Past years’ predictions that the U.S. housing market would bounce back in the second half of 2011 failed to materialize. A turgid housing market, near record high unemployment and the global financial crisis served as the backdrop of another challenging year for the North American wood products industry.
Challenging yes; boring no. Following are my votes for top wood-related story lines of 2011. See if you agree with any or all of them.
No. 1: Feds Raid Gibson Guitar
Armed agents of the Department of Justice raided Gibson Guitar’s two facilities in Nashville in August and seized pallets of ebony and rosewood lumber, dozens of guitars and electronic files. The Feds alleged that the confiscated wood entered the country in violation of the Lacey Act. Gibson also was busted by federal agents for alleged Lacey Act violations in November 2009.
Harry Juskiewicz, CEO of Gibson, launched a PR campaign writing blogs and appearing on news outlets to declare his company’s innocence, lash out at the government for persecuting his company and blasting the Lacey Act as being “unconstitutional.” As of this writing, the U.S. government had yet to file any charges against Gibson for the 2009 or 2011 raids. But a bill was introduced in the House of Representatives last month to amend the Lacey Act, drawing widespread support from groups involved in the importation of wood and wood products while garnering opposition from groups wary that the Lacey Act would lose its teeth. Finally, Gibson just introduced a model of guitars using torrefied maple for fretboards in place of the mahogany imported from India being held by the Feds as potential evidence.
No. 2: Cabinet Giants Restructure
The Kitchen Cabinet Manufacturers Association released a study indicating that the U.S. cabinetry market is $6.7 billion; impressive but a far cry from the industry’s girth in more recent normal economic times. Masco, the nation’s leading cabinet source, officially shut down its Mill’s Pride plant in Waverly, OH, sold off the equipment at its barely used mega KraftMaid factory in West Jordan, UT; and announced layoffs of 175 additional KraftMaid personnel in Ohio. All of this was on top of closing a pair of Merillat cabinet plants last year. No. 2 MasterBrand Cabinets, comprised of Aristokraft, Schrock, Omega and others, spun off along with Simonton Windows, Therma-Tru doors and other Fortune Brands companies as a new publicly traded company on the NYSE known as Fortune Brands Home & Security.
No. 3: IKEA U.S. Plant Unionizes
Employees of IKEA’s Swedwood manufacturing plant in Danville, VA, voted to join the International Association of Machinists and Aerospace Workers (IAMAW), ending a saga that brought bad national press on the Swedish-based company’s alleged unfair treatment of workers. A few weeks later, employees of EBI LLC, a Danville-based supplier of upholstered furniture to IKEA, voted against unionizing. Finally, Scanwood, a manufacturer of RTA wood chests for IKEA based in Dartmouth, Nova Scotia, went belly up. The company’s equipment was put up for auction and its 220,000-square-foot plant was sold to a company that intends to turn it into a sound stage for movie and TV productions.
No. 4: Jeld-Wen Under New Ownership
Toronto-based ONEX Corp. became the majority owner of Klamath Falls, OR-based Jeld-Wen, North America’s largest maker of doors and windows. The deal purported at $871 million came amid reports that Jeld-Wen was at risk of seeking Chapter 11 bankruptcy protection. The balance of the company continues to be owned by the trust of the late founder Richard Wendt, members of the Wendt family, Jeld-Wen employees and other existing shareholders.
What were your top stories for 2011?
May the New Year bring new opportunities and prosperity for all.
Note: For more of the same, check out My Top Wood Stories fo 2011: Bonus Edition.
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