First Crumpler outsources it labour to Vietnam now Timbuk2 to
Why is Timbuk2 contracting it's labour to China? It's not "economic
reality", it's economic opportunity.
Opportunity that results from a Chinese system that supresses human
rights and exploits child labour and forces political prisoners into
Another reason: "Next year a 17.8 percent U.S. tariff on textile goods
from China is set to expire, making goods manufactured abroad even
"Dwight credits Honeycutt for creating a cult following for Timbuk2,
but he said the time had come for the company to change course. "
"Bike messengers make up only a small percentage of Timbuk2 sales. But
are a necessary ingredient in the popularization of the bags."
In other words messengers seved us well but we don't need them anymore.
This is not the same Timbuk2. Dwight threw out Honeycutt and brought in
here for real messenger bags - the best ones are still made by
Facing economic reality
Popular S.F. messenger bag firm finds cheaper
San Francisco Chronicle, November 9, 2004
By Pia Sarkar
When Mark Dwight took over as chief executive officer of Timbuk2, he
knew right away that big changes had to be made.
For years, Timbuk2 had been stitching its popular bike messenger bags
at its Mission District factory at a time when few other businesses
could resist sending their manufacturing jobs to cheaper lands abroad.
Rob Honeycutt, a former bike messenger who founded Timbuk2 in 1989,
began sewing the original bags in his Duboce Triangle apartment in San
Francisco. Back then, Honeycutt believed that "Made in the U.S.A."
meant something, and
he still does. "It has some real cachet," he said in a recent interview.
But in time, Timbuk2 could no longer fight economic reality. When
Dwight, who spent much of his career in the technology sector, came on
board in 2002, one of the first things he did was to start
manufacturing a new line of products -- in China.
Dwight's decision illustrates the larger struggles that businesses face
when they must choose between keeping their roots and remaining
For instance, Levi Strauss & Co., a San Francisco institution,
its last two sewing plants in the United States in January and shifted
production to China and elsewhere.
Timbuk2's move sparked a minor outcry from its loyalists. Dwight
responded with an explanation on the company's Web site: "Yes, it's
true. Timbuk2 is making some of its new products in China. We realize
this may concern some of our long-standing customers."
The Web site describes the company's fight against "economic pressures
to close our factory and move everything to low-cost manufacturing
centers outside of the United States" and says that Timbuk2 sees no
other options but to manufacture
its laptop bags in China.
"Unfortunately, it is not practical for us to make these new products
in our San Francisco factory," the Web site says. "The labor cost alone
would make the retail price absurdly high."
The elaborate explanation wraps up by saying, "If 'Made in China'
offends your sensibilities, we're sorry, and we encourage you to
purchase one of our
messenger bags made in San Francisco."
Offshoring is a new concept for Timbuk2, which until recently had kept
its manufacturing local.
The Mission District factory on Treat Street is painted a bland sort of
beige and covered with what looks like graffiti. Upon closer
the graffiti turns out to be the company's official sign above its main
reinforcing Timbuk2's street credibility. A spray-painted blue boy with
devilish grin and a Timbuk2 messenger bag draped across his shoulder
visitors that they have come to the right place.
The factory employs 45 people, half of whom work on the 13 production
lines. The rest work in sales, marketing and finance.
Bolts of bright fabric are stacked on top of each other on the factory
floor. Dwight points out that it takes 12 to 15 minutes to turn them
into classic Timbuk2 messenger bags. A red tag is attached to every bag
to signify that it is custom made. Designated sewing machines mark each
bag with the company's signature swirl logo.
Workers at Timbuk2's factory keep their heads down and their mouths
closed for the most part. They are all Asian women, their hands always
in motion as they slip material through machines and watch the thread
form tight dashes along the fabric. The only noise comes from the
sewing machines themselves, which drill, then click, then drill again.
Although Dwight said the company still holds true to its original
customer, the bike messenger, it has broadened its scope to a far wider
audience. Bike messengers make up only a small percentage of Timbuk2
sales. But they are a necessary ingredient in the popularization of the
"I believe the messenger bag has legitimized the man purse," Dwight
said. "This was a signature blue-collar product that was adapted as a
These days, Dwight has honed his rationale for shipping jobs to China.
Cheap labor costs dominate the list, but also important is China's
fast- developing infrastructure, particularly in Shenzhen in southern
China, where Dwight has
access to a rich supply of materials and the latest techniques in
manufacturing because of the number of companies and factories there.
"It's not all about labor going to China," Dwight said. "The ecosystem
in China is complete. That infrastructure has atrophied in the U.S."
But whenever he is asked -- as he inevitably always is -- whether he
plans to maintain Timbuk2's factory in San Francisco, Dwight answers
the same way. "What I am
committed to is keeping this factory open," he said, "as long as it's
Ashok Bardhan, senior research associate for the Fisher Center for Real
Estate and Urban Economics at UC Berkeley, said that Timbuk2 faces the
issues that the manufacturing sector has been dealing with for decades.
main pressure to go offshore, he said, is the high cost of doing
in the United States.
"This is not a phenomenon that is reversible," Bardhan said. "So there
is little anyone can do about it."
Dwight is careful to point out that he has not technically moved his
operations to China. He has simply expanded them to include China. He
also notes that Timbuk2 has expanded operations in San Francisco,
adding an extra production line to the factory and nudging up the
number of employees by 10 percent in
the last two years.
Although protective of his San Francisco factory, Dwight is not exactly
an apologist for offshoring.
"People don't really understand the (offshoring) issue," he said. "It
really has to do with white-collar jobs. When people started to see the
moving abroad, then they realized that nothing is unassailable."
But, Dwight said, offshoring is nothing new to his industry of blue-
collar jobs. "My industry is very mature in offshoring and
outsourcing," he said. All his competitors sent jobs abroad many years
ago, he added.
The pressure for Timbuk2 to go offshore came at a crucial juncture of
the company's development. Jordan Reiss, who began working for Timbuk2
in 1999, created its Build Your Own Bag Web site, which allows
customers to go online, pick out colors and fabrics, and e-mail their
orders. In 2000, Reiss said, the company was divided about which
direction to take the business in next. Although Timbuk2 had always
sold its products in bike shops and specialty stores, it was seeing an
increase in Internet customers.
The new online business model, although successful, started to pull
company apart, Reiss said. "Certain factions didn't want to abandon
traditional channels of selling to retail stores while others wanted to
expand on the Internet, with the possibility of becoming purely
consumer direct," he said. "Unfortunately, that disagreement in upper
management was not resolved."
The online model would have most likely kept Timbuk2 in domestic
manufacturing because its custom-design nature would not be suited for
mass production abroad.
But when Dwight arrived in 2002, he made it clear that Timbuk2 would
become an online-only company.
"Retail is vital to us," Dwight said. "We can't build our brand just on
Today, Timbuk2's products can be purchased at 1,500 different retail
stores, including REI, Eastern Mountain Sports and Apple Computer
stores. About one-quarter of Timbuk2's sales are overseas, one-quarter
from the Internet and one-half in retail stores.
Since Dwight took over, the company has more than doubled its business,
he said. Under the company's founder, Rob Honeycutt, Timbuk2 had been
doing about $4 million in annual sales.
"The company went through a little downturn when I arrived," Dwight
said. "They were in survival mode for 13 years."
Dwight credits Honeycutt for creating a cult following for Timbuk2, but
he said the time had come for the company to change course. Honeycutt
Reiss left Timbuk2 shortly after Dwight became CEO. Both men still hold
stake in the company.
Reiss, who said he is happy with the job Dwight is doing, decided to
leave Timbuk2 when offshoring became a part of the company's business
model. "It started to lose some of its newsworthiness in my mind,"
Reiss said of the company. "It was just going to be another offshore
For his part, Dwight would like to discourage Timbuk2's customers from
getting too attached to the company's home base. "I've tried to
decouple the brand name from 'Made in the U.S.A.,' " he said. "I want
the brand promise of 'Made in the U.S.A.' to be reinforced, but I don't
want the product to be dependent on it."
As a savvy entrepreneur, however, Dwight knows how to play the San
Francisco homegrown appeal to his advantage.
"I'm proud that we defy conventional wisdom," he said. "It is also not
lost on me that there's a promotional aspect of being here."
What it does: Makes bike messenger bags, as well as laptop bags,
handbags and other accessories
Location: 350 Treat St.,
CEO: Mark Dwight
Number of employees in San Francisco: 45