Peloton allegedly knew about rusty parts on their expensive home gym equipment, but instead of doing the right thing, the company painted the oxidized parts with paint and shipped the machines to buyers. The last few quarters have been difficult for the brand, once valued at around $50 billion and now at nearly a fifth of that value. The troubles started early last year when it had to recall its treadmills for safety reasons.
As losses piled up and hundreds of millions were allocated to deal with supply problems, Peloton was also overwhelmed by Wall Street expectations for its once high-velocity business, which was now under immense pressure from major players. investors. While Peloton’s new boss has denied any speculation of a purchase, rumors suggest that big sharks like Amazon are circling the troubled brand, with Nike and Apple also in the fray.
But it looks like Peloton’s PR nightmare is far from over. Financial Times Peloton’s top brass executed a controversial plan called “Project Tinman”, which was essentially a ticking time bomb about to explode. Late last year, employees at Peloton’s warehouses began noticing that paint was peeling off parts like the handlebars and the inner seat frame on their expensive bikes. Upon further inspection, it turned out that Rust was to blame, but reportedly did not affect the structural integrity of the machine. It was a textbook quality assurance issue. But unlike Apple, which can blame customers for holding a phone the wrong way rather than admitting to its poor antenna design, Peloton didn’t have that market reputation or a charismatic leader at the helm, but the company decided to cover it up, literally.
Project Tinman allegedly involved using a “rust converter” to hide the effects of corrosion. The chemical reacted with the iron oxide to form a black layer, a desperate move to avoid another costly recall. In the company’s own words, the corrosion problem affected about 6,000 stationary bikes, and the rust had “no impact on performance, quality, durability, reliability, or the overall experience of a bike member.” Peloton internally considers its buyers as members in an attempt to foster a sense of community, much the same way Uber uses the term driver-partner, although the examples from each company suggest otherwise.
Peloton reportedly called the rusty parts issue “cosmetic oxidation.” In fact, oxidation reduces the structural strength of parts made of metals such as iron. Calling it cosmetic seems totally misleading and more like a practice of self-ignorance. Furthermore, officials who spoke under conditions of anonymity suggest that the oxidation levels were far worse than just cosmetic aberrations. Some of the warehouse workers claim that bikes with “strong” rust problems were shipped to customers. “Sometimes the bikes had things outside so we couldn’t deliver them, but. . .[there were] many bikes that were rusty inside that were still selling,” the report adds.