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Part
5: The End of an Era
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The
Market Changes
Sekine Cycles’
period of little-challenged prosperity was short lived. A combination
of competition, market forces, economic factors and random
circumstances all contributed to the demise of the Sekine Canda Co. and
the Rivers operation.
The Bike Boom that sponsored the interest in building Sekines in Canada
tapered off. Hindsight tells us that booms, trends and fads are, by
nature, temporary. Bicycle sales in Canada, and around the world,
dropped, forcing companies to rethink their futures and production
goals.
In addition to that challenge, other issues surfaced.
Coming soon after steady progress up to 1974, some news caused some
concern locally.
The Canadian government saw fit to lower the tariff on bicycle imports,
from 25% to 15%, in 1975. This encouraged a new rush of imports,
which proved to be bad news for Sekine Canada, as well as other
domestic bicycle manufacturers of the time. A re-instated 25% tariff in
1975 provided some temporary relief.
The conveniently available labour force, which helped attract the
initial investment, turned out to have a down side. Oo-Za-We-Kwun
housed the workers and provided 50% of the employees’ wages for the
first six months. The goal of Oo-Za-We-Kwun was to provide training to
allow it’s clients to move on to un-subsidized employment elsewhere.
For Sekine that meant high turnover of staff. As the manufacturing
Component increased and more skills were required, that became a
problem.
By 1978 Oo-Za-We-Kwun was finding that the $2 million annual
operational grant wasn’t covering its training operations and its
responsibility for maintaining the huge property. At the same time
independent sources were beginning to question the whole concept.
To add to the financial concerns North American inflation rose in the
1970’s causing financial problems for companies financed by large
loans. Sekine experienced cash flow problems related to the nature of
their operation. There was a long time between the day the bike was
assembled to the day they got their payment for that bike.
Sekine continued in production until the early eighties amid a series
of ownership and investment changes as efforts were made to save the
operation.
Oo-Za-We-Kwun was
closed in June of 1980, eliminating the ready labour supply. Loans were
called in and subsidies dri3d up. The Manitoba Government declared the
operation not viable and withdrew any support.
Sadly, in the
midst of mismanagement allegations the company fell into
receivership. By 1981 the doors of the Sekine plant were closed
and the assets sold off the following year, to help offset outstanding
debts. Sekine Canada would never recover, although Sekines were
still manufactured in Japan for a time.
Oo-Za-We-Kwun was closed in June of 1980, eliminating the ready labour
supply. Loans were called in and subsidies dried up. The Manitoba
Government declared the operation “not viable” and withdrew any support.
Sadly, in the midst of mismanagement allegations the company fell into
receivership. By 1981 the doors of the Sekine plant were closed
and the assets sold off the following year, to help offset outstanding
debts. Sekine Canada would never recover, although Sekines were
still manufactured in Japan for a time.
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