At Cybex’s four-year-old Owatonna, MN, manufacturing plant, workers powder-coat pieces of the strength equipment and Arc Trainers manufactured there. Photo courtesy of Cybex International.

As Star Trac moves its manufacturing from Irvine, CA, to mainland China, the spotlight has shown even brighter on that country as a location for fitness equipment manufacturing. China’s low labor costs have meant a slight advantage for companies that have manufacturing plants or partners there, some suppliers say, but as China’s labor costs continue to rise, that advantage may be dwindling. Does that mean that the U.S. manufacturing market will see growth?

Doug Johns, global marketing director at Precor, Woodinville, WA, says it could.

“In manufacturing in general, the trend is going to be that America will have a more competitive position than we have had,” he says.

However, rising Chinese labor costs were just one factor in the decision by Med-Fit Systems, Fallbrook, CA, to move its Nautilus manufacturing from Taiwan and China to its Independence, VA, facility earlier this year, says Dean Sbragia, CEO of Med-Fit Systems. Med-Fit bought that plant for $2.1 million from Nautilus after its purchase of Nautilus’ commercial business last year.

“It’s kind of the perfect storm right now—weak dollar, rising Chinese prices, rising energy prices,” Sbragia says. “To have control over our development, design, engineering, manufacturing and distribution all under one roof and absorbing that overhead increases our margins and allows us to be more competitive. The more volume we do through our factory, the more manufacturing variances we absorb, the more competitive we can be in this market. It all makes sense to us to utilize that facility to its fullest capacity.”

By the end of the year, all Nautilus products will be manufactured at its Virginia plant, Sbragia says. An analysis showed that by doing so, the company could make its products less expensively than (or at least be competitive with) Asian-made products. In addition, the move would help the company improve product quality and control inventory better without price increases for Nautilus’ domestic customers, Sbragia says.

For larger manufacturers, the cost advantages of manufacturing low-end cardio and strength equipment in Asia are lost at the high end, says Jim McIntyre, vice president of sales and marketing for Paramount Fitness, which is based in Los Angeles and manufactures most of its equipment there.

“Cardio and strength products designed for long-term performance in heavy use facilities require high-quality components and materials, which are costly regardless of manufacturing origin,” McIntyre says. “In addition, import costs for these high-end commercial products, as well as fluctuations in foreign currency exchange rates and material costs, can easily offset other cost advantages of manufacturing overseas.”

Despite the benefits that Nautilus and Paramount Fitness see in manufacturing in America, not every manufacturer can do so. For smaller companies without deep pockets, partnering with plants in Asia can be a great way to operate, says Scott Eyler, owner of SKE Consulting, St. Louis, a company that connects U.S. manufacturers with manufacturing facilities in Asia. Two up-and-coming Asian markets are Vietnam and Thailand, both of which still have low labor costs and are growing markets for apparel manufacturing. Like China and Taiwan, Vietnam and Thailand could take those skills and eventually translate them to equipment manufacturing—but only after they develop their infrastructure to support the transportation and shipment of commercial fitness equipment.

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