By JAN LARSON McLAUGHLIN
BG Independent News
Peloton is backpedaling on its promise to bring more than 2,000 jobs to Wood County.
Last August, Peloton broke ground for the proposed $400 million manufacturing plant in Troy Township in Wood County.
This morning, the fitness company announced it will be “winding down” development of the Peloton Output Park. The company plans to finish the external construction of the 1 million square foot plant, then sell both the building and the land.
“We are forever thankful to Wood County, Troy Township, JobsOhio, the Ohio Development Services Agency and the Regional Growth Partnership for welcoming Peloton to the community and for their invaluable partnership,” the company’s press team reported. “While we won’t be able to ultimately occupy the property, overall we not only had the opportunity to highlight the talent and resources Troy Township offers, but we also invested approximately $100 million in the area.”
The announcement was a disappointment to county officials.
“Obviously we were excited for the Peloton project,” Wood County Economic Development Commission Executive Director Wade Gottschalk said this morning.
Wood County and Troy Township had what Peloton was looking for – a strong workforce, infrastructure already in place, and a location that is one day’s drive from 60% of the U.S. population.
The plans called for the plant to produce Peloton bikes and treadmills, and employ an estimated 2,147 people. Peloton planned to invest $400 million in the plant that was expected to be up and running by the first quarter of 2023.
This was pitched as the first large manufacturing facility built by Peloton in the U.S.
But the company appears to have miscalculated the demand for its exercise equipment.
Last month, Associated Press reported that Peloton was temporarily halting production of its fitness products amid waning consumer demand.
Peloton sales had spiked as quarantined Americans bought at-home exercise equipment as a way to stay fit. At first, the company couldn’t keep up with demand. Then Peloton faced competition from companies selling cheaper bicycles and exercise equipment. In addition, many high-end gyms are offering virtual classes that once were Peloton’s biggest draws. And in recent months, Americans have been returning to their local gyms.
This morning, Peloton announced two steps it will be taking:
- Complete the exterior construction of the Troy Township plant, then sell the site.
- Reduce its workforce across nearly all business operations – resulting in the loss of 2,800 jobs. Corporate positions will be reduced by approximately 20%.
Peloton’s warehouse and delivery centers have reportedly had their hours cut to 20 hours per week amid lower demand for exercise equipment. And production of its bike and treadmill products have been temporarily halted.
While disappointed, Gottschalk remains optimistic about marketing the Troy Township site.
“We would look forward to marketing that and finding a new project,” Gottschalk said this morning. “Obviously a lot of that depends on who is in the market at any given time.”
“It’s still one of the best sites in Ohio,” he said. And a lot of companies could be interested in a million square foot building. “Hopefully we can land one sooner than later.”
Peloton had received the standard tax break from Wood County, of 100% abatement for 15 years. Gottschalk said the tax break was performance based. “They have to build and create jobs to get it,” he said.
Both Eastwood and Penta school districts had been promised revenue from Peloton, with Eastwood to get $389,000 annually and Penta to get $43,000 annually.
It’s possible that the tax abatement could transfer to a new tenant, Gottschalk said.
Last summer’s groundbreaking was packed with dignitaries celebrating Ohio’s coup in getting the Peloton plant.
“This is really big,” Ohio Gov. Mike DeWine said at the groundbreaking. “They could have taken this anywhere. But they came to Northwest Ohio.”
Peloton CEO and co-founder John Foley talked about the company’s start 10 years ago.
“We wanted to make sure everyone could prioritize their health,” in spite of their busy schedules, he said at the groundbreaking. “I’m very proud to bring jobs and manufacturing back to stateside.”
The company also announced that Foley has been removed as President and CEO. He will stay as executive chair of the board.
Barry McCarthy, who has held senior leadership roles at Spotify and Netflix and is a longtime advisor and board member at public and private technology companies, has been appointed CEO and President, Peloton announced.
