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Lexington furniture plant will be closed
350 jobs gone by mid-October; Stanley was last in its class operating in Davidson County
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Published: July 9, 2008
Davidson County's battered furniture industry received another major blow yesterday with Stanley Furniture Co. Inc.'s decision to close its Lexington plant and cut 350 jobs by mid-October.
The announcement is particularly stinging, local officials said, because the plant at 802 W. Center St. represents the last major operation left in a county that has been at the epicenter of a collapse of domestic furniture making since January 2000.
Counting the Stanley closing, Davidson will have lost almost 5,000 furniture jobs in the past 71/2 years. Stanley will keep about 20 jobs at a separate warehouse in Lexington.
"I don't think there's any exaggeration in saying that Stanley's work force represented the best of the best that Davidson County had to offer in furniture manufacturing," said Steve Googe, the executive director of the Davidson County Economic Development Commission.
"Stanley benefited over the years from people losing their jobs at Lexington Home Brands and Thomasville Furniture. A lot of these people have been making furniture most of their adult life," he said.
"But business conditions being what they are in the furniture industry, it's not surprising that even a company as committed to domestic manufacturing as Stanley had to make this decision," Googe said.
Stanley's is the third plant-closing announcement in the region since June 26. The shutting down of a Drexel Heritage and Henredon plant in High Point will eliminate 300 jobs, and the closing of an American of Martinsville Inc. plant in Martinsville, Va., will cost 400 jobs.
This is also Stanley's second plant closing in the past nine months. It closed a plant in Martinsville, which resulted in the elimination of 250 jobs.
Jeffrey Scheffer, the president and chief executive of Stanley, said that "a perfect storm" of a housing slump, shrinking disposable income and slipping consumer confidence led to the decision to consolidate North Carolina production into a more modern plant in Robbinsville. Stanley plans to add 200 jobs in Robbinsville, and company officials said that there will be some opportunities for employees in Lexington to move.
"The trends have led to an industrywide weakness in consumer demand for residential furniture not seen since the early '80s," Scheffer said. "We are making difficult moves from top to bottom and throughout our business to remain profitable now, and to be well-positioned for continued success when demand eventually improves."
Stanley said it is cutting two executive positions -- vice president of purchasing and vice president of human resources -- as part of the restructuring. It also is offering a voluntary early- retirement incentive to qualified salaried employees.
Ken Smith, the director of furniture services for Smith Leonard PLLC, said that Stanley is adjusting its capacity "to what it thinks its volume needs will be."
Scheffer said that despite the closing, Stanley remains committed to domestic manufacturing "which accounts for about two-thirds of our revenues."
"However, it means we must continue to manage our costs through improved work flow, labor productivity and better asset utilization," Scheffer said.
Stanley said it plans to take a pre-tax restructuring and impairment charges in the second half of 2008 of up to $8 million related to the closing. It expects annual savings of up to $6 million from the consolidation.
Googe said that a silver lining from having had so many furniture plant closings in recent years is that Davidson is well prepared to help the Stanley employees.
"Davidson County Community College has probably retrained about 5,000 people who have lost their furniture job," Googe said. "We also have proven that companies are attracted to skilled former furniture workers, which has been big in our ability to recruit a diverse company base for our future economy."
■ Richard Craver can
be reached at 727-7376 or at rcraver@wsjournal.com.
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