Summer 2002 Volume II, Number 2
Competitiveness of U.S. Wood Furniture Industry
By A. Schuler
The US Furniture industry is losing market share to imports at a fast pace, with the problem not contained to the residential wooden household furniture, but also spreading to kitchen cabinets, upholstered, and office furniture. With the decline of furniture
production, supplying industries including hardwood
lumber, MDF, particleboard, furniture equipment manufacturers, and furniture
consultants to name a few, are being adversely affected as their main customer
becomes smaller. In 2001, over 50 businesses in the wood industry closed in NC
alone, leading to more than 5,000 direct employment lost. Adding insult to
injury, the U.S. exported 77 million cubic feet of hardwood logs last year.
Seventy five percent went to Canada, which exported 1.5billion (US$) of wood
household furniture (2nd only to China's 2.5 billion US$ exports) to the U.S.
The problem is getting worse, and there is no 'silver bullet' solution. There are a number of problems: (1) our domestic industry has not invested the necessary capital in order to maintain global competitiveness while foreign based companies have; (2) many countries manage their monetary policy (e.g. weak currencies) to support their export industries - Canada, Mexico, and China are three good examples; (3) furniture industry wage rates in the U.S. are 10 times higher than Mexico and China's wage rates are a fraction of Mexico's. In some ways, the U.S. is a victim of its own success - with the strongest, most vibrant economy in the world and a standard of living second to none, the US economy acts as a magnet for many products and services, particularly ones with a high labor content.
Two years ago, we started a COOP project with NC State University in order to identify potential ways to remedy the situation. Part of this endeavor was the formation of a loose group of industry executives, government employees (state and federal), and academicians - a "Steering Committee" - to guide our program of research and technology transfer. We have used workshops, publications, and presentations to generate interest in finding a solutions) to the problem at hand. Some suggested solutions include 'lean manufacturing" ; focusing on mass customizing furniture for today's aging baby boomers; and building strategic alliances with offshore suppliers.