MONROE -La-Z-Boy Inc. will cut 500 jobs, or nearly 5 percent of its workforce, in a newly announced restructuring plan that will include factory closures and consolidations.
The move will affect some jobs in Monroe, world headquarters of the nation's second-largest furniture manufacturer. But spokesman Mark Stegeman was unable to provide information about the number or nature of positions involved there. The number is expected to be fewer than 100, according to the company's formal announcement yesterday.
"These moves are necessary for our company to remain com-
petitive and we will provide outplacement assistance to these employees during this transition period," Chief Executive Kurt Darrow said in a statement.
The restructuring plan is part of a series of moves in recent months to restore profitability to the struggling firm, which like other U.S. furniture companies has been battered by low-cost foreign imports. The latest actions include:
•Shutdown in July of a factory in Lincolnton, N.C., which makes La-Z-Boy-branded recliners and occasional chairs. The plant employs 250. Work will be moved to plants in Newton, Miss., Siloam Springs, Ark., and Dayton, Tenn.
•Closure in May of a 150-employee Iuka, Miss., factory making sofas, loveseats, and upholstered chairs for the firm's Bauhaus division. Work will shift to Saltillo and Sherman, Miss.
•Additionally, 100 jobs will be lost as part of changes in La-Z-Boy's corporate structure; closure of a lumber mill in North Wilkesboro, N.C., and transfer of work to an existing mill in Hudson, N.C.; and a plant consolidation in Taylorsville, N.C., that will reduce facilities of the firm's Kincaid unit there from three to one.
The company did not say how many are employed at each plant or when the changes will occur. The actions will save $11 million a year when fully implemented. Initially, however, the firm will take a pre-tax charge of $9 million to $10 million, or 11 to 12 cents a share, to cover employee severance payments and other costs.
In earlier moves to improve La-Z-Boy's financial position, executives announced they plan to sell the firm's Sam Moore, Pennsylvania House, and Clayton Marcus divisions. Last month, the firm revealed that in the fiscal quarter ended Jan. 27 it lost $7.8 million on sales of $403.9 million, which were down 10 percent from the year-earlier period.
The Lincolnton closing will reduce the firm's capacity to produce La-Z-Boy-branded chairs and other upholstered furniture by 5 percent but will not affect deliveries to customers, officials said. The furniture maker has 11,350 employees worldwide.
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