American Bicycle Group rides into future

American Bicycle Group rides into future

Litespeed, Quintana Roo maker shifts to Chattanooga location

August 28th, 2016 by Mike Pare in Business Around the Region

Staff Photo by Dan Henry / The Chattanooga Times Free Press- 8/18/16. Peter Hurley, CEO of LItespeed, stands in American Bicycle Group's showroom while speaking about the company's new Amnicola Highway location on Thursday, August 18, 2016.

Photo by Dan Henry /Times Free Press.

Gallery: American Bicycle Group rides into futureLitespeed, Quintana Roo maker shifts to Chattanooga location

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Bypass surgery to bikes for CEO Hurley

Some 14 years ago, at age 45, Peter Hurley was involved in investment banking in the Northeast when the unexpected happened — a heart attack. Following bypass surgery, Hurley recalled that it was “time to get serious and get healthy.” An associate at the time, he said, told him of a company that was on the market, American Bicycle Group, in which he thought Hurley would be interested. “They knew I’d changed my ways,” Hurley said. In 2007, he purchased the company and moved from the Northeast to Ooltewah to run the business.

American Bicycle Group is riding one of the biggest investments in the company's history into a facility that its chief says positions the maker of road and mountain bikes for the future.

The company that's behind Litespeed and Quintana Roo bicycles has moved from its longtime Ooltewah location to a production facility just off Amnicola Highway near Chattanooga State Community College.

Peter Hurley, the company's chief executive, said the new headquarters is about 37 percent larger at 40,000 square feet and houses production, assembly as well as corporate offices.

The timing of the move is right as the high-end bike maker readies for the 2017 model year and preps for what the CEO calls "a shifting marketplace."

"It's all changing rapidly," he said about meeting customers' needs. "It's a lot more complicated."

In the future, Hurley said he sees the company staying more in touch with consumers when it comes to individual preferences such as colors, wheels, and components "so it's exactly as the customer wants it."

About $1.7 million was invested into the move to the building, 49 percent of which is owned by the company's management team while Hurley holds the remainder.

Hurley said the home office, which formerly housed a wine distributor, also will hold warehousing for the company and enables those operations to shift from Los Angeles to Chattanooga.

"Shipping and receiving will expand," he said as he walked through the space recently.

In Ooltewah, Hurley said the 35-employee company shared a building with Hawker Powersource, a maker of industrial lead-acid batteries.

"They're growing. We're growing," he said.

Hawker bought the ABG space and gave the company enough time to find the new location.

American Bicycle makes 30 different models between its two brands, which range in price from $1,800 to $10,000, Hurley said.

In the coming year, ABG is looking to take advantage of a new category of sport bicycles which travel over gravel roads, the CEO said. He cited the myriad of old fire roads which run across the country.

Marcus Higgins, ABG's operations director, said the company tends to make bikes in batches of 20 to 50 at a time. Customers finish off the bikes through more and more customization.

"There's much more sub-assembly," Higgins said.

Hurley said American Bicycle Group uses "aerospace quality" sheet titanium and carbon fiber to make its high-end products, which tend to make the bikes "an extremely efficient conveyance."

"That's what people pay for," he said. "It's hand made. Not just hand made, but hand made in Tennessee."

Hurley said ABG products are sold around the globe. He said 40 percent of its inventory is sold overseas.

All its sales are though dealers and distributors, Hurley said, though he declined to say how many bicycles it makes annually or detail company revenues.

He said that sales over the past year were down about 9 percent from the prior period. He blamed uncertainly over the economy and the presidential race.

But, Hurley added, July sales were strong, and Hurley expects to get a bump from the Olympics.

"It's good for the industry," the CEO said.

Hurley said the company recently added a couple of more employees, though some workers have been with ABG for many years.

Higgins, who has been with the company for 25 years, said many employees have developed highly tuned skills and are cross-trained.

"If someone is out, another can fill in," he said.

Eric Tittsworth, in his third year at ABG, is now a welder. He started working in bicycle assembly but later took a welding course and now is employed in the mobile bike shop.

Tittsworth said he does "adventure riding," a growing pastime in which he will camp out after doing up to 75 miles a day on his bike.

Hurley said that one effective skill set in the plant is that the company produces in-house numerous small parts which are required for its bikes.

"What makes us unique in the business is that we make our small parts," he said. "That's important because it means better quality. It fits that bike."

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.


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