Sit back in your La-Z-Boy recliner,
whether it was made right here
or it was made in Chinar.
Take the time and carefully read,
how people right here
can be affected by greed.
All right. So I was a better poet in eighth grade than I am now. Right now, I make a little over $30,000 a year to try to prepare people to be able handle jobs that may not exist 10 years down the road.
On the other hand, Kurt Darrow, who has been CEO of La-Z-Boy, a major Neosho employer, since September 2003 is being paid more than $800,000 to send those jobs to Asia. According to information provided to company stockholders, Darrow has a base salary of $491,321. He also receives a bonus of $209,425, has stock options worth $50,000 and "other" compensation amounting to $76,806 or about $828,000 total.
What has Darrow done to earn that money?
In yesterday's Turner Report, information was provided from La-Z-Boy's latest filing with the federal Securities and Exchange Commission, in which Darrow said the company would bounce back by moving its manufacturing operations from the U. S. overseas. Of course, he hedged his bets by saying that comeback was going to take a while.
La-Z-Boy management's plan has not been any secret.
The Aug. 11 Toledo, Ohio, Blade featured an interview with Darrow, in which he said the company is "fundamentally changing our processes and business practices." He said La-Z-Boy could no longer sit back and let competitors continue to gain advantages, according to the article.
The interview took place during a week in which Darrow authorized the closing of three plants, two in Pennsylvania and one in Mississippi, and a warehouse complex in Pennsylvania. Those moves cost 550 people their jobs, according to the article, but Darrow was upbeat about the layoffs, noting that it would save La-Z-Boy $8 million to $10 million annually.
Apparently, nothing gets in the way of corporate profits more than American workers with their salaries and benefits. At the same time as those closings were announced, La-Z-Boy announced the temporary closing of a fourth plant in Hudson, N. C., which put 120 more workers on at least a layoff.
From the Toledo Blade article, "Explaining the firm's decision to boost imports from China, Mr. Darrow, who recently completed his third trip to that nation is as many years said La-Z-Boy can't ignore economic realities such as cheaper raw materials and growing furniture manufacturing prowess in the Asian nation.
"Mr. Darrow said La-Z-Boy wants to import 75 percent of its wood products, including dining room sets and bookcases, from Chinese manufacturers. That is up from 40 percent now.
"The growth of imports has angered manufacturers and the U. S. Commerce Department, which recently found that some Chinese manufacturers dumped $1.2 billion worth of products in the United States at unfairly low prices."
Apparently, the reason La-Z-Boy is not shipping out all of its manufacturing to China has nothing to do with any loyalty toward employees. The Toledo Blade article said, "The 25 percent of its wood products that La-Z-Boy will continue to make will include solid-wood pieces and children's furniture, which are not widely available from China."
Other areas of La-Z-Boy will remain in the U. S. for the foreseeable future, the article said. Darrow told reporters that production of sofas and other upholstered furniture will continue in the U. S., but he will be watching China "intently" for manufacturing improvements in those areas.
"If it does improve," Darrow said, "we'd rather be on the front side of the curve this time rather than the backside of the curve." Part of the problem on moving that area from the U. S., Darrow indicated was the pesky stubbornness of American consumers.
"In the upholstery business, a large segment of consumers are interested in their choice of fabric or their choice of frame. There are serious hurdles to provide a 'have it your way' solution from offshore."