IIt’s easy to assume that the American subsidiary of Swiss bicycle parts manufacturer DT Swiss AG ended up in Grand Junction because the area is such a hotbed for cycling.
In fact, the arrival of this subsidiary, DT Swiss Inc., in 1994 preceded the region’s rise to national bike prominence.
“Back then, Grand Junction, all the trails and the mecca of mountain biking, it wasn’t then. It was starting, but…it all happened after 1994,” said Chip Barbieri, who moved to Grand Junction 16 years ago to become CEO of the US subsidiary.
On the contrary, Barbieri said, the choice of Grand Junction reflected a Swiss-German style of avoiding taking huge financial risks.
“They’re not shy about getting into new ventures, but they’re certainly doing it in a, shall we say, financially secure way,” he said.
The company had an acquaintance at an independent distribution company that offered space in a local building that was not fully utilized. The idea was that if the company liked the neighborhood, they could eventually find their own building.
DT Swiss liked the area and within about a year bought their own building. Initially with three local employees, the subsidiary now employs nearly 70 people and, after numerous extensions, now operates in four buildings on a mainly industrial campus.
The subsidiary was the first of many that DT Swiss AG has opened outside of Switzerland, as it globalizes its manufacturing and distribution to be closer to the bicycle manufacturers and other customers it serves.
The Grand Junction site started making spokes, DT Swiss AG’s initial product, early on, before starting to make wheels around 2006-07.
It also distributes some bicycle parts that DT Swiss manufactures elsewhere, handles sales and marketing for North and South America, and has a customer service center that also serves the Americas.
He’s expanded his local building space six times over the past decade, including a pretty big expansion last year, and is now renovating another building he bought last year to further expand his production capacity. .
“I can already tell you that this is not enough space. We’re probably looking at another expansion in the coming year,” Barbieri said.
These expansions reflect the rise of cycling fueled by the pandemic and the growth of the e-bike industry which has opened up cycling to a wider segment of the public.
The growth of the Grand Junction operation has paralleled the growth of DT Swiss AG as a whole. DT Swiss AG was once a company whose previous owner decided it needed to be financially straightened out so that it could be sold. Barbieri said it was a tiny division of a company called United Wireworks, which dates back centuries, having made wire for everything from baskets to the chain mail that once protected soldiers.
DT Swiss developed as a spoke manufacturer during the 20th century. Barbieri said United Wireworks brought in three men to shine DT Swiss so it could be sold and after that the three ended up buying it themselves in 1994.
Opening the Grand Junction branch helped the company better serve the needs of bicycle manufacturers like Cannondale and Trek at a time when those companies were producing a lot of bicycles in the country. Barbieri said spokes come in many sizes, so it was easier for bike makers to get spokes of the sizes they needed from DT Swiss in Grand Junction rather than having them shipped from Switzerland. .
These days, the big bike makers no longer produce in the United States, having moved production to places like Eastern Europe and Asia, Barbieri said.
But many smaller, typically high-end, domestic bike makers, such as Santa Cruz and Yeti, have taken their place. Barbieri said these companies are looking for flexibility in terms of supply, only bringing in products when they know what orders they have. These companies worked with the Grand Junction plant to ship products to tight deadlines, at least before the pandemic made those deadlines harder to meet.
COVID-19 has only complicated what has become in recent years a difficult freight situation for DT Swiss.
Barbieri said that when DT Swiss opened in Grand Junction, the town proved attractive as a “pretty cool area” with a pleasant environment, a workforce with a strong work ethic, taxes cheap and cheap buildings, and freight “didn’t matter,” at the time as cheap, he said.
He then added with a laugh that “today freight is a much bigger issue” with Grand Junction’s industrial businesses.
Freight is more expensive in the region these days and shipments take longer, making freight the main issue DT Swiss faces being based in the region, Barbieri said. Freight-related logistics issues are also proving difficult for manufacturers like DT Swiss. He said that in order to run a manufacturing operation, it is important to be able to rely on the consistency of freight services, in terms of deliveries arriving when they are supposed to arrive.
Now a truck that was supposed to arrive on a Wednesday could arrive on Wednesday, or maybe Friday, he said.
This stems in part from factors that have arisen as a result of the pandemic, such as the degree of availability of drivers, trucks and shipping containers. Barbieri said loaded shipping containers from overseas make it all the way to his factory, but now shipping companies want their containers returned to ports faster and pay trucking companies incentives for them. unload quickly, before the cargo reaches its final destination. This slows down shipping and creates the risk of damage when cargo is transferred out of containers before being sent on the rest of its journey.
Barbieri said he hoped to see fewer such problems as the logistical issues eased.
In addition to more expensive shipping, Barbieri noted that local real estate is also not as cheap as it used to be. It still compares favorably to Denver, but it’s more expensive than a number of other places in the country.
This has affected what DT Swiss has to pay employees and offer when recruiting workers in other areas, as well as the benefits it offers.
However, quality of life can be an important factor in recruitment. Mesa County’s flourishing as a cycling destination means people can work for DT Swiss “in an area with some of the best known trails in the world,” Barbieri said.
The area’s general outdoor lifestyle has helped attract DT Swiss employees, including Barbieri himself. He had worked in other states for companies in a number of industries, including previously in the bicycle industry with Cannondale. He said he and his wife, in considering moving to Grand Junction, considered the hiking, biking, skiing and other outdoor activities the area offers, along with other factors like the quality of local health care.
The affection of the employees for the region is something that the parent company in Switzerland takes into consideration, but at the end of the day it must be convinced that the American company is doing what it must do financially and by providing services and by manufacturing for customers, Barbieri said.
It is uncertain whether the company will remain in Grand Junction. He said that whenever he considers another local expansion, DT Swiss always considers whether to stay or go elsewhere.
“We are a business. We are an international company, so we always look at finances. … Until now, everything mathematically indicated that we were staying,” he said.
Barbieri said he doesn’t see that changing unless something drastic happens, like tripling taxes or doubling the cost of employees.
But as companies like his face growing challenges, he thinks entities such as the state should take a closer look at the financial tools they are making available to help communities both attract new businesses and keep those that already exist.
Barbieri sees other places going so far as to construct a new building for a business, and not require it to be depreciated over 20 years, in exchange for employing a certain number of employees during that time.
Although he is impressed with the Grand Junction Area Chamber of Commerce and the Grand Junction Economic Development Partnership, he said he believes they should have more incentives than they can offer.
“The bands here, in my opinion, do a better job than the ones with bigger tools, in my experience, so kudos to them,” Barbieri said.