All three events occurred within a week. Asheboro-based Klaussner Furniture Industries said it was closing a plant in its hometown. Norfolk, Va.-based furniture importer Ison International announced it was moving to Thomasville. Chinese manufacturer Dream Rooms revealed it was shifting its American headquarters from Los Angeles to High Point. More evidence that, battered by foreign competition, the mighty Triad furniture industry was dwindling into warehouse and office jobs?
Maybe not. Klaussner, which will shed 130 jobs by the end of this month, blames the closing not on cheaper foreign goods but on the woes of two of its largest customers, retailers Sofa Express and Levitz Furniture. And while the region’s boosters welcome Ison International, which will hire at least 25 in Thomasville, and American Dream Rooms, which will employ 40, they are not resigning themselves to recruiting only distribution centers. They claim furniture manufacturing is making a comeback. Steve Googe, executive director of the Davidson County Economic Development Commission, acknowledges that his county has lost about 5,000 furniture-making jobs since 2000. But he believes the tide is turning. “We’re working with a British company right now that makes high-end furniture and is looking to locate here. We’ve had several Chinese companies here looking for sites to build projects.”
The reason is simple, says Andrew Brod, director of UNC Greensboro’s Office of Business and Economic Research. “Thank you, weak dollar. We’ve been reading for some time about the weak dollar encouraging foreigners to be tourists in the U.S. But productive assets are also cheaper for foreigners when the dollar is weak.” Foreign manufacturers want to sell goods to American consumers, and that’s cheaper when they are made in the U.S. instead of imported. “You’ll take a big hit on the capital investment for the construction, so why not do that when the dollar is weak?”
Googe cites another factor. “We have a lot of lumber processors that were processing lumber for the furniture industry here. They never moved.” Some manufacturers pay to have lumber shipped to the offshore factories, then pay to have the finished product sent back to the U.S. “When oil prices were $40 a barrel, that made sense. Now, with prices more than $90 a barrel, it doesn’t make any sense.”
Loren Hill, president of High Point Economic Development Corp., confirmed that Chinese and European furniture makers are looking in the region. “We’ve not had any international manufacturers opening up yet, but we’re talking to them.” Brod is not surprised by renewed interest in domestic furniture manufacturing. “Particularly in case goods, the rush to Asia is slowing a bit. It’s not as easy to monitor the process, and any intellectual property that you might have is not as secure.”