Just last week, another domestic woodworking company announced plans to cut 400 jobs at its Virginia facility, while shifting the bulk of its casegoods manufacturing overseas to Asia. Sadly, in the quest by wood products manufacturers to remain cost-competitive with imports, this move is not atypical in today’s market.
However, it may be in the near future.
New Niche: Made in America
There are numerous indications that the U.S. wood products manufacturing industry is slowly getting back on track, especially as we hear about more companies opening plants in the United States or returning production stateside. Quality control, soaring fuel prices and faster turnaround time are just some of the reasons cited for the reverse trend.
IKEA manufacturing subsidiary Swedwood is one such example. The company, which was featured in the May issue of Wood & Wood Products, cited reducing sourcing costs, lead times, transportation costs and currency exposure as reasons for opening a production facility in the United States. LACK, EXPEDIT and BESTÅ lines are manufactured at the new 930,000-square-foot facility in Danville, VA. Within 10 years, Swedwood plans to have four facilities spread across 209 acres.
Also making a statement for manufacturing domestically is North Carolina-based Linwood Furniture, featured by Contributing Editor Hannah Miller in this month’s issue. Formed in 2006 after renowned designer Bob Timberlake refused to allow his World of Bob Timberlake line to be manufactured overseas, the management team for Linwood purchased a former Lexington 400,000-square-foot plant and has since flourished. Projected sales for the 135-employee shop are $10 million to $12 million this year. The company’s three-year plan calls for sales in the $25 million to $30 million range, and employee size growing to between 175 and 200 people.
In addition to producing the Timberlake line, Linwood also manufactures four collections under its own brand. The company has five additional collections in planning, among them a licensed collection with NASCAR’s Richard Childress.
One of Linwood’s marketing tools has been its active promotion that products are “made in America, by American craftspeople, many of them with decades of experience.” Reinforcing that pride, American flags are hung throughout the plant; a suggestion made by Timberlake.
According to Linwood President and CEO Bob Shaak, the company is not intimidated by imports. “We’re not trying to compete with imports,” he says. “You find a niche within the market.
“Not everyone wants the lowest price. People like to buy nice things. Well-styled furniture that’s affordable, will be successful,” Shaak adds.
Beginning in this month’s issue, industry expert Tom Dossenbach explores various growth opportunities for manufacturers in the U.S. wood products industry. “Any time you talk about a global economy or global market, you must look at your domestic opportunities, while not forgetting to take a serious look at potential export markets for your own goods and services,” he advises.
To get up to speed, Dossenbach recommends manufacturers do the following: identify your target customers and then structure your sales and marketing efforts to serve the needs of these target customers; ensure your management strategy meets those requirements; and set up your plant to ensure the implementation of these strategies.
“The trick,” he says, “is to target a group of customers who share similar requirements and to design your products and services to meet those needs. Simply put: Make what your current and future customers want.”
Have something to say? Share your thoughts with us in the comments below.