At a time of continued growth as announced last week by parent Brunswick Corp., Life Fitness has said it will close its Paso Robles, Calif., strength-training equipment production plant and consolidate it with its facility in Ramsey, Minn., to streamline manufacturing operations.
The California plant closure will be done in phases, starting in June, and will be completed by the end of this year, Life Fitness said. It will affect 158 employees, all of whom will receive assistance as a part of the layoffs.
"The change will allow us to take advantage of integrated high-tech processes that exist in our Ramsey facility, such as laser cutting, robotic welding and painting," said Kevin Grodzki, Life Fitness president. "Such capabilities will be necessary for us to successfully compete in an increasingly competitive fitness market."
The Paso Robles plant has manufactured commercial strength products, including the Life Fitness Pro Series selectorized strength line, multi-stack products and Cable Motion products, and the Hammer Strength Motion Technology selectorized strength training line. In addition to its Ramsey, Minn., facility, Life Fitness has manufacturing operations in Franklin Park, Ill., and Falmouth, Ky.
In other news, the company has finalized its research begun months ago -- as reported by SNEWS -- into the possibility of opening an Eastern European manufacturing facility, with the decision to enter a joint venture agreement with a Hungarian manufacturer for certain products. The company has said in preliminary information -- look to SNEWS for details next week -- that the plant will allow it to be closer to a growing European customer base and to better serve those customers.
In its quarterly earnings report last week, Brunswick announced that the fitness segment, made up of Life Fitness and its brands, Hammer Strength and ParaBody, as well as retailer Omni Fitness, had sales of $119.2 million, up 14 percent from $105 million a year ago. Operating earnings rose 40 percent to $12.5 million from $8.9 million, and operating margins were 10.5 percent and 8.5 percent in the first quarters of 2003 and 2002, respectively.
"The growth in marine and fitness sales more than offset a decline in our bowling and billiards sales for the quarter," said Brunswick Chairman and CEO George W. Buckley, in a statement.
"Life Fitness' sales growth continued to outpace the industry as we enjoyed strong results in all market segments, including commercial, consumer and international, where we continue to gain market share," Buckley said. "We expect this momentum to continue, fueled by some 50 new products that Life Fitness intends to roll out this year."
SNEWS View: Life Fitness seems to generally be doing well for Brunswick and is on a tear with new products. Look at our Did-You-Hear shorts for a picture of one of the new schmantzy treadmills introduced at last weekend's Club Industry East show. Certainly the move into Hungary makes economic sense too -- as does the close of the California plant -- but it's unfortunate for the 158 employees involved.