Deciphering ‘Essential’ During the COVID-19 Pandemic
On Monday, March 16, Santa Cruz County in Northern California issued a shelter-in-place order due to the COVID-19 pandemic, requiring residents to stay home and limiting full business operations to companies deemed “essential,” like medical facilities and trash collectors. Ibis Cycles, one of a number of mountain-bike brands in Santa Cruz, announced publicly that it was closing due to the order. When employees went home that night, it was unclear when they’d return.
The next day, Ibis’s executives read the order more closely, homing in on a provision that allowed non-essential businesses to maintain basic operations if they met certain conditions. Basically, as long as anyone who could work remotely did so and the rest of the staff maintained social-distancing guidelines and proper hygiene, the company could continue operating. So on Thursday, March 19, Ibis reopened—with a stockpile of masks and gloves for its warehouse workers and measures in place to keep them apart. It was no accident that the company did not make a public declaration of its about-face. For one, employees focused initially on filling back orders, not promoting product launches and generating new sales. But there was also a squishy perception factor. “We just kept it on the down low,” Ibis president Tom Morgan said.
Which kind of says it all right now. A conscious, responsible mountain-bike brand is making and selling bikes, keeping its staff employed and at least some semblance of the economy in motion, going to great lengths to make sure its workers don’t spread the virus—all within the law. Yet its president doesn’t really want to broadcast that Ibis is open. And he’s not alone. Multiple companies contacted for this story opted not to comment on their level of operations, seemingly afraid to enter an arena where there are no right answers. Yet the same question lingers for every brand in cycling, especially since bike suppliers and shops are now deemed “essential.” Where does one draw the line between public health and economic stability—nay, economic survivability—without a precedent to go on?
Hope Technology didn’t waffle. The U.K.-based component manufacturer ceased production on March 27, for a minimum of three weeks. Co-founder Ian Weatherill and his brother Alan, the company’s sales and marketing manager and employee of 30 years, debated what to do. The local edict allowed them to keep operating, but employees were worried about the virus. “There’s a lot of interest still, there’s a lot of people who want to buy parts for their bikes,” Alan Weatherill said. “But do they really need disc brakes? Should we be putting our products into the distribution chain? Disc brakes are not essential, although we’d like to think they are.”
Hope Tech operates in a 12,000-person factory town called Barnoldswick, which includes the Rolls-Royce Aerospace factory. All factories are closed now. Hope’s 160 workers were prepared to take a 20-percent pay cut since they knew the government would cover at least 80 percent of their wages if they stopped working, but Hope covered the remaining 20 in good faith. “We have no venture-capital people, no borrowing and we own the building, so if we close, our losses aren’t as big as companies with shareholders or who have rent to pay,” Alan Weatherill said. “It’s still quite a significant hit, but we can weather it.”
Below Hope on the accessory totem pole are hundreds of smaller brands, making up the base of the industry’s pyramid, if you will. Grand Junction, Colorado-based Rocky Mounts, which was founded in 1995 and produces racks, locks and mounts, suspended its operations on March 24. All 14 employees are indefinitely furloughed, a.k.a. not getting paid.
The first sign that the sky was about to fall came quickly. “I just started to notice our dealer orders had stopped 100 percent,” Rocky Mounts founder and owner Bobby Noyes said. “And the only sales channels we had left were Amazon and our website. Then Amazon said it was suspending sales of everything but medical and household products. The orders on our website started cratering, and one day at work I could tell everybody was scared.” Noyes did some math and realized that trying to maintain a bit of revenue wasn’t worth the safety risk or stress to employees. “I’m not going to worry about selling a couple more car racks,” he said. “Let’s just hit the reset button, walk away and come back refreshed when we know it’s a brighter day.”
There was only one problem. Rocky Mounts’ sales had been up 25 percent recently, and Noyes bet big that the growth would continue. When the pandemic exploded in the U.S., he had three 40-foot containers steaming across the Pacific full of new product. The boxes travel from China to Los Angeles, catch a train to Salt Lake City, then a truck to Grand Junction, where usually the product gets unloaded and quickly shipped off to dealers. The first container arrived last week carrying about $250,000 worth of hitch racks. Only now, the dealers had no use for them.
“Literally two days before the pandemic blew up, we had a huge order ready to send to REI, then they closed all their stores,” Noyes said. Even after paying the shipping fee and duties, he wasn’t about to put six employees into the container to unload it, he told his freight company. Nor did he have anywhere to store the racks. It didn’t matter. He learned he’d be on the hook to the steamship line for $250 each day the container wasn’t emptied. All warehouse space in Denver was either full or outrageously expensive. His agent at Charles Schayer and Company, Gayle Meagher, who has handled his shipping for decades, told him she couldn’t do anything. Already she’d had to stop fronting clients for their customs clearance fees and steamship fares—Schayer’s method of doing business for decades—because too many companies were going under and leaving her employer stuck holding the bill.
“Gayle was in tears. And this is the hardest woman I’ve met in my life,” Noyes said. “She goes, ‘Bobby, the whole system is collapsing. Everybody I’ve talked to this week has told me the same story.’ That floored me to hear that from her. The logistics side of this thing is gonna be a bloodbath.”
Which brings us back to Ibis. Staying in business wasn’t easy, but Morgan said he and the company’s owners still feel like it was worth the accommodations they made. “It’s not exactly the start to the season we expected, but all things considered, it’s going pretty well,” said Morgan, who’s spoken to a number of competing manufacturers that are following a similar strategy. “For a lot of these shops, particularly ones that have had to shut down, being able to deliver a high-end, pre-sold bike at this point may make the difference between them being able to pay their rent or make payroll, or not. So we’re happy to help with that.”
All of Ibis’s 35 employees are being paid in full even though most are working about 30 hours, Morgan said. Two warehouse workers approached management and said they didn’t feel comfortable working in the warehouse—but they still needed a job. One has a degree in environmental studies, so he’s been researching ways to reduce Ibis’s packaging waste. Another is selling all of the company’s old demo and test gear—stuff that piles up at every warehouse and collects dust because no one has time to deal with it.
Lest anyone confuse “still operating” with “humming right along,” the status quo is not comfortable. Lines are blurry. Is a high-end mountain bike really an essential product right now? “We’re doing our best to question ourselves and question each step that we’re taking,” Morgan said. “And I think that the first question we’re always asking is: Are we doing what’s right in terms of the health and welfare of our staff? So far, I think, yes. But we’re learning on the go.”
This article originally appeared on Bikemag.com and was republished with permission.
For access to exclusive gear videos, celebrity interviews, and more, subscribe on YouTube!