Raleigh staff were told the news at 2.30 this afternoon.
The decision was made by the twelve members of the Executive of The Raleigh Cycle Group on 11th March.
The Executive decided to cease assembly of cycles in the UK from the end of 2002.
Raleigh executive chairman Phillip Darnton told BikeBiz.co.uk that in a price fight only those companies who could reduce their costs would survive:
"Chinese bikes have a 45.6 percent duty against them yet imports increased by 150 percent last year. There are key countries that have no tariffs such as Bangladesh and Vietnam. The quality of the bikes from these countries has increased dramatically over the last couple of years.
"Product will also become cheaper from Taiwan because the bicycle industry across there has all but collapsed. They will do almost anything to keep their factories turning over.
"Over-capacity is hitting hard. It’s a price fight out there and profitability forecasts for the next few years are nowhere near as good as they were in 1999 and 2000.
"Re-investment in a new assembly plant in the UK cannot now be financially justified. Tariff protection does not extend beyond 2005, and it cannot be assumed sufficient in the medium term to ensure the financial viability of the investment required in a UK assembly plant of Raleigh’s scale."
Darnton told Bikebiz.co.uk he was "very, very disappointed" at the loss of UK assembly.
"I thought it could be done but it can’t."
Darnton will leave Raleigh next year.
"There’s no place for a top heavy management structure, myself very much included. However, I would like to see things through to completion."
In late 1999 the previous owners of Raleigh – the US-based Derby Cycle Corporation – sold the Triumph Road site to the University of Nottingham. Derby CEO Gary Matthews also sold Sturmey Archer to a flaky investment firm for £30.00 and when Sturmey Archer was soon thereafter closed, Derby Cycle Corporation came in for worldwide criticism, including from this website. Matthews was later shown the door and in August last year Derby, led by Alan Finden-Crofts, filed a voluntary petition under Chapter 11 of the US Bankruptcy Code.
Derby’s assets were bought by Raleigh Cycle Limited, formed by a management buy-out team, consisting of Alan Finden-Crofts and a number of key managers within the existing business. The purchase includesd Raleigh America, Raleigh Canada, Raleigh UK, Derby Cycle Werke in Germany and Derby Trading Company in Taiwan and China and was completed on 26th October 2002.
Under the Asset Purchase Agreement between Raleigh Cycle Limited and The Derby Cycle Corporation, Raleigh Cycle Limited acquired $95m in assets of the businesses and was established on a debt-free basis, with trade suppliers of the business being paid in full. The businesses acquired had annual sales of $280m in 2001 from the distribution of 1.4m bicycles.
Thanks to the sale of the land to Nottingam University, the Triumph Road factory had to be vacated by December 2003 and Darnton was charged with moving to a new assembly plant on allotment land in Bulwell, north of Nottingham.
But three allotment holders, and a rich farmer and some potentially homeless newts, have long been holding up breaking ground on the new factory, which should have started at the end of last year. 141 gardeners were happy for Nottingham city council to move them to a new allotments site, but three refused compensation and dug their welly boots in, thanks, in part, to cash provided by the rich farmer who used the Bulwell Three in his campaign to get the Raleigh factory on his land.
Nottingham North MP Graham Allen said the Bulwell Three’s anti-Raleigh factory campaign had been a disgrace and was responsible for the loss of the 280 jobs: "This was the straw that broke the camel’s back. Had the planning issue been dealt with speedily, Raleigh would already have been on the site."
A judicial review was due to heard on March 20th but with the Bulwell plot no longer required, the court has been informed there is no longer a need for the judicial review.
Darnton said the problems encountered over the proposed move to Bulwell were "irritating" but did not overly influence the decision to shed jobs and cease UK assembly:
"The protracted uncertainty about the availability and timescale for a move to [Bulwell] site has not helped the company’s position. Nevertheless we very much regret that the Raleigh Cycle Group’s decision should have quite unforeseeably coincided with the latest phase of the litigation concerning the Judicial Review of the City Planning Application."
280 assembly jobs are to go by the end of 2002, including the job of Steve White, factory manager. Raleigh currently employs 380 people.
At its peak, Raleigh employed 7000 workers who churned out more than a million bikes a year, many for export. By 2003, 100 office workers and warehouse staff will be responsible for the sales, design, import and distribution of 300 000 bikes a year. All will come in boxes from a variety of Far Eastern suppliers.
Phillip Darnton said: "We are absolutely committed to continue to supply ‘Raleigh-quality’ cycles, built to our specified high standard by partner suppliers overseas. We are seeking an appropriate location locally for our distribution centre, as well as offices, so that we will maintain our own distribution fleet with which to support fully our customers nation-wide.
"[Ceasing UK assembly] was a serious decision we had to make and one that clearly has impact throughout the UK cycle industry."
However, the move can be seen to be a natural evolution. UK light manufacturing has been in constant decline since the 1950s and, if anything, Raleigh has stayed loyal to Nottingham, and to the UK, long after most other companies of a similar type.
Raleigh bikes right up until the 1960s consisted of frames and parts wholly made by Raleigh or Raleigh subsiduaries such as Sturmey Archer. Everything from bottom brackets, to cranks to pedals to handlebars, even spokes were made in Nottingham.
The components that came the furthest were saddles, from the Birmingham factory of Brooks, another Raleigh division.
This, however, was becoming increasing anarchronistic in an age when most British manufacturing concerns were outsourcing their manufacturing overseas or disappearing altogether.
In 1970, the UK imported a mere 27 000 cycles – about 4 percent of the UK market. The UK exported 1m+ bikes, the majority of them being Raleighs. By 1975, while exports remained at about the same level, there were nine times as many imports. Six years later exports were overtaken by imports, mainly from Europe. From 1980 to 1986, imports accounted for about 40 percent of the UK market.
Then came the mountain bike boom and bicycles from the USA and Taiwan started to come in. In 1987, for the first time, UK consumers bought more imported bikes than British, and imports soon took about 60 percent of annual UK sales.
Despite the mountain bike, or perhaps even because of it, Raleigh’s market share continued to decline.
In May 1999, Raleigh announced that it was to cease volume production of frames in the UK. The frame welding robots, installed in 1996, were auctioned off in December 1999.
This was perhaps a far more symbolic end to cycle production than the current news of the cessation of assembling.
The forerunner to Raleigh, a backstreet hand-built bike maker called Woodhead, Agnois and Ellis, was formed in 1886 and operated from premises in Raleigh Street, Nottingham. It made just three bikes a week. One of these was bought by a former lawyer and businessman, Frank Bowden, who, similar to Victor Kiam of Remington fame, liked the product so much he bought the company.
He turned the craft operation into Raleigh, the world’s biggest producer of bikes.
He moved the newly incorporated company from a backstreet location to a five-story factory in Russell Street and the workforce rose to 200, making 60 bikes a week. In the 1890s Raleigh moved to Lenton and started to grow.
Thirty years later the factory covered 16 acres and employed 2500 people. Both the factory and the workforce grew right up until the 1950s. At its peak in the 1950s, Raleigh employed 7000 people on a 40 acre site that covered most of Lenton Boulevard, Triumph Road and Orston Drive.
Under TI’s 27-year ownership (1960-87) Raleigh’s market share shrank from 75 to 36 percent.
Successes such as the Chopper in the 1970s or the mass production of mountain bikes (1m sold, 1986-90) were not able to bring the "good old days" back for Raleigh, and the company steadily chipped away at its Nottingham factory sites for decades. In 2000 the Triumph Road site was sold to the University of Nottingham. The Sturmey Archer factory was demolished. The last remaining Raleigh factory is due to be knocked down next year and turned into student accomodation.
The factories at their peak were immortalised in the novel ‘Saturday Night and Sunday Morning’ (1958) by Alan Sillitoe, a former Raleigh employee. This was later made into a film of the same name where Arthur Seaton, the fictional Sturmey Archer capstan lathe operator, was played by Albert Finney. (Incidentally, this 1960 film was highly successful at the time and enabled producer Harry Saltzman to buy the rights of Ian Fleming’s James Bond novels, the rest, as they say, is history…)
Sillitoe started work at the factory as a 14 year old just after WWII. He earned £1 12s 6d a week for working an eight hour day. He wrote in ‘Saturday Night and Sunday Morning’ that he worked in a factory "smelling of oil-suds, machinery and shaved steel that surrounded you with air in which pimples grew and prospered on your face."
Arthur Seaton, aka Alan Sillitoe, will, indeed, outlast the Lenton factory. In his novel set in the 1950s, Sillitoe’s rebellious character said:
"[it] could go on working until it blew itself up from too much speed, but I, he thought, already a couple of dozen above his daily stint, will be here after the factory’s gone."
For a quick peek at Albert Finney at Raleigh capstan lathe and on a bike, check out this film trailer: http://amazon.imdb.com/…/ASIN=B00005S8KV?0054269&949926&28
For a full overview of the Derby story, including the messy demise of Sturmey Archer, start here and read the 100+ articles on this subject http://www.bikebiz.co.uk/…/sturmey_list.php
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HISTORY: The Heron Evolves: Raleigh from 1975 to 2002
Yvonne Rix and Toyah Wilcox. Leslie Roberts and Noel Edmunds. Max and M Trax. Diamondback and Derby. Raleigh was an interesting, but turbulent, place to work in the years 1975 to 2002. Here, in an updated version of a paper written for the 11th International Cycle History Conference held at Osaka in August 2000, TONY HADLAND catalogues the ups and downs for Britain’s best known bicycle manufacturer.
Above: The Raleigh factories in the 1950s.
Below: Albert Finney in Saturday Night Sunday Morning (1960)
Base: Alan Finden-Crofts