Dorel suspends most manufacturing at Michigan furniture plant, 170 jobs affected

MONTREAL (CP) – Dorel Industries Inc. (TSX:DII.B) is suspending most of the manufacturing at its Ameriwood furniture plant in Dowagiac, Mich., affecting 170 of 215 employees there.
“While we remain convinced that there will be sustained demand for domestically manufactured ready-to-assemble furniture, we have concluded that with the improvements made to date, our manufacturing footprint exceeds anticipated market needs,” CEO Martin Schwartz said in a release Thursday.


The suspension “will ensure the long-term viability of our domestic operations and speed Ameriwood’s profitability growth,” he said.
“RTA furniture is a business we know well and will maintain. We are confident that, despite a difficult environment, we will definitely prevail.”
The suspension at Dowagiac will result in a pre-tax restructuring charge of about $11 million, most of which will be recorded this year. Of that amount, about $9 million will be a non-cash charge representing the writedown of building, equipment and other assets.
In the annual outlook, organic revenue growth is expected to be modest, but earnings improvements will outpace revenue increases.
On the home furnishings segment’s other businesses, Dorel’s president said that despite a slow first quarter at Cosco Home & Office, which markets folding furniture, step stools, ladders and home healthcare products, the balance of the year is expected to be better than 2016.
Dorel Asia, which designs and sources furniture, experienced a record 2016 and is expecting more of the same in 2017.
Dorel Industries is a global company engaged in designing, manufacturing and marketing consumer products sold through its juvenile, home furnishings and recreational/leisure segments.
Based in Montreal and with significant operations in the United States and Europe, Dorel employs about 4,700 people in 15 countries. Annual sales total US$1.8 billion.