MONTEREY, Calif. (BRAIN) — X-Fusion is closing its U.S. headquarters in California and moving customer support to an outside facility in Reno, Nevada — a move necessitated by the costly construction of a new dedicated factory for the suspension brand in Taichung, Taiwan.
X-Fusion is the suspension division of Taiwan frame manufacturer A-Pro, and was originally housed in the same factory alongside A-Pro’s aluminum frame production. But as A-Pro added new manufacturing capabilities, including carbon frame and rim production, X-Fusion’s space and capacity came under pressure, general manager Joel Smith told BRAIN during Thursday’s opening day of the 2017 Sea Otter Classic.
“Every time I’d go there we were getting pushed into a smaller and smaller corner. It was easy to see even three or four years ago we had run out of space,” he said.
In addition to space concerns, X-Fusion wanted to become a more vertically integrated manufacturer. Historically, the bulk of its fork components have been sourced externally and assembled by X-Fusion, but the new factory will allow more of those parts to be produced in house.
“We need to be more vertically integrated to be competitive,” Smith said.
But the expense of building the new factory, where move-in will begin in about two weeks, spurred the decision to close X-Fusion’s 6,000-square-foot facility in Santa Cruz, California.
“The reality is, (the factory is) a huge overhead, especially at the start of the project. So for X-Fusion, for the first time there’s a big overhead burden — a massive overhead burden,” Smith said.
The Santa Cruz office had been in charge of OEM sales, global marketing, service for U.S. customers, and overseeing international service centers. Domestic service will now shift to a new 2,000-square-foot facility in Reno, Nevada, run by nine-year X-Fusion service technician Mike Davis, who left the brand last year to join electric auto maker Tesla. X-Fusion is providing financial support to the new facility, with an eye toward it becoming an independent service center, Smith said.
“Part of the reason to do that at this point is that a lot of the international locations where we’re at, we have successfully set up partnerships with service businesses to provide after-sales support and service, which of course is the biggest part of suspension — having a dialed service center and being able to provide customer support, because they need service,” he added.
X-Fusion shut down its service center early this week and has begun transferring tools and spare parts to the Reno facility, set to begin operation May 1.
“I think we’ll provide the same level of service as before, especially with Mike as service technician,” Smith said.
The new center is also a third the size — and half the cost per square foot — of the Santa Cruz facility.
Working from home in Santa Cruz, Smith will continue in his role overseeing OEM sales for the U.S., Canada, South America and Europe; marketing for the U.S. and Europe; distributor sales; and managing overseas service partners.
“When we need service in the Czech Republic, as an example, I’m the guy who finds them, qualifies them and gets them up and going, and then the Taiwanese guys take them from there,” he said.