Henry Ford did something 110 years ago that some considered bold and others thought was crazy: He increased his workers’ pay to $5.00 a day. He did it mainly to stanch the turnover that bled his workforce and others in the industry. He reasoned—correctly—that a more stable workforce would be more efficient.
His action would mean, not surprisingly, that other employers, in and outside the auto industry, had to increase their wages. And that led to another phenomenon that, wrongly, has been cited as Ford’s main motivation for increasing his employees’ compensation: Many more of them could afford the cars—mainly, Model Ts—they were sending forth from assembly lines. Mind you, the car was still a significant, if not major, purchase for most of those assemblers. But the Model T was certainly more attainable for them than automobiles that were made before the advent of the assembly line, and on the wages workers previously earned.
What if Ford’s gambles hadn’t paid off? What if, after introducing the assembly line and a vehicle that practically defined “economy car” and paying his workers more, the company lost money—or showed a net profit that was less than the price of one of the vehicles it produced?
He would have had a situation like the one Brompton now faces. For year ending in March 2024, the British folding bike maker cleared only £4602 ($5696 at today’s exchange rate) in profit: less than one of its top-of the-range T Line Explore bikes sells for.
What is perhaps most startling, at least for the company and the bicycle industry, is that the previous year netted £10.7 million. In other words, Brompton lost 99 percent of its profitability in just one year.
Analysts blame Brompton’s predicament on many of the same woes that have beset the bicycle industry during the past couple of years. Surges in demand, combined with supply-chain disruptions led to the closure of some bike shops. The ones that survived placed hefty orders once supplies became available again. But the pandemic “boom” went bust and retailers found themselves discounting overstocks.
Brompton’s situation was complicated, I believe, by the kinds of people who were likely to buy one of their bikes—and the image of those bikes and the company. The latter can be summed up by one shop owner who calls Brompton “the Tesla of bicycles.” I think he was on to something. “It’s not just the prices,” he explained. “A lot of people think they’re bikes for people who live in Soho or by BAM (the Brooklyn Academy of Music).”
And that brings us to a significant part of Brompton’s demographic. While competition from eBike rental schemes and manufacturers like British startup GoCycle has affected the entire industry, it seemed to hit Brompton particularly hard: It seems, to me, that many Brompton customers, especially young professionals, were seeking easily-rideable and -portable transportation that looked stylish even more than they sought actual bicycles.
So it’s no surprise that Brompton plans to launch a more utilitarian lineup that includes eBikes. That, company boss Will Butler-Adams, is a “cause for optimism “ that there are “opportunities on the other side” for Brompton and other bike companies that can weather the storm.
