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You never know what’s going to happen next in America’s trade dispute with China. It’s like a game of chicken. Who knows which country will be first to blink? Nobody likes to see so much disruption and uncertainty, but one thing is true: All of us are affected.
Regardless of your political views, Donald Trump has confronted unfair trading practices like no other American president before him. It’s about time someone had the temerity to stand up for American workers. Before you disagree with this point, go talk to the 300,000-plus workers who lost their jobs in the furniture industry in the last decade.
The apple cart is upset. The horse is out of the barn. The game is on. Who knows if we will have a trade agreement that satisfies anybody? But I can say this: It will not be business as usual. When this is over, there will be a level playing field. And what more can you ask for?
We have a fighting chance to produce more furniture, cabinets and fixtures in the United States and, for the first time in a long time, compete on that level field. We have access to sophisticated manufacturing technology, amazing design and production software, an abundance of resources, low utility costs and efficient supply chains. Oh, and did I mention we are the largest economy in the world?
All of the ingredients are here. Billions of dollars of capital can’t find enough homes, so financing is not an excuse. There is a wild card—it takes courage. And I’m not sure how many new secondary panel processing facilities will emerge from the ground up in the years ahead. Who has the courage to invest in new state-of-the-art production facilities? Someone is going to have to fill the void. I predict that those who do will be handsomely rewarded.
Reshoring is one of the top trends in 2019. There are several reasons beyond trade disputes driving this trend. An increased standard of living and higher wages in “off-shoring” producers are contributing to a level playing field here and driving production home. As production becomes more sophisticated, infrastructure becomes increasingly important. Most countries with cheap labor have insufficient infrastructure to accommodate modern facilities. And, of course, automation of repetitive processes is the ultimate field leveler.
Suppliers of composite panel products and TFL are doing their part to prepare for a manufacturing renaissance in America. Arauco’s massive Grayling, Michigan, facility; Egger’s Lexington, North Carolina, plant; and Kronospan’s investments in the last few years in Oxford, Mississippi, are all gearing up for production increases in furniture, cabinet and fixture manufacturing in the US.
The table has been set. But who is going to sit down and enjoy the feast? If the enormous investments made on the supply side mentioned above are any indication, new investments are going to be FDI. FDI? What’s that? It’s government lingo for “foreign direct investment.” In other words, not home grown American. It’s Hyundai building in Alabama, IKEA in Virginia, Foxconn in Wisconsin. Where is that American ingenuity? Does anyone have the courage to build something from scratch, something truly American? We’ll see.
Zeus said: “Perseus has won. My son has triumphed!”
To which Hera responded, “He is a fortunate young man.”
“Fortune is ally to the brave,” Zeus proclaimed.