The Financial Times is reporting that Peloton painted over rust on new bikes last fall in an effort to avoid a recall. You can access the full article here, but note that it is behind a paywall.
According to The Financial Times the project was internally labeled “Project Tinman”. In September of 2021 – only months after the Tread+ recall – Peloton warehouse staff observed that some Bikes originally shipped from Taiwan had chipped paint:
Instead of returning bikes to the manufacturer, executives hated a plan, dubbed internally as “Project Tinman”, to conceal the corrosion and sent the machines to customers who had paid between $1,495 and $2,495 to purchase them.
FT Magazine first reported on Project Tinman last week when speaking to new Peloton CEO Barry McCarthy, but they have since spoken to eight current and former employees to gain further information on the project.
Peloton told The Financial Times that the cause of the chipped paint was “a build-up of rust on ‘non-visible parts’ of the bike – the inner frame of the seat and handlebars – and did not affect the product’s integrity.” The issue apparently affected at least 6,000 bikes, and Peloton said that 120 staff members had performed “rigorous testing” to confirm that the rust did not impact product performance.
However, The Financial Times’ sources provide an additional layer to this story:
Internal documents seen by the FT showed that Tinman’s “standard operating procedures” were for corrosion to be dealt with using a chemical solution called “rust converter”, which conceals corrosion by reacting “with the rust to form a black layer”. Employees said the scheme was called Tinman to avoid terms such as “rust” that executives decided were out of step with Peloton’s quality brand.
Insiders were also angered about enacting a plan that they argued cut across Peloton’s supposed focus on its users, who are called “members” to evoke a sense that buyers are more than customers and part of a broader community. Tinman also put a spotlight on the company’s quality control process versus meeting aggressive sales targets in the search for growth.
The Financial Times spoke with two warehouse workers who maintained that “many” products – both the original Bikes and the newer Bike+ – were delivered to customers with “severe” rust. However, Peloton explained that this was a cosmetic issue that they resolved by sending the bikes to “rework” locations before going to the “final mile” warehouse, from which they would then be shipped to customers.
Internal documents showed that if the product did not meet cosmetic standards, it should be discarded or offered as a “refurb” – a discounted bike available only to employees and their friends. Yet numerous Peloton employees explained that such quality controls were not always followed due to the pressure to meet sales quotas.
It is important to note that rust is not covered under the warranty. One former Peloton employee told The Financial Times that Peloton refused to assist some customers who reported rust on their brand new bikes. Peloton has since declared: “If we become aware that this specific issue has caused a problem for any member, we will replace the bike.”
You can read the complete article here from The Financial Times.
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