Friday, March 04, 2005

La-Z-Boy is making profits, but workers at the Neosho plant won't be seeing any extra money because of it.
Workers received notices from management recently that their annual cost-of-living pay increases, which normally kick in on March 1, would not be coming this year.
The notice read as follows:
"Through the first three quarters of this year, we have seen steady improvements in our sales results. While this is a positive trend, our cost of production continues to be higher than last year primarily as a result of continued increases in raw material pricing. We have seen increases in hot rolled steel up more than 100 percent over last year. Plywood prices have continued to increase as well. All this combined has led to a less than acceptable financial performance for the Residential division this fiscal year.
"With high energy prices, rising interest rates, and a weakened dollar, we find it necessary to initiate a number of measures to improve our financial performance. We must make every effort to deliver the highest possible performance for the remainder of the fiscal year and improve from that level as we head into next year. In order to keep growing as a company, we must differentiate ourselves from our foreign competition so that our customers will understand the difference between our products and theirs.
"As an example, we have eliminated the summer shutdown in order to deliver product every week. As another example, we are now using leather cut and sewn product which enables us to be price competitive at certain price points. And another example is the transition we are going to make to cellular manufacturing (additional information will be coming in the near future). All of these things will reduce costs, improve delivery, improve quality, and will ultimately position our company to remain a growing company for the future.
"Even with these changes, it is necessary in the short term to make other tough decisions in an effort to improve our current financial performance. As such, we have decided to postpone all salary and hourly wage increases for this year. I would like to challenge each of you to do what you can to improve our overall performance and we will continue to look for new ways to improve our operations. As we improve our results, we will consider salary and hourly wage increases at that time.
"I know I can count on all of you to do your part in finding ways to be more productive and reduce costs. I am confident that taking these necessary and proactive steps will insure our near-term and future success."
The notice was signed by John Kellogg, plant vice president. It might be added that Kellogg did not deliver the message in person, as he has done with good news in the past.
That appears to be way industry and big business are headed these days. Instead of rewarding employees for working hard and making the company a profit, you tell them they will receive no extra pay or benefits unless they work even harder and make the company more money.
Of course, by that time operations may be ready to go in China and there will be no more need for workers at La-Z-Boy Neosho.

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