Black Diamond Equipment has closed a ski factory it opened at its Asian headquarters in Zhuhai, China a little over two years ago and will completely shutter its campus in the Southern Chinese city as part of a realignment that is shifting manufacturing jobs to the United States and Europe, The B.O.S.S. Report confirmed last week.
The development came to light Monday when the Governor’s Office of Economic Development (GOED) in Utah announced the company's plans to invest $7.7 million expanding to create up to 160 new manufacturing jobs at its Salt Lake City campus to take over manufacturing of climbing gear that was being made in Zhuhai. As part of a contract with GOED, Black Diamond Equipment can earn up to 15 percent, or $353,247, of the additional state taxes it expects to pay as a result of the expansion. The company will earn the tax credits each year as its meets the criteria established in its contract with the state.
Black Diamond Inc. (BDE) CEO Peter Metcalf revealed in August, 2014 that Black Diamond Equipment expected to repatriate more than half its hard goods manufacturing from Zhuhai to Salt Lake City by early 2017. Publicly trade BDE also owns POC Sports, a Swedish maker of cycling and snow sports gear and apparel, and PIEPS, an Austrian company that makes personal locator beacons and other avalanche safety gear.
“We have come to the conclusion that a large, large part of that – a majority of that – can be repatriated to North America, and some of it to, perhaps, other suppliers in Asia, and give us higher margins, reduced overhead as well as reduced response time to our key customers” Metcalf said at the time. “We see that as very important because we're in a period of just-in-time inventories, in a mode where the larger retailers like to work with forecast versus absolute [bought or] bookings and you need to be able to respond to that.”
The initiative comes as BDE works with consultants to eliminate 25 percent of Black Diamond’s hardgoods SKUs to reduce the complexity and costs of its supply chain even as it greatly expands its apparel SKUs. While those SKU cuts could slow top line growth significantly in 2015, they will pave the way for healthier returns long term, Metcalf said last November.