One import lesson from hosiery: Midsized companies won't survive
By Furniture Today Staff -- Furniture Today, March 10, 2002
GREENSBORO, N.C. — Furniture isn't the first U.S. industry to face an onslaught from imports.
Sid Smith, former president and chief executive officer of The Hosiery Assn. and now a consultant, said foreign production has decimated the domestic hosiery manufacturing base. U.S. hosiery production first moved to Mexico, then farther south and to Asia.
"What do you do when you have no more price efficiencies to roll back?" Smith rhetorically asked his audience at an American Furniture Manufacturers Assn. import seminar here. "Have we cut too much? Do we have the brainpower still on board to deal with the issues of globalization?"
He predicted that in furniture, as in hosiery, the pressure from imports will be hardest on midsized companies. The big companies have the resources to survive or can acquire what they need, and small companies can find niches, often settling for supplying only the large companies.
"Consolidation is coming and it's going to wipe out guys in the middle," he said.
Smith also brought a sober challenge for the AFMA. The Hosiery Assn. pushed free trade, at least until factions in the industry group divided on whether to try to stop imports or to push even more aggressively for lower tariffs and elimination of trade restrictions.
As a result, "the association went neutral on all international trade issues," Smith said. "It stood for nothing. I suggest that positioning your association is going to be a challenge, but that debate needs to be held. Protectionist or free trade-minded? It is a huge philosophical gap that has to be bridged."
Smith advised AFMA to recognize that free trade will happen, since it will occur with or without the U.S. furniture industry's participation. To stand in the way of free trade would be "like trying to stop the industrial revolution," he said. "Folks who wanted to do that are no longer with us."
He advised furniture companies to never lose control of the marketing of their products, and to prevent foreign companies from getting between U.S. producers and their consumers. He also warned that as U.S. companies cut costs, they should be careful not to dispose of the very brainpower needed to survive the crush of import competition.
| Smith |
-
Focus on Made in USA
Nov 4, 2011 -
Focus on Made in USA at High Point Market
Oct 21, 2011 -
AHFA Manufacturing Summit focuses on future
Jun 8, 2009
VIEW ALL GALLERIES
