Thread: La-Z-Boy cuts jobs, moves some to Mexico

La-Z-Boy cuts jobs, moves some to Mexico
by Charles Slat , last modified April 03. 2008 11:08AM
Monroe-based La-Z-Boy Incorporated said it will shut its Tremonton, Utah, plant this summer and move all U.S. cutting and sewing operations to Mexico in hopes of saving $25 million annually. The moves will impact about 1,680 U.S. workers.

The move of the cutting and sewing work will affect about 1,050 La-Z-Boy employees at five other La-Z-Boy plants. The shutdown of the Utah plant will affect 630 workers. The Utah plant production will be shifted to the other five plants and could result in the addition of 400 jobs to the five remaining plants, company officials said.

Shifting the company's domestic cutting and sewing operations to Ramos Arizpe, Mexico, will take 18 to 24 months. The company expects to start production at its Mexican facility early next year.

The company's Utah facility employs 630 people, accounts for 13 percent of the La-Z-Boy branded upholstery manufacturing capacity and produces recliners, motion furniture and stationary upholstery. La-Z-Boy will cease operations at the Utah facility this summer and shift work to the company's remaining five facilities.

"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," said Kurt L. Darrow, La-Z-Boy president and chief executive officer.

"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."

He said the new Mexican facility will be able to rapidly supply the company's 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 its U.S. plants with kits for its high-volume products.

"Once we made the decision to transition the domestic cut-and-sew operations to Mexico, we analyzed our remaining total capacity," Mr. Darrow said. "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.

"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," he continued. "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.

"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," he said.

When the Utah plant closes, La-Z-Boy will still have 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 it will employ approximately 8,000 people in those facilities.

The 675,000-square-foot Utah plant will be put up for sale. As a result of the moves, La-Z-Boy will take a pre-tax restructuring charge in the range of $17 million to $20 million, or 20 to 24 cents a share, spread over the next two years. The company said it should start to feel the full impact of annual cost savings starting in fiscal 2011.
http://www.monroenews.com/apps/pbcs.dll ... /488949391

Add La-Z-Boy to the boycott list. Of course, none of us will have jobs or money to buy their products.

Another American Traitor...I sure wish some inovative people would come along and replace these traitors with other companys and the ones moving down there and taking American Jobs would lose their _____.

No more lazy boy for this family! Out the door you go!

This is bad news affecting 2000 United States Citizens losing their jobs. Of course if they had not outsourced United States Jobs they would have imported ILLEGALS to take United States Citizens' Jobs!

Is it just me or does something seem suspicious here?

Article published Sunday, April 6, 2008
La-Z-Boy likely to be exception to local firms' quiet meetings
Area roster with public shareholders shrinking

By LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER


ANNUAL shareholder meetings are a requirement for most companies with publicly traded stock, a place where shareholders of all stripe are provided equal opportunity to question a company's top management.

But this year, fewer Toledo-area companies are publicly traded, and some that traditionally have had their meetings locally are traveling. Most of the meetings, typically held in April and May, are short and have few controversial issues up for vote. The sessions are open to shareholders, but not the general public.

One exception to lack of controversy could be Michigan furniture maker La-Z-Boy Inc. of Monroe, which finds itself in the sights of one of the nation's biggest and most active investors.

The California Public Employees' Retirement System, or Calpers, has almost $245 billion in assets under management and has selected La-Z-Boy as one of five companies on its "focus list."

That means the behemoth investor hopes to change management practices at the firm this year.

The company had $1.5 billion in revenue last year and its stock is trading at $8.63 a share, or about $3 above the five-year low it reached last November of $5.31 a share.

"La-Z-Boy's stock has severely underperformed," Calpers argued in a brief. The investor took issue with the company's "deteriorating trend in annual business fundamentals" and a "lack of board accountability."

CalPers holds $3.5 million of La-Z-Boy's $500 million in outstanding stock and is seeking to force the company to abandon its practice of electing board members on staggered terms and instead elect them all each year.

RiskMetrics Group, a New York firm that tracks shareholder proposals, said it expects a "contentious" 2008 proxy season.

As in previous years, executive compensation and corporate governance issues will dominate the meetings nationally, RiskMetrics said in a bulletin.

A number of financial-company executives will face shareholders seeking creation of mortgage lending compliance committees on their boards to determine mortgage loss prospects.

Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, said shareholder actions can shape business practices.

"They do quite well overall," he said. Turbulent market conditions, he added, tend to create greater support for shareholder activists.

In the Toledo area, few big issues are expected at the meetings. Three companies have their meetings on the road, usually to give stockholders elsewhere a chance to more easily attend.

Cooper Tire & Rubber Co. has its meeting at the Westin Hotel and Conference Center at Detroit Metro Airport this year instead of nearer its corporate home in Findlay.

Libbey Inc. is moving its meeting this year from its Toledo headquarters to Chicago, where it will coincide with the National Restaurant Association's annual trade show, said Greg Geswein, vice president and chief financial officer.

"We're having our board meeting in Chicago because our board likes to go to these types of events to see how our product stacks up to the competition," Mr. Geswein said. Some employees will attend but probably few investors, he added.

Similarly, Cedar Fair LP will go to its Knott's Berry Farm in suburban Los Angeles instead of meeting in Sandusky as it usually does.

"We've had it out there before. The last time was in 2003," explained Brian Witherow, vice president and corporate controller for the Sandusky amusement park company.

"We'll tend to get a decent number here in Sandusky because we've got more of our unit holders here," he said, adding that he expects far fewer attendees in California.

Cedar Fair is one of several local companies using the meetings to alter executive compensation or incentive plans. Mr. Witherow said Cedar Fair, a limited-partnership operation, is asking shareholders to adopt an "omnibus incentive plan" that will replace a number of previous plans.

MBT Financial Corp., parent company of Monroe Bank & Trust Co., in Monroe, is seeking approval for its own replacement stock incentive plan, an executive said.

The Andersons Inc., of Maumee, is presenting an overhaul of its incentive and bonus packages.

The larger issue facing shareholders, however, is a request to authorize issuance of up to 50 million more shares of common stock.

Gary Smith, treasurer and vice president for finance, said the agribusiness has about 18.1 million shares outstanding.

"Typically, you like to have about three times [the number of outstanding shares] available for what we may use. We don't have anything specific in mind right now, though."

Added shares could be used to raise cash for new ventures, such as more investment in ethanol-producing facilities, or for employee stock incentives.

No local company has shareholder proposals on the annual meeting agendas, and the only contested board race is at Croghan Bancshares Inc. in Fremont, where Toledo insurance agent Nathan Danziger again will try to win a seat. in Fremont, where Toledo insurance agent Nathan Danziger again will try to win a seat.

Three area companies that long have been part of the annual meeting circuit won't be this year.

The former Pavilion Bancorp Inc. in Adrian was purchased last year by First Defiance Financial Corp.; the former Manor Care Inc. in Toledo was bought last year by the Carlyle Group and has been renamed HCR ManorCare Inc.; and Sky Financial Group Inc. of Bowling Green was acquired by Huntington Bancshares of Columbus.

Dana Holding Corp., which emerged from Chapter 11 in Jan-
uary, will not hold a meeting this year, a common practice for firms in their first year post-bankruptcy.

Another formerly bankrupt company, Owens Corning of Toledo, had an annual meeting in December and likely won't meet until the last three months of the year.

Contact Larry P. Vellequette at:
lvellequette@theblade.com
or 419-724-6091.


http://tinyurl.com/6bm7nr

La-zy Boy will only make third world products from now on. I hope that their products don't come to America ever again.