TPX: Did Tempur-Pedic Declare Victory Too Soon on Production Issues?
We noted recently that Small Cap Watch List (Track at Marketocracy) member Tempur-Pedic (TPX) was facing a problem most businesses would like to have: demand for more of its products than it could produce. Then, when they reported earnings it looked as though the issue may have been put to rest:
“By late March, the Albuquerque plant had considerably expanded its throughput which allowed us to build inventory and eliminate backorders. As a result, we believe we have ample levels of mattress inventory and capacity to meet U.S. demand going forward.
But what Albuquerque giveth, Denmark taketh away. According to an 8K filed today:
Tempur-Pedic International Inc. (the “Company”) confirmed today that, in connection with the negotiation of its local labor agreement for hourly workers at its manufacturing facility in Denmark, the hourly workers are engaged in an unauthorized work stoppage. On Monday, April 23, 2007, the local labor board ruled the stoppage was prohibited, ordered the union to return to work immediately and assessed hourly fines.The Company is actively pursuing negotiations and currently expects this matter to be resolved quickly. However, production at the plant is disrupted at this time.
Well, mangement got their raises. When business is this good, workers have more power than usual – and it looks like they plan to use it.
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[...] Small Cap Watch List (Track at Marketocracy) and Mid Cap Watch List (Track at Marketocracy) member Tempur-Pedic (TPX) is just too darn busy to spend much time negotiationg with workers over pay. As a result, the work stoppage announced yesterday has been quickly resolved: Tempur-Pedic International Inc. (the “Company”) confirmed today that the Company and the union representing hourly workers at its Denmark facility have signed a two year labor agreement. Hourly workers have returned to work and the matter has been resolved on mutually acceptable terms.The Company noted it believes the impact of this matter has been minimal and the plant is fully operational at this time. [...]