This week’s events could have a major impact on the future of businesses and employees in Northeast Mississippi.
And no, we’re not talking about the Affordable Care Act, aka Obamacare, though that will have an impact in other ways. But that’s a story for another day, as the saying goes.
The events I’m talking about have to do with two major employers in the area, both of whom employ about the same number of workers: Cooper Tire and Lane Furniture.
On Monday, shareholders for Cooper are set to vote on the company’s merger with India-based Apollo Tyres.
The $2.5 billion deal, in which the smaller Apollo is buying Cooper in an all-debt transaction, has many worried.
Opponents say Cooper would have to pay $150 million to $200 million yearly in debt service, a strain on its finances. Retirees worry there have been no assurances their pensions are guaranteed. Cooper’s three U.S. plants worry Apollo will not invest in the facilities and send jobs elsewhere.
But many analysts say the debt concerns are overblown, that the investment banks backing the deal have it covered just fine.
And the shareholders’ vote is a mere formality. Most of the shares are held by institutional investors who will most likely back the deal.
But the vote doesn’t finalize the merger. There’s still the issue of the union workers at Cooper’s plants in Findlay, Ohio and Texarkana, Ark, who put a wrench in the merger recently. An arbitrator said Apollo will have to negotiate with them before the plants can be sold. Cooper was not too pleased with the ruling, needless to say.
Meanwhile, the 1,300 Cooper workers in Tupelo are wondering if a) the deal goes through and b) what happens if and when the merger is finalized.
Then there’s Lane Furniture. For a month now, workers have been caught up in the parent company’s Chapter 11 bankruptcy filing.
Furniture Brands International said it hopes to sell off most of its assets – except Lane – to an equity firm. Another firm said it has interest in all of FBI’s brands, including Lane.
Furniture Brands said when it filed Chapter 11 it hoped to sell Lane to an interested buyer within 30 days, and we’re in that window this week.
Would a buyer be the salvation for Lane? Perhaps. With more than 1,400 people working for the company across the region, we certainly hope so. But unfortunately, most furniture analysts don’t think a buyer will be able to keep everyone on board.
Offering a bit of hope is that Ashley Furniture and Jackson/Catnapper have advertised quite a bit that they’re hiring workers. Other furniture companies are adding employees, too. And Posturecraft, the Alabama mattress maker relocating to Plantersville, is hiring.
A lot of questions, a lot of worries, a lot of hope. That’s what this week brings.
Dennis Seid is the Daily Journal’s business editor. Contact him at (662) 678-1578 or firstname.lastname@example.org.