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Industry forced to operate

Furniture manufacturers working smarter

Perhaps more than any other member of Mississippi’s business community, the manufacturing industry in Northeast Mississippi has struggled through the economic downturn.

Several thousand jobs have been lost. Plants have closed.

Long the bell cow of the region, the furniture business has not been exempt as companies see their lines of credit dry up, their profits shrink and their payrolls vanish. Plants have had to cut production hours to offset the decreased demand for furniture.

“Business has been difficult,” said Gentry Long, vice president of upholstery merchandising at Lane Furniture in Tupelo. “We’re doing as well as can be expected in this climate we’re in.”

Long said Lane has had to “sharpen everything (we) do,” from forecasting the volume and cost of the raw materials the plant uses to manufacture couches and loveseats to figuring out how to maintain a full work-week for its employees. “We’ve had some reduction in capacity, but we’ve made sure that our weeks are full.”

In an economy that is forcing manufacturers of every product imaginable to cut production, Lane employees working 40 hours a week is the exception, not the rule. “We’re working overtime now, even though our capacity is not what it used to be,” Long said. “We have an obligation to our employees to give them full work weeks so they can support their families.”

Lane’s case is a theme Randy Kelly is seeing and hearing a lot of in the region.

“I think (Northeast Mississippi’s furniture industry) has made the turn,” said Kelly, the executive director of Three Rivers Planning and Development District. Based on everything he’s heard, Kelly said, there are a number of facilities in production six days a week, which was common when the economy was churning.

“The ones that have sharpened their knives management-wise and marketing-wise have weathered it well,” Kelly said. “Some are talking about loans and expansions.”

Expansion, once the economy turns, is on Lane’s radar, according to Long. “We have every intention of increasing our capacity. Space isn’t an issue as far as that is concerned,” he said.

With a brutal few months behind them, furniture manufacturers hope they have bottomed out, and can begin the very early stages of recovery. The cost-cutting measures taken since things went south should serve them well, Kelly said.

“They have gotten lean and mean (expense-wise) and cut out anything they can cut out and have stabilized and have started to prepare themselves for up-growth,” he said. “Obviously, I haven’t talked to all of them, but that is what I’ve heard from the ones I have. The last two weeks have been encouraging. Everybody I communicate with seems to think – or hope, at least – that we’ve taken the worst lick (from the economic downturn).”

One of the indicators leading the way is the up-tick in orders from the retailers who sell the products manufactured in the plants of Northeast Mississippi. Orders plunged, as retailers were unable to secure operating capital through lines of credit, brought on by the virtual collapse of the institutions that guaranteed them.

A retailer placing orders has historically been a good sign.

“A good pre-market is a strong indicator of where the retailers think the economy is going to go,” Kelly said.

Tupelo Manufacturing Company president Mary Werner said her company’s employees are working full workweeks, plus overtime.

Contact MBJ staff writer Clay Chandler at clay.chandler@msbusiness.com .

About Clay Chandler

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