What do cotton textiles and household furniture have in common? Answer: The U.S. textile industry has already been brought to its knees by overseas competition, chiefly China; the American furniture industry is in the process of getting similar treatment.
Go into a furniture showroom today and you're confronted with merchandise from the Far East and/or Eastern Europe. It's the same old story: cheap labor that allows them to undersell U.S. manufacturers, even after the cost of shipping the stuff thousands of miles.
Furniture-making and textile manufacture obviously have commonality, in that a lot of upholstery fabrics are (still) U.S.-made. But the Chinese have made a significant dent in the fabrics sector and they're currently being investigated on charges of dumping as much as $1 billion annually of products ranging from beds, desks, dressers, and various types of chests. Furniture manufacturers and labor unions have petitioned the Department of Commerce to impose tariffs on the imports.
In 2003, an estimated 16 percent of the upholstered furniture purchased in the United States came from overseas; wood furniture imports were 52 percent.
In 1948, a Russian émigré, Morris Futorian, who'd been inspired by Detroit's assembly lines, was lured to my hometown of New Albany, Miss., to set up a furniture manufacturing operation. He named his company Stratford. To speed the manufacturing process and take advantage of unskilled labor, he standardized designs and broke the assembly process into individual operations. To keep warehousing/inventory costs low, he shipped only carload lots.
By 1952, he was selling Stratolounger reclining chairs nationwide for under $99 and by 1954 he was running three production factories in Mississippi, plus other ancillary businesses. His original 55,000 sq. ft. plant grew to 1.2 million sq. ft. — the largest under one roof in the United States.
Thousands of people made good money, raised families, and sent their kids to school, thanks to Futorian paychecks. Dozens of employees, seeing a good thing, created their own companies to supply furniture frames and other products to Futorian. Others took what they'd learned and went into furniture manufacturing themselves, cranking out everything from fancy living room furniture to dinette sets. A lot of 'em became millionaires. Lord knows how many companies or how much total wealth eventually resulted from Futorian's inauspicious beginning in smalltown Mississippi.
Today, over 30,000 Mississippians are employed in 130 furniture manufacturing and 180 direct supplier operations, with an annual payroll estimated at nearly $800 million.
But the camel has its nose under the tent. “Imports have changed the price/value relationship in our industry,” Mississippian Mickey Holliman Jr., chairman of Furniture Brands International, said in a speech. “We're experiencing price deflation, with high-quality products manufactured offshore being sold at a price substantially lower than domestic-made products of similar quality… and we face labor rates in Eastern Europe, Vietnam, and Mainland China in the 10 cents to 50 cents per hour range, with zero benefits.”
Still, he contends, opportunities remain and “the political and cultural stability of the world depends on our continuing engagement with these countries in business.”
Maybe. But a lot of textile companies that thought they could co-exist with the Chinese dragon are now history, and those that remain are more and more threatened.