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How United Furniture went from state-funded darling to coldly laying off 2,700 workers

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How United Furniture went from state-funded darling to coldly laying off 2,700 workers

United Furniture Industries — the Tupelo-based furnishings manufacturer that recently laid off its entire staff via email and text message – received more than $3 million dollars in taxpayer money through business incentive grants since 2009.

The furniture company regularly got sums every few years — ranging from $200,000 to $1.3 million — in exchange for the promise to create jobs.

It was the largest employer in Monroe County. Now, its owner is missing and its former employees are filing lawsuits and hunting for new jobs.

“It’s a disgrace is what it is,” Jackson-based attorney Phil Hearn told Mississippi Today. Hearn is leading a class-action lawsuit on behalf of hundreds of workers.

United was an anchor of the furniture manufacturing hub of Northeast Mississippi — among the dozens of companies benefitting from decades of tax breaks to do business in-state. The companys buildings in Lee County were free from local and state property taxes, another incentive perk. It also likely saved massive amounts of money on its payroll taxes as part of a job creation rebate program and tax credits from a special program for upholstery companies.

When then-Gov. Phil Bryant announced that United would get more than $1.3 million to support an expansion in 2013, he called the manufacturer “a valued business partner for the State of Mississippi.”

In 2015, the company got $500,000 more with similar fanfare. Then, $200,000 the next year and another promise of 100 new jobs. Both the most recent grants were awarded through the state’s “ACE” program – commonly referred to as “deal closing funds” when competition is fierce.

Every celebrated announcement touted jobs, partnerships and keeping Mississippians at work in the furniture industry.

But with one email to 2,700 employees overnight a few days before Thanksgiving, that long-standing partnership shattered. The company wasn’t just closing – it was already closed. No federally-mandated warning to employees that layoffs were coming. No announcement of a sale. No filing for bankruptcy.

Just closed.

Hearn said in his three decades as an attorney handling employee rights cases, he’s never seen anything like this: a total disregard for labor laws, no planning, and limited information available to workers.

“I’ve been with the company through several owners and names,” line worker Jeff Jones told the Daily Journal. “We’ve always bounced back. In the email they made it perfectly clear there’s no bouncing back from this.”

Jones worked for United Furniture for more than 30 years.

Hearn said the state’s history of supporting the company gave employees a sense of security that made the sudden collapse even more shocking.

“It can be difficult to evaluate some of these incentive programs for various reasons,” said State Economist Corey Miller. “A number of companies that get them get more than one incentive, and it’s difficult to untangle the impact of each one.”

Miller said in the case of United, the company’s sudden fall doesn’t mean the millions the state put up to support the company were for nothing.

“I don’t think they necessarily weren’t worth doing,” Miller said. “I haven’t evaluated the whole situation, but it’s possible because they were around for a while, people had jobs, that the state got some return on investment.”

United Furniture was created after a merger between three companies in 2000: Comfort Furniture, Parkhill Furniture and United Chair. Comfort Furniture, the leading of the three, was founded in Mississippi in 1983.

Over the 2010s, the company regularly received state-funded support in grants through the Mississippi Development Authority. In addition to grants, the company was also certified to participate in the state’s Advantage Jobs Incentive Program, which allows companies to have up to 90% of payroll taxes withheld for up to a decade dependent upon the number of jobs it created.

In 2020, the revenue department projected the total cost of the program would be about $18 million and covered a dozen companies in 10 counties – including in counties that were home to United facilities.

Another tax credit program, specific for upholstery companies such as United, allows them up to $2,000 job tax credit per position created since 2010 and covers up to 100% of their income tax liability.

But any details about if United – or any one company – took advantage of either programs and to what extent isn’t public, according to the state Department of Revenue.

By 2017, United had about 3,500 employees and facilities in Nettleton, Tupelo, Okolona, Sherman, Vardaman, Amory and out-of-state facilities in North Carolina and California. The company took over a Belden factory that belonged to a competitor, buying out the Lane brand for an undisclosed amount.

But in July of this year, United announced it was laying off 300 people and closed its Amory plant because it was turning the facility into a distribution warehouse. After the layoffs, the company still had 17 facilities (including one in Vietnam) and about 2,700 employees.

“Our team is committed to the long-term success of our company,” then-Chief Executive Officer Todd Evans said in a statement at the time. “That commitment requires right-sizing at the present time. We are confident that the product, sales, and operational plans that we have established will provide for a successful future.’’

But that success didn’t come.

Miller, the state economist, said the United situation seems like more of an outlier — not an indication Northeast Mississippi’s furniture industry as a whole is in danger.

There has been some slow down industry-wide, Miller said. Companies aren’t seeing the same high demands for home furnishings they were during the pandemic. But most companies aren’t at a crisis level.

The larger economic impacts to the Monroe and Lee counties will depend upon how quickly workers are in new jobs, Miller said.

Nettleton-based furniture manufacturing company Homestretch Furniture hired 15 former United workers at a recent job fair. Ashley Furniture, another company with local manufacturing, has also recruited workers.

MDA declined to make any comments specific to United or its past grants, but Deputy Director Laura Hipp said in a statement that the state agency will “work with local economic development partners on how the needs of the area can be supported.”

Hearn, the attorney, said he’s seen entire families devastated: five brothers who all worked for United, a mother and two daughters – one pregnant – now without health insurance.

His clients largely fall into two categories: eager for another furniture job because it’s all they know, or eager for a change because they’re terrified the same thing will happen at another plant.

His clients range from executive-suite workers to line workers and truck drivers.

“They all have one thing in common,” he said. “They’re scared to death.”

Had United followed Worker Adjustment and Retraining Notification (WARN) laws, it would have given employees 60 days notice before the massive layoffs.

The decision to shutter the company came from Stage Capital LLC, the company’s owners. Head of Stage Capital, David Belford, has been missing since the email closing the company went out.

Hearn said he’s heard company rumors the millionaire – or possible billionaire – ran off to Paris.

United is now facing three class-action lawsuits – which a judge could roll into one case – that accuses the company of failing to follow the WARN Act and still owing workers their last week’s paycheck.

“I’ve never seen anything so callous,” Hearn said.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi Today

On this day in 1997

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mississippitoday.org – Jerry Mitchell – 2024-12-22 07:00:00

Dec. 22, 1997

Myrlie Evers and Reena Evers-Everette cheer the jury verdict of Feb. 5, 1994, when Byron De La Beckwith was found guilty of the 1963 murder of Mississippi NAACP leader Medgar Evers. Credit: AP/Rogelio Solis

The Mississippi Supreme Court upheld the conviction of white supremacist Byron De La Beckwith for the 1963 murder of Medgar Evers. 

In the court’s 4–2 decision, Justice Mike Mills praised efforts “to squeeze justice out of the harm caused by a furtive explosion which erupted from dark bushes on a June night in Jackson, Mississippi.” 

He wrote that Beckwith’s constitutional right to a speedy trial had not been denied. His “complicity with the Sovereignty Commission’s involvement in the prior trials contributed to the delay.” 

The decision did more than ensure that Beckwith would stay behind bars. The conviction helped clear the way for other prosecutions of unpunished killings from the Civil Rights Era.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

Medicaid expansion tracker approaches $1 billion loss for Mississippi

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mississippitoday.org – Bobby Harrison – 2024-12-22 06:00:00

About the time people ring in the new year next week, the digital tracker on Mississippi Today’s homepage tabulating the amount of money the state is losing by not expanding Medicaid will hit $1 billion.

The state has lost $1 billion not since the start of the quickly departing 2024 but since the beginning of the state’s fiscal year on July 1.

Some who oppose Medicaid expansion say the digital tracker is flawed.

During an October news conference, when state Auditor Shad White unveiled details of his $2 million study seeking ways to cut state government spending, he said he did not look at Medicaid expansion as a method to save money or grow state revenue.

“I think that (Mississippi Today) calculator is wrong,” White said. “… I don’t think that takes into account how many people are going to be moved off the federal health care exchange where their health care is paid for fully by the federal government and moved onto Medicaid.”

White is not the only Mississippi politician who has expressed concern that if Medicaid expansion were enacted, thousands of people would lose their insurance on the exchange and be forced to enroll in Medicaid for health care coverage.

Mississippi Today’s projections used for the tracker are based on studies conducted by the Institutions of Higher Learning University Research Center. Granted, there are a lot of variables in the study that are inexact. It is impossible to say, for example, how many people will get sick and need health care, thus increasing the cost of Medicaid expansion. But is reasonable that the projections of the University Research Center are in the ballpark of being accurate and close to other studies conducted by health care experts.

White and others are correct that Mississippi Today’s calculator does not take into account money flowing into the state for people covered on the health care exchange. But that money does not go to the state; it goes to insurance companies that, granted, use that money to reimburse Mississippians for providing health care. But at least a portion of the money goes to out-of-state insurance companies as profits.

Both Medicaid expansion and the health care exchange are part of the Affordable Care Act. Under Medicaid expansion people earning up to $20,120 annually can sign up for Medicaid and the federal government will pay the bulk of the cost. Mississippi is one of 10 states that have not opted into Medicaid expansion.

People making more than $14,580 annually can garner private insurance through the health insurance exchanges, and people below certain income levels can receive help from the federal government in paying for that coverage.

During the COVID-19 pandemic, legislation championed and signed into law by President Joe Biden significantly increased the federal subsidies provided to people receiving insurance on the exchange. Those increased subsidies led to many Mississippians — desperate for health care — turning to the exchange for help.

White, state Insurance Commissioner Mike Chaney, Gov. Tate Reeves and others have expressed concern that those people would lose their private health insurance and be forced to sign up for Medicaid if lawmakers vote to expand Medicaid.

They are correct.

But they do not mention that the enhanced benefits authored by the Biden administration are scheduled to expire in December 2025 unless they are reenacted by Congress. The incoming Donald Trump administration has given no indication it will continue the enhanced subsidies.

As a matter of fact, the Trump administration, led by billionaire Elon Musk, is looking for ways to cut federal spending.

Some have speculated that Medicaid expansion also could be on Musk’s chopping block.

That is possible. But remember congressional action is required to continue the enhanced subsidies. On the flip side, congressional action would most likely be required to end or cut Medicaid expansion.

Would the multiple U.S. senators and House members in the red states that have expanded Medicaid vote to end a program that is providing health care to thousands of their constituents?

If Congress does not continue Biden’s enhanced subsidies, the rates for Mississippians on the exchange will increase on average about $500 per year, according to a study by KFF, a national health advocacy nonprofit. If that occurs, it is likely that many of the 280,000 Mississippians on the exchange will drop their coverage.

The result will be that Mississippi’s rate of uninsured — already one of the highest in the nation – will rise further, putting additional pressure on hospitals and other providers who will be treating patients who have no ability to pay.

In the meantime, the Mississippi Today counter that tracks the amount of money Mississippi is losing by not expanding Medicaid keeps ticking up.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

On this day in 1911

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mississippitoday.org – Jerry Mitchell – 2024-12-21 07:00:00

Dec. 21, 1911

A colorized photograph of Josh Gibson, who was playing with the Homestead Grays Credit: Wikipedia

Josh Gibson, the Negro League’s “Home Run King,” was born in Buena Vista, Georgia. 

When the family’s farm suffered, they moved to Pittsburgh, and Gibson tried baseball at age 16. He eventually played for a semi-pro team in Pittsburgh and became known for his towering home runs. 

He was watching the Homestead Grays play on July 25, 1930, when the catcher injured his hand. Team members called for Gibson, sitting in the stands, to join them. He was such a talented catcher that base runners were more reluctant to steal. He hit the baseball so hard and so far (580 feet once at Yankee Stadium) that he became the second-highest paid player in the Negro Leagues behind Satchel Paige, with both of them entering the National Baseball Hame of Fame. 

The Hall estimated that Gibson hit nearly 800 homers in his 17-year career and had a lifetime batting average of .359. Gibson was portrayed in the 1996 TV movie, “Soul of the Game,” by Mykelti Williamson. Blair Underwood played Jackie Robinson, Delroy Lindo portrayed Satchel Paige, and Harvey Williams played “Cat” Mays, the father of the legendary Willie Mays. 

Gibson has now been honored with a statue outside the Washington Nationals’ ballpark.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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