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Posted: 5:15 PM- La-Z-Boy Inc., the maker of the namesake living-room recliners, will close a factory in Utah and move 1,200 U.S. manufacturing jobs to Mexico to reduce costs.
The facility in Tremonton employs 630 people, La-Z- Boy said today in a statement. The plant, which makes furniture and upholstery, will close within the next several months.
La-Z-Boy cut 500 jobs last year after shutting down three plants in the United States. The reductions come amid declining industry sales caused by the deepest housing slump in at least a quarter century. The company's revenue dropped 7.8 percent in the quarter ended in January.
La-Z-Boy, based in Monroe, Mich., will reduce costs by $25 million annually from the job cuts, starting in 2011, the company said.
The furniture maker will have a pretax expense of $17 million to $20 million, or 20 cents to 24 cents a share, related to the reductions. The expenses will be incurred in the fourth quarter and in the following two years.
About 1,050 La-Z-Boy employees at five upholstery plants in the U.S. will lose their cutting and sewing jobs in the next 18 to 24 months because of the shift to Mexico. La-Z-Boy plans to hire about 400 positions in the United States as it moves production from the Utah plant.
The company has about 8,100 employees in its upholstery division, spokeswoman Kathy Liebmann said. La-Z-Boy plans to begin production at the Mexican facility, located in Ramos Arizpe, early next year.
La-Z-Boy rose 16 cents to $8.85 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have dropped 30 percent over the past year.