Petitioners argue duties have helped level playing field
Jay McIntosh -- Furniture Today, October 4, 2010
The Vineyard bedroom by Gat Creek comes in solid black cherry and solid white oak. A four-piece group in the solid cherry shown here would retail at about $4,995.
HIGH POINT - U.S. wood bedroom furniture manufacturers would be less competitive and worse off without antidumping duties on Chinese imports, the original supporters of the antidumping investigation continue to argue today.
And the "weakened state" of the industry - with demand for furniture down and heightened pressure on prices from consumers made more budget- conscious by the recession - makes the domestic producers even more vulnerable than in 2004, they say.
Those are among the key arguments of the U.S. supporters of keeping the duties in force, according to a statement the group filed on Dec. 31, 2009, with the U.S. International Trade Commission. It paints a picture of American factories that would be subject to unfair and more intense competition from imports without the protection now in force.
Prepared by the supporters' Washington law firm, King & Spalding, the filing notes that Chinese wood bedroom shipments to the United States have declined since peaking in 2006. It said the antidumping duties also "restrained the aggressive pricing" of Chinese goods.
"The beneficial volume and price effects of the (antidumping) order improved the financial condition of the industry and allowed U.S. producers to maintain production capacity that otherwise would have been closed in the face of increasing dumped imports," the statement said.
It also noted that even as Chinese bedroom furniture imports have declined, imports from other countries have grown. The statement added that if the government were to allow the antidumping duties to expire, U.S. manufacturers "will be forced to compete with both the increased (non-Chinese) imports and a renewed influx of unrestrained dumped Chinese imports."
Vietnam became the largest U.S. source of imported wood bedroom furniture last year, with production apparently shifting there from China.
The supporters' statement also predicted that the end of duties "would cause extreme downward price pressure." Such a climate would further endanger U.S. production, it said, especially since the industry also is coping with reduced demand as home furnishings sales have suffered along with the weak housing market.
Revocation of the duties would likely lead to more U.S. plant closures, the statement predicts.
Under advice from their legal counsel, many U.S. manufacturers that supported the initial antidumping investigation in 2003 have declined to comment further. That includes Vaughan-Bassett, whose chairman, John Bassett, was a key vocal proponent of the original antidumping initiative. Also declining comment were other major producers on the list of original supporters including Bassett Furniture, Century Furniture and L. & J.G. Stickley.
Steve Kincaid, president of Kincaid Furniture, who oversees the wood divisions of antidumping investigation supporter La-Z-Boy, said, "Both Lea and Kincaid support continuation of the duties. We think it has been beneficial to us." However, he and other La- Z-Boy officials declined further comment.
John Sandberg, president of Sandberg Furniture, also a proponent, said only, "As much as it cost us customers and backlash before, I can't comment, so I will leave it at that."
Some supporters did discuss the issue more openly, saying that the U.S. government's decision to impose duties has helped level the playing field in regard to pricing and thus has made them more competitive as manufacturers.
Vaughan-Bassett continues to operate a nearly 1 million square-foot factory and warehouse in Galax, Va. Here workers are seen preparing head boards for finishing.
"I have re-equipped my plant with the latest technology available and I am a very efficient and competitive manufacturer because of it," said Reau Berry, president and owner of contract furniture producer Johnston Tombigbee Furniture Mfg.
Berry noted that that a key issue in the debate on imports has been the Chinese government's longstanding policy of pegging its currency to the U.S. dollar, which some critics have said unfairly makes Chinese products cheaper here. "Every little bit helps when you are trying to compete against the Chinese government."
He declined to say how many workers he has today versus when the antidumping duties first went into effect in 2005 other than to note, "We are hanging on."
Gat Caperton, president and CEO of manufacturer Gat Creek, said the duties helped save American jobs. He said he also believes Chinese product is still being priced unfairly and for that reason supports the continuation of the duties.
Caperton said that his company is still in business because it has continued to invest in its factory. Over the past several years, the funds the company has received from antidumping fees have helped contribute to an expansion and upgrading of the company's finish room and a $500,000 boiler project at the plant, he said.
Greg Harden, president and CEO of Harden Furniture, said that in determining that Chinese goods were unfairly underpriced, the U.S. Department of Commerce has sent a message that products must be priced honestly and legally.
"When you've got offshore competitors, whether it's with government assistance or simply choosing to price products at an artificially low level for competitive reasons and it's not allowed by the (trade regulators), it's very disruptive on the target country's manufacturing base," Harden said.
He said Harden has continually reinvested in its operations, including an estimated $500,000 to $1 million spent on product development and marketing each year. The company's factory was modernized in the late 1990s and the manufacturer has continued to upgrade systems and facilities.
Stanley’s original licensed Coastal Living group launched in 2008 included domestically produced and imported pieces, including this headboard made with natural woven materials. Some pieces in the original collection will be finished domestically, but the collection will now all be made overseas as the company ceases production at its 1.7 million-square foot plant in Stanleytown by year end.
"Is the investment greater because of the proceeds of the antidumping? Probably not. I think we would have done it regardless. But it's certainly helped finance" the investments, he said.
Richard Perdue, president of Perdue Woodworking, said that he continues to support the antidumping investigation as long as the Department of Commerce determines products are still being dumped.
He said the company has been able to keep its employment stable at about 180 over the past five years. He said the funds have helped save jobs. Today, the company only imports hardware.
Perdue said the company spent some of the duties received on machinery for its factory, although he declined to specify on what and how much. He added that the money has helped it remain competitive and that has saved jobs.
Not every domestic producer that backed the antidumping case continues to support the effort. That includes Vaughan Furniture, which closed its last case goods plant in Galax, Va., in 2008 to become an all import bedroom resource. It dropped off the list of supporters around the same time and is not currently a member of the American Furniture Manufacturers Committee for Legal Trade, which supported the original investigation.
Webb Furniture, a Virginia manufacturer owned by Vaughan and Vaughan-Bassett, stopped producing bedroom shortly after the duties were first imposed and now only produces particleboard and mirrors. Its name was off the list of supporters by 2006 and it too is no longer a member of the aforementioned furniture manufacturers committee.
However, Webb President Lee Houston said he commends those who supported the effort early on, including John Bassett.
"I appreciate everything they did," he said. "We were in that first group and I'm glad it was done and am happy for those people who were successful and who are in business today."
Stanley Furniture, a petitioner that has been one of the largest U.S. bedroom producers, has closed two case goods plants in recent years and will cease production at a third by year end, converting it to a finishing, assembly and warehouse operation. It will continue to produce its Young America youth bedroom line in Robbinsville, N.C.
Company President and CEO Glenn Prillaman said Stanley supported the original petition because it believed it owed it to its shareholders and workers to determine if international trade laws were being broken. In retrospect, he said, he doesn't believe the antidumping initiative was enough to offset the competitive advantages of many overseas manufacturers.
"It is very difficult for anyone to imagine until they experience it first hand, the overwhelming advantages that exist in the realm of manufacturing in Asia," he said, adding that Stanley spent its duty distributions on various operational expenses and capital improvements.
Today the company believes it can be competitive as a producer of youth bedroom furniture based on the custom, safety and environmentally friendly aspects of the line, he said. That's one reason it supports leaving the duties in place.
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Vietnam Duties Likely?
Sep 23, 2011 -
Antidumping revisited
Oct 4, 2010 -
Duties on Chinese goods help other Asian sources
Nov 5, 2010 -
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Petition timeline
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