A Furniture Manufacturing Comeback? Changes In
Fri October 21, 2011
A Furniture Manufacturing Comeback? Changes In China Create Opening
The world's largest furniture market gets underway Saturday in High Point, NC. It's the industry's showpiece event where manufacturers show off and sell their products to retailers. This year's market will have an old-school component. There will be a large pavilion for furniture that's made in America.
In fact, there are signs that changes in China could spur a furniture comeback in the U.S.
There's an old saying: If you can't beat 'em, join 'em. That's what Bruce Cochrane did about 15 years ago. At the time, he was helping run his family's 91-year-old furniture production plant.
"We started to see the imports coming in. We were beginning to see the difficult times ahead," he said.
The family decided to sell Cochrane Furniture.
And then Cochrane went to China. He became a consultant for some of the biggest names in American furniture - Clayton Markcus, Craftmaster, Berkline. During that time, the U.S. lost more than 300,000 furniture industry jobs, according to the Bureau of Labor statistics.
"I'll be the first one to say I was part of the problem. I helped these people move jobs to Asia. It was short-sighted and greedy on my part, but now we have something to do to start anew," Cochrane said.
Cochrane is back at his old plant in Lincolnton, North Carolina. The space is mostly vacant, but not for long.
"Come back in 45 days, there will be finishing booths and stainless steal finishing lines," Cochrane says, describing one section of Lincolton Furniture's more than 300,000 square feet of warehouse and manufacturing space.
Production of kitchen and bedroom furniture is scheduled to begin in December. Cochrane expects to have 130 employees by the spring.
He says the timing is right to compete with Chinese imports.
For one, the cost of labor and materials are rising in China. In fact, there are labor shortages. That means it takes longer to get products shipped to the U.S. He says Chinese furniture may still cost less, but the price difference isn't what it used to be.
A report released this month supports that assessment, especially if those trends continue over the next few years, says Hal Sirkin. He co-authored that report for the business consulting firm Boston Consulting Group.
"We saw there would be a tipping point for some goods around 2015 where it makes sense to manufacture in the U.S. economically."
And there's something else at play. The more China's standard of living increases, Sirkin says, the more its people will purchase products made in China.
"In some sense, growth and demand in China is of course creating a need to build a new plants," Sirkin says. "When I build a new plant, do I build a new plant in China or do I repurpose the plant in China and put another one in the U.S.? In essence, the growth in China is allowing plants to come back to the U.S."
And that's happening in the furniture industry, says Ray Allegrezza. He's editor-in-chief of Furniture Today.
"This industry is betting on itself and betting large that they might have been down, but they're not out."
For example, Ashley Furniture has announced a $40 million investment for a new line at company headquarters in Arcadia, Wisconsin. It debuts this weekend at the industry's showcase event, the High Point Market in High Point, North Carolina.
Tom Conley is the market's president.
"You have other companies really trying to merchandise the fact that they're Made in the USA," Conley says.
That includes Bruce Cochrane and his Lincolnton Furniture Company.
"People realize that made in America means jobs in America, and jobs in America means a better place," Cochrane says.
Lincolnton Furniture is among more than 70 companies that will show off their products at a new High Point Market showcase: A Made in America Pavilion.
The market's Tom Conley says it represents a change, but not huge shift. After all, there was a time when it wouldn't have been necessary to point out something was Made in America.