Chinese Imports Put California Furniture Maker On The Ropes

Los Angeles Times LOS ANGELES — The streets around John Sandberg’s furniture factory are dotted with the shuttered shells of manufacturers that have closed or left town. But the Sandberg family, woodworkers for four generations, has found ways to keep Sandberg Furniture Co., about 5 miles south of Los Angeles, going despite foreign competition, the nation’s stiffest environmental laws, and the housing industry collapse. For one of the state’s oldest furniture manufacturers, a maker of moderately priced bedroom furniture, survival is a matter of adaptability, Chief Executive John Sandberg said. “We’ve had to be very efficient. We’ve become highly automated. We’ve had to cross-train our workers, in the factory and in the office,” he said. “But we are very good at what we do, and that’s why we are still here.” Employment at Sandberg Furniture has fallen to about 150 from about 450 several years ago. The main threat to the recovery of the U.S. furniture manufacturing industry is foreign competition, particularly from China, according to many U.S. furniture firms. In October, Sandberg and other furniture makers went to Washington to argue against eliminating “anti-dumping fees” levied against importers of Chinese-manufactured goods sold in the United States for less than fair market value. “Imports from China jumped 148 percent from 2001 to 2003,” said Joseph W. Dorn, a lawyer testifying on behalf of the furniture manufacturers. “The imports undersold domestic producers’ prices in each and every quarterly price comparison. The U.S. producers’ prices declined. So did their production and employment. The industry’s operating income fell by 57 percent. Sixty-five plants closed.” U.S. importers have paid more than $500 million in retroactive anti-dumping duties since the system was implemented in 2005. Mr. Sandberg said that his share of the fees helped him stay in business. The biggest challenge for Sandberg Furniture arrived in 2003, when the trickle of Chinese furniture imports became a deluge. Worse, no matter how Mr. Sandberg juggled the numbers on his analysis of the Chinese competitive landscape, the results were grim. The company was losing about 10 percent of its business annually. “In investigating Chinese production of laminate bedroom furniture in 2003, I discovered that I could import completed and boxed product for less than our material cost. I knew we were in trouble,” Mr. Sandberg said. “We make bedroom collections that use paper laminates instead of solid wood or wood veneers for the exposed surfaces,” he said. “Our company is a leader in the technology for making paper-laminate bedroom collections.” Sandberg’s primary customers are low-income families and young adults just starting out. The company’s bedroom sets sell for $499 to $1,199, but the most popular sell for $899 to $999. Read original post here.