[HN Gopher] Peloton to invest $400M to build its first U.S. manu...
___________________________________________________________________
Peloton to invest $400M to build its first U.S. manufacturing
facility in Ohio
Author : jbredeche
Score : 151 points
Date : 2021-05-24 18:26 UTC (1 days ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| snypher wrote:
| Hooray, a million square feet of treadmill and exercise bike
| factory. Anyone care to guess what kickback or tax credit Ohio
| handed over for this?
|
| Edit: it was $47 million. See you all in 6 to 12 months when this
| goes the way of Foxconn.
| Animats wrote:
| US$24K per job is not too much. The upper limit for cost-
| effectiveness for job subsidies is maybe $30K. The main problem
| is making sure the benefits are not paid out until the jobs
| have been created.[1]
|
| [1]
| https://www.timesfreepress.com/news/local/story/2017/sep/17/...
| ericmay wrote:
| The level of cynicism is concerning.
|
| But also (as an Ohio resident) there isn't really all that much
| in the way of incentives for a business to move here. The state
| has to do _something_. But this won 't go the way of Foxconn -
| mark my words, because it's not nearly as complicated to set
| up.
|
| Like it or not, the future state for not just the world but
| individual states will be competition for jobs and revenue, so
| they're going to have to give companies a good reason to locate
| to their sovereignty. Tax advantages are a tool they can use
| (among other things), and unlike the federal government the
| state governments (at least Ohio) have to actually balance
| their budgets and spend somewhat responsibly - so they can't
| just do whatever they want and have to be strategic. Not
| collecting taxes is fine because if Peloton wouldn't locate
| here without that nothing is really being lost. At least there
| are jobs.
| dghlsakjg wrote:
| There's a lot of options that aren't "give corporations a
| $47mm handout".
|
| What if they put that money into better technical education
| facilities, or tax credits for Ohio residents paying off
| student loans. Increasing services so that people working
| remotely will want to come.
|
| I feel like a place with a low cost of living that attracts
| highly talented people for a variety of reasons is a better
| long term investment than a treadmill factory. If I was
| looking to open a satellite office, I can tell you that
| proximity to a treadmill factory is pretty low on the list.
|
| Tax breaks like this are tactical, state and city governments
| need to be strategic. While tactics like tax breaks can be
| part of a strategy, it doesn't seem to be a great one since
| it doesn't build "moats", and all it takes to be defeated is
| the next state over offering something slightly better. Ohio
| of all places should know that manufacturing facilities can
| be closed on short notice for reasons they have no control
| over.
| ericmay wrote:
| > What if they put that money into better technical
| education facilities, or tax credits for Ohio residents
| paying off student loans. Increasing services so that
| people working remotely will want to come.
|
| Well, a few issues. This is money that has to be collected
| and spent - more taxes or a change in the budget. Not
| collecting taxes on new construction isn't money the state
| has to spend, it's just money it isn't collecting. The
| alternative, at least in this case is that this factory
| just isn't built in Ohio. It wouldn't affect doing other
| things to attract residents. Frankly, I think we should
| create large-scale corporate subsidies to relocate jobs to
| the state. If you build your facility or office here, no
| corporate tax on that entity. More jobs and more money and
| revenue from other taxes will be enough.
|
| > I feel like a place with a low cost of living that
| attracts highly talented people for a variety of reasons is
| a better long term investment than a treadmill factory.
|
| Well, the cost of living isn't all that low, and where it
| is low no talented person without connections to the state
| wants to live here. Why live in Ohio when you have the
| _exact_ same thing almost everywhere else in the country,
| from Oklahoma to Iowa, to Indiana to Michigan. There aren
| 't many unique reasons to locate a business here,
| unfortunately. There are plenty of talented people here,
| though many leave for other locations.
|
| > If I was looking to open a satellite office, I can tell
| you that proximity to a treadmill factory is pretty low on
| the list.
|
| Sure, but you're also generally not opening a satellite
| office here unless you have a very good reason, and that
| reason would have nothing to do with the existence of a
| treadmill factory. In other words, Ohio is very low on your
| list, so if you have a reason for being here it's a very
| good one that this won't affect.
|
| > Tax breaks like this are tactical, state and city
| governments need to be strategic. While tactics like tax
| breaks can be part of a strategy, it doesn't seem to be a
| great one since it doesn't build "moats", and all it takes
| to be defeated is the next state over offering something
| slightly better. Ohio of all places should know that
| manufacturing facilities can be closed on short notice for
| reasons they have no control over.
|
| Yes. We should grow a coastline, build some mountains and
| ski resorts, and have great weather instead.
|
| I agree that state and city governments need to be
| strategic, but you're paining a mutually exclusive picture
| where one doesn't exist.
|
| Personally I think the only thing we can do is create
| walkable neighborhoods with mixed-use development - make
| Columbus, Cleveland, Cincinnati, and other towns and cities
| more like places in Europe where people would actually want
| to live. Otherwise Ohio is pretty indistinguishable from
| most of the country.
| Judgmentality wrote:
| A company getting a tax break is not in the same league as what
| happened with Foxconn in Wisconsin. That was a truly special
| example of wild incompetence and corruption.
|
| https://gimletmedia.com/shows/reply-all/wbhjwd
|
| https://www.theverge.com/2018/12/6/18128133/foxconn-deal-wis...
|
| This is just a company that actually wants to build what
| they're saying they'll build (at least I believe Peloton wants
| to build treadmills and exercise bikes because that's what they
| do, I have no idea why anyone would build a "state of the art"
| facility for a technology that's already been largely obsoleted
| as was the case with Foxconn and LCD screens) and hoping for a
| tax break.
| jacob2484 wrote:
| What's the alternative? A new facility is better than a
| facility outside the US.
| catillac wrote:
| It won't happen here, but in the Foxconn case a better
| alternative would have been to not grant the incentives and
| "lose out" on Foxconn coming to Wisconsin.
| ipaddr wrote:
| Better for whom the tax payer?
| aml183 wrote:
| If you want to learn more about tech in Ohio. Check out OhioX. It
| is the trade association for the technology community in Ohio.
| They are doing some great work on trying to attract and retain
| tech talent in the region.
|
| https://www.ohiox.org/
| mvzvm wrote:
| This is great. Really looking forward to learning more about
| this. I wonder how automated it will be.
| fuzzer37 wrote:
| Seriously, a million square feet to build stationary bikes with a
| screen attached? Does anyone have any predictions when this
| market will be saturated? It's not like exercise equipment is a
| recurring purchase.
| outside1234 wrote:
| You are thinking with a static mindset.
|
| Its clear that they are thinking of a broader market and
| company.
|
| Its not hard for me, for example, to see how they can scale
| this to rowing and treadmills and beyond given their strong
| brand.
| Closi wrote:
| I suspect that your assumption that this facility is just to
| make stationary bikes might be a little off.
|
| Part of this investment is likely to be expansion of their
| product range.
| ipaddr wrote:
| Did you think they were only going to make 10 a day? Depending
| on volume a million square feet might not be enough.
| Grakel wrote:
| This is like replacing a CRT with a high def flat screen.
| There's millions of them out there in gyms and schools and
| hotels, and these are WAY better.
| cl0ckt0wer wrote:
| But you'll have to buy a new bike in a couple years when they
| stop updating the software on the old ones.
| gregmac wrote:
| As a consumer, this is the bit that drives me crazy about
| most of this stuff: a part with a lifecycle of a few years
| (CPU) is attached to a part with a long lifecycle (cycle,
| fridge, display/TV), thus making the whole thing effectively
| have the short lifecycle.
|
| I wish they'd use something like a Pi CM4 that could be
| upgraded at least once or twice over the 10+ year lifecycle,
| but I also understand why this will never happen.
| RankingMember wrote:
| The service is the real product here - the equipment just helps
| with lock-in. They do seem to be spending the money in the
| right places- their instructors and production are second to
| none.
| giglamesh wrote:
| I recently watched a preview for an Apple Fitness spin class
| and I could not believe how cheesy and superficial it
| appeared. Apple! I never really appreciated how good Peloton
| is until Apple helped me see how bad it could have been.
| matwood wrote:
| IMO, Apple goofed by not buying Peloton to bootstrap their
| Fitness they same way they bought Beats to bootstrap music.
| awa wrote:
| People are used to paying $100+/mo for a Gym, if Peloton can
| convince them to work out at home thats worth the $2500 they
| charge every 3 years or so. They can make the equipment free or
| cheap with multi-year subscriptions.
| sumtechguy wrote:
| My wife was dumping 50-100 a month into a gym. I said "I will
| buy you whatever equipment you are using there and if it
| breaks you can go back". That was 15 years ago and the stuff
| is still in good shape and used daily.
|
| Renting makes sense if you can not afford it at all or only
| will use it for a small period of time. If you are going to
| use something long term you are usually better off buying
| that thing.
|
| Also try to buy used equip. Many times people realize they
| did not really want to do it at all but made an excellent
| coat hanger. Usually it is in very good condition and you can
| save a decent amount of cash.
| asdff wrote:
| I think also there is this idea that it's the machine or
| the equipment you need, but all you need is the movement
| and resistance. When the pandemic hit I bought resistance
| bands instead of expensive free weights. $60 later I'm
| squatting, deadlifting, overhead pressing, curling, bench
| pressing, shoulder pressing, calf raising, lat raising,
| doing everything really with a rubber band instead of a
| hunk of metal, doing the same movements and getting the
| same pump for half the price of a monthly gym membership
| around here.
| sumtechguy wrote:
| I agree. For me it was mostly just to stop her renting
| the machine. I personally just use simple stuff you learn
| in PE and some isometrics. Using bands would be a nice
| augment to that.
|
| You do not need a lot of money to exercise. You can get
| in cheap. Mostly it is about setting up a routine and
| doing that. Basically 'procrastination is the thief of
| time' and 'by repetition I get things done'.
| cactus2093 wrote:
| Just goes to show there's no winning with internet opinion.
| Building stuff overseas at the lowest possible price is
| exploitative and sacrifices American jobs, but then when a
| company wants to build more expensive, higher quality stuff in
| the US it's a waste of resources.
| colinmhayes wrote:
| Well yea, different people have different opinions. I think
| globalization is a good thing that provides cheap goods and
| better jobs for the global poor. Others think globalization
| is a bad thing that offshores American jobs and exploits
| workers. I don't think either side is wrong.
| cactus2093 wrote:
| > Well yea, different people have different opinions.
|
| Yes but the fact that either extreme can bubble up to the
| top such that if you say anything you immediately get hit
| with the strongest disagreement, is I think one of the
| hallmark properties and biggest problems with the
| internet/social media
| fighterpilot wrote:
| The idea that overseas manufacting in poor countries is
| exploitation is such obvious BS, given that you can observe
| the hundreds of millions that were lifted from poverty as a
| direct consequence, and without which would still be in
| poverty.
| TimPC wrote:
| Removed by poster. Comment had out of date information.
| aspir wrote:
| Is that what they already did?
| https://www.nytimes.com/2021/05/05/business/peloton-recall-t...
| TimPC wrote:
| Thanks I missed the news they finally did this.
| ojbyrne wrote:
| Isn't that what this is:
| https://www.cpsc.gov/Recalls/2021/peloton-recalls-tread-plus...
| ydnaclementine wrote:
| Shoutout to Ohio! Interesting they chose Troy Township
| (population 4k), wonder if they plan on employing the entire
| city.
|
| I'm unfortunately a little skeptical, but I hope it works for the
| city/state and Peloton. If you find the idea of new plants
| opening in the US interesting, I recommend the documentary
| American Factory. It is about a plant owned by a Chinese company
| opening in Ohio (Dayton), so the circumstances are completely
| different from this. It explores the clash of cultures and
| conflict of attitudes of the employers and employees. I liked how
| they dove into some employees and employers lives and
| circumstances.
|
| I thought it was interesting, but I'm a little biased because I
| happened to be living near Dayton when it was filmed, and had no
| clue this type of thing was going on.
| abnercoimbre wrote:
| I don't know if this does anything for you, but American
| Factory was actually produced by the Obamas. Their first
| Netflix documentary.
|
| Politics aside, I thought that was a pretty neat tidbit.
| newhotelowner wrote:
| > wonder if they plan on employing the entire city.
|
| Population of Miami county is 100k. People in this part of the
| country travel 30-45 miles to work.
|
| https://www.google.com/search?q=miami+county+population
|
| They always talk about upto x number of jobs. Actual numbers
| are usually lower.
|
| There are close to hundred Japanese companies/factories in
| Ohio.
| baybal2 wrote:
| > Shoutout to Ohio! Interesting they chose Troy Township
| (population 4k), wonder if they plan on employing the entire
| city.
|
| I bet no, and I bet they also went trying the cumbersome
| robotisation route yet again.
| aynyc wrote:
| _$400 million_
|
| _1 million square feet_
|
| _more than 2,000 jobs_
|
| Given how much automation is used in modern factory, I'm
| surprised it'll create that many jobs. Given the products are
| fairly consistent, wouldn't the production lines be robots?
| jjk166 wrote:
| I mean, it's still just 1 person every 500 sq ft. That's a
| pretty sparsely populated factory.
|
| And nowadays automation rarely reduces the number of employees
| substantially. The days of a worker doing one very simple task
| day in and day out are long gone. Most automated manufacturing
| lines are designed with every step having an associated
| operator who can load material in and out (which is a very
| difficult task to automate generally), which also keeps a
| person conveniently located for handling errors, cleaning,
| light maintenance, handling edge cases, assisting people at
| neighboring workstations, etc. In fact, automation actually
| often requires more labor as robots tend to be slower than
| human workers and prone to various errors which humans would
| simply deal with. Their advantage though is in automation's
| consistency, which allows for much more efficient supply chain
| management. While some automated systems can be made to
| outperform human operators, this is usually prohibitively
| expensive.
| jcrawfordor wrote:
| Extensive production automation is really expensive. You'd
| probably be surprised how much electronics and consumer goods
| manufacturing is still largely manual. In particular, high
| automation gets you into pretty extreme retooling costs
| whenever you change your designs.
| baybal2 wrote:
| If feel you know what you are saying.
|
| People saying automation will save American manufacturing
| have zero experience with real manufacturing.
| underwater wrote:
| They usually fudge the numbers for number of jobs badly. For
| example you might find that construction requires 1,500
| different people for varying lengths of time, and the factory
| employs 500 people on an ongoing basis.
| aynyc wrote:
| That's more inline from what I've read but is that true in
| general?
| baybal2 wrote:
| $400M for a bicycle factory?????
|
| That's a lot of money...
|
| People in other countries can open a few car factories with money
| like that.
| ipaddr wrote:
| Creating a factory in the cheapest geographical region ends up
| costing more in shipping per car plus the duties for importing
| a car.
|
| 400 million in some locations would be bigger than the annual
| budget for the country. But in some locations you wouldn't even
| get a call back trying to buy a basketball or baseball team or
| soccer team.
| Closi wrote:
| A modern large car plant starts at $3bn-4bn then goes up from
| there depending on how much of the manufacturing you are going
| to do yourself, so it's more like 10% of the cost of that.
| baybal2 wrote:
| Just two weeks ago, I've been in talks with a co who is in
| the process of building a car factory, and possibly a second
| one in a few years.
|
| And not of a OEM kit assembly type, but a proper on with body
| shop, and everything. Price? A bit more than $110M
| Closi wrote:
| Well clearly there is a large variety in size and scope,
| which is why I tried to say a "large" car plant (by which I
| meant reasonable complexity and manufacturing volume).
|
| Clearly you can open a very small car factory for $1
| million with a body shop if you want to.
| olyjohn wrote:
| I don't get what this means? What's an "OEM kit assembly
| type" car factory?
|
| And what do you mean a body shop? Do you mean like a
| fabrication facility where they form body panels, and then
| do paint after assembly?
|
| Body shops are where they do repairs for collision and
| dents after a car is already completed. A domestic factory
| might have one to fix flaws in the paint and body incurred
| during manufacturing... Cars imported from overseas get
| bodywork done at the port, generally due to shipping
| damage. (Yes your brand new car may have already been
| repaired.) It's not really the big part of building a car
| at all though. I feel like you might be missing something,
| or misunderstanding something. Or maybe it's just me.
| baybal2 wrote:
| > I don't get what this means? What's an "OEM kit
| assembly type" car factory?
|
| A type of a factory that does assembly only from parts,
| without making parts themselves
|
| > And what do you mean a body shop? Do you mean like a
| fabrication facility where they form body panels, and
| then do paint after assembly?
|
| I mean a shop where they _manufacture_ a car body, and
| its parts.
| mediaman wrote:
| There is no way you're building anything but a very small
| car factory for $110m. Maybe this involves a long of hand-
| work for low volume niche vehicles? Specialty government
| vehicles?
|
| Normal car factories run $500m for something smallish to
| $4bn for a facility with more volume.
| baybal2 wrote:
| It's in top 100 electronics companies globally, aiming to
| join top 20 this decade, and you can easily do.
|
| Yes, the panelling lines is half the cost, and assembly
| would be mostly manual for the beginning.
| ivalm wrote:
| top 100 electronics company in car space means it is
| extremely small/doesn't produce meaningful amount of
| cars.
| caycep wrote:
| I wonder if a lot of it is also going to supplier/worker
| infrastructure...Apple tried it in limited ways but I think a
| lot of it fell through due to, either US workers not having
| the right sort of technical education, vs. all the
| infrastructures for small parts, prototyping, etc, still
| being in China and the US factory was often stuck waiting for
| things to be shipped back
| alexaholic wrote:
| Will the new factory fix their treadmills?
|
| Re https://news.ycombinator.com/item?id=26846641
| Zenst wrote:
| Well, the choice of location may offer some legal preference in
| case of future faults. I'm aware that Ohio has a safe harbour
| law to protect companies against data breach if they comply
| with certain criteria they outline. So may well be other such
| safe harbour legislation that would be favourable for liability
| mitigation and with that, insurance liability reduction.
|
| So may well be many nuances at play in this selection, or might
| even be down to some CEO living nearby and just wants to pop a
| made local/USA sticker on the product.
|
| Time will tell.
| alexaholic wrote:
| Dear people who are downvoting me: I'd appreciate if you shared
| some thoughts in the comments. Otherwise, you're just being
| meaner than I was in my original comment.
| sremani wrote:
| Never Complain about downvoting - even if you think its
| unfair, its counter productive. Also, refraining (from
| complaining) will build the disagreement muscle and will
| check 'approval seeking' instincts.
|
| my 2 cents.
| catillac wrote:
| I didn't and don't appear to be able to downvote, but your
| comment appears super orthogonal to the title subject, far
| enough afield to be considered trolling or just trying to
| drag Pelotons name through the mud in unrelated discussions.
| That to me would be what I would speculate led to the
| downvotes.
| [deleted]
| renewiltord wrote:
| I've responded to a few of these "share if you're downvoting"
| comments and usually they're just a vehicle for an argument.
|
| But whatever, I'll do it this time too. I downvoted your
| comment because it bored me with how repetitive the idea it
| expresses is. I don't need to go into every Apple thread and
| be reminded they have a walled garden, every Microsoft thread
| and reminded of their antitrust stuff, every Peloton thread
| and reminded of the treadmill. It was mainstream news in the
| US, dude.
|
| I have only so much time and I don't want to spend it reading
| the same thing over and over again.
|
| Hence a downvote for boring me.
| tw04 wrote:
| As I said in that thread: there was never anything wrong with
| their treadmills. They function exactly like all of their
| competitors treadmills WRT: dangerous for pets and small
| children.
|
| On top of the safety key which was easily removable, they've
| now added a PIN on top - so if pulling out the magnetic key is
| too much effort you don't even have to do that.
| alexaholic wrote:
| It's not the function, but the form that's wrong with those
| treadmills
| ibero wrote:
| In that very thread the top comment thread is specifically
| about the treadmills lacking a "guard or plastic covering on
| the bottom that stops the tread from pulling something
| underneath."
|
| that too me is something that would fall under a "factory
| fix."
| tw04 wrote:
| Which was a silly suggestion, and if you look at their
| competitors (nordic track being the primary) - they have no
| such plastic guard. Their fix is a pin, you can return the
| treadmill if you don't like that option.
|
| The only thing that plastic guard will do is create a spot
| for clothing and fingers to get caught.
| fastball wrote:
| Yes, a plastic guard creates opportunities for catching
| fingers and clothing, but (unsurprisingly) people think
| this is preferable to their child's head getting caught
| in the treadmill[1]. A child was killed by one of these
| things.
|
| It is absolutely a massive design flaw that this
| treadmill lacks a protective guard and/or an automatic
| cutoff that triggers when it sees an unexpected level of
| resistance. You know, like if a child's head gets caught
| in it.
|
| [1] https://www.youtube.com/watch?v=onXNnlCYJ4Y
| tw04 wrote:
| Which, again, happens with all treadmills, because they
| are dangerous. Which is why there is a security key and a
| giant warning to keep small children and pets away from
| it.
|
| https://www.dailymail.co.uk/news/article-4350594/Girl-3-s
| eri...
| fastball wrote:
| It doesn't happen with _all_ treadmills, it happens on
| treadmills without a guard. You pointing to other flawed
| designs doesn 't make Peloton's design less flawed.
| tw04 wrote:
| I'd challenge you to find me 10 treadmills that have the
| guard you speak of. I have personally looked at probably
| 2 dozen treadmills in my life while shopping. Run on
| hundreds in gyms across the globe. I can't think of a
| single treadmill I've ever come across with a plastic
| guard across the bottom. I have no doubt a few exist but
| I would be absolutely shocked to find out they exist in a
| meaningful enough number to be anything but a rounding
| error.
| fastball wrote:
| I'd challenge you to do the opposite, because my
| experience is apparently the antithesis of yours. I have
| run on treadmills in gyms all over the world as well and
| I can't remember using a single one that didn't have
| better protection from sucking small things into it than
| the Peloton. Every treadmill I've used (as far as I can
| recall) either had a much more enclosed back or a
| (usually metal) bar to prevent exactly the situation that
| occurred in the video I posted.
| theli0nheart wrote:
| You are engaging is incredibly irresponsible behavior, and
| your claim is untrue. Peloton's treadmills have an elevated
| backside and no under tread guard to prevent being pulled
| from underneath the machine. Kids have died from this defect.
| You are threatening the safety of young children by helping
| spread this lie.
| dang wrote:
| Please make your substantive points without falling into
| the flamewar style and especially without escalating to
| personal attack. When someone else is wrong, it suffices to
| supply correct information.
|
| https://news.ycombinator.com/newsguidelines.html
| theli0nheart wrote:
| I knew I'd probably get flagged for this, and I'm sorry
| for devolving this thread. A close friend's child was
| severely maimed as a result of this defect, so when
| someone with nothing at stake shares an opinion that
| "nothing is wrong", it struck a nerve. Only sending love.
|
| Edit: This is the first time in over a decade on HN that
| I've posted an apology and been downvoted for it. Is this
| kind of followup against site guidelines or discouraged?
| I'm trying to understand what I've done wrong here. This
| feels incredibly toxic.
| dang wrote:
| I'm sorry to hear about your friend's child. That would
| be the kind of detail that would make the original
| comment much more meaningful and relatable, though of
| course it's also a sensitive thing that one might not
| want to include.
|
| I wouldn't worry about the occasional errant downvote; if
| it isn't a noticeable pattern, it's best to remember that
| misclicks are a thing, and just move on. People will
| usually give corrective upvotes in such cases (https://hn
| .algolia.com/?dateRange=all&page=0&prefix=true&sor...).
| If it does become a noticeable pattern, then it's best to
| reflect on what in one's comments might be giving rise to
| it, because the odds in that case are that there's
| something worth adjusting.
| tw04 wrote:
| I'm not, because I remove the safety key when I'm not using
| it. It takes literally 1 second, it's a magnetic key. The
| amount of effort to install and remove it is a fraction of
| what it takes to tie my shoes before a run.
|
| If someone leaves a loaded gun on the kitchen counter and
| leaves it for an unsupervised child to play with, do you
| blame the gun manufacturer, or the parent?
|
| https://www.dailymail.co.uk/news/article-4350594/Girl-3-ser
| i...
| ipaddr wrote:
| You do in some places. Blame the gun for existing.
| conk wrote:
| I'm surprised they don't already have a North America facility
| for final assembly. The idea of shipping finishes treadmills and
| exercise bikes just seems impractical and expensive.
| JoblessWonder wrote:
| FWIW, they don't ship finished bikes or treadmills to
| customers. There is a final "assembly" that takes place in the
| owner's home. Just putting the pieces together, nothing too
| intense and lasts maybe 30 minutes.
|
| I got mine before COVID, but I know that it was a big to-do
| during COVID because everyone wanted a bike but people didn't
| want strangers coming in to their houses to install them.
| (Understandable at the time.)
| asdff wrote:
| Most bikes you buy online are like this. The bike shop puts it
| together for you.
| jdeibele wrote:
| My wife ordered an electric bike about a year ago from
| Strom/Stroem and it finally showed up a couple of weeks ago. I
| did the "final assembly", which was attaching the handlebars
| and front wheel. The hardest part was putting a plastic cover
| over the 5 cables on the downtime. That took two people, one to
| hold the cables while the other snapped the cover in place.
|
| The bike was designed in Denmark but the box came from
| Thailand. I would guess that ocean shipping for Peloton from
| China to Los Angeles or Long Beach and then truck or rail from
| there to Portland is slightly cheaper than just truck or rail
| from Ohio but probably not enough to matter.
|
| I'd never tried an electric bike before. I can see why people
| use them instead of cars. It's pretty awesome.
| Theodores wrote:
| I am impressed that they have turned a low volume product in the
| cycle trade into a cash cow. Their products get used and were
| much loved during lockdown.
|
| But do they sell in the Netherlands? Point being that exercise
| can be built into your life, cycling to work, the shops or to see
| friends and family.
|
| As much as I am impressed by the Peloton product, here I am right
| now in a nature reserve with ample birdsong, having taken 45
| minutes to get here by foot with my flask and phone. I am not
| likely to buy their products, my real bicycle cost a fraction of
| a treadmill and it actually gets me from A to B as do my boots.
|
| There is something wrong when mankind is buying SUVs and these
| glorified hamster wheels.
|
| I only saw a few regular dog walkers on my stroll today but they
| are neighbours and I said hello. I don't want a virtual hello on
| a hamster wheel, thanks.
| RC_ITR wrote:
| Hey - if you really are where you say you are, put down your
| phone and disconnect for a bit.
| gamblor956 wrote:
| Peloton sold well during the pandemic precisely because people
| _couldn 't cycle to work,_ or go to shops, or the gym, or see
| friends and family.
|
| Moreover, having a Peloton does not conflict with _also_ going
| outside for exercise; most of the Peloton users I know engage
| in outdoor activities like (trail) running and mountain biking
| and have the machine because it 's convenient to just hop on
| whenever.
|
| There is something wrong when a man thinks that a slow stroll
| through a nature reserve constitutes anything even remotely
| close to the type of exercise one gets in a cycling class.
| Theodores wrote:
| If I am on my way to work I am motivated to not be late. I
| can truly go for it and reliably give myself the least amount
| of time for the journey because it is a bike and traffic or
| schedules of trains or buses matter not.
|
| If I am on a glorified hamster wheel I have none of that
| motivation. I also lack the exhilaration from having
| survived. It means nothing to me.
| tw04 wrote:
| I find this thread fascinating. Everyone acknowledges we need
| solid manufacturing jobs to return to the US to help create more
| middle-class jobs. Peloton makes this announcement and it's
| nothing but sarcasm and snark. I can't tell if it's just
| responses from people that are all in Silcon Valley and
| completely oblivious to the plight of Midwest Americans, or
| people that are just being mean for the sake of being mean.
|
| So I'll say: kudos to you Peloton. Subsidy or not, providing some
| much-needed jobs to the Midwest. They could have just as easily
| setup the factory in Mexico to reduce labor costs, but didn't.
| MeinBlutIstBlau wrote:
| Might I bring up the Foxconn factory in WI...
|
| As a midwesterner, I'll believe it when it's built. Otherwise
| to me it's just another means of washing bribe money somehow.
| SQueeeeeL wrote:
| I remember hearing the governor of WI so proud of
| "WisconValley" as he dubbed it. And it was all basically an
| elaborate tax scam by FoxConn which sucked up a bunch of tax
| money and basically evaporated.
| missedthecue wrote:
| Foxconn didn't get paid cash up front. The tax breaks are
| on earned income over the next several decades. They didn't
| earn any income. They didn't get any tax breaks.
|
| Yes, the state of Wisconsin sunk some money into
| infrastructure in the area, but that just means
| infrastructure got built in Wisconsin. That's not profit
| for Foxconn.
| valleyer wrote:
| Good points. So what did Foxconn gain? Or was it really
| just a slip-up?
| DiabloD3 wrote:
| It was a slip up in the sense that Foxconn didn't get to
| go home with the money, since there was hardly any up
| front.
|
| Foxconn is known for the, uh, con, so a lot of industry
| insiders weren't surprised this entire thing played out
| the way it did.
| c618b9b695c4 wrote:
| >but that just means infrastructure got built in
| Wisconsin.
|
| Quite a bit of the infrastructure goes nowhere -it only
| benefits a factory built out at that location. As a
| Chicago resident who sometimes visits Milwaukee, I will
| personally note that the interstate construction was
| horrible and ripped up roads that had been completed just
| a few years prior.
|
| To say nothing of the people that lost their homes to
| eminent domain.
| matwood wrote:
| Everyone knew the Foxconn plant was a joke when it happened,
| and was mainly to get Trump off their backs by giving him a
| photo op.
| tw04 wrote:
| Foxconn has a long history of doing exactly what they did in
| Wisconsin - over and over and over again. That's ignoring the
| fact their initial claim of investing $10 billion was absurd
| on its face.
|
| Peloton has a very real financial incentive to do this.
| Treadmills and bikes are HEAVY, and as they called out in the
| article the demand has outstripped supply and rush shipping
| from overseas has been extremely expensive for them.
|
| Foxconn's reasoning was essentially: we don't want to be
| caught up in Trump's trade war so we'll say we're building
| this factory and get a bunch of tax breaks.
| nomoreplease wrote:
| > Might I bring up the Foxconn factory in WI...
|
| You may, but might I mention those are different
| circumstances? In one case, it's a foreign company and a
| government leaders making grandiose statements with little
| action.
|
| In this example, it's a publicly traded US company that's
| making the move to control their own supply chain that was
| affected by foreign manufacturing. They stated they intend to
| break ground this summer. Could you wait a few months to see?
| ibero wrote:
| You are referring to 2 comments both heavily downvoted.
| iaHN wrote:
| I know the phrase gets overused but that would be a prime
| example of virtue signaling.
| president wrote:
| I don't agree with the comments in question but downvoting
| them to oblivion is a bit harsh and uncalled for. It's like
| that scene from the high school movie trope where a group of
| kids tells another kid they can't sit at their lunch table.
| dang wrote:
| That would be more like downvoting an account or a person.
| Downvoting a comment simply signals that there's something
| wrong with the comment. If the next comment is fine, it's
| welcome at the lunch table.
|
| It's true that comments sometimes get downvoted unfairly,
| but I'm not seeing that in this thread. In such cases,
| though, the thing to do is give them a corrective upvote: h
| ttps://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor
| ....
| mediaman wrote:
| As of this writing, the majority of root-level comments are
| some mix of extreme cynicism and knee-jerk reactions. But
| you're right, at least they're downvoted.
|
| I think the reason is that most of HN is not very
| knowledgeable of manufacturing generally (one commenter was
| shocked at spending $400m on a factory), combined with hatred
| for Peloton (for whatever reason) specifically.
| the_only_law wrote:
| I'll bite: are the majority of jobs going to support middle
| class lifestyles. I used to live in a town where there was a
| decent amount of manufacturing and your basic "machine
| operator" was probably getting paid less than what retail
| companies are offering right now.
| slver wrote:
| > it's nothing but sarcasm and snark
|
| The average fella will always want to just drink a beer with
| friends and badmouth the politicians, their boss, a few
| celebrities and some rich people. Forums like this one are just
| the electronic version of it.
|
| It doesn't matter.
|
| That said, look for Peloton having solid business reasons to do
| this, maybe even tax subsidies and the like. A CEO may have
| their best intention to help America and create jobs and so on
| good things. But still ultimately it has to also make business
| sense, because they answer to a board and the board answers to
| shareholders.
| lotsofpulp wrote:
| >because they answer to a board and the board answers to
| shareholders.
|
| Because customers will purchase alternatives that are 5%
| cheaper.
| unixhero wrote:
| I bought one that does not come with a monthly
| subscription.
| lotsofpulp wrote:
| I was referring to people knowingly choosing to purchase
| products made with cheaper labor from overseas over more
| expensive products made with domestic labor/environmental
| regulations.
| brandonmenc wrote:
| Plenty of people will spend an extra 5% to buy something
| Made in the USA.
| lotsofpulp wrote:
| The lack of manufacturing capability in the US for
| consumer products shows that either it's more than a 5%
| premium and/or "plenty of people" is an insufficient
| amount for large scale businesses.
| slver wrote:
| That's fine. I wasn't trying to strike a cynical tone.
|
| A business is a business. It has to make choices that make
| business sense.
| lotsofpulp wrote:
| I was not either. I just like to point out that people
| like to blame executives and shareholders and owners, and
| yet it is the country as a whole knowingly voting with
| their dollars for cheaper products made with cheaper
| labor from overseas that enable those businesses to
| succeed (and consequently the businesses using domestic
| labor to fail).
|
| So a CEO answers to a board answers to shareholders
| answers to the collective population of buyers, which is
| us.
| xsmasher wrote:
| The comments I see are mocking the product as rich-people toys;
| completely ignoring the software/services side of the equation.
|
| We wouldn't see the same snark if it was a Razer mouse factory,
| even though that's also rich-people toys, because it's more
| line with average HN user's interests.
| elzbardico wrote:
| We should be glad we keep finding ways for the uber rich to
| spend at least some of all the money they've been hoarding
| the last 20 years.
| foxyv wrote:
| I always hesitate to praise new plants in the US. They added a
| Sketchers distribution center in my home town and they just
| closed the other locations laying off a ton of workers. It was
| so automated it replaced a couple other plants with less than
| half the workers that were laid off. With the tax breaks it was
| given, it was a net negative for the city even accounting for
| the jobs it "Made".
| onepointsixC wrote:
| Unless there were ridiculously excessive tax breaks, I fail
| to see the issue. Where as they previously had a greater
| number of workers doing the same thing, they now have fewer
| workers who are more productive. More productive workers
| could receive higher wages as their work ultimately generates
| more value.
| kortilla wrote:
| That's still better than a plant opened in Mexico that
| results in 0 US jobs overall.
| RandallBrown wrote:
| How can a tax break be a net negative for the city if it
| creates new jobs in the city (assuming the other location
| layoffs were in _different_ cities).
|
| Without the tax break, none of the new jobs would have been
| made in the city at all.
| sandworm101 wrote:
| >> How can a tax break be a net negative for the city if it
| creates new jobs in the city
|
| Any time the costs to the city outweigh the benefit of
| getting those jobs. Industrial pollution can be a greater
| detriment than a handful jobs. Or the city can turn over
| land that would otherwise be put to other uses. Or the jobs
| might all be people who don't actually live in the city,
| saddling the city with resulting traffic/pollution issues
| but with no practical job benefits. I don't know or think
| that Peloton is going to do such things, but it is very
| possible for downsides to be greater than the benefit of
| creating jobs.
|
| A classic example might be a distribution warehouse (not
| amazon, oldschool warehouse). Maybe there are five or ten
| people who work at the facility, but the city has to deal
| with a constant flow of trucks in and out. The downside of
| those trucks will probably be greater than the handful of
| jobs a warehouse may generate.
| baybal2 wrote:
| Where do people keep seeing "industrial pollution" in
| very basic, not material intensive light industry?
|
| There are very few things in the light industry today
| making pollution. PCB etchants, dyes, solvents -- all
| being actively reclaimed for decades.
| foxyv wrote:
| The trucks tore the heck out of the roads and there were a
| lot of infrastructure upgrades like stop lights.
| digdugdirk wrote:
| In an ideal situation, that would absolutely be the case.
| The trouble comes when neighbouring suburban "cities" start
| competing against each other for the potential for a
| business like OP referenced.
|
| Oftentimes these are just incorporated industrial areas
| with minimal housing and little/no incentive to invest in
| public services. The businesses in this city/township are
| certainly running the show, and the few people living
| within those borders have little to no incentive or ability
| to organize and work for change. Afterall - people with
| surplus money/time would choose to live elsewhere.
|
| Its a vicious cycle to the bottom, since these types of
| cities/townships compete against the main city proper (in
| the case of large urban areas) or other nearby cities and
| towns that are actually trying to provide for their
| citizens.
| SkyPuncher wrote:
| A few things:
|
| * It sets a precedent for other companies to leverage the
| same tax breaks.
|
| * Facilities still use public roads and infrastructure. A
| road with 50 more trucks per day deteriorates more quickly,
| but the facility isn't paying for that directly.
| vkou wrote:
| Cities typically don't collect income tax, so their ability
| to derive revenue from 'job creation' is limited.
| Especially if the people working those jobs are
| living/shopping in the next town over.
| dexterdog wrote:
| If the cost of the tax break is more than the salaries of
| the employees then it would be cheaper to just hand out the
| money.
| AzzieElbab wrote:
| I suspect few people actually want to work at manufacturing
| factories
| jpindar wrote:
| WTF?
| AzzieElbab wrote:
| I worked at two, in two countries. Experience not worth
| reliving
| Analemma_ wrote:
| Part of the cynicism is that we've seen announcements like this
| before get quietly abandoned once the fanfare fades away. Apple
| was making Mac Pros in Texas... then they stopped and moved
| production to China. Microsoft was making the Surface Hub in
| Oregon for a little while... then they stopped and moved
| production to China. And don't even get me started on the
| Wisconsin Foxconn fiasco.
|
| Cynicism is a perfectly justified response to announcements
| like this.
| slver wrote:
| > Apple was making Mac Pros in Texas... then they stopped and
| moved production to China.
|
| Quote:
|
| "It was an experiment to prove that the U.S. supply chain
| could work as good as China's, and it failed miserably," a
| former senior manager is quoted as saying.
|
| No one opens a whole factory just for the PR. They tried, and
| the experiment didn't work. The US has objective problems in
| supporting mass manufacturing and assembly. Guilting
| companies into it won't work.
| makomk wrote:
| The problem that the US has supporting mass manufacturing
| and assembly is that companies like Apple stopped making
| things there, and once that happened all the expertise and
| supply chains to support that manufacturing was lost,
| meaning that now it's not possible to make stuff in the US
| anymore and those companies are totally dependent on China
| which didn't make this mistake. Part of the problem Apple
| had was that they couldn't get items as basic as screws in
| the quantities needed from US suppliers, and why would they
| be able to when there's no US manufacturers which need
| those items in those quantities?
| slver wrote:
| There's a chicken egg problem, but let's not blame Apple
| for this trend. Apple's original move to China in the 90s
| was ALSO prompted by the need to scale. This wouldn't
| make sense if we interpret things the way you do.
| [deleted]
| dang wrote:
| The contrarian dynamic strikes again! https://hn.algolia.com/?d
| ateRange=all&page=0&prefix=true&sor....
|
| You're not wrong about the thread, or rather the initial time
| sequence of the thread--but it's important to understand that
| that is not representative of the community. It is only the
| self-selected first-to-comment. Unfortunately the comments with
| the fastest TTP (time to post) tend to be the ones produced by
| reflexive reactions, and--also unfortunately--most reflexive
| reactions are negative ones.
| [deleted]
| dang wrote:
| > _Next steps after identifying the problem?_
|
| The only step I know that seems viable is the long, slow
| process of community education. Technical solutions don't
| really seem like they would help. I suppose we could put up
| a nag screen when there aren't many comments in a thread,
| asking people to check whether they're posting from the
| right place...but we've always tried to avoid that kind of
| thing, and even if each such step made sense individually
| they would soon compound into something annoying.
|
| Fortunately, not everyone needs to understand these things,
| just enough to start feeding back into the system and
| affecting the culture.
| fighterpilot wrote:
| What about a nag screen that only pops up when the post
| sounds snarky or angry, as determined by a ML/NLP model
| dang wrote:
| I'd need to see such a model doing a good-enough job of
| identifying snarky / angry comments. The worst case of
| such a solution is that it's almost good enough but not
| quite--an uncanny valley type thing--in which case it
| will just piss people off. And anything less good than
| that would merely add noise.
| koheripbal wrote:
| I think it's worse than that. Social media sites suffer from
| their own popularity as they attract new younger audiences.
|
| I think HN is suffering from its own success with a notable
| drop is comment / post quality.
|
| The first rule of HN is you don't talk about HN. ... also, if
| you've found a new forum, please let me know!
| dang wrote:
| The attempt to avoid or at least stave off the traditional
| decline curve of internet forums is kind of the original
| idea behind HN:
|
| https://news.ycombinator.com/newswelcome.html.
|
| https://hn.algolia.com/?dateRange=all&page=0&prefix=false&s
| o...
|
| I don't think this particular issue is related to new
| younger audiences, because--by inspection at least--the
| initial wave of objections isn't noticeably coming from
| newer users. I haven't specifically analyzed that though.
|
| Complaints about "notable" drops in quality go back all the
| way to the beginning of HN. Of course it's possible that
| they're all true, but that would be a _lot_ of notable
| drops. Or maybe some are true and some aren 't, in which
| case we're fluctuating within a range... or maybe they
| didn't use to be true but now they are true? That's of
| course what the person perceiving the "notable drop" always
| feels--but there are also other explanations for this
| feeling, such as sample bias and nostalgia bias (https://hn
| .algolia.com/?dateRange=all&page=0&prefix=true&que...).
| It's pretty hard to establish anything objective about it.
| If I randomly look at past frontpages and past comments,
| they don't seem consistently better or worse (but see the
| previous sentence).
| defaultname wrote:
| When they left that reply there was a tiny number of
| `cynical' replies. Replies that most people would just skim
| right past and look for substance, though there really isn't
| a lot to discuss about "company announces manufacturing
| plant" beyond things like tax incentives (which would be a
| cynical comment). Maybe people could talk about automation if
| there were details and it was further along, but it isn't.
| It's just an announcement.
|
| Any assumption that a site frequented by people around the
| globe should be euphoric about a US manufacturing plant seems
| flawed.
|
| I don't intend this comment to argue with them or with the
| assessment, but I've lurked on HN long enough to see the
| growing tide of early onset pearl clutchers who hit a quiet
| thread with a trite "Well I've never!" moral righteousness,
| then enjoying waves and waves of adulation while the target
| of their disdain are pummeled. What is the dynamic behind
| that? Shouldn't it have a name, because it is a negative,
| increasingly common tactic that sidetracks many threads.
| dang wrote:
| Sorry, but I'm not really following you. Certainly there's
| no assumption that anyone should be euphoric about
| anything.
| Nition wrote:
| We're lucky in a sense to have a double-contrarian dynamic
| here.
|
| On Reddit there's only a single-contrarian dynamic, where the
| contrarian post remains at the top, and is less liable to be
| questioned than the original article. Sometimes the top-
| voted, contrarian post has evidently not actually read the
| article.
|
| Of course in older days of forums there was an infinite-
| contrarian dynamic, where the arguing back and forth
| continued forever.
| mensetmanusman wrote:
| You should write a book on moderation.
| happytoexplain wrote:
| >people that are all in Silcon Valley and completely oblivious
| to the plight of Midwest Americans
|
| I'm not seeing this attitude here. The (heavily downvoted)
| comments are all criticizing feasibility. A factory quickly
| shut down helps nobody. Maybe they're wrong, but not everything
| needs to immediately devolve into binary identity politics,
| with the clueless elites vs the struggling Americans.
| pie420 wrote:
| No. Stop giving kudos before anything is done. Give kudos when
| the money is spent, the factory is running, and the peletons
| say "Proudly made in Ohio". Until then, this is another foxconn
| free press incident. Peletons makes an announcement "Built in
| USA", it helps the brand, consumers get a vague feeling that
| all Peletons are built in the USA, then peletons quietly nixes
| those "plans" outsources to China, and they keep the consumer
| goodwill while exporting jobs to China.
|
| You give kudos for actions, not words. At this point you are
| just anti-anti-peleton circlejerking
| colinmhayes wrote:
| Good paying manufacturing jobs are not coming back in any
| meaningful way, globalization made sure of that.
|
| That doesn't mean manufacturing won't come back, just that it
| will be highly automated or the jobs won't be high paying.
| mediaman wrote:
| No disrespect meant, but this sentiment is common among those
| without any experience with US manufacturing.
|
| Industrial maintenance mechanics make $25-35 an hour
| depending on skills. Machinists make $30-50/hr. Skilled
| machine operators earn $22-30+ hourly depending on the type
| of machine and skill required. Plants like these hoover up
| industrial, mechanical, electrical, process, mechatronic
| engineers all at over $100k.
|
| Perhaps you meant that completely unskilled labor is less in
| demand at manufacturing facilities. Even that isn't really
| true: the idea that 100% of these roles are automated is
| often believed by people without exposure to manufacturing;
| the reality is that you still need a lot of unskilled people
| making $15-20/hour for the plant to work, even with plenty of
| automation.
|
| There are certainly fewer jobs than before, due to greater
| efficiencies and automation, but they aren't bad paying.
| colinmhayes wrote:
| I'd say $20-25 is the cut off for good paying so really
| only the well paid people are the skilled ones. Those jobs
| will continue to exist, but will not be as numerous as
| unskilled jobs that paid well once were.
| baybal2 wrote:
| > Peloton makes this announcement and it's nothing but sarcasm
| and snark.
|
| Because people expect another Juicer here. There is no way in
| the world for a bicycle factory to cost $400M.
|
| For such money, I can setup you 400 bicycle factories, and
| somebody who is an industry insider can probably do even more.
|
| I myself been involved with company trying to start a scooter
| knockdown kit assembly line, with some parts manufacturing 7
| years ago in BC, Canada, and Washington state in USA.
|
| It was all around $800k USD, which includes 1 year of
| operation. It was all a complete disaster though on the
| manpower, and supplies side, as everybody except for the
| company owner expected.
|
| The first line worked who did not manage to miswire a colour
| coded, mechanically keyed harness with just 6 connectors was a
| MEng graduate who wanted 60 something thousand USD, and was
| slow as molasses.
|
| And yes, custom fasteners were impossible to procure in North
| America as such. Fastener companies wouldn't even talk to you
| if you don't put up n*$100k up front. Same thing in China
| starts in under $10k.
| jjk166 wrote:
| Yeah there's a big difference between a 1 Million square foot
| factory for a major manufacturer and a couple used tormachs
| in a garage.
| baybal2 wrote:
| Even just hearing "tormachs" is already telling.
|
| If anybody done serious manufacturing, they know to avoid
| machining like a curse.
|
| I really feel they (and pretty much everybody else in this
| "manufacture in USA" bunch) don't really know what they are
| doing.
| jaywalk wrote:
| The 400 $1 million bicycle factories will probably fare just
| as well as your $800k scooter assembly factory. I think
| Peloton knows a little bit more about manufacturing their
| product than you do.
| baybal2 wrote:
| I don't think so
| dr-detroit wrote:
| Peloton isn't a bike.
|
| My dad works for Nintendo and he told me for the average
| commercial construction project it costs roughly $14,225,000
| to build a medium sized warehouse (25,000 square feet) in
| Ohio.
| intricatedetail wrote:
| We need country of origin information on products along with some
| colour coding, e.g. if given country has minimum wage, slave
| Labour etc. If product contains parts and labour from many
| countries then all should be listed ordered by level of
| participation.
| barbazoo wrote:
| I'd support that. Regarding country of origin, doesn't every
| product have a "Made in ..." on it and it's packaging? I'm only
| familiar with Europe and Canada though.
| halostatue wrote:
| This is inconsistent. In Canada, at least, "Made in Canada"
| or "Produced in Canada" does not necessarily mean "made
| mostly in Canada from Canadian parts". All that's necessary
| is a certain percentage of assembly or preparation (for
| foods).
|
| I'm not sure of the _exact_ proportions required, but I first
| noticed this on food products ("Prepared in Canada from
| domestic and foreign ingredients" is frequently found on
| foods I buy).
| intricatedetail wrote:
| I've seen products "made in USA" where they get preassembled
| product from China and only load firmware and put a sticker
| with serial number. Insane.
| just-ok wrote:
| Perhaps we could store that information on the blockchain and
| put it on a QR code in the clothing label... /s
| 8ytecoder wrote:
| Not nearly enough to change behaviour. I knew fully well the
| impact of buying A vs B in a recent purchase decision - A is
| unethical but B was a full $1000 more. It was hard to suck it
| up and do the right thing. If we want to effect change, just
| add a tax that equalizes unfair advantages - paying unliveable
| wage? That tax should then be used to pay a basic income here.
| If manufacturers still want to keep their facilities elsewhere
| - for non-destructive reasons - so be it.
| legitster wrote:
| My understanding from talking to industrial engineers is that
| American manufacturing is quite competitive when the product is
| consistent. It's when you work in batches or need to make
| constant adjustments to the line or product (very labor intensive
| activities) that it gets prohibitively expensive.
|
| It makes sense that Peloton foresees many, many years of sales
| without needing to update their hardware much.
| OldHand2018 wrote:
| I know some people that run a number of small manufacturing
| sites spread across the US. When they get something tricky,
| they send it to their factory in (to avoid flame wars) State A,
| which happens to spend more per student than the national
| average. Line workers have the freedom to experiment and
| improve the process until they have something very good, and
| then they move the line to their factory in State B, which
| happens to spend significantly less per student than the
| national average. Probably just a coincidence though.
|
| PS - 2020 was their best year ever and 2021 could be even
| better. People are currently willing to pay American rates to
| avoid supply chain risk.
|
| PPS - Ohio is a great location for Peloton. I bet they can get
| 70-80% of their product by value from supply manufacturers just
| within the state. Expand to Michigan and Indiana and you might
| be at 85 or 90%. This is in the Toledo metro area which already
| has a large auto manufacturing supply chain, as well as PV
| panel production. They've got plenty of workers and suppliers
| to draw from.
| gogopuppygogo wrote:
| Ohio also has some beautiful areas you can enjoy nature in
| and low cost of living. It's the winters that get you.
| halfmatthalfcat wrote:
| Same could be said for anywhere in the Midwest tbh
| [deleted]
| daniellarusso wrote:
| That is a very interesting strategy.
|
| It makes sense, and also having enough diversity of locations
| to avoid infrastructure outages.
|
| Very clever.
| baybal2 wrote:
| > My understanding from talking to industrial engineers is that
| American manufacturing is quite competitive when the product is
| consistent.
|
| When the product is consistent, you can get competitive pretty
| much everywhere. That's a luxury you will never have unless you
| are already a big MNC.
|
| On paper, US manufacturing been cheaper than in China for quite
| a few years already, but you have to spell that "ON PAPER" with
| big bold letters.
|
| 1. Labour -- flyover states had wages comparable to South China
| for 2-3 years.
|
| 2. Education -- supposedly best in the world, supposedly, at
| least beating Chinese public secondary school
|
| 3. Supreme "intellectual" property regime -- no comparison to
| China at all, you can sue whomever, whenever, for whatever, and
| barristers here are even calling you themselves to offer their
| services to sue your competitors
|
| 4. Supply chain -- world's biggest companies are there, if they
| are all here, there must be at least something they all buy.
|
| 5. Taxes -- US vs. China's tax rate are incomparable: 30% vs
| 60%-70% something depending on incalculable amount of fees,
| charges, levies
|
| How things are in reality:
|
| 1. People in US you can hire cheaper than highschoolers in
| China are really not-employable, in other words people with
| problems.
|
| 2. Education is there, but only for people who can already dish
| out a sum, otherwise even a passable secondary education is not
| a given.
|
| 3. Yes, you can sue everybody, and the same applies in reverse
| too!
|
| 4. Those companies really do buy, and sell a lot of stuff, just
| not from you, but the same guy you buy your stuff in China
|
| 5. US taxes are half that of China, but Chinese accountants
| know how to run from taxes 10 times better than American
| accountants.
| cwilkes wrote:
| Huh, I would have thought constant changes would be easier
| onshore as it is easier to talk to the factory floor in real
| time to make the adjustments. Once that is all sorted out you
| then send it offshore as it is easily repeatable.
| legitster wrote:
| I think people underestimate how much of offshore
| manufacturing is done by hand still. The cheapness comes from
| any factory being able to switch to just about any
| competitive production quickly. But they are much less likely
| to invest in equipment and automation.
|
| At scale, there are also complications, like the cost of
| training, labor laws, or approving role changes with the
| union.
| bluGill wrote:
| Labor onshore is expensive. If you only need a few it doesn't
| matter but once you have offshore labor they are flexible
| enough to handle changes. Onshore manufacturing implies a
| large amount of automation, but that automation limits the
| changes you can make and still fit into the automation. If
| the change is something that is CNC, then you can make the
| change easily. However if the change needs a whole new jig,
| making the jig is more expensive than having a skill
| machinist make the part by hand with a file - those skilled
| machinists are cheaper offshore. You pay off the jig over
| thousands (or millions) of product.
|
| Once you have production offshore it is even harder. They may
| have made a few jigs (not as many as labor is cheap enough to
| not need them), but and odds are even in the worst case they
| can re-use all but one of those jigs. Thus once you are
| offshore it is better to let offshore do the prototype work.
|
| It gets far more complex than that.
| baybal2 wrote:
| "Labour" is not expensive in US, in fact it's cheaper than
| in quite a number of other developed countries, and now
| South China.
|
| Brains, even tiniest amounts of them, are.
|
| Read my story above how my first line worker in Canada whom
| I found to not screw up a completely banal assembly was a
| 60k+ MEng.
| DavidPeiffer wrote:
| I'd like to point out John Foley, the founder of Peloton, is an
| industrial engineer himself. For making a physical product,
| it's a great background to start with.
|
| Lots of analogs to great programmers in terms of when to
| optimize what, and how. Manufacturing process selection,
| optimal batch size, make vs buy, accounting for supply chain
| uncertainty, profitability analysis, etc.
| azinman2 wrote:
| > "We believe that working out at home is the future," the CEO
| said. "That is why we're investing in this facility."
|
| Is it really going to be that much bigger post Covid? It's not
| like home gyms have never been thought of before, or there's
| something new that happened that Peleton didn't already have in
| 2019.
|
| Sure Peleton has features that make it feel like you're connected
| to a larger community. But ultimately many people want the actual
| ability to talk to the instructor, or feel the energy from others
| in the class (eg why live music/comedy cannot be replicated), or
| build bonds and social relationships with others. Those that
| don't care about these things already would have worked out at
| home before. Sure maybe some bought this equipment during Covid,
| but that doesn't mean it all of the sudden becomes "the future of
| working out."
| dillondoyle wrote:
| I have been surprised how strong the Peloton online community
| is.
|
| I have more than one friend who's life has been basically taken
| over, like Cross fitters can be. It's all she posts on
| Instagram! Have their own group, organize rides with custom t
| shirts and everything. Actually did a meet up in person from
| across the country. I think she does interact with her favorite
| instructor off the platform too.
|
| Seems more personal than like a large brand spin class. Who
| knows maybe they make some in person gyms, like a bike-share
| program, since the bikes are so expensive.
|
| But I am for sure in the category of building an intense home
| gym that I don't use as much as I should given the cost ;)
| cyrux004 wrote:
| Cancelled my peloton fitness subscription today and back to gym
| (Orange theory). Havent used my home treadmill for a few weeks
| back. Its hard to stay motivated at home for long stretches.
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