Optimism for 2010 but manufacturers still face challenges
One Goal: To Be the Best in Business
Although the industry won’t see sales levels like we had back in 2006-2007, business will get better by year’s end. By and large, that is the message conveyed by association leaders polled by Wood & Wood Products for our State of the Industry Report.

“The U.S. woodworking industries have been hurt badly by the extended national recession,” says Tom Julia, president of the Composite Panel Assn. (CPA). “I believe all will recover, though some more quickly and better than others. What is important is that the industry not be painted with a single brush, and that one or two positive economic indicators not be immediately translated into an economic recovery such that we lose sight of the tough work still ahead.”

Andy Counts, CEO of the American Home Furnishings Alliance (AHFA), agrees. “As companies continue to wrestle with a challenging economic environment, they are also taking steps to position themselves for the recovery that is sure to come.”
“Our members have responded by belt-tightening, controlling costs, reducing worker hours, layoffs and plant closings,” says Dick Titus, executive vice president of the Kitchen Cabinet Manufacturers Assn. “They are looking forward to better days and fighting to stay the course.”

“Success in 2010 will be defined as a second year of survival,” says Ken Hutton, executive director of the Wood Machinery Manufacturers of America. “In general, it will mean operating the business in a different context than ever done previously since there still will be too much supply chasing demand.”

David Rothwell, president of the Woodworking Machinery Industry Assn. agrees. “[An] industry trying to do ‘business as usual’ needs to adjust to the new realities. Manufacturers need to update their production methods urgently in order to meet global competition. The U.S. woodworking industry also needs to be more open to global opportunities and more aware of global challenges they will be facing, such as mass customization, high quality, design innovation, etc.,” he adds.

Complete coverage, including forecasts and insights from other association leaders, begins on page 21.

Other Challenges Ahead
Many of those interviewed referenced two legislative issues under review which could greatly impact the woodworking industry in the next few months. They are the proposed development of a national standard for combustible dust explosion prevention and the Biomass Crop Assistance Program (BCAP).

Combustible dust hazards rose to attention following the fatal dust explosion and fire at the Imperial Sugar refinery in Port Wentworth, GA. Almost immediately, OSHA reissued its Combustible Dust Emphasis Program targeting 64 industries, including woodworking. Work also has begun to develop a national standard to address potential fire and explosion hazards of combustible dust in the workplace.

What this will mean for woodworking facilities across the board, and the impact it will have on engineering controls, operating procedures and general “housekeeping,” are discussed in depth in this issue by Jamie Scott, corporate officer of Air Handling Corp. and also the chairman of the Wood Machinery Manufacturers of America’s Combustible Dust Task Force. (See the article beginning on page 32, and also our online coverage in the News Archives at WoodworkingNetwork.com.)

The BCAP, on the other hand, has the potential to negatively affect a large portion of the woodworking industry. While providing needed subsidies to sawmills and lumber producers, the ramifications of the program is that it can create a shortage of raw materials for producers of composite panels. This is because the current BCAP does not consider hardwood and softwood chips “to be used for high-value products.”

Composite panels — which utilize the same chips and fibers — are indeed used to make a number of “higher-value” products, including cabinetry, furniture, flooring and doors. However, companies that would normally supply those raw materials to the particleboard and MDF producers are instead eligible to receive more money by selling to biomass conversion facilities. In fact, the government has earmarked $514 million in subsidies for the effort, and to help meet requirements under the 2007 energy bill.
Americans are already taxed with paying for the BCAP — will we have to also deal with higher product costs and job losses? The CPA has estimated that 20,000 jobs at U.S. composite panel mills could disappear, along with 350,000 additional jobs in the furniture, cabinet and related industries that use composite panels as substrates, if changes are not made to the program.

CPA has joined with other groups, including the Business and Institutional Furniture Manufacturers Assn., AHFA and the Biomass Power Assn., to call for an immediate change to the BCAP eligible materials list. A Web site has been formed in support of reforming the BCAP. Visit BCAPreform.org for information.
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