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.



Police Blotter: Drinking Ladies Can’t Find Their Friend; Woman Says Her Drink Was “Spiked”

Latest Bradley County Arrest Report

Chattanooga Man With Loaded Gun At Construction Site Gets 15 Years In Federal Prison


A woman at Station Street at 26 Station St. told police she and some friends came to Chattanooga from Rome, Ga. to drink. They started the night at South Side Social and then went to Station ... (click for more)

Click here for the latest Bradley County arrest report. (click for more)

A man who police said brandished a gun near a construction site in Chattanooga on Feb. 2, 2021, has been sentenced to serve 15 years in federal prison. Gerald Lynn Campbell appeared before ... (click for more)



Breaking News

Police Blotter: Drinking Ladies Can’t Find Their Friend; Woman Says Her Drink Was “Spiked”

A woman at Station Street at 26 Station St. told police she and some friends came to Chattanooga from Rome, Ga. to drink. They started the night at South Side Social and then went to Station Street. While at the bars, one friend, Jordan, also met up with some people she knew. After some time of drinking, the woman and her friends were ready to leave. Jordan wanted to hang with the ... (click for more)

Latest Bradley County Arrest Report

Click here for the latest Bradley County arrest report. (click for more)

Opinion

Uncovering Chattanooga’s Hidden Gem

Missionary Ridge is Chattanooga's "diamond in the rough" that can spearhead a new era in our city's growth. Way back on Nov. 25, 1863, soldiers under the leadership of General Ulysses S. Grant stormed Missionary Ridge and broke the back of the Confederacy. The Battle of Missionary Ridge demonstrated the superior forces of the industrialized North and gave their soldiers a chance ... (click for more)

Is The Guy With The Gun A Good Guy Or A Bad Guy? - And Response (3)

So we have experienced another mass killing. Recently - on the very day a few gun safety measures were made into law - the Supreme Court in its infinite wisdom said it is okay to open carry your guns. My question is this - if I see a person carry a gun into my grocery store should I worry? How will I know if he is a good guy with a gun or a bad guy with a gun? I guess the ... (click for more)

Sports

Dan Fleser: Vols Baseball, Basketball Get Top Transfers

Whether it’s entire universities or individual athletes, college athletics continues to be a fluid situation. Something or someone always seems to be moving somewhere. Usually there’s nothing going on during the languid days of late June and early July. But news last week of Southern Cal and UCLA joining the Big 10 Conference in 2024 was a whole lot of something. During ... (click for more)

Lookouts Rally Twice To Beat Birmingham

It’s been a tough week for the Chattanooga Lookouts, but it all ended on a positive note with a come-from-behind victory over the Birmingham Barons Sunday night at AT&T Field. The Lookouts had to come back twice against the Barons after the division leaders scored five unearned runs in the fourth inning for a 6-5 lead after leading 1-0 in the first. It wasn’t the prettiest ... (click for more)