EuroWire May 2016

Transatlantic cable

the big cycling race Tour Down Under since 1999, producing champion riders including Rohan Dennis, Stuart O’Grady and Jack Bobridge. But they have particular resonance locally, where General Motors Holden’s car manufacturing plant in Adelaide will close next year with a loss of thousands of jobs: at the plant but also at component manufacturers that have supplied it for decades. As South Australia’s traditional car making sector winds down, a high-end bike manufacturing industry is breaking out ahead of that trend. The Lead ’s Caleb Radford reported on companies that are taking advantage of the state’s industrial strength and access to university testing facilities to produce brands that can command $3,500 for a wheelset. (“Bicycle Manufacturing on Rise as Cars Take Back Seat,” 2 nd March). Custom-made titanium bicycles from Astir Frames are assembled in Adelaide from imported parts. Founder James Moros said the decline of the automotive industry was opening doors for him. “If there are factory machines that are idle, I’ll ask to use them,” he told Mr Radford. “I’m not scavenging. I’m utilising available equipment that other people aren’t using at the time.” Another company nding success in South Australia is Bouwmeester Composites, which makes high-performance carbon bre wheels for o -road racing bikes. Founder and CEO Mello Bouwmeester brought the composites work to Adelaide after previously manufacturing overseas. Finch Composites, which is testing a prototype carbon wheel equipped with disc brakes for racing bikes, is looking to partner with auto parts suppliers suddenly open to new business opportunities. Co-founder Ben Tripodi said that, for the present, the Adelaide-based company is concentrating on local business. But, he told The Lead , “We do really want to target the American market.”

† Meanwhile, hourly manufacturing wages in China rose about 12 per cent a year, on average, between 2000 and 2013, much reducing the traditional Chinese advantage in labour costs. With the ready availability of inexpensive oil and natural gas in the USA, the average cost of production there is now only ve per cent higher than in China, according to a Boston Consulting Group report cited by Mr Rothfeder. For most businesses, he wrote, “the calculus in favour of reshoring or maintaining existing US operations is obvious.” † All the “campaign-trail bluster” about winning back jobs from China is the more repellent to Mr Rothfeder for the appeal it holds for the many blue-collar American workers whose manufacturing universe has been altered beyond recognition by technology and globalisation. Their former jobs are gone forever. For those seeking one very big job – the presidency of the United States – he observed, “saying ‘China’ over and over is far easier than understanding the relationship between its economy and ours.” Manufacturers in various places are preparing to ride a new old friend – the bicycle – to a potentially lucrative market The bicycle industry worldwide was worth $48 billion in 2014, driven by the sale of some 133 million bikes. It is expected to reach an estimated $65 billion by 2019 on the back of rising fuel prices and growing tra c congestion. These statistics, supplied by the Adelaide-based news service The Lead South Australia , are signi cant well beyond the region that has hosted

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May 2016