Posted on 04/03/2008 6:53:58 PM PDT by Tennessee Nana
Workers at Dayton, Cleveland Facilities Get Notices
La-Z-Boy and Whirlpool are moving jobs to new plants in Mexico, bringing job losses to hundreds of workers in Dayton and Cleveland.
La-Z-Boy employees in Dayton were told today that the cutting and sewing operation is being moved to Mexico.
Kathy Liebmann, La-Z-Boy spokesperson, said the Dayton facility has over 2,000 employees, but she did not have a breakdown on those in cutting and sewing. A La-Z-Boy employee said it was around 750.
Ms. Liebmann said La-Z-Boy is closing a plant at Tremonton, Utah, but will keep its other plants open, including the one at Dayton. She said the 400 production jobs at the Utah plant will be spread over the other five plants.
She said workers in cutting and sewing will have an opportunity to train for available production jobs.
Ms. Liebmann said the Mexico plant is slated to open in January.
Meanwhile, some 350 Whirlpool employees are losing their jobs at the former Maytag facility in Cleveland.
Those jobs are also going to Mexico as well as to Oklahoma.
Ms. Liebmann said the transition will take place over the next 18-24 months.
La-Z-Boy makes recliners and other furniture.
Kurt L. Darrow, La-Z-Boy’s president and chief executive officer, said, “Speed to market for custom orders is a tenet of our brand promise to the consumer and the strength of our U.S. facilities enables us to deliver on that promise. With its proximity to the U.S. and the lower cost structure inherent in a Mexican-based operation, we made the decision to transition our domestic cutting and sewing operations while streamlining the assembly aspect of production in the United States.
"Our new Mexican facility will be able to rapidly supply our domestic plants with cut-and-sewn fabrics and leather for custom orders and will complement the existing cut-and sew program from China, which supplies our U.S. manufacturing operations with kits for our high-volume SKUs.
“Once we made the decision to transition the domestic cut-and-sew operations to Mexico, we analyzed our remaining total capacity. With the floor space created by consolidating six cut-and-sew operations into one in Mexico, and with our manufacturing facilities dedicated solely to production, we determined we could service our existing and future demand with one less facility. Importantly, our remaining facilities will be able to increase their capacity utilization as a result of this change. Therefore, we made the difficult decision to close our Tremonton, Utah, facility.
"We are confident this reallocation of resources, combined with the many changes we have made to our production processes, will continue to strengthen our operations. We regret the impact these moves will have on the families and lives of those employees affected and greatly appreciate the contribution of each employee and thank them for their years of dedicated service.”
Mr. Darrow added, “With the normal attrition rate at our production facilities and the time with which we plan to transition our cutting and sewing operations, employees working in that capacity will have the opportunity to learn new skills and be considered for other positions within their facilities as they become available, particularly as we shift production from Utah.”
Following the closure of its Utah facility, La-Z-Boy’s upholstery segment will have a total of 5.5 million square feet of upholstery manufacturing space in North America, including 4.8 million in the United States and 700,000 square feet in Mexico and will employ approximately 8,000 people in those facilities.
Mr. Darrow said, “With the breadth and size of our operation, we will ensure that our dealers and their customers will continue to receive excellent service with ontime deliveries as we transition production between facilities. Additionally, our manufacturing footprint will allow us to flex our capacity as we execute on our strategic growth plan.”
The Utah facility, which is approximately 675,000 square feet, will be idled after operations cease and will be marketed for sale. As a result of these actions, La-Z-Boy will take a pre-tax restructuring charge in the range of $17 - $20 million, or $0.20 to $0.24 per share. This charge will be principally for severance and other benefit costs and will also include training costs to begin production in the other facilities, the write-down of certain fixed assets and other associated costs.
As the plant is closed and the cut-and-sew operations are transferred, these charges will be incurred as follows: $2.0 - $2.5 million in the fourth quarter of fiscal 2008; $9 million-$10 million in fiscal 2009; and the balance in 2010.
Once these moves are completed, the company expects to realize in excess of $25 million in annual cost savings, with the full benefit beginning in fiscal 2011.
Mexico and China...
PING
We send them our good jobs...
They send us their illegal aliens...
What a trade agreement...
Have the usual suspects come by yet and told ya this is really good for Tennessee and America?
remind me never to buy laz-a-boy furniture. Lead I can deal with, but Salmonela just does not work for me.
La-Z-Boy and Whirlpool, two more companies I don’t need to do business with.
Good. It will make their firm stronger and more competitive.
It will make the chairs cheaper and they will sell more.
Hopefully, they will stay in business and grow and add different employees.
God bless the laid off employees and I hope they get retrained.
Ain’t no unions in Meheco. Same product, cheaper cost.
oh, lord. I’m from Cleveland, and I bet I know some people affected by this. This sucks.
“In related news, La-Z-Boy announcet today that they are changing the name of their company to La-Z-Muchacho...”
I am with ya, not a dime to either company from me. In fact, I am trying hard to buy from only American companies, it is hard though.
Me to … and yes I know several that will be affected. ;-(
When it comes to profits, these corporate sellouts package it up real good. If they could get away with it, they'd sell America to Bangkok for the right price, thank us for our service, and then tell us all to leave.
Yes it hard but I refuse to buy from a company that is taking jobs away from Americans. Hershey chocolate is moving factories to Mexico & I won’t buy from them either.
Hey - thats ok , we’ll build high tech stuff like computers and camcorders and , er - ah . Oh yeah, the chinese are doing that.
Cleveland, Tennessee
It’s near Chattanooga
And BTW, won't ever buy a POS Maytag again.
Maytag, a typical story:
Build good products for many years and develop a great reputation and customer loyalty.
And then start building crappy products to save/make extra money, exploit your brand name until your customers figure out that they are getting screwed, and then downsize and outsource because you can no longer compete.
All the while, your very highly paid management and CEO try to figure out what went wrong even though they know what went wrong. They just don't want to admit it since it might mean some of them get fired.
Yeah...I’m from Cleveland, TN
Just stating a fact, not voicing an opinion. ;-)
Yep, those execs will get their bonuses and their stock will go up. But the employees (remember them?) you know, the ones that made it happen? They are the ones having to hit the bricks.
This $hit would be unheard of if the first "cost saving" measure was to move all upper management functions out of the country and fire the managers here.
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