HBut in denial, Peloton's share price is collapsing, the company recently laid off 20% of its employees and replaced its CEO, and demand for its products has plummeted. As if it couldn't get any worse, it became known that while Peloton's business was losing money, the company was selling rusty exercise bikes.Discuss
Exercise company executives covered up rust on invisible parts of their exercise bikes and then sold them to customers as new for over $2,000. The so-called “Project Tinman” suggested using a chemical solution called “rust converter” to hide the corrosion that was causing the paint to peel off a batch of bikes received from a supplier in Taiwan.
Documents obtained by the Financial Times show that under the Tinman project, “standard operating procedure” began to hide corrosion with a solution that forms a black layer on rusty bicycle parts. Warehouse workers were ordered to look for rust and determine the level of corrosion so they could decide whether the bike was salable or not, according to unnamed sources cited in the report. That definition was subjective, however, and one worker told the FT he felt pressured to label bikes with medium rust as “light rust” as Peloton struggled to keep up with pandemic-driven demand.
< p class="jsx-349690625">Peloton told the FT that such a determination was not part of its policy: unsellable inventory to the market. If anyone did this, they were acting against company policy and practice.”
Several warehouse workers tasked with checking the bikes told the FT that some were sold with “heavy rust”, and one person sent a photo of a rusty bike to the new store last week.
Source: Gizmodo