Posted on 08/27/2003 1:12:26 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
Bankruptcies. Plant closings. Hundreds of workers with nowhere to turn. It's all familiar to North Carolina's textile industry after nearly a decade of free trade, but now it's happening in furniture factories throughout the state.
Stoneville Furniture of Rockingham County, known for casual dining furniture, filed for Chapter 11 bankruptcy protection last month for the third time in 15 years. Hooker Furniture of Martinsville, Va., this month closed a 270-worker plant in Kernersville, blaming the economy and cheap imports. Next month, Broyhill Furniture will let 506 workers go in Rutherfordton.
Since 1990, the state has lost nearly 26,000 jobs in furniture manufacturing, nearly 16,000 of them in the past five years. Economists predict more job losses.
"Say goodbye," Gary Shoesmith, who teaches economics at Wake Forest University, said of the furniture industry, which for 100 years has dominated towns in the Piedmont and foothills of North Carolina and Virginia. "I think you'd be hard-pressed to find a modern, automated furniture factory that can compete on a worldwide scale."
Still, not everyone is giving up, especially since last month's bankruptcy filing by textile giant Pillowtex, which put about 5,000 people in North Carolina out of work. That blow appears to have galvanized public support for trade reforms that help manufacturers, and renewed efforts by those still standing to find ways to keep jobs here.
A coalition of 32 furniture makers is trying to persuade federal officials to slow the growth of imports by imposing "anti-dumping" measures against China. The group, the American Furniture Manufacturers Committee for Legal Trade, argues that China-made furniture is being sold in the United States at artificially low prices, a form of dumping that is banned by U.S. trade laws.
"Why should so many good, hardworking Americans lose their jobs because they're not playing on a level field?" said committee chairman John Bassett. "We don't want a handout. We just want the opportunity to compete fairly."
Bassett, chief executive of Vaughan-Bassett Furniture, said he has lowered prices and modernized facilities to better compete against imports. But last year, he had to cut 250 jobs in Atkins, Va., in the southwestern corner of the state.
Now his company, which employs 520 in Elkin, is looking to hire more workers and expects sales to pick up this year. Bassett says he can continue to make furniture in North Carolina and Virginia by keeping prices low and increasing efficiency.
"Nobody thinks we can do anything anymore. America has given up on America," Bassett said. "And when you tell people you can compete, instead of thinking that's great, they think you must be crazy."
But the numbers are not on his side: Of all the household furniture sold in the United States last year, 39 percent was made somewhere else, up from 22 percent in 1994, according to the Richmond, Va., investment banking firm Mann, Armistead & Epperson.
The increase was even bigger for wood furniture, a mainstay in North Carolina. Last year, 48 percent of all wood furniture sold in the United States was made elsewhere, up from 26 percent in 1994.
Consumers aren't likely to rush to Bassett's side, either. A survey by Advo Inc. last year of 750 consumers who had bought furniture in the past six months found that only 2 percent cared where it was made.
"People want the look they want, and if they don't see a difference between a product made in North Carolina and one made in China, they'll go with the one made in China, particularly if it costs 40 percent less," said Richard Bennington, director of Home Furnishings Programs at High Point University.
For one thing, people have more to buy, such as computers, DVDs, big-screen TVs, theme-park vacations, and frequent dinners out, Bennington said. And consumers today aren't so interested in passing furniture on to their children and grandchildren, he said. They're looking for something that lasts eight to 10 years, costs as little as possible, and "matches their drapes and holds their socks."
It takes about four weeks to ship furniture from Asia to the United States, but that's a small price to pay when manufacturers can hire workers in Asia for $12 to $15 a day, compared with $12 to $15 an hour in the United States. Rather than move operations abroad, many companies simply go out of business, or increase their imports and cut their prices to compete.
Bennington predicts the state's furniture industry someday will be made up almost entirely of small, niche producers and large wholesalers that buy furniture from foreign makers and sell it in the United States under the same brand names as before. Marketing and design work also will stay, he said.
Michael L. Walden, an economist at N.C. State University, predicts the state's furniture output will grow, but at half the rate of other industries.
"It's kind of the same story with textiles," Walden said. "Foreign producers are not able to do a lot of the fancy things, but they can make the standard, run-of-the-mill stuff and sell it here at lower prices."
That inability to make the "fancy things" leaves enough room for North Carolina's furniture output to grow at a modest annual rate of 2 percent, Walden said. But that isn't enough to restore jobs, let alone stop the job losses, he said.
Lexington Home Brands, for instance, said this month that it will close a 516-worker plant in Lexington that opened in 1901. It will shift about 100 workers to another plant in Lexington and lay off the other 400 or so beginning in October, said Human Resources Director Jim Tysinger. More demand for less-expensive imports made the plant obsolete, Tysinger said.
Lexington Home Brands still will employ 1,500 in North Carolina, but there's no guarantee those jobs will be around forever.
Despite closing its Kernersville plant, Hooker Furniture can survive in North Carolina, where it employs 900 at six facilities, said Paul B. Toms Jr., chairman and chief executive officer.
As far as Toms sees it, U.S. manufacturers can still offer more variety and better quality in less time than their foreign competitors.
"I believe there will be more plant closings," Toms said. "But I do not believe the entire furniture industry is going to Asia. Companies that understand what they need to do to be competitive and are willing to invest in their plants, equipment and people will survive."
Bennington, of High Point University, mentions Thayer Coggin Inc. as just such a company.
Founded 50 years ago in High Point, Thayer Coggin makes modern, upscale furniture for customers interested in, say, a red chaise lounge or a purple sofa with black-checkered pillows. Because Thayer Coggin prides itself on filling custom orders, moving its operations overseas would not make sense, said Royale Wiggin, chief operating officer.
"I'm sure it could be done in Asia, but it would be difficult," she said.
But that example does little to allay concerns about the loss of jobs. Thayer Coggin also has struggled during the economic slump and laid off a dozen workers this year.
Although it expects sales to improve as the economy does, the company isn't likely to make a dent in the jobless rate for furniture workers.
Its payroll: just 100 people.
Staff writer Amy Martinez can be reached at 829-4652 or amartine@newsobserver.com.
After all, there are no garantees in life & one can have more than a single career.
Lets not look to uncle Sam for a handout & for crying out loud, lets stop feeling sorry for ourselves. 4 billion people survive on third world wages so what makes us feel we're special?
OPEN ASSIGNMENT
MISSION TO SAVE AMERICAN JOBS
August 27, 2003
President Bush:
Mr. President your mission, should you decide to accept it, is to recover the 3+ million jobs lost on your watch. You are to find where they went, recover them, and prevent this from happening again.
You have until November 2004 to complete this mission.
If you choose not to accept this mission, or are incapable of performing, don't run in the GOP Primary so another Republican can accept this important mission for America.
American Citizen Voter
PS Ronald Reagan was the last Republican to understand. Ross Perot sent a warning to your Dad but since then all we hear is the mantra, 'Perot gave us Clinton'. Actually your Dad gave us Perot.
"Handout" my derriere.
The trade and economic policies advocated by the Bush Administration are equivalent to waging economic warfare against the American Middle Class.
Dubya really has become a frightful parody of Papa Bush, hasn't he?
Good grief, one would think that even a nematode could at least learn SOMETHING from previous experience. But these clueless twinklenads seem hellbent on repeating the same old mistakes in spades. It'd be absolutely hilarious if it wasn't so doggone real.
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