MUSCATINE, Iowa (AP) — Office furniture and fireplace hearth maker HNI Corp. said Friday it plans to close its Richmond, Va., manufacturing plant during the first half of 2008, impacting about 370 workers.
The company plans to consolidate production into its facilities in Cedartown, Ga., and Muscatine, Iowa. HNI said the decision is expected to save more than $10 million a year starting in 2009.
HNI anticipates spending $6 million in capital expenditures during 2007 and $3 million in 2008 on the initiatives. The resulting charges will hurt pretax earnings by about $15 million to $17 million during the period from 2007 through 2009.
HNI anticipates recording about $3.5 million in restructuring costs during the third quarter, and between $2.5 million and $3.5 million in the fourth quarter. The expenses are expected to increase to between $8 million and $9 million in 2008 and then fall to $1 million in 2009.
HNI said the consolidation will reduce structural costs and streamline customer fulfillment at HNI's office furniture operating unit, HON Co.
''Rising freight costs and the opportunity to provide our customers with a better, more cost-effective fulfillment process necessitated this realignment,'' said HNI Chairman, President and Chief Executive Stan Askren.
HON will also move distribution centers located in Richmond and Cedartown to a third-party logistics provider.