PANDEMIC!  REBOOT! (tm)  Kent International, Steering Clear

founded by his grandfather in the shadow of the Manhattan Bridge.  As CEO of Kent International, a high volume, mass-market bike supplier to Walmart and other big retail, he knows the bike business.  But no one could have foreseen the tectonic shifts ahead. Two generations after his grandfather Avram immigrated from Poland, landing on New York’s Lower East side, the business that started as a repair shop has prospered, but not without ups and downs.  By the time Avram’s son moved the company to New Jersey, the industry had grown to include hundreds of competing bicycle producers. Third generation CEO Arnold Kamler, however, inherited quite a different challenge, taking the helm after the industry had consolidated and moved offshore, leaving only four U.S. mass-market bike producers.

With the help of Governor Nikki Haley, Kamler opened a new plant in South Carolina.  Here, he set up a high volume operation with a positive approach to his workforce, all of whom he knows by name, and automation, with new machinery to take over pieces of the high volume production process.  It was a new approach to the challenge of reshoring.

Bumps in the road

Nevertheless, pre-pandemic Kent encountered big challenges.  The Toys R Us bankruptcy hurt the industry.  Even though Kent suffered a $7M loss, a set-back that Kamler still looks back on with questions, the company recovered. “Yes, we lost a lot of money by what we consider to be a bizarre bankruptcy.  Only six months after receiving a $3 billion loan, Toys R Us decided to close the doors.  It was unprecedented, never happened before.  We changed banks and have been treated very well by Truist bank and that helped us recover.”  

Tariffs on imported parts added to the industry’s challenges.  “The tariffs hurt us a lot initially as 95% of our products had additional tariffs of between 10 and 25%.  Half of these were removed late last year as exclusions were granted.  However, these exclusions expire in early August and there is no indication as to whether they will be renewed or not,” said Kamler.   For more on the tariffs, see:

                    TV clips on tariffs - 2019

1. https://www.youtube.com/watch?v=LhpchHFkC_I       CNN Kate Bolduan  May 10

2. https://www.youtube.com/watch?v=zlA9GfxgO1Y       CNN  Alison Camerata  May 14

3. https://video.foxbusiness.com/v/6042016423001/#sp=show-clips  FBN Liz Claman May 28

4. https://www.youtube.com/watch?v=ENWA8O7cGTY   CNBC  Brian Sullivan June 12

5. https://video.foxbusiness.com/v/6072041198001/#sp=show-clips     FBN Liz Claman  August 12

6. https://youtu.be/-rk_BpKqjL8    CNN Don Lemon  August 26

7. https://vimeo.com/user87970289/review/357004217/505081baa4    CNN Erin Burnett/Jim Sciuto  August 30

8.  https://video.foxbusiness.com/v/6088825064001/#sp=show-clips      FBN – Liz Claman Sept 23

9. https://video.foxbusiness.com/v/6116260716001/#sp=show-clips

A good side to the pandemic’s mass transit and social distancing, however, is that the public is turning to bicycles.  Sales are up as “people are using bicycles for a combination of social distancing and to avoid public transportation.”

“I feel like a rock star,” said Kamler.  “Kent bikes have been Walmart’s biggest item for the past five weeks, with unit dollar sales up 125%, double that of a year ago.”  Soaring sales made it easier for Kent to maintain its commitment to employees. When two employees tested positive, the plant shut down seventeen days for deep cleaning.  During that time Kent continued to pay all salaries. Two weeks later on re-opening with new strict protocols there have been no new cases.  Although the company considered and applied for a government loan, the application was withdrawn. 

For more than two months the New Jersey corporate headquarters also remained closed with employees working from home.

The Three Questions:

 1.         As head of a manufacturing operation, which changes have you had to make because of the pandemic?  Do you feel that the mission has changed because of the pandemic? 

Arnold Kamler:  Of course the first changes were for strict cleaning and requiring gloves and masks – and these need to be changed each day.  We already had required eye protection and this continues as well.  But the tough part for us is the new spacing to keep workers six feet away from each other.  It has forced us to slow the line down and probably caused about a 35-40% production cut, thus causing increased labor and overhead cost per unit of 40%.  As our USA production is less than 15% of our corporate cost, we are absorbing this and hoping for a cure and a vaccine to be developed soon.  We could have laid off workers but in the long term interest of our employees, we have had zero layoffs.

2.        What should US companies work on more now?  R & D, lean mfg methods, labor, robotics, IT, supply chain, or something else?

Yes – all of these but no different than before.  We feel eventually a cure and or vaccine will be developed and we are willing to do whatever is necessary to support our staff.  We are a private company and if we had to lose money to do this, we would.

3.     What do you think will happen next?  

 I am very optimistic.  The economy was on a huge rebound starting from 2014 and continued into the current administration.  Once the country gets healthy, the economy will bounce back.  I am more concerned with the health issue than the economic issue.

But you know, I would trade all of this in a heartbeat for healthy friends and neighbors.  In a heartbeat.