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Furniture Maker Cuts Wages in Dumas.

Production employees at the Akin Industries Inc. furniture manufacturing plant in Dumas have been informed that their pay has been cut 7.5 percent, effective immediately.

Production employees are paid on a piece-work basis rather than by hourly wage, said Mike Akin, president of the company and a member of the Arkansas Economic Development Commission. The Dumas plant employs 29 production workers out of a total plant workforce of 87, Akin said.

Akin Industries, which has 120 employees in its original plant in Monticello, accepted a package of state incentives when it agreed to take over the Dumas plant in June after Bassett Furniture Co. shut down its operation in February. The Monticello plant manufactures tables and other non-upholstered furniture, while the Dumas plant produces upholstered furniture.

The pay cut does not affect production workers at Monticello, Akin said.

Akin has been criticized for accepting incentives from the state Department of Economic Development, which he advises as a member of the AEDC. He was, in fact, chairman of the commission at the time the incentive package was negotiated, although his term as chairman has ended.

Similarly, ADED has been criticized for offering incentives to a company already in the state, although two out-of-state manufacturers turned down the plant before it was offered to Akin Industries. About 50 of the jobs in Dumas were moved from the Monticello plant, according to Akin.

Akin vehemently denied suggestions that he was cutting pay rather than laying off extra employees to meet employee head counts required under the state incentive plan. The employment incentives are not even available until June 2002, he said, and employment at the plant has been reduced by recent attrition.

Instead, he blamed the former management for overpaying for upholstered piecework, beginning before the jobs were moved to Dumas.

Separating the upholstery and casework lines into separate plants "allowed me to capture my true labor costs for each division, and that's part of what brought [problems with the pay rate] to light," Akin said.

"Actually, they've been getting a bonus for about the past 12 months," Akin said. But he acknowledged that the workers' per-piece rate had not been raised.

Some of the money that had been paid to the upholstery production employees was supposed to be used to pay support workers, he said. The 7.5 percent pay cut will not make up for all the misdirected wages, he said.

The piecework rate averages to $10-$12 an hour, Akin said. The average is similar in Monticello, but, he said, t e per-piece rates were different in the two plants because the products are different.

Privately held Akin Industries had sales of about $15 million in 2000, Akin said. The memo to production employees, dated Jan. 19, says the cut in the piecework rate was "necessary for the survival of the company," and Akin acknowledged that the company was "seriously pursuing any cost-cutting we can."
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Title Annotation:Akin Industries Inc.
Comment:Furniture Maker Cuts Wages in Dumas.(Akin Industries Inc.)
Author:Moritz, Gwen
Publication:Arkansas Business
Article Type:Brief Article
Geographic Code:1USA
Date:Jan 29, 2001
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