La-Z-Boy Shipping Jobs to Mexico, Layoffs Coming to Dayton
This announcement affects several hundred workers in Dayton and follows a recent industrial trend: pack up and head south.
Thursday, La-Z-Boy announced it is shutting down its cutting and sewing divisions all across America. Those jobs will move to Mexico where labor is cheaper and labor laws are more relaxed.
The Dayton factory employs around two-thousand.
A La-Z-Boy spokesman could not say exactly how many workers will be laid off, but several hundred will lose their jobs in the next 18-24 months.
The industrial movement to Mexico is not new to this area.
Last year, Maytag Whirlpool in Cleveland announced it was laying off 340 employees and moving operations south of the border as well.
Here is the official release from La-Z-Boy.
NEWS RELEASE
NORTH AMERICAN OPERATIONS
MONROE, MI. April 2, 2008—La-Z-Boy Incorporated (NYSE: LZB) today announced two major initiatives designed to strengthen its North American operations.
The company will consolidate all of its domestic cutting and sewing operations in Mexico and will transfer production from its Tremonton, Utah plant, which will be closed, to its five remaining La-Z-Boy branded upholstery manufacturing facilities.
The transition of the company’s domestic cutting and sewing operations to Ramos Arizpe, Mexico, in the State of Coahuila, will impact approximately 1,050 La-Z-Boy employees at the five remaining facilities and will take place over a period of 18 to 24 months.
La-Z-Boy expects to begin production at its Mexican facility in early calendar 2009.
The company’s Utah facility employs 630 people, accounts for 13% of the La-Z-Boy branded business total upholstery manufacturing capacity and produces recliners, motion furniture and stationary upholstery.
La-Z-Boy will cease operations at the Utah facility during the summer of 2008 and production will be shifted to the company’s remaining five facilities.
As a result, La-Z-Boy expects to add approximately 400 production positions to its other facilities.
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.”
Darrow continued, “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.”
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.
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; $9.0 - $10.0 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.
TRADERS
la-z-boy is just another american company turning it's back on the people who made them what they are today. Traders to the american people and traders to their country. One word "GREED" is all you can say. It's never enough for rich people, they always want more, more, more. Well good luck trying to buy your way out of hell with money. Cause the Good Book says it's easier for a camel to pass through the eye of a needle that it is for a rich man to enter the kingdom of heaven. What goes around comes around and I hope la-z-boy folds like the first chair they ever produced. I wonder what E.M.Knabrush and E.J. Shoemaker would think about how the American workers that they loved so much were being treated?
La-Z-Boy
Got some good comments here but you're all missing the point. La-Z-Boy is not moving to Mexico for profits (at least not mostly). They are moving because US regulations make it almost impossible for them to do business here. They are moving the sewing and dying operations. Do you have any idea of the cost of environmental regulations on the use of dyes and chemicals? In the US those regulations can triple the price of a product. And it's not just La-Z-Boy. It's darn near every manufacturer in the country. Toss in reduced wages, low to no benefits and America becomes a nation of health care and service industry workers. Want to blame somebody? Blame the eco-nuts at the EPA and a Congress without the guts to challenge the ecological bull being sponsored by the EPA and its supporters. I'm a retired Industrial Engineer and about three forths of my job was to ensure compliance with hundreds of thousands of pages of regulations.
LAZBOY
Are you a moron or what? They are moving the CUT AND SEW operations....we do not have a "dye" operation of any kind- we used to have a place to stain and finish our own wood, but that ended several years ago, when LZB decided that it was cheaper to farm it out. Now, I challenge you to go to your nearest LZB retailer and find ANY real wood.... take notice people...it's plastic!!(Speaking here of the handles with the LZB logo on them) Also made off site. The wood that you do see- bases and the wooden arms on the 532 chairs is done off site and shipped in. Our fabric, and leather come into the LZB plants ready to go. Fabric comes in on large rolls, where it is laid on large tables, cut and sent to the sewing departments for further operations. The leather comes in precut pieces in boxes so that all we have to do is unpack it, cut the vinyl and the black paper that doesn't show, sew what we have to and then send it to be stuffed and put on the frame. 50 to 60 % of our operations right now are cut and sewn in CHINA. This is cloth and leather combined.
They tell us that there will be other jobs that we can do in the plant. These jobs will be in their "cells" (small upholstery groups).... Tell me, how many women do you know that have the UPPER ARM STRENGTH that it takes to be able to pull fabric that has been stuffed, hold it in one place while stapleing it to a frame? Not many. We have women that know nothing but the sewing operations. Most of whom are fast approaching the retirement age.
I know of what I speak first hand as I have been a LOYAL LZB employee for 10 years. It don't look to me like I will be able to retire from there unless I can figure out a way to age another 10 years in the next 12 months!
"GREED"
I WORK FOR LA-Z-BOY AND WHAT YOU DONT UNDERSTAND IS THAT ALL THE PRODUCTS THAT WOULD HAVE EPA REGULATIONS ON THEM ARE NOT EVEN MADE IN THIS COUNTRY. ALL THE FABRIC, LEATHER, METAL PARTS, WOOD, ETC. IS MADE IN OTHER COUNTRIES THAT DONT FALL UNDER EPA ANYWAY. IVE BEEN WITH THIS SO-CALLED COMPANY FOR 16 YEARS AND THE BIG CEO'S JUST KEEP GETTING RICHER AND THE EMPLOYEES JUST KEEP GETTING POORER. THEY HAVE CUT MY RATES SO BAD THAT YOU CANT EVEN MAKE A DECENT LIVING. LA-Z-BOY IS SELLING OUT THE AMERICAN PEOPLE. WHAT COMES AROUND GOES AROUND. WHO DO THEY THINK WILL BUY THEIR PRODUCTS WHEN THE AMERICAN WORKERS ARE OUT OF A JOB? THE MEXICAN, CHINESE, ETC. I DONT THINK SO!!!! IT WOULD TAKE A YEARS WAGES FOR THEM TO PURCHASE 1 CHAIR. SO DONT THINK ITS THE EPA. ITS "GREED" PURE & SIMPLE!!!!!
Lazboy what a joke
all of you lazyboy workers in tremonton, ....drop these suckers like a dead duck....quit today, walk of the job, draw unemployment while looking for another job....lazy boy doesn't deserve good workers like all of you....give them a run for their money....leave em without workers right now...don't wait for the boom to fall on you..get out of there...and don't ever, ever, ever, buy anything made or designed by lazy boy ever again and be sure to spread the word......you all thought you could retire someday...so much for the greed of american corporations like lazy boy...my sincerest condolonces to all of your great workers who have been dealt very unjustly.....remember the early americans...they wouldn't put up with this nonsense, they would leave and get a job where an employer appreciates all that you do...if you can find one out there ...but in the meantime don't give lazy boy the satisfaction of using you for a little bit longer....
long live the american spirit minus the mexican spirit would make for a better usa.
lazyboy
lazyboy is not the only company going over seas if you ever stop and look at what you have at your home its probably not made in america either
NAFTA
NAFTA (Now Another Foolish Trade Agreement) that Bush/Clintons have supporting claiming it will create jobs for the American people, well it did not. Bush wants to go further with CAFTA. It is no wonder why we are in ression. The article furthermore mentions a supplier in China. The corporations need to focous on people and not profits and making the American familes rich and not the CEO. After this tranisition in which I beleive will be faster than predicted to going to Mexico, will not stop at sewing, I beleive they will send the assembly work there as well.
We need to BOYCOTT anything that is made in a 3rd world country even if we have to do without. This is the only way we can stop the trend of outsourcing. Along as obsessed consumers go to Wal-Mart and buy all the cheap junk from China/Mexico etc the companies will continue this trend, seeing Americans is accepting it. If we as a country STOP buying outsourced junk then a message will be loud and if they do not relocate manufacturing on our homeland then we will not buy it anymore and they will go out of business, it would be no loss to us.
We can no longer depend on our goverment to protect us from imports only the consumer can do it, so Just say no to imports!!!
If it is not American made, then it is not good enough!!!!
My boycott will not send a message alone, it will take everyone to participate in a national BOYCOTT of 3rd world made productds!!!!!!
Let just do not complain do something about it, BOYCOTT is the only way!!!!!!!!!
We can talk about it yet our voices will go unnoticed, we can quit spending our money on it and that will not go un noticed.
When you go to buy, say by to imports before someone job will say buy to them. And Buy AMERICAN!!!!
sad
This is just another continuation of NAFTA! Americans have been sitting fat in their Lazy Boy chairs and upholding traitors like Clinton and Bush that brought us this treason. If you don't know what nafta stands for, look it up in the same computer that you are reading this comment on. Educate ourselves, or we will all end up slaves in the country our founders died to make free! Ron Paul was trying to warn us about this kind of abuse of power for years.
I say to the employees of lazyboy to leave and let the company suffer for their greed. They will be gone this summer anyway, and the results to their private lives will be the same.
Sincreley,
a never again customer of Lazy boy,
Sterling Smith
GREEDY LAZYBOY DECISION
"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.”
ARE THEY SERIOUS? THEY COULD NOT CARE ANY LESS ABOUT THOSE EMPLOYEES AND THEIR FAMILIES. I WOULD LOVE TO SEE ALL EMPLOYEES QUIT ON THEM, SUPPLIERS STOP ORDERING THEIR PRODUCTS AND CUSTOMERS STOP BUYING IT! GO ON AND MOVE THEIR WHOLE ENTIRE GREEDY BUSINESS TO MEXICO, WE WON'T BE BUYIN'! HELL, BEFORE VERY LONG, THEY WON'T HAVE ANYONE TO WORK FOR THEM IN MEXICO, COS THEY'RE ALL OVER HERE!!!! WOULDN'T THAT BE JUSTICE!
GOOD ONE! LOL
GOOD ONE! LOL I LIKE THE WAY YOU THINK MAD AMERICAN! AND THEY WONDER WHY SO MANY AMERICANS ARE NOT WELCOMING THE ILLEGALS ANYMORE! THEY ARE BEATING US OUT OF ALL OF OUR JOBS. AND NOT JUST THIS COMPANY... MANY OTHERS MOVE OVER THERE AND THE IMIGRANTS THAT ARE COMING OVER ARE BEATING US OUT OF JOBS OF QUALITY LABOR SUCH AS CARPENTERS, FLOORING SPECIALISTS, AND OTHER CONTRACT WORK SO THEY CAN DO THEIR SHOTTY MAKE-SHIFT MEXICAN ENGINEERING THAT THE SKILLED WORKERS HAVE TO FIX LATER. SEND THEM HOME!
FOOD FOR THOUGHT...:
COULD THEIR PRESENCE HERE BE THE BIG REASON THE ECONOMY IS SO BAD RIGHT NOW? I MEAN, WE HAVE KNOWN THEIR PRESENCE IS/WILL CONTINUE TO BE TAXING ON RESOURCES THAT WE THE TAX PAYERS WERE SUPPOSED TO KEEP "FLOWING". BUT IF MORE ILLEGALS WHO DON'T PAY TAXES ARE USING SAID RESOURCES THAN THERE ARE PEOPLE PAYING INTO IT, IT WOULD BE ALMOST DEFINATE THE RESOURCES AND MONIES FUNDING IT WOULD QUICKLY DEPLEAT. WE HAVE TO SECURE THE MEXICAN BORDER AND KEEP TIGHT REGULATIONS AND "PROCEDURES" TO HOW MANY, HOW OFTEN, AND WHO GETS TO STAY IN THE U.S. AND THE EXCUSE THAT "WELL HE WILL SHOVEL COW-POO FOR $3.50 HR VS AN AMERICAN WHO WANTS $8 HR" IS NO LONGER A VALID EXCUSE.
VOTE NICKY G FOR PRESIDENT IN 2008... LOL
I SMELL A BOYCOTT!
LETS SEE IF WE CAN GET THEM TO QUIT SELLING IN U.S. SINCE THEY SEE GREENER PASTURES (AT OUR EXPENSE) IN MEXICO. LET THEM KEEP THEIR PRODUCT THERE AS WELL. ITS NOT LIKE WE DON'T HAVE CHOICES OF AMERICAN MADE BRANDS OF FURNITURE.
Only in America. Greedy
Only in America. Greedy corporations take jobs from American workers and send them to Mexico (in this case) while Mexico sends their rejects to America to milk American social programs. The real American people have been betrayed by their country and corporate leaches.
WHAT GONNA HAPPEN TO THE
WHAT GONNA HAPPEN TO THE PEOPLE OF AMERICA MANY FAMILY'S GETTING HUNGRY WHILE THE OTHERS COUNRTY GIVE THEM JOB...THIS IT TOO SAD.....WHY NOT CUT OFF ONLY THE PAY OF LOCAL WORKRS INSTEAD TO LAY OFF THEM...
Profits should fall I will
Profits should fall I will no longer buy lazy boy and that is what is in my house and what i was going to take my son shopping for since he is soon to be married
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you leave you die
I wish the U.S. would adopt a new law once a company leaves the U.S. they cant re-enter (the U.S.A.)to set up anymore factorys in that name like LZB(or any other company for that matter). If they come back they have to pay a back up taxes on the day they left U.S.. Cheap labor is wrong. I wont buy another thing from LZB or any over seas