Summit Held with Major NC and Indiana Furniture Industry Executives - First Conference Defines Issues and Concerns

Furniture World Magazine

In an industry known for its competitiveness and plagued with overseas competition, there is hope declared following a symposium of furniture executives held on Tuesday, May 13. The first of several anticipated meetings was held in Huntingburg, Indiana with the CEOs, presidents and other senior management members of 9 long established American furniture companies. This high level meeting of industry experts was conceived by Davidson Vision president and CEO Ben Ross and Lincolnland Economic Development Corporation executive director Tom Utter. Ross and Utter have known each other for many years and worked together previously on projects in Kentucky and Indiana. The objectives for the meeting were established through a number of conversations between Ross, Utter and Steve Googe, executive director of the Davidson County Economic Development Commission. In working with industry in their respective regions, they are acutely aware of the loss of US furniture manufacturing jobs and the closure of plants. The summit meeting was an outgrowth of these concerns and the idea that although competitive, these companies could work together to create domestic production efficiencies in material and manufacturing costs. The NC contingency departed the recently expanded Davidson County Airport on a private plane. Included were Ross and Googe; Tommy Hedrick, chairman of the board of the Davidson County EDC; from Lexington Home Brands (LHB), Chairman and CEO Bob Stec, and Bill Mitchell, vice president of manufacturing; Larry Beck, LHB human resources and also a local councilman; and, Councill Companies’ Chief Executive Officer, Rob Ginn; and media consultant Kathy Wall, president of The Media Matters, Inc. of Lexington. The goals of the day were perhaps best stated by LHB’s Mitchell, “We simply want to retain jobs in our industry and we’re eager to discover whatever can be done.” Councilman Beck illustrated how the loss of jobs in an area not only affects those families in which there is an income loss but everyone in an affected area. “For instance, the loss of jobs means the loss of electricity, water, and gas revenues for the affected city or county and as a result higher taxes are required to provide area residents and other businesses with services,” stated Beck. Upon arrival at the Huntingburg Airport, the NC group was greeted by Huntingburg Mayor Gail Kemp. Utter and Ross then addressed a group of area media at a reception and press briefing. During the press briefing, Utter and Ross spoke about the day’s objectives and Utter described the conference as the beginning of “co-opetition” or a cooperative effort between competing companies. They both stressed the collective need to identify workable solutions to issues that affect the industry and the communities. As an example, the National Association of Manufacturers recently published a study that indicates every state in the U.S. except one had a net loss of manufacturing jobs over the past two and one half years. It will take aggressive measures to reverse that trend. The remainder of the day was closed to the media to allow the manufacturers to freely discuss proprietary issues and concerns. During a stopover at Thermwood Corporation in Dale, Indiana where the NC contingency met with company President, David Hildenbrand and Executive Vice President, Mike Hardesty, the group discussed ways that technology can be used to create efficiencies. They also shared their belief that a key to competing in the American marketplace is in offering unique, custom products that consumers will embrace. Thermwood is a leading manufacturer of CNC routers with 25% of their machinery production exported from the US. Following the Thermwood meeting, the group moved to a nearby location where they were joined by their southern Indiana counterparts for several hours of roundtable discussions. Representing Indiana furniture manufacturing were: Martin Vaught, director of public relations for Kimball® International; Hank Menke, president of OFS®; Glenn Lange, president of Best Chairs; Paul Ruhe, president of Mobel, Inc.; Ken Lamkin, vice president of Mobel, Inc; Bill Klem co-owner of Klem Furniture; and Jan Olinger, international sales manager for Thermwood Corporation. Speaking during the first session were a number of state, federal, and local government officials who discussed services and options available in which the government assists US manufacturers in being competitive. Val Huston, an international trade specialist with the US Department of Commerce distributed packets of information which included copies of the Department of Commerce Web site, international furniture trade show dates, and an outline on trade “adjustment” assistance for firms. Huston reminded the group that the US government offers matching funds programs for manufacturing improvements such as ISO9000, training, and marketing/advertising promotions. They also provide services that make it easier for US companies to do business in foreign countries and they work as advocates in solving problems. Huston stated that further information on Trade Adjustment Assistance for Firms (TAA) can be found at www.taacenters.org and the Department of Commerce site, www.commerce.gov. Matthew Gettman, commercial representative for the Foreign Commercial Service located in the United States Embassy in Beijing, discussed topics including anti-dumping regulations and a China specific safeguard, which is run by the International Trade Commission (ITC). The ITC determines whether the domestic industry is suffering material injury as a result of the imports of specific products. Once an affirmative preliminary determination is made by both Commerce and ITC, Commerce may instruct the US Customs Service to assess duties against imports of that product into the United States. Gettman stressed there are better chances for government support when an industry bands together to make a united case for intervention. Additionally, he stated there are programs to protect trademarked and patented products. United States Senator Richard Lugar’s office was represented at the meeting by two senior staffers, Larry Ordner and Lane Ralph, who indicated they would carry the group's concerns to Senator Lugar. They indicated that he would work on behalf of the furniture industry. Other Federal and state government representatives included: Connie Fowler of the Indiana Department of Commerce; Ursula Wegrzynowiz of the Export-Import Bank of the US in Chicago, Illinois; Joe Fritts, vice president of Tradespan International in Columbus, Indiana; Chris Matney, international trade division of the Indiana Department of Commerce; and Kristin Jones, director of international trade for the Indiana Department of Commerce. Southern Indiana local government officials included: William Schmidt, mayor of Jasper, Indiana; Mayor of Huntingburg, Gail Kemp; Debra Beavin of the IN15 Regional Planning Committee Economic Development District; Christine Prior of the Huntingburg Chamber of Commerce; Jim Kemper, a Dubois County Commissioner; Nancy Eckerly, director of the Jasper Chamber of Commerce; and Jim Ebert of the Spencer County Council. Following the public sector sessions, a furniture industry only meeting was conducted at which there was review of the earlier presentations and frank discussions that the situation is dire and immediate actionable steps are needed if the industry is to survive as an employer in the US. Collectively the group of executives represented over 10,000 existing American furniture manufacturing jobs. The consensus was that time is of the essence and both short term and long term measures are necessary. Cited as challenges were the US government legal structure, patents, torts, and intellectual property rights. Also relayed were strong concerns with labor and regulatory issues. Echoed from the earlier Thermwood meeting was that a key to competing in today’s marketplace is in offering products that offer custom looks rather than mass produced characteristics. The group agreed that all US manufacturing is experiencing similar challenges and the furniture industry should research what other industries have accomplished or are currently developing. Utter stated, “The shift in manufacturing to offshore facilities strikes at the very heart of the US economy and the heritage of American manufacturing. Since our summit last week, numerous Indiana manufacturers have called to express the challenges they have in common with the furniture industry. As economic developers we are encouraged by and appreciative of the grassroots swell of support for our efforts on behalf of the furniture industry.” Specifically identified as action steps: 1. Request the two EDC groups to research the necessary steps for ITA review. 2. Enlist the assistance of industry organizations such as the American Furniture Manufacturers Association (AFMA) and the Business and Institutional Furniture Manufacturer’s Association (BIFMA) in the ITA solicitation. 3. Lobby for increased tariffs and duties on raw materials being exported to other countries and on finished goods being imported into the United States. 4. Communicate with the textile industry groups about their efforts on fair trade and the results of those efforts. 5. Work collaboratively to report findings and progress of the EDC efforts and pursue those that are viable. A number of other collaborative efforts were identified and discussed but are not being released at this time pending further review by the industry participants. Future meetings will be held on a timetable to be determined by the progress of the EDC groups.