First Year A Struggle For Harpers Plant Parent Company Reports Lag In Sales, Productivity
Managers at Harpers Inc. were all smiles Thursday while showing off the company’s expansive furniture manufacturing plant to Idaho Gov. Phil Batt.
However, officials at Kimball International Inc., Harpers corporate parent in Indiana, have reason to frown.
Harpers hasn’t lived up to some of the expectations that accompanied its opening a little more than a year ago. The company suffers a lag in new orders and still does not have the large work force that was promised to Inland Northwest business recruiters.
In the company’s most recent quarterly financial report to the Securities and Exchange Commission, Kimball reports sales and orders are down for its steel office-furniture division - Harpers.
“The company expects operating losses on steel office furniture product lines to continue into the 1996 fiscal year,” Kimball reports in the 10-Q report for the fiscal quarter which ended March 31, 1995.
The decline in performance for the steel furniture division during the first nine months of its fiscal year was blamed on “continued production inefficiencies at the new Idaho facility (that) were compounded by increased competitive pricing pressures in this product line.”
All other Kimball product lines showed improvement in sales and operating income during the reporting period, according to the report. Kimball also makes pianos, wood furniture, cabinets and electronic contract assemblies, among other products.
Harpers has yet to start building up an inventory, General Manager Greg Davis said Thursday. So all the work that the plant does comes from customer orders.
According to Kimball’s SEC statements, the orders for steel furniture during the fiscal quarter were down 8 percent below the year-earlier period.
Harpers has faced substantial hurdles to getting its 500,000-square-foot Post Falls factory up to full speed.
The complex painting system for the office furniture slowed production because it continued to break down. Getting it to work properly took nearly a year, compounded by glitches like power outages and smoke from grass burning last year that set off smoke alarms and idle the system for nearly half a day at times, Davis said.
The machine worked fine for Batt Thursday, spraying a fine mist of beige paint on panels dangling from hangers.
Davis has said the plant was still working out kinks during the beginning of the year, the period of Kimball’s report to the SEC. The plant has since improved its efficiency and performance, he said.
Despite that improvement, the company’s work force isn’t growing as rapidly as expected.
Harpers originally estimated it would employ 600 workers. Last month, Davis said 480 people worked at the plant. Thursday he told Batt that 425 people now work there.
The governor’s visit was a celebration of sorts for Harpers, not a time to reflect on the company’s woes. Batt toured Harpers and other North Idaho businesses to support the work of his Economic Stimulus Committee, a group of private business people who look at Idaho’s economy.
Employees stopped to shake Batt’s hand and waved at him from assembly tables in the factory. When told that Harpers could add more workers to the North Idaho economy - which lags behind the rest of the state - Batt liked what he heard.
“This is impressive,” Batt commented to Harpers staff. “I’m especially pleased that you are considering expansion. Idaho needs more of these jobs.”
Adding more employees will be a completely market-driven decision, Davis said. He had hoped to see the facility ramp up by the end of the year.
Harpers management also faces a union drive on the production floor. Local 582 of the Teamsters out of Spokane has been trying to force a union election by persuading 30 percent of Harpers workers to sign cards saying they want the union to bargain for them.
However, the union has not been successful in getting the necessary cards to persuade the National Labor Relations Board to hold the vote.
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