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Peloton says it will let Taiwan-based Rexon build all its bikes, treadmills

The web-connected exercise bike maker said on Tuesday that Taiwan-based Rexon will manufacture its products, allowing it to focus more on technology and content. Photo courtesy Peloton
The web-connected exercise bike maker said on Tuesday that Taiwan-based Rexon will manufacture its products, allowing it to focus more on technology and content. Photo courtesy Peloton

July 12 (UPI) -- Smart fitness equipment maker Peloton announced on Tuesday that it will outsource all of its manufacturing in a bid to turn around the company's financial woes.

Peloton said that it will stop making its own web-connected exercise equipment -- bikes and treadmills -- and instead turn production over to Taiwanese firm Rexon.

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The company already had an existing relationship with Rexon, but Tuesday's move expands that partnership and allows the Taiwan-based business to build all of its equipment.

Peloton announced earlier this year that it would cut about $800 million in annual costs to get control of production costs and company expenses. That included the elimination of about 2,800 jobs.

The company also said early this year that it would cease Bike production for a couple months and ended production of its more expensive Bike+ last December.

Peloton's equipment is unique in that it allows users to participate in exercise classes via streaming video. The company was founded in 2012.

"We are thrilled to be expanding our partnership with Rexon, a leading Taiwanese manufacturer with over 50 years of experience," Peloton Chief Supply Chain Officer Andy Rendich said in a statement Tuesday. "Rexon has been with Peloton for many years and is a proven partner for our global operations.

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"We plan to maintain a significant corporate and manufacturing presence in Taiwan with over 100 Peloton Taiwan team members who continue to play a key role in our engineering and manufacturing strategy."

Tuesday's announcement is part of a suite of moves that Peloton has made recently to improve its fiscal fortunes. It named former Spotify and Netflix executive Barry McCarthy as its new CEO in February, replacing founder John Foley in the post.

Founded in 1972, Rexon will become the primary manufacturer of the hardware for Peloton's Bike and Tread product lines. The company said the move will simplify its supply chain and allow it to focus more on technology and content.

"We are grateful for the opportunity to play an even greater role in the company's manufacturing and look forward to continued collaboration in the future," Rexon CEO Rex Wang said in a statement.

Some Peloton bikes were the subject of a recall last year due to potential danger for small children and pets near the machines.

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