In March of 2013 the snowboard world was rocked with news that the Elan factory was closing. A factory with 25 years of experience that had made millions of snowboards for countless brands. Here we are two years later and GST (Global Sports Technologies) the other stalwart of European manufacturing is closing.
Last Wednesday, February 26th all companies utilizing this factory were given notice that GST would be closing its doors and no longer able to service their accounts after the 2016 production season. On top of notifying the brands they work with their workforce of 85 skilled laborers was also informed they would be let go.
Ana Van Pelt of Niche Snowboards informed us earlier today when we reached out to her for comment on the matter that Capita is extending the opportunity to GST’s labor force for employment at their new factory.
Production will cease on July 31, 2015. GST’s current roster of companies they make boards for includes Niche, Stepchild, DC, Rome (some), Jones, Drake, and a few other smaller brands.
When we talked to a spokesmen from Jones Snowboards they were quoted as saying, “We were confirmed by GST last week they would be closing, but not until they finished producing our entire 2016 board order. So this manufacturing change will not effect the Jones line until 2017.”
*Update* Jones snowboards have added to the above quote.
The timing of the announcement is ideal as we ordered the majority of our 2016 production run last July and the boards have been in production since November 2014. Our production is ahead of schedule for the year and all boards will be ready to ship on time. With production on schedule, we will also have ample time to transfer our technology, designs, and if necessary, machinery to our new manufacturing partner. GST has committed to helping us every step in the way towards a successful transition.
Production orders received before March 5th will be met. When we talked with one inside source for a large retail chain inside the United States they were quoted as saying, “All the companies we talked to are not backing out of their production obligations.” This means unlike when Elan went bankrupt, companies will not have to scramble to find a new production facility to deliver product on time.
How did this happen? In a Austrian news story reasons Thomas Berger who helped found the company was quoted as saying, “It goes to low-wage countries such as China, Taiwan, Vietnam, and Dubai and Eastern Europe. In these countries, neither labor or employment law, environmental and trade legal standards are comparable.”
Other reasons cited include the deflation of the Euro, high Austrian production costs amid the price erosion in the marketplace, and turnover from the factory falling from €12 million for 2014/2015’s orders to €7 million for 2015/2016’s orders.
One other reason that was not cited in that article, but was told to us from a credible inside source, was the lack of companies paying on time or not paying at all. This put a burden on the factory. This is also indicative of other deep rooted issues in the snowboard industry.
Ana Van Pelt of Niche Snowboards who recently spoke with Thomas Berger of GST informed us that while the news is saddening, all companies that are producing at this factory are being aided in their transition to new manufacturing facilities. No one will be left scrambling to take the appropriate steps to secure new manufacturing partners. Molds that are proprietary to brands will also have the potential to go with them as they exit this facility.
The town of Antiesenhofen where the factory is located in will also feel the effects of this closing. As our inside source indicated the business from the factory kept the town and its inhabitants employed. With a downturn in employment this will spread to other businesses in the little Austrian town.
We will update this story as more information becomes available.