Under pressure from cheap imports from Asia, manufacturing employment in Mississippi in the furniture industry has been in a decline for several years. But there are some indications that trend will level off in the near future.
“I have talked to a couple of large upholstery companies that recently had their best month in the past two years,” said Greg Giachelli, vice president of existing industry, Community Development Foundation, Tupelo. “The furniture industry has seen decline in the past couple of years, but I think you will see it level out in the next six or seven months. A lot of that will depend on housing starts. The furniture industry trends follow housing starts quite heavily. The housing industry has been in a slump. If it starts to pick up, I think you will see the furniture industry pick up a little bit.”
Mississippi employment in furniture manufacturing was 6,300 in 1960, and peaked in 2000 with a little more than 30,000 jobs. That number is now down to approximately 26,000. But the Franklin Furniture Institute at Mississippi State University (MSU) is predicting an 11% increase in furniture and furniture-related product manufacturing employment by 2014.
“The furniture industry accounts for between 10% to 11% of total manufacturing jobs in Mississippi,” Giachelli said. “About 74% of the state’s furniture industry is in the 10-county area of Northeast Mississippi. We now have about 21,000 jobs in the furniture industry in that 10-county area. The thing that is so critical about that is some of the counties in the 10-county area are very heavy in the furniture industry. You can look at Lee County as a whole, and 34% of the manufacturing jobs are in furniture. Some counties like Chickasaw and Pontotoc and probably Union and Tippah range from 60% to 80% of the manufacturing jobs in the furniture industry. That is why it is so critical to do everything we can to keep the furniture industry vibrant and strong.”
One way to do that is the help the industry respond to the flood of cheap imports from China. In 2005, $11.5 billion worth of furniture was imported from China.
“One of the main factors right now in the furniture industry is how you combat that,” Giachelli said. “One effort is providing training courses to help them with new technology to compete in the field. The second most important thing we have done is establishing the Foreign Trade Zone. That significantly reduces duties and tariffs on raw products shipped in, and will make a significant impact in the next two or three years.”
Chuck Grogan, vice president and general manager, La-Z-Boy Chair Company, Newton, whose company employs 1,150 employees spread among four plants in Newton, said the company has seen a decline in overall sales due to less consumer spending combined with competition from China. To compete better, they are converting their production system to lean manufacturing.
“We are taking the traditional batch-and-queue lines to one piece flow cells,” Grogan said. “Basically, we are using Toyota production systems and lean manufacturing methodology to reduce waste in our production process. We are using a mix of imported and vertically produced raw materials.”
In addition to those actions to reduce price and improve competitiveness, La-Z-Boy is also working to distribute its product faster.
“We feel good about the future,” Grogan said. “We are currently the third-largest furniture company in the nation. We plan to hold that and gain ground on the top two companies.”
Jay Moon, president and CEO, Mississippi Manufacturers Association (MMA), said efforts to support the furniture industry include the Tupelo Furniture Market receiving $200,000 from Momentum Mississippi for marketing. Also, the Franklin Furniture Institute works with the state’s furniture manufacturers to encourage innovation and cost containment, and to enhance workforce training in the industry.
“The MMA works both with our state Legislature and our congressional delegation to ensure that the furniture industry is supported in Jackson and Washington,” Moon said. “The state’s furniture industry has $1.4-billion annual impact. The furniture industry contributes significantly to our state’s economy, particularly to Northeast Mississippi. The furniture industry includes not only the furniture manufacturers. Tree growers, sawmills, logistics companies and a wide variety of other support businesses are created if we maintain a strong furniture industry.”
While the state has seen thousands of job losses in the industry in recent years, all is not bleak.
“There have been a few bright spots this year,” Moon said. “Foamex in Tupelo and Ashley Furniture in Ecru announced investments to existing facilities, while La-Z-Boy’s corporate consolidation and Benchcraft’s expansion will add 130 and 100 employees, respectively, in Newton and Blue Mountain.”
The Franklin Furniture Institute is expanding the scope of services offered to the furniture industry.
“While continuing to provide outstanding technical assistance in engineering, process management, lean production and testing, the institute is working with other units, both on and off campus, to provide assistance in areas such as design, marketing, management and logistics,” said Amy Garrard, outreach coordinator, Franklin Furniture Institute. “The institute provides assistance to individual companies as well as conducts research into broad issues that impact the entire industry.”
The institute works with the Mississippi Development Authority (MDA) to expand trade to other countries. Currently, the MDA is providing an opportunity for furniture manufacturers to participate in international trade shows in Mexico. Additionally, the Appalachian Regional Commission and the State of North Carolina have invited Mississippi furniture and suppliers companies to participate in the 13th Annual International Furniture Expo in Shanghai, China, September 12-15, 2007.
Workforce training is also vital.
“Mississippi State University, the Community Development Foundation and Itawamba Community College are working together to provide workforce training in the areas of ergonomics, computer skills, supervisory skills, goal setting, problem solving, teamwork, motivation and health promotion, to furniture companies in the North Mississippi area,” Garrard said. “This training is provided at no cost to the companies through a grant from the U.S. Department of Labor for a two-year time period. This training program is expected to lead to improved employee attitudes, create higher retention rates, lessen absenteeism and improve employee productivity which in turn helps the industry remain competitive.”
Contact MBJ contributing writer Becky Gillette at email@example.com.