Friday, June 14, 2024

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Precor files plan to close Whitsett plant, lay off 123 employees

Precor, an exercise equipment manufacturing company with a plant in Whitsett, has notified the state Department of Commerce that it will close its plant at 5704 Millstream Road in Whitsett and lay off 123 employees this fall.

Precor has filed a “Worker Adjustment and Retraining Notification” (WARN notice) with the state commerce department, announcing its intention to permanently close its facility in Whitsett.  Federal law requires companies with at least 100 full-time employees to provide a minimum of 60 days’ notice of any planned closure that will result in mass layoffs.

Precor was bought out in late 2020 for $420 million by Peloton, which specializes in at-home internet-connected exercise bikes and treadmills, according to Supply Chain Dive, a manufacturing trade publication.  Supply Chain Dive reported last month that Peloton is struggling to sell some of its manufacturing assets after losing millions in revenue in 2022.

Peloton subsequently reported that it had not anticipated the risks of acquiring Precor.  Those unanticipated risks include: Precor’s past practice of operating in commercial markets that Peloton has little experience in; the 791 Precor employees based “in a number of countries around the world [who] are now Peloton employees”; and a failure to assess the magnitude of liabilities and other shortcomings in Precor’s business prior to acquisition, according to Peloton’s 2022 annual report.

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Precor had a total of 791 employees in 13 countries, with most based at the manufacturing plant in Whitsett and Woodinville, Washington, Peloton stated in its latest annual report to investors.

Peloton had experienced a rise in at-home exercise equipment sales at the height of the Covid-19 pandemic.

However, the company announced in July 2022 that it would abandon its efforts to bring manufacturing in-house and also would cut its U.S. workforce by about 21 percent (or 780 employees), from 3,723 to 2,943 employees, and would eliminate 500 positions in Taiwan, according to Peloton’s 2022 annual report.  Peloton also had announced in May 2021 its plans to build a manufacturing facility in Troy Township, Ohio, but has since decided to sell that property, according to the 2022 annual report.

The closure of the Precor plant in Whitsett permanent and takes effect at the end of October, according to the WARN notice that was filed with the N.C. Commerce Department Thursday, March 9.

The Precor plant is located on 33.34 acres of land that fronts I-85/40 and is owned by Rock Creek Investments, LLC, according to Guilford County’s tax department.

Guilford County tax records list the latest assessed value for the land at just over $1 million.  The latest assessed value for the business real property – which includes machinery/equipment, furniture, computers, improvements, and unspecified supplies – at 5704 Millstream Road is listed at $5.4 million, according to Guilford County’s tax records.

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