WOOD COUNTY, Ohio — Plans for Peloton's first U.S. factory to be built in Wood County were scrapped Tuesday as the company continues to lose revenue and fitness subscribers.
A Peloton spokesman confirmed to WTOL 11 that Peloton Output Park in Troy Township will be sold once external construction is complete. The company announced plans in May 2021 to build a $400 million facility on more than 200 acres.
Construction started last summer.
"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," a Peloton spokesperson said. "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 $90-$100 million in the area."
Peloton expects the move to result in $60 million in restructuring capital expenditures.
Wood County Economic Development Executive Director Wade Gottschalk said the news surrounding Peloton for "a while" signaled Tuesday's decision was a possibility. Still, he's confident the site will be occupied.
"Having a building there actually can help. Because for a lot of companies, the biggest hurdle is time. And having a building in place, or mostly in place anyway, can cut a lot of time off of their process."
Construction continued on the facility Tuesday morning. Northwest Ohio commercial real estate developer Brian McMahon thinks the location is still prime for a large company.
"One of the reasons Peloton picked that location is it has a lot of strength in accessibility and utilities," McMahon said. "It has the ability to get to rail. One thing in demand in our market is spec buildings, which can be easily adapted for someone who wants to be in this market."
McMahon said interest in Wood County from large companies is still as strong as it's ever been.
Wood County Commissioner Doris Herringshaw said all the infrastructure for the site is already in place.
"The key will be finding someone who needs that much space," she said. "
Officials had held high hopes for Peloton's impact on the region's economic development.
In the summer of 2021, Wood County commissioners agreed to give the exercise-bike manufacturer a 100% property tax abatement for 15 years and the Ohio Tax Credit Authority approved a 2.301%, 15-year job-creation tax credit for the Peloton project.
Plans last year called for the new factory to create 2,100 jobs.
JobsOhio President and CEO J.P. Nauseef released the following statement Tuesday:
"We are disappointed to hear of Peloton's announcement to wind down operations in Ohio. We are committed to working with Peloton and JobsOhio's partners in northwest Ohio to ensure that we create a bright future for this site and the incredible community that surrounds it. JobsOhio and the state of Ohio had committed performance-based incentives for the project, and with fiscal safeguards in place, no assistance has been drawn by the company. In the very near future, Wood County, Ohio, will boast a tremendous site that is ready for development and that will empower a company to move quickly to set up successful operations and create jobs for the dedicated and skilled workforce of Northwest Ohio. Ohio is experiencing once in a generation opportunity, and while we are disappointed in today's news, we are optimistic that Ohio's momentum is strong moving forward!"
On Tuesday, Peloton also announced CEO John Foley will be stepping down as part of a large restructuring of the business. The company plans to eliminate 2,800 jobs.
The company’s shares have been on a roller-coaster ride since the pandemic began, surging more than 400% in 2020 amid COVID-19 lockdowns that included gyms. Nearly all of those gains were wiped out last year as the distribution of vaccines sent many people out of their homes and back into gyms.
This week, there were reports that Amazon or Nike might buy the company and those that have pushed for the sale of Peloton continued to do so this week.
Peloton is looking to reduce its planned capital expenditures for this year by about $150 million. The restructuring program is expected to result in approximately $130 million in cash charges related to severance and other exit and restructuring activities and $80 million in non-cash charges. The majority of the charges will be recorded in fiscal 2022.
Peloton reported losses of $439.4 million in the last quarter of 2021, compared to a net income of $63.6 million for the same period a year earlier.
The Associated Press and WTOL 11's Jon Monk contributed to this story.