. There's a good chance they would because Grand Junction still offers quite a lot to especially outdoorsy-oriented companies."
DT Swiss' Grand Junction facility now primarily manufactures spokes for the U.S. and the Americas, but it also assembles high-end wheels. "The wheels we produce here are typically for the more boutiquey, higher-end brands and those that do their final assemblies in the U.S.," says Barbieri. "Even some of the big guys do a little bit of their line in the U.S."
DT Swiss is known in the U.S. for its high-end wheelsets, but it also produces other components, including shocks and dropper posts for mountain bikes. However, it's not as prominent as some other component manufacturers. "We're not out screaming and shouting and . . . spending tons of money on our marketing campaigns," Barbieri says. "We put it all into the engineering and the equipment and . . . our ability to manufacture as much as possible around the world."
The company supplies parts for well over 200 bike manufacturers around the world. "It's one of those things where we've silently come up the ranks and," Barbieri says. The majority of its products are DT Swiss-branded components, but the company also does some private-label manufacturing. Barbieri estimates that depending on the year it could account for between 10 and 15 percent of its business.
The company's global footprint includes facilities in Taiwan and Poland, where it produces rims and hubs. "It enables us to be more consistent with our manufacturing, so no matter where that hub goes it's built the same," says Barbieri. "That's important whether we sell it to somebody that's building the bike in Asia and using the bike in Asia or in Europe."
It also has facilities in France and Germany, allowing it to meet demand close to where bicycles are manufactured and assembled. "On our sales front, we very much work globally," Barbieri says. "There's really no other way to do it."
While the products are designed in Switzerland, having offices in the U.S. and elsewhere helps the company design parts that work throughout the world, he adds. "For example, one area where it's different is the mountain-bike riding in Switzerland, very different terrain, very different conditions. Unless you're in Southern Europe, you're going to get some humidity and they're mostly going to be more forested areas. Here it tends to be more of the kind of high-desert environment. So it's much drier; you have more fine dust all over the place."
Barbieri continues: "If you're a German engineer and you're working in Switzerland, you're not always thinking about that, so the team here, of course, helps them quite a lot with that side of it going: 'No, really this is going to be an issue.' . . . We will design it so that it works in both environments."
DT Swiss is rolling along with industry trends as well. "Mountain is certainly the biggest. Road for us is getting there. It's almost as big," says Barbieri. "But you'd find that our road market is much more centered in Europe and our mountain-bike market is much more centered in the United States."
E-bikes are on the rise, especially in Europe. "That number flipped about a year and a half ago in Europe," he notes. "In the U.S, not yet. But the growth figures of e-bike are growing pretty darn fast in the U.S."
As bicycling coalitions and governments work to expand the use of e-bikes on roads and mountains in the U.S., Barbieri adds, "It's an area where our engineering is spending a lot of time, a lot more time than we used to on e-bike systems, because it is different."
The products for e-bikes have to withstand additional torque and power being delivered at the hub, and that requires different hubs and spokes, if not rims. "The assembly of the wheel is equally important as to how well you keep those tensions and what you do with it."
Like many in the bike industry COVID-19 presented unique challenges for DT Swiss. "When it first hit, we got hammered," says Barbieri, citing canceled orders in March and April. "Nobody knew what was going to happen. Fortunately as the industry went into May and especially into June, it did a complete 180. Not only that, but it went to the point where there are clients of ours who are doing about 300 to 400 percent more bike manufacturing than they had originally planned for 2020."
Barbieri says that now many of its orders won't be filled until later than originally planned and the company is having to decide whether or not to expand production facilities and its workforce. He doesn't anticipate the demand to drop off sharply, but already DT Swiss is talking to clients about their plans for manufacturing into 2022.
"The big guessing game going on between us and all of our clients together is, 'Okay, how much bigger does the bike industry get when things settle out? Is it 20 percent bigger? Is it 30 percent bigger? All these people buying the product, will they stick to it?'"
Challenges: "Certainly the one large challenges is . . . what does COVID ultimately do to the bike industry?" says Barbieri. "Changing volume and changing production output is a big deal and it takes a lot of money to do either, to grow it or to shrink it. So, that's a large challenge for this coming year."
Opportunities: "We're well-equipped on the engineering front for anything coming down the line like the e-bike phenomenon," says Barbieri. "The opportunity is that we can retain a very high level of trust and commitment by the buying public in the products we supply around the world because of our efforts there already.
He adds, "The other opportunity we have is that, over the last 10 to 15 years, we really positioned the company to be in most of the places that a world where bikes are either consumed or assembled, and that's somewhat unique. Not a lot of suppliers have that capability like we do."
Needs: "Certainly to be ahead of the game with where to be prepared to manufacture in the volumes that are ahead of us," says Barbieri. "That's big money and it's time, and these are two things that aren't always super easy to deal with."
In the U.S., he adds, "One of the needs is for more of the general population to recognize DT Swiss for what we do and why we do it."