Academics: No plant reopenings
By Thomas Russell -- Furniture Today, November 10, 2003
High Point — Duties on Chinese-made wood bedroom furniture could slow U.S. job losses and possibly boost production, but don't expect shuttered plants to reopen anytime soon.
That's the view of North Carolina-based academics who are following legal efforts by domestic manufacturers to impose duties on Chinese imports.
"If I had to forecast, I doubt it would bring back jobs that are already gone," said Denis Cormier, director of the Furniture Manufacturing and Management Center at North Carolina State University. "Once you shut a factory here, those jobs won't come back. It's possible (that antidumping duties) will slow down the exodus. That would be the most significant impact if this legal action is successful."
A group of 31 domestic manufacturers filed a petition Oct. 31 with the International Trade Commission, alleging Chinese wood bedroom furniture is being dumped on the U.S. market.
Wake Forest University economist Gary Shoesmith believes the petitioners probably have a sound argument in charging that China has failed to meet its obligations under the World Trade Organization. If the petition is successful, he said, it might cause some plants to boost production. But, like others, he doesn't think that alone will save the domestic industry.
"If I were a furniture manufacturer, I wouldn't bring a shut plant back on line because of this," Shoesmith said.
Richard Bennington, director of High Point University's furniture management and marketing program, agrees a successful petition could stem some manufacturing job losses, and might result in some added work shifts and hours at domestic factories, but not much else.
"We have excess capacity with plants that are still open," he said. "They are running short hours and don't have as many workers as they used to have."
At best, Bennington believes, the petition could give manufacturers some breathing room to become more competitive.
"If you slow down the job losses, that gives you more time to retool factories and figure out the various advantages you have in North Carolina versus China," he said. "The thing that most people have been surprised about is how fast all this has happened. It's probably a delaying tactic as much as anything."
Experts noted that being more competitive means becoming more automated and less labor intensive. Automation likely would be easier for products with flat surfaces and straight edges versus heavily carved pieces.
"(The industry) probably isn't going to be here in the long run, unless a manufacturing process can be devised that doesn't require heavy labor," Shoesmith said.
And even if duties protect some U.S. jobs, he said, they would make things difficult for retailers who have established relationships with importers.
"(Some retailers) oppose the filing, and the reason is not that they won't be able to bring in cheap furniture (from somewhere else)," Shoesmith said. "They have already set up these channels. If these duties are imposed, it upsets their apple cart."
Furniture industry analyst Jerry Epperson believes Chinese manufacturers found not to be dumping eventually might develop their own U.S. sales networks and operations.
"And if they're selling directly to retailers, maybe one day they'll take the next step and open their own stores," he said.
| Acknowledgements | ||
| Case Goods Editor Powell Slaughter contributed to this story. | ||
