Burley Design converted to a cooperative in 1978. In the mid-1990s the cooperative had 100 worker-owners. After some difficult financial years the members voted to demutualize in 2006, after which a significant portion of workforce was laid off by the new owner.
Joel Schoening conducted an organizational analysis of Burley Design Cooperative based on research done in the years before the demutualization.
Here is the Register-Guard's article on the sale of the cooperative: Eugene co-op shifts gears: The maker of bicycles and bike trailers incorporates.
Burley was a significant supporter of the Oregon-based Western Worker Cooperative Conference, the template for the regional federations that eventually organized the U.S. Federation of Worker Cooperatives. Presenters from the cooperative educated other workers on finances, and governance, and were themselves a topic of discussion after the dissolution of the cooperative - a presentation well-documented for the U.S. Federation newsletter by Kim Coontz. In it she writes:
Burley Design was a manufactuiing cooperative in Eugene, Oregon that specialized in quality bikes and bike products. They were probably best known for their state-of-the art bike trailers and their tandem bikes. At its business peak, Burley was a highly profitable business with more than 10 million dollars in annual revenue.
All worker-members—from clerical to equipment engineers were paid the same, which was a relatively high wage for most positions (but low for management ). In response to business success the co-op positioned itself for growth by purchasing an adjacent building and state-of-the art manufacturing equipment. According to Patricia Marshall, a longtime Burley member who is writing a book about Burley, the co-op’s collapse in 2006 was caused by both internal and external threats. Externally, the co-op faced increased competition; this peaked when NAFTA widened the door to overseas manufacturing which could compete by producing products for substantially less. At about the same time the cost of living in Eugene increased substantially. Housing prices soared. Mean while, Burley wages remained static. This made it difficult for the co-op to attract and retain the highest skilled workers.
Burley’s internal threats prevented the company from successfully addressing the external threats. Members were not united in the co-op’s bicycle focus. Some felt that Burley should take a major shift away from designing and manufacturing bikes. There were also disagreements about overall sales strategies. A Research and Development team was ultimately formed, but mistrust and divisions among co-op members not on the team led to a bifurcation composed primarily of management and sales workers on one side and line worker-members on the other. Many co-op members became side-tracked by issues surrounding internal work issues like leave time and work-related policies. Patricia Marshall said that these issues took time away from timely responses to sales orders and business matters.
Although the co-op eventually dismantled the flat wage structure in favor of a more market-based wage structure, the co-op lacked an effective system of rewarding seniority and was unable to dismiss or selectively retain the most needed and productive worker members. As financial challenges grew, the more experienced and skilled workers left the co-op. In an effort to stay afloat the co-op sold the building they previously purchased and leased it back so they could retain use. The co-op borrowed at high interest rates in order to make payroll. Ultimately, the co-op sold the business to a local entrepreneur who continues to manufacture Burley bike trailers.
Steven Thompson also wrote about the demutualization in a 2006 edition of Rural Cooperatives: Bike co-op goes flat: difficulties faced by worker-owned bike co-op offer lessons for others of potential business pitfalls.
Here is Patricia Marshall's requiem from the Register-Guard:
Burley was one of many cooperative businesses that sprang up in Eugene in the 1970s: Genesis Juice, Hoedads, Second Growth, Starflower - most of them are gone or have reorganized as more conventional businesses. Burley remained a cooperative for 28 years, one of the longest-running and most successful
In the mid-1990s, Burley had nearly 100 members, all of whom enjoyed good wages and exceptional benefits, as well as a share in the company's profits. When the dividend checks were issued, a couple of times a year, it seemed that hundreds of thousands of dollars flooded the community, temporarily boosting the profits of restaurants, bars and home improvement stores.
The last few years haven't been as flush. In June, the remaining members voted to dissolve the cooperative and become a traditional corporation, to prepare the company for sale to a private owner. In the aftermath, everyone has an opinion about what went wrong.
It's easy to point the finger at the cooperative structure, to see the dissolution of the cooperative as vindication of the idea that co-ops are an unworkable way to manage a business. But to do that is to ignore the fact that it did work, and the company prospered for more than two decades, supporting local families and turning the wheels of local commerce, all the while adhering to the democratic idea that the member-owners had equal say in the company direction.
And it's easy for ex-members, many of whom may lose a chunk of money that they were counting on, to blame bad management and increased product cost for the decline. The whopping $1.5 million loss in 2005 lends itself to that theory.
But the truth, as with many things, probably lies somewhere in the middle. Burley has never been easily defined, or easily managed. It was a group of people who took a funky little bike trailer and made it world famous, while running a business with integrity and care. Despite the democratic structure, Burley was as effective in the market as any bike business, and more effective than many.
The thing that struck me the most when I came to Burley in 1992 was how dedicated everyone was to the cooperative idea, and how differently that dedication manifested itself from member to member. There was no challenge that members weren't ready to tackle, despite widely diverse opinions. Meetings were the heart and soul of the business, the place where we hashed out the issues of the day. For many, leaving no stone unturned, leaving no one's opinion unexamined, was the only fair way to operate.
The democratic process wasn't always pleasant, but it made us feel connected: It caused the seamsters to sew better, the salespeople to sell harder, the assemblers to take extra care with the trailers and bikes they personally identified with.
We worked hard to pull through tough times, but after the issues were resolved and the work was done, we could enjoy free lunch, or go on a bike ride, or cheer the Insane Unknowns while they played softball on a summer night. Once in a while, the trailer production team deep-fried a turkey and invited the co-op to lunch. We held Burley Cafes to raise funds for charitable causes, adopted families every Christmas, donated trailers to those in need and contributed to local non- profits.
Throughout it all there was a sense of camaraderie, a sense that we were working for something bigger than ourselves, the sense that we could redefine the work world, and come out better for it.
I don't know about the Burley of the past few years. I know there were big changes - changes that curtailed the flow of information and streamlined the process by minimizing democratic decision-making. The cooperative structure always meant that the business would be what the current members made it. At the meeting during which the remaining 33 members voted to sell the business, one director pointed out that they had chosen to stay and fight it out, rather than closing the doors.
I didn't make that decision, but if I had been asked, I probably would have supported it - even though it meant a portion of my retained earnings disappeared - because that decision meant my friends and former business partners would still be employed making products I cared about. Other people might have made other decisions, but it wasn't up to them. The members made the choice.
We had a saying at Burley: Once you work here, you're ruined to work anywhere else. I've discovered, along with a lot of other former co-op members, that it's not true - there are other jobs in Eugene where workers are respected, are paid well, and have some flexibility. There is life after Burley, something too many people will be finding out soon.
But I doubt there's any job out there that will replicate the experience we had at Burley.