Office furniture maker HNI closes Kentucky factory

DES MOINES, Iowa - Office furniture and fireplace insert manufacturer HNI Corp. said Friday it plans to close a Kentucky factory to reduce costs.

The company said it notified workers and union officials of its decision to close the Owensboro, Ky., office furniture factory beginning in the fourth quarter. The work will be absorbed by other factories. The closure should be completed by the end of the second quarter 2010.

Total cost savings wont be known until after the company negotiates closing details with the union, said Gary Carlson, a company vice president.

The plant, which is part of the HON Co. division, employs 150 workers, including about 125 represented by the United Steelworkers Local 9443.

The closing will cost about $6.1 million.

The Greater Owensboro Economic Development Corp. said on its Web site Friday that it has offered more than $2 million in incentives and training grants to entice the company to keep the plant open.

Muscatine, Iowa-based HNI said in July its second quarter sales fell 37.5 percent. It lost $1.4 million, or 3 cents per share, compared with a profit of $13.5 million, or 30 cents per share the year before.

The company has been reducing manufacturing costs for the past few years. It closed a plant in Louisburg, N.C., in July and one in Richmond, Va., last year. A Monterrey, Mexico, factory was shut down in 2007. Others were closed in Washington and California in 2006.