Furniture Antidumping Petition Gains Momentum
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Furniture companies allege that the prices of imported Chinese wood bedroom furniture violate U.S. trade laws.
American Furniture Manufacturers Committee for Legal Trade Member List (as of Aug. 8)
Bassett Furniture Ind., Bassett, VA
Carolina Furniture Works Inc., Sumter, SC
Century Furniture Co., Hickory, NC
Copeland Furniture Co., Bradford, VT
Crawford Furniture Co., Jamestown, NY
Crescent Mfg. Co., Gallatin, TN
Durham Furniture Co., Canfield, OH
The Good Furniture Cos., Carson, CA
Harden Furniture Co., McConnellsville, NY
Harden Mfg. Corp., Haleyville, AL
Hart Furniture Co., Collierville, TN
Higdon Furniture Co., Quincy, FL
Hooker Furniture Corp., Martinsville, VA
Johnston/Tombigbee Furniture Mfg., Columbus, MS
Keller Mfg. Co., Corydon, IN
Lexington Home Brands, Lexington, NC
Michels-Pilliod Furniture Co., Linwood, CA
Mobel Furniture Co., Ferdinand, IN
Moosehead Furniture Mfg. Co., Monson, ME
Palliser Furniture Co., Winnipeg, MB
Sandberg Furniture Mfg. Co., Los Angeles, CA
Shermag Inc., Sherbrooke, QUE
Stanley Furniture Co., Stanleytown, NC
Stickley Furniture Co., Manlius, NY
Vaughan Furniture Co., Galax, VA
Vaughan-Bassett Furniture Co., Galax, VA
Vermont Tubbs Inc., Brandon, VT
Webb Furniture Ent., Galax, VA
A coalition of furniture manufacturers plans to target imports of Chinese wood bedroom furniture in an antidumping petition to be filed this fall with the Department of Commerce and the U.S. International Trade Commission.
The group, American Furniture Manufacturers Committee for Legal Trade, quickly expanded from 15 founding companies to 28 companies. It represents a geographic cross-section of the United States and also includes a pair of Canadian-based companies that sell much of their products to the U.S. market.
The committee, which covers virtually all price points within the bedroom furniture category, alleges that Chinese manufacturers are selling products at artificially low prices. This “dumping,” the committee claims, is crippling the ability of domestic manufacturers to fairly compete and forcing many to curtail or close their U.S. manufacturing operations.
If the petition is successful, bedroom furniture imported from China will be subject to antidumping duties.
“The future of the domestic furniture industry is at stake,” said Paul Broyhill, former president and CEO of Broyhill Furniture Co. and a spokesman for the committee. “If nothing is done, more factories in the United States will continue to close and more jobs will be lost in the U.S. and shifted overseas.”
Furniture Workers Support Petition
The antidumping movement gained further momentum July 29 when 98% of 3,300 employees at 10 plants operated by Vaughan-Bassett, Vaughan Furniture and Webb Furniture affixed their names to a declaration supporting the antidumping petition. (See box.)
Doug Bassett of Vaughan-Bassett Furniture Co. and a spokesman for the committee, said the support by a majority of workers at the three Galax, VA-based companies made them duty bound to follow through with the petition filing. He said he expects workers employed by some of the other 25 companies belonging to the coalition to take similar action in coming weeks.
“The petition grows stronger with the combination of worker and employer support,” Bassett said. He added that the employee votes send a message to workers at companies not currently participating in the coalition that they could force their employers to get involved if a majority of the workers signed a similar declaration supporting the antidumping petition.
Supplier Support Sought
In another development, the Committee for Legal Trade invited suppliers to the domestic furniture industry to attend an Aug. 12 meeting in Greensboro to learn more about the antidumping petition.
Show of Force
More than 3,200 employees of Vaughan Furniture, Vaughan Bassett Furniture and Webb Furniture signed petitions declaring their support for the antidumping action. A sample petition follows:
DECLARATION OF WORKER SUPPORT FOR ANTIDUMPING PETITION AGAINST WOOD BEDROOM FURNITURE FROM CHINA
We, employees at (name of plant) of (name of company), declare that we are engaged in the manufacture of wood bedroom furniture in the United States. Our industry is experiencing material injury and is threatened with further material injury as a result of dumped imports of wood bedroom furniture from China. Consequently, we, the undersigned, support this petition for the imposition of antidumping duties against the wood bedroom furniture from China.
DECLARED BY:
(Attach names, addresses, phone numbers and signatures of all employees who support the petition.)
“I implore you to attend and participate in this meeting to learn more about how we are trying to level the playing field and promote free, fair and legal trade,” wrote John Bassett III, president and CEO of Vaughan-Bassett Furniture Co., in an open invitation to suppliers.
Doug Bassett said the committee hoped that up to 500 managers and sales representatives of everything from hardware and lumber to cutting tools and woodworking machinery would attend the meeting. He added that the committee member companies hoped to enlist the moral and financial support of their vendors. Anticipated legal costs associated with filing and defending the antidumping petition will run $1 million or more, he said.
Big Two on the Sidelines
As of press time, Furniture Brands International and La-Z-Boy Inc., the nation’s two biggest furniture manufacturing enterprises, were not participating in the antidumping fight. In addition, Ashley Furniture and Ethan Allen were two other major wood bedroom furnituremakers that had not joined the committee.
FBI’s holdings include Broyhill, Drexel Heritage, Henredon, Lane and Thomasville. La-Z-Boy’s include American Drew, American of Martinsville, Hammary, Kincaid, Lea and Pennsylvania House.
Mark Stegeman, a spokesman for La-Z-Boy, said, “We’re basically evaluating our position right now.” He added that La-Z-Boy officials planned to make their position known during the company’s first-quarter conference call scheduled for Aug. 13.
During a July 24 teleconference report on second-quarter earnings, Mickey Holliman, FBI’s chairman and CEO, sought to clarify the company’s position on the antidumping petition. He prefaced his remarks by saying, “I have not seen any details on the fact finding that led to (the antidumping petition) announcement.
“Furniture Brands International strongly supports open competition and free trade. We source over 20 percent of our product from the Far East. The offshore producers with whom we do business are well established and are people of integrity. We have no reason to believe they are engaged in any kind of activity that is unfair or illegal and we would vigorously oppose any private or government action that is protectionist in nature.”
Holliman went on to say, “(I)f there is something illegal going on then we should address it. But as we discuss this issue, let’s be careful to draw a distinction between illegal acts which should not be tolerated and the adverse effects that arise from legal imports or from the soft business environment of the last few years, all of which is simply part of the tough facts in our competitive industry.
“Unless we keep that distinction clearly in our minds, I am concerned that we may wind up confusing the issue and unfairly impede import business that is a strong and growing part of our industry and has been a great benefit to our consumers and to our shareholders.”
Petition Background
Over the last three years, numerous furniture factories have been closed across the United States as more and more manufacturing has shifted overseas, particularly to China. According to the Bureau of Labor Statistics, the wood furniture manufacturing industry has lost 34,700 workers since 2000, a loss of 27% of the total workforce.
The committee said that a survey of 18 U.S. producers combining for 2002 sales of almost $1 billion in domestic bedroom furniture, saw their domestic shipments fall 21%, sales drop 20% and operating income plunge 47% from 2000 to 2002.
Last fall, members of the American Furniture Manufacturer Assn. voted to commission a study to research trade laws and determine whether domestic manufacturers could amass a case worth pursuing.
In July, Joe Dorn of the law firm King & Spalding, the committee’s legal counsel, presented the report that evaluated whether China was guilty of illegally dumping furniture in the U.S. market.
“Our study indicated that there is a strong case to be made that China is illegally dumping bedroom furniture into the U.S. market,” Dorn said. “We also found substantial data indicating that domestic producers of bedroom furniture have been injured by illegal dumping from China.”
The report led to the creation of the Committee for Legal Trade. The committee announced July 15 that it planned to challenge the prices of wood bedroom furniture imported from China.
Among other things, the petition must be supported by companies and/or workers that account for at least 25% of U.S. production. Doug Bassett said the participation criterion was met by the 15 founding members of the committee.
Dorn said once a petition has been filed, the ITC would immediately commence a preliminary investigation and determine within 45 days whether or not the petition has merit.
If the petition moves forward and is successful, any duties that are imposed would be paid by the U.S. importers of record. The duties would be set at the amount required to offset the margin of dumping and to restore fair competition to the market.
According to the committee’s press release, “The margin of dumping is the difference between ‘normal value’ and ‘export price.’ Because China is a non-market economy country, normal value is not based on either what producers in China charge customers in China or on what it costs them to make furniture in China. It is based on what it would cost to make furniture in a ‘surrogate’ market economy country at a comparable level of economic development, such as India or the Philippines.”
Doug Bassett said that by U.S. statute, the antidumping case “must be adjudicated within 12 to 13 months of being filed.”
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