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Cardinal Cycling Group sells Detroit Bikes to new company

Published May 31, 2024

DETROIT (BRAIN) — Cardinal Cycling Group has sold Detroit Bikes to Beacon Manufacturing, a new company led by Detroit’s general manager, Gary Thornton.

Detroit was established as a domestic manufacturer of steel-framed utility/urban transportation bikes, and also provided assembly and manufacturing for other brands including Schwinn, Dick's Sporting Goods and Motivate.

But Detroit Bike's growth as a brand has been stalled by high inventory and discounting in the last two years. So while Beacon will provide customer services to Detroit Bike owners and will relaunch the brand at some point, Beacon is focused on the business that has sustained the company recently: prototyping and logistics services for light electric vehicle (LEV) manufacturers.

“We’ve pivoted from being a manufacturer of sub-$1,000 commuter bikes to working with smaller companies bringing LEV's to market,” said Thornton, who is Beacon's CEO. “Beacon has grown out of the fact that Detroit wasn’t manufacturing a lot of Detroit (branded) bicycles.”

Beacon is part of the New Lab program at Michigan Central in Detroit, along with Bloom, a startup that also provides services to the light electric vehicle industry.

Thornton, an industry veteran who joined Detroit after Cardinal acquired the company in 2022, said Beacon now has about seven employees but plans to increase that to as many as 75 over the next year. He said Beacon has more inquiries from potential clients in the LEV industry than it can currently accommodate. 

“There’s a lot of pent-up demand. At this point we’re having to say, ‘not yet’ to a lot of requests,” he said.  

He said Beacon has modern CNC, laser-cutting, laser-welding, and 3D-printing capabilities and access to state-of-the-art facilities at New Lab and from suppliers in the Detroit area.

“We are really spoiled in what we have access to in the shared manufacturing space here,” he said. “We can bring a brand from proof-of-concept to actual vehicle manufacturing.”

Cardinal retains some Detroit assets

Cardinal, which owns Time Bicycles, acquired Detroit in 2022 from founder Zak Pashak. CEO Tony Karklins said Cardinal is now devoted to domestic composite manufacturing. “Cardinal is focused on carbon; we won’t be doing anything else in metal,” Karklins told BRAIN. Time will begin frame production in South Carolina this year. The brand also continues to make carbon frames in Europe.

In the sale of Detroit Bikes to Beacon, Cardinal retained some Detroit inventory — including about 500 complete bikes and e-bikes, as well as some P&A and frame materials — valued at about $500,000 wholesale. Karklins said Cardinal is looking to sell that inventory to the right kind of buyer. 

“Our goal is to get the remaining inventory into the right hands of major metro urban bicycle dealers, college/university-based dealers, or rental companies,” Karklins said in a press release. He told BRAIN, "This is not a bunch of Ultegra groups that would be easy to price; it really needs the right kind of buyer."

Cardinal also has retained some of Detroit’s steel-frame manufacturing equipment, which has been shipped from Detroit to Cardinal’s facility in South Carolina. Karklins said Cardinal does not intend to resume steel-frame manufacturing but is looking to either sell that equipment or set up a steel manufacturing facility to lease to other manufacturers. He said the manufacturing equipment has a capacity of 5,000-10,000 bikes annually.

Cardinal’s facility in South Carolina also houses the carbon-rim manufacturing company Munich Composites SC, which Karklins and other investors, including the owners of the Boyd Cycling wheel company, bought last month from its German founders.

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