La-Z-Boy, Whirlpool Moving Hundreds Of Jobs To Mexico

Workers at Dayton, Cleveland Facilities Get Notices

Thursday, April 3, 2008

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.

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.

Latest Hamilton County Arrest Report

Renowned Chattanooga Musical Director Glenn Draper Dies

Online Petition Starts To Save Old Oak, Cherry Trees At Site Of Major St. Elmo Project

Here is the latest Hamilton County arrest report: AARON, TAMMY RENEE 2425 ASHMORE AVE APT 9 RED BANK, 37415 Age at Arrest: 49 years old Arresting Agency: Red Bank THEFT (UNDER 1000) ... (click for more)

Renowned Chattanooga musical director Glenn Draper has died at his residence at Alexian Village on Signal Mountain. Mr. Draper came to Chattanooga in 1968 and spent more than 30 years as director ... (click for more)

An online petition urges a developer to save some large old trees at the site of a major project planned in St. Elmo's business district. The petition asks that a "giant oak and row of cherry ... (click for more)

Breaking News

Latest Hamilton County Arrest Report

Here is the latest Hamilton County arrest report: AARON, TAMMY RENEE 2425 ASHMORE AVE APT 9 RED BANK, 37415 Age at Arrest: 49 years old Arresting Agency: Red Bank THEFT (UNDER 1000) THEFT (UNDER 1000) --- BARBEE, JOSHUA 250 FISHER LANE DECATUR, 37322 Age at Arrest: 32 years old Arresting Agency: Hamilton County POSSESSION OF DRUG PARAPHERNALIA SIMPLE POSSESSION ... (click for more)

Renowned Chattanooga Musical Director Glenn Draper Dies

Renowned Chattanooga musical director Glenn Draper has died at his residence at Alexian Village on Signal Mountain. Mr. Draper came to Chattanooga in 1968 and spent more than 30 years as director of Choral Activities and professor of Music at the University of Tennessee at Chattanooga and director of Music at First Presbyterian Church of Chattanooga. During his illustrious ... (click for more)


Rhonda Thurman: More Money Won't Fix The Problems In The Hamilton County Schools - And Response

“For the Children”, “Invest in our future”, “Our children deserve a first class education”, “Our teachers make less than all the counties around us”, “It will only cost a latte a day or a night a week eating out”, these statements show up at HCDE school budget time as sure as, “Have a nice day” at the bank, “My pleasure” at Chick-fil-a and “Thank you for shopping at Walmart”. These ... (click for more)

Roy Exum: What The Indians Knew

‘Flea’ Chambliss, who was a hale-and-hearty friend for my entire life, died at the age of 81 last week and, when the funeral is held at Lookout Mountain’s Church of the Good Shepherd this coming Tuesday (3:30 p.m.), you can bet some glorious stories will be told. After all, ‘Flea’ was indeed a Chambliss – their family Bible proclaiming he was regally known as John Alexander Chambliss ... (click for more)


CFC Avenges Earlier Loss To Georgia Revolution With 2-1 Win On The Road

With the score between Chattanooga Football Club and the Georgia Revolution tied at one a piece, the saying “it’s sometimes better to be lucky than good” most certainly applied to Chattanooga’s second goal of the game as CFC avenged an earlier loss. It all started with a lackluster clearance by Georgia off of a Chattanooga throw in. The ball flew out to CFC’s sturdy defender ... (click for more)

Mangels Erases Richmond In Red Wolves' 1st Road Win, 2-0

With 83 minutes gone by and a 1-0 lead in his pocket, goalkeeper Andrew Mangels just needed to defend his net for a few more minutes. Those minutes were fraught with danger though, as the Richmond Kickers mounted attack after attack in a desperate effort to equalize the score. But the Red Wolves came out on top for their first road win. The latest onslaught came on a long pass ... (click for more)