LIANE HANSEN, host:
Tobacco, textiles and furniture once formed the backbone of North Carolina's traditional manufacturing economy. But the business of making tables, chairs and sofas is changing because of cheap labor overseas and sluggish sales at home. From member station WFDD in Winston-Salem, Thibault Worth reports.
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THIBAULT WORTH: Twice a year, the sleepy town of High Point, North Carolina comes to life in a weeklong furniture fashion show.
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WORTH: Thousands of furniture manufacturers, retailers and others are here to attend what's billed as the largest home furnishings trade show in the world. Bernie Madden owns a high-end interior design firm in Kansas. He's attended the High Point market show for 35 years.
Mr. BERNIE MADDEN (Interior Designer and co-owner, Madden-McFarland Interiors): We come because of two reasons. We buy as well as we charge our batteries, and that's what we come here for. It's an exciting industry. If you don't come to High Point, I don't think you're in the high-end business. You just can't survive without coming here.
WORTH: But while Madden charges his batteries, manufacturers and retailers are trying to charge up sagging sales. Despite a housing boom during the first half of the decade, furniture sales never really followed as analysts expected. Speculators bought nearly a quarter of those homes and never furnished them. Analyst Jerry Epperson tracks the furniture industry for Mann, Armistead & Epperson. He says there's another reason why sales are slow: Consumers are worried about debt.
Mr. JERRY EPPERSON (Managing Director and Owner, Mann, Armistead & Epperson): I don't think there's any question. Last year, you saw the minimum payments on credit cards go up. Most people have got mortgages, and some of those adjustable-rate mortgages, the rates are going up. So all those things are taking money out of the consumer's pocket.
WORTH: North Carolina officials are concerned about all of this. In nearby Caldwell County, once dubbed the furniture capital of the South, unemployment has soared to above eight percent. Bobby White is the former county manager.
Mr. BOBBY WHITE (Former County Manager, Caldwell County, North Carolina): We had the highest proportionate relationship of manufacturing jobs per capita of any county in the nation geared primarily to furniture manufacturing and did very, very well.
WORTH: White says during a five-year span, more than 7,000 jobs from Caldwell County disappeared. But last month, a new company came to town: Google. The Internet search engine needed a place to house computer servers for all its users' Web searches in exchange for tens of millions of dollars in local and state incentives. Google has also agreed to hire and retrain up to 250 laid-off furniture workers in the town of Lenoir, and while Caldwell County looks towards other industries, it isn't giving up on its furniture roots.
Hickory Chair is a high-end furniture manufacturer near where Google is building its server farm. CEO Jay Reardon says his company has thrived since it adopted a production model used by automaker Toyota. Each week, managers sit down with workers and ask them to report inefficiencies on the factory floor and then they fix them. Reardon says furniture manufacturers should pay less attention to labor costs and more on productivity.
Mr. JAY REARDON (CEO, Hickory Chair): People keep focusing on how much does somebody make an hour, and is that high compared to the Chinese or some other import. It's not the amount. It's how much of that time is actually being used to do something that's constructive that people can see when they're evaluating whether to purchase an item or not.
WORTH: It seems to be working. During the toughest times in the history of the furniture business, Hickory Chair has seen six years of steady growth. The company is up to 500 employees, twice as many as Google plans to hire in Lenoir.
For NPR News, I'm Thibault Worth in Winston-Salem, North Carolina.
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