Wood Manufacturing Returning to U.S.: Boston Consulting Group
Wood Manufacturing Returning to U.S.: Boston Consulting Group

Wood Manufacturing Returning to U.S.: Boston Consulting GroupCHICAGO - Furniture production is among seven sectors that could create 2 to 3 million jobs as a result of manufacturing returning to the U.S.—an emerging trend that is expected to accelerate over the next five years, says The Boston Consulting Group.

Among U.S. wood products firms experiencing the upside of insourcing are Crawford Furniture, which has reopened a manufacturing plant in Jamestown, NY; Lincolnton Furniture, Lincolnton, NC; and Stanley Furniture, which has consolidated its entire manufacture of juvenile furniture to the U.S. Other furniture manufacturers are also starting up or expanding in the U.S.

Bruce Cochrane, Lincolnton Furniture president, says China's advantage on wages over U.S. workers has declined from 50 percent to 10 to 15 percent. Cochrane says Lincolnton is adding autoamted saws, routers and finishing systems to produce 200 different pieces of furniture using Appalachian hardwoods, beginning this December in the 380,000 square foot plant that once housed his former Cochrane Furniture. That firm's lines were previously sold to Chromcraft-Revington.

Boston Consulting says U.S. firms, including furniture manufacturing, transportation goods, electrical equipment/appliances, plastics and rubber products, machinery, fabricated metal products, and computers/electronics, will see a “tipping point” by around 2015—when China’s shrinking cost advantage will prompt companies to rethink where they produce certain goods meant for sale in North America. In many cases, companies will shift production back from China or choose to locate new investments in the U.S.

St. Martin Cabinetry America, a unit of Shanghai-based St. Martin Cabinetry, has already made an initial move in that direction. Last month the company opened a 60,000 square foot plant in Cressona, PA for production of melamine plywood frameless cabinets from inventory components imported from China. The features a showroom and areas for assembling and clamping the dowel-constructed wood cabinets.

The U.S. is also expected to become a more competitive export base in these sectors for Europe and Canada. Wood products firm Fortune Brands Home & Security (FBHS), which Tuesday began trading on the New York Stock Exchange, says it will pursue external markets.

Chris Klein, CEO of the $3.2 billion cabinetry, door and window firm says while export accounts for 5 percent of sales, China, India and Latin America are big prospects for his firm's MasterBrand Cabinets, Simonton Windows and Tru-Temp Doors. Klein told the Wall St. Journal that FBHS has already moved jobs back to the U.S. from China, and plans to keep manufacturing here. "Labor's getting tighter in China," Klein said.

Wood Manufacturing Returning to U.S.: Boston Consulting GroupThe insourcing trend will also impact suppliers to the wood industries. Global Finishing Solutions, Osseo, WI manufacturer of spray coating and finishing systems, announced a $10 million expansion in its Wisconsin plant. The company closed its Monterrey, Mexico plant in July.

"It's a very positive move for us," says Rick Binder, President of GFS. "This investment allows us to consolidate manufacturing operations resulting in a significantly higher level of production efficiency, quality, and improve our ability to provide exceptional service to all of our customers."

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