From the mag: Intense-ly conflicted

TEMECULA, CA (BRAIN) —The rise of carbon fiber has forced some tough decisions on Intense Cycles. After all, founder Jeff Steber built the company’s reputation on high-performance aluminum mountain bike frames handmade at its state-of-the-art factory in Southern California. Would Intense have to compromise its commitment to domestic manufacturing to compete with the flood of high-end carbon off-road bikes pouring out of Asia?

“Carbon is pushing aluminum downstream at the high end just like it did in road,” Steber said. It was a market shift that couldn’t be ignored. Intense initially explored manufacturing its carbon bikes stateside with Ogden, Utah-based component maker Enve Composites, but it quickly became clear that even with business incentives from the city it wasn’t a viable option.

“Our frames would come in $1,000 more than our competitors. You can’t compete like that,” Steber said.

The choice was made: Intense would go to Asia for its carbon but keep all its frame assembly and aluminum manufacturing in Temecula.

“We’re kind of coming up to date. It’s something we need to do to be competitive in the future,” director of operations Matt Dashell said of the move into carbon. But as carbon grows to represent a greater share of the model lineup—and with many boutique brands already reaping huge savings outsourcing their aluminum production overseas—what is the future of Intense’s domestic manufacturing?

“Do we keep trying to force this to happen?” Steber muses.

LEAN AND LOCAL

Steber’s mezzanine office overlooks Intense’s factory floor packed with expensive CNC machines, lathes, frame jigs and welding stations. It all represents a seven- figure investment in aluminum production, and it’s all paid off—just in time for carbon to dominate the high end in mountain bikes, Steber notes wryly.

Still, the factory hummed with activity on a recent visit. Demand for Intense’s aluminum gravity and trail frames remains strong, and the Taiwan-sourced front and rear triangles of its full-suspension carbon models are assembled on site with house-fabricated linkages, axles, hangers, dropouts and bolts.

Recent adoption of lean manufacturing principles has helped cut delivery times from three months to two weeks, and a one-piece work flow—assembling only what ships that day—keeps inventory low. Operations director Dashell points out that long before he worked for the company, as a customer he waited four months to take delivery of an Intense 5.5 frame.

“Our manufacturing is more efficient than it’s ever been,” he said.

Further efficiencies are gained by working with a number of vendors in the same industrial park that houses Intense, such as Temecula Quality Plating, which anodizes all of Intense’s frame hardware and linkages. Another nearby business supplies shipping boxes. Steber had long admired the special-order work Temecula Valley Powder Coat did on his display frames for bike shows, but the company lacked the capacity to take on bigger jobs. For years, Intense trucked its frames 60 miles to vendors in Orange County. In 2006, however, Steber offered to guarantee TVPC all his powder coat business if the company expanded its capacity. The neighbors have been doing business ever since.

Responding to dealer demand, the Intense factory is building up a lot more complete bikes these days. “We were kind of known as a frame company, but shops now want completes on their floor,” Steber said. “It’s putting a little more pressure on us to compete with the big guys who have a full line of bikes and own the showroom floor.”

ADDING FIBER TO THE DIET

Meanwhile in Taiwan, Intense is benefiting from carbon fiber production processes and expertise refined over the years by larger suppliers and their factory partners, Steber noted.

“Ten or 12 years ago, it would have been impossible for us to do it,” he said.

Intense enlisted Thomas Harter at German firm Seed Engineering for its carbon engineering, and tapped the factory knowledge of trading company Action Trading International to help find its overseas manufacturer and handle quality control and invoicing. But the shift from operating as a single, self-contained unit to manufacturing on two fronts has not been easy.

“From my viewpoint it’s a challenge to finance it, and we’ve had to get creative,” said Marv Strand, vice president and general manager. “It’s a new business model for us. We used to be backorder-driven; we’ve had to change that operational outlook to forecast-driven.”

Developing carbon fiber technology and paying upfront for molds and frames overseas—all while continuing to source aluminum for Intense’s domestic frame production—has strained the company’s resources, Strand and Steber both acknowledge. Marketing budgets have been slashed, and the World Cup team that served an important brand-ambassador role is no more.

The company currently has three carbon models—debuting its newest, the Hard Eddie 29er hardtail, at April’s Sea Otter Classic—and has two more in the works for 2012 and spring 2013. As additional carbon bikes come on line, the company sees certain aluminum models—and their attendant U.S. production—leaving the Intense fold, particularly in shorter-travel categories.

“Five-inch and under has fallen off the radar [for aluminum] unless prices are lowered enough. There are still legs for longer-travel bikes,” said Strand, adding that he perceives a “mental block” among consumers about carbon downhill frames.

Intense has also considered keeping its factory busy by building frames for other brands, though talks with outside brands have not gone beyond casual conversation, Strand noted.

Job shopping outside the industry also remains an option. And although business consultants advised Steber six years ago to move all his manufacturing overseas, for a guy who started out welding frames in his garage— and who places great value on local job creation—that remains a particularly tough sell.

“We’ve decided we’re going to keep it going for as long as we can, but maybe it only makes sense for a few certain models,” he said. “It’s part of our history, our story. I mean, I make stuff.”