In a continuing effort to shift more production to its plant in China, Star Trac is shutting down its factory in California, resulting in close to 50 layoffs.
The Irvine, CA-based company announced in early April that it would shut down its factory in Murrieta, CA. Production was scheduled to stop May 31, but new Star Trac President Dustin Grosz says that deadline may get extended by a few more weeks. A total of 48 employees currently work at the Murrieta factory, which had produced Flex Fitness products.
In addition to those jobs that will be eliminated, Star Trac laid off about 25 employees from its corporate headquarters last month. Most of those employees were in departments such as sales, finance, accounting and IT, says Grosz, who adds that some of those departments are being consolidated with the StairMaster offices in Vancouver, WA. Star Trac owner Michael Bruno purchased the StairMaster and Schwinn brands from Nautilus Inc. last year.
“In Irvine, we’re going to continue to have our marketing team, our product development team, our warehousing and shipping of goods,” Grosz says. “We’re going to keep our showroom here for our customers to come into. We have all of our testing labs and everything else that’s still going to be here.”
Bruno has been in China for about a month overseeing the company’s production in its Xiamen, China, plant. Bruno, who bought Star Trac 10 months ago, said in March that he hoped 75 percent of the company’s production would be shifted to China by June and 90 percent would be shifted to China by the end of the summer.
Grosz says Star Trac should be close to Bruno’s percentage prediction by summer’s end. In the meantime, Grosz says the company will continue to be in a turnaround phase over the next couple of months. He says he does not anticipate more layoffs.
“We believe that we made the necessary changes with the decisions that we’ve made in the past 45 to 60 days,” Grosz says. “With those decisions, we feel very strongly that we’re going to be able to make the transitions and consolidate some of the functions and then be back to profitability and growth in the not-too-distant future.”
Grosz, who came from StairMaster to take over as Star Trac president after Mike Leveque resigned in March, says the company has gained some momentum after the International Health, Racquet and Sportsclub Association show in March—where it announced several international club agreements—and the FIBO trade show last month in Germany.
“A lot of the buying decisions for a lot of our customers had been made for the spring and summer, so therefore, we’re not going to be able to get the business for spring and summer,” Grosz says. “But as we go into the fall and winter, we’re starting to pick up that business that we’ve maybe lost in the past 18 months of downturn in our company. It’s coming back. It just takes time. We feel good about where we’re at in the process.”
Grosz acknowledges some of the mistakes the company has made in the recent past, mistakes the company is now trying to correct.
“We’ve lost customers, we’ve disappointed customers, but a lot of that can be easily fixed,” Grosz says. “What we failed at is not delivering on our commitments, not providing the product on time, not providing the parts when we have a quality issue. We’re making a lot of headway there. Are we where we want to be? No, absolutely not. We’ve got a lot of work to do. But we’re getting the traction we needed and the focus we needed.”