Economy
5:38 am
Thu October 27, 2011

Back From China: Furniture Maker Returns To N.C.

The self-proclaimed "world's largest furniture market" in High Point, N.C., is the industry's showpiece event, where manufacturers hawk their products to retailers. And this week, the market also has an old-school component: a large pavilion dedicated to furniture that's made in America.

In fact, there are signs that market conditions stemming from China's fast growth could spur a comeback for furniture makers in the United States.

There's an old saying: If you can't beat 'em, join 'em. That's what Bruce Cochrane did about 15 years ago. At the time, he was helping run his family's 91-year-old furniture production plant, in rural North Carolina.

"We were starting to see the imports coming in," he says of those days. "We were beginning to see the difficult times that were going to be ahead"

The family decided to sell Cochrane Furniture. And then Bruce Cochrane went to China. He became a consultant for some of the biggest names in American furniture: Clayton Marcus; Craftmaster; Berkline. During that time, the U.S. lost more than 300,000 furniture jobs, according to the Bureau of Labor Statistics.

"I'll be the first one to say, I was part of the problem," he says. "I helped these people move these jobs to Asia. You know, it was short-sighted and greedy on my part — and I realize that. But now we have something to do to start anew."

Cochrane is back at his old plant in Lincolnton, N.C., where the manufacturing space is mostly vacant — but not for long.

"If you came back here in 45 days, there would be finishing booths, and a lot of the stainless steel finishing lines are here," he says of the huge space. "Everything's here now, except for the booths."

The plant is scheduled to begin producing kitchen and bedroom furniture in December. And Cochrane says he expects to have 130 employees by the spring.

It occurred to him that furniture production could make a comeback in the United States a few years ago, when one of his clients shut down a factory in China. Suppliers couldn't deliver because the cost of labor and raw materials there had risen so fast.

"One day that comes up, and they're out of cash," he says. "Everything is a cash business over in China — they pay people by cash. So people were literally running out of cash. And they just said, 'I'm out of cash. I've got to close down.'"

While many imports from China may still be cheaper than their American-made counterparts, Cochrane says the price difference is narrowing.

A report released this month by Boston Consulting Group supports that assessment. And there's something else at play, says Hal Sirkin, a co-author of the report. The more China's standard of living rises, the more its people will purchase products made in China.

"In some sense, the growth and demand in China is creating the need to build a new plant," Sirkin says. "Then, when I create a new plant, do I build that plant in China — or do I repurpose the plant in China and put another one in the U.S.? So it's really, in essence, the growth of China is allowing some of the plants to come back to the U.S."

And that's happening in the furniture industry, says Ray Allegrezza, of the trade publication Furniture Today.

"This industry is betting on itself — and they're betting large — that they might have been down, but they're not out," he says.

For example, Ashley Furniture has announced a $40 million investment for a new line at its company headquarters in Arcadia, Wis. It debuted over the weekend at North Carolina's High Point Market.

Market President Tom Conley says there's a different vibe to this event.

"You have other companies that have made products in the U.S.," he says, "and they're continuing to really merchandise the fact that the products are made in the U.S."

That's true for Bruce Cochrane and his new venture, Lincolnton Furniture Company.

"That's the most important part of this whole story," Cochrane says. "People realize that 'Made in America' means jobs in America; jobs in America mean a better place."

A new pavilion at the furniture convention is highlighting this point. More than 70 companies, including Lincolnton Furniture, are participating.

It represents a change, but not a huge industry shift, Conley says. After all, there was a time when it would not have been necessary to point out that something was made in the United States.

Copyright 2011 WFAE-FM. To see more, visit http://www.wfae.org.

Transcript

ARI SHAPIRO, host: One of the country's biggest furniture shows wraps up today in High Point, North Carolina. The High Point market is where manufacturers show off their, couches, cupboards and armoires and sell those furniture pieces to retailers. As of now, the products there are likely to be made in China. But changes in China mean production may return to the U.S., as Greg Collard of member station WFAE reports.

GREG COLLARD: There's an old saying: If you can't beat 'em, join 'em. That's what Bruce Cochrane did about 15 years ago. At the time, he was helping run his family's 91-year-old furniture production plant in rural North Carolina.

BRUCE COCHRANE: We were starting to see the imports coming, and we were beginning to see the difficult times ahead.

COLLARD: The family decided to sell Cochrane Furniture. And then Cochrane went to China. He became a consultant for some of the biggest names in American furniture: Clayton Marcus, Craftmaster, Berkline. During that time, the U.S. lost more than 300,000 furniture jobs, according to the Bureau of Labor Statistics.

COCHRANE: You know, I'll be the first one to say I was part of the problem. I helped these people move these jobs to Asia. It was short-sighted and greedy on my part, and now we have something to do to start anew.

(SOUNDBITE OF RUSHING WATER)

COCHRANE: Cochrane is back at his old plant in Lincolnton, North Carolina. The space is mostly vacant, but not for long.

Come back here in 45 days, there will be finishing booths and stainless steel finishing lines.

COLLARD: Production of kitchen and bedroom furniture is scheduled to begin in December. Cochrane expects to have 130 employees by the spring. It occurred to him a few years ago that furniture production could make a comeback in the U.S. One of his clients in China shut down a factory. Suppliers couldn't deliver, because the cost of labor and raw materials there had risen so fast.

COCHRANE: One day it comes up, and they're out of cash. Everything is cash business over in China, and they pay people by cash. So people were literally running out of cash, and they just said, I'm out of cash. I've got to close down.

COLLARD: A Chinese import may still be cheaper, but Cochrane says the price difference is narrowing. A report released this month by Boston Consulting Group supports that assessment. And there's something else at play, says Hal Sirkin, a co-author of the report. The more China's standard of living increases, the more its people will purchase products made in China.

HAL SIRKIN: In some sense, the growth and demand in China, of course, is creating the need to build a new plant. Then when I create a new plant, do I build a new plant in China, or do I repurpose the plant in China and put another one in the U.S.? In essence, the growth of China is allowing some of the plants to come back to the U.S.

COLLARD: And that's happening in the furniture industry, says Ray Allegrezza. He's with the trade publication Furniture Today.

RAY ALLEGREZZA: This industry is betting on itself, and they're betting large, that they might have been down, but they're not out.

COLLARD: For example, Ashley Furniture has announced a $40 million investment for a new line at company headquarters in Arcadia, Wisconsin. It debuted over the weekend at North Carolina's High Point Market. Market president Tom Conley says there's a different vibe to this event.

TOM CONLEY: You have other companies really merchandise the fact that their products are made in the U.S.

COLLARD: Such as Bruce Cochrane and his Lincolnton Furniture Company.

COCHRANE: People realize that made in America means jobs in America. Jobs in America means a better place.

COLLARD: A new pavilion at the furniture convention is highlighting this point. More than 70 companies, including Lincolnton Furniture, are participating. It represents a change, but not a huge industry shift, says the convention's Tom Conley. After all, there was a time when it would not have been necessary to point out that something was made in the United States. For NPR News, I'm Greg Collard, in Charlotte. Transcript provided by NPR, Copyright National Public Radio.