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Core Health and Fitness to shift Independence plant operations

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Manufacturing operations will be moved to Asia; assembly, paint and distribution positions kept in Independence

By The Staff

INDEPENDENCE ― Core Health & Fitness has announced that operations will be shifting from manufacturing to customization at its Independence plant over the next six to nine months, with manufacturing operations moving overseas.
“This process will result in several organizational changes, including the planned elimination of approximately 50 positions in Independence,” according to a statement from the company.
In a statement dated Dec. 12, 2018, Erin O’Brien, director of marketing at Core Health & Fitness, said that in the coming months “the company will go through a deeper process to shift to a much smaller footprint in Virginia, focused on custom powder coating, upholstery, assembly and light manufacturing. The company will continue to operate its East Coast distribution from this facility” in Independence.
“The company will be offering enhanced severance benefits and outplacement services to assist employees’ pursuit of new career opportunities,” O'Brien said.
Deputy Grayson County Administrator Mitch Smith said on Thursday that Core reached out to the county prior to Christmas about the shift.
“They will be keeping assembly, paint and distribution here, but manufacturing will be moving to [Asia]. When I met with them [in December] they said they will retain around 35 employees,” Smith said.
Smith added that Core plans to keep operations going normally in Independence until June.
The move was prompted, Smith said, “to keep the company viable and keep its operations going efficiently. They do plan to maintain a presence in Grayson County.”
Smith further stated in an email to the Declaration, “Grayson County is glad that Core will still remain as an employer in our area, and we hope that future business will allow for more employment.”
An online article from the fitness industry trade magazine “Club Industry” noted that Core had not responded to its inquiry about whether the recent tariffs imposed on imports between the United States and China has played a role in this decision.
In 2014, Core added Nautilus equipment to its product lineup, which already included Stairmaster, Star Trac and Schwinn, after closing a deal to buy the Independence plant from former owner Med-Fit. The plant has manufactured Nautilus projects for nearly 40 years.
Core said then that Grayson County successfully competed agains California and China for the project, which was expected to create 250 new jobs and involve a capital investment of $2 million. However, the plant did not reach that hiring goal.
The state and local incentive package to land the Core project in 2014 was a little more than $2.7 million. It included $1.05 million from the Virginia Tobacco Commission, $350,000 from the Governor's Opportunity Fund, as well as help from the Virginia Jobs Investment Program and tax credits. Core also assumed Med-Fit's loan debt of $225,000 to the Grayson Industrial Development Authority, which the county agreed to waive if Core met certain performance parameters of job creation and capital investment.
Responding to an inquiry about those agreements on Thursday, Smith said, “The equipment, or the asset capital improvement plan portion has been met; but they will probably not be able to meet the employee plan.”
Smith assured, however, that “Core is committed to keeping their end of the agreement as far as unmet goals.”
The 262,000-square-foot Core plant sits on a 56-acre campus in Independence.