MUSCATINE, Iowa–At the beginning of September, HNI announced they will build an additional plant in Saltillo, Mexico. The plant, scheduled to open in the first quarter of 2022, will mainly produce office seating. HNI offers a variety of office and home office furniture, which has sold well throughout the COVID-19 Pandemic.
Steven Bradford, senior vice president, general counsel, and secretary, explained that the new plant will primarily address labor shortages that have affected HNI along with other manufacturers across the country since the beginning of the COVID-19 Pandemic. He stated: “we are faced with an acute labor situation. Roughly speaking, there are 10.8 million open positions in the US, which is 3 million more than pre-COVID. Demand for our products is high, yet we are unable to hire sufficient production workers to return to pre-COVID levels.” With concerns about the COVID-19 Pandemic lingering and many people debating whether to seek in person or remote work, Bradford noted that at HNI, “employment applications are down 25%-30% versus pre-COVID levels.”
While HNI has offered several incentives and programs to entice more workers to their Muscatine location, it still has not brought in enough people for the company to return to pre-pandemic staffing levels or to keep up with current demand for their furniture. “To attract more production members, we are paying $2,000 hiring bonus for first shift and $3,000 hiring bonus for second shift, allowing more part time work, doing more member appreciation activities, and increasing pay for most production workers to ensure our wages are competitive,” outlined Bradford. “Still, we are unable to find sufficient production workers to meet customer demand for our products.”
This situation has led to members in Muscatine having to work a significant amount of overtime. By adding an additional plant, Bradford believes HNI can fill all orders for their products while allowing their staff in Muscatine to return to their typical hours. “There will be no change to operations in Muscatine and no job losses–the new plant will provide additional capacity,” emphasized Bradford, “the large amount of overtime work being performed by members in Muscatine may reduce once the facility in Mexico is operational. Our members have expressed their appreciation for this added capacity.”
As HNI begins their work on their new plant in Mexico, they hope it will keep their business, in all its locations, successful. “We are always evaluating and reorganizing our structure and capabilities to better serve our customers and to meet the needs of our customers for our products and services,” shared Bradford. “This includes continually looking at our production capacity and capabilities.” Through this work, Bradford hopes that HNI as a whole can, “meet the high customer demand for our products.”