Posted on 06/24/2003 10:06:38 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
Import sales keep climbing, but declining sales of Hooker Furniture's domestically produced furniture leave employees in Virginia and North Carolina working less than 40 hours per week and facing one-week factory shutdowns in each of three upcoming months.
Hooker Furniture recently reported the company set a new quarterly record with sales of $80.1 million for the second quarter ended May 31, an increase of nearly 29 percent when compared to the second quarter of 2002. The company also set a six-month record, with sales of $154.6 million for the first half of 2003.
"We're pleased with our top line growth for the quarter, especially given the sluggish retail environment in which we've been operating," said Paul Toms, chairman and chief executive.
The sales records received a boost, too, from sales of upholstered furniture from Bradington-Young, acquired by Hooker earlier this year.
For Hooker Furniture, shipments of imported products for the year's first half increased more than 69 percent to $73.2 million when compared to the same period last year. Meanwhile, shipments of furniture manufactured domestically dropped more than 24 percent to $60.5 million.
The company said it anticipates plants in Virginia and North Carolina will remain on a 35-hour work week schedule "for the foreseeable future." And, in addition to a traditional plant shutdown for the week of July 4, "Hooker expects to shut down selected facilities for an additional week in July and all facilities for an additional week in each of August and September."
Last month, Hooker announced plans to close a plant in Kernersville, N.C. - the first closing in the company's 79-year history. The closure affected about 270 workers. Second-quarter 2003 results were affected by a related one-time charge of $1.5 million pre-tax.
Hooker Furniture's stock is listed on the Nasdaq SmallCap Market. The stock price closed Monday at $26, down $3.25.
The jokes are just to easy.
Given that the import side of their business is booming, is it not more logical to conclude that there's something about the domestically-built furniture that's keeping customers away?
Here's a clue. Good quality wooden furniture costs more money. It is usually manufactured here in the USA. But cheap fiberboard furniture is manufactured heavily overseas. Now, what is the largest growing segment of our population? Illegals who work at the bottom of the economy. What can they afford? The cheap imported furniture.
Yes, burdensome domestic regulations imposed by the federal government drive up the cost.
Lowering tariffs to imports while maintaining those domestic burdens is an act of oppressive tyranny by the Zoellick/Bush administration against those peacefully employed in our domestic furniture industry.
The article goes on to note that there is a 25-35% cost advantage from the use of East-Asian manufacturing. The thing keeping folks away from Hooker's furniture would therefore appear to be price.
That's why reducing regulations is the way to attack the problem. But you can't do that because government workers depend on those burdensome regulations for thier jobs. Now who is more important, the man producing a valuable product, or the government man making it harder to produce anything? We must have our priorities in order in this country!
Absolutely! That pesky labor component of the cost that allows an American family to eat properly, and have indoor plumbing. BTW that labor component would be competetive if the manufacturer weren't forced to cough up additional dough to cover an ever-increasing list of government-mandated giveaways (often demanded by the workers themselves): 12 weeks of family leave, expensive health insurance (caused by government meddling in healthcare), worker's compensation insurance, unemployment benefits for deadbeats, skyrocketing Medicaid & Medicare "employer contributions", etc, etc, etc....
ANY form of taxation is "bad economics" in theory.
But our Founders recognized that some form of taxation was necessary to provide federal funding.
They demonstrated their preference for the "revenue tariff" with the enactment of The First Federal Revenue Law.
On April 8, James Madison, once again a congressman from Virginia, addressed the House. He went right to the point. Congress, he said, must "remedy the evil" of "the deficiency in our Treasury." He argued that "[a] national revenue must be obtained," but not in a way "oppressive to our constituents." He then proposed that the House adopt legislation, virtually identical to the unimplemented Confederation tariff, imposing a five-percent tariff on all imports
Congressman John Laurence of New York supported Madison's proposal, arguing that "the more simple a plan of revenue is, the easier it becomes understood and executed." Madison elaborated. A single, uniform tariff, he insisted, had two advantages. First, it could be imposed quickly, which was important because "the prospect of our harvest from the Spring importations is daily vanishing." Second, it was consistent with the principles of free trade ("commercial shackles," he said, "are generally unjust, oppressive, and impolitic").
While the Federal Government can no longer be funded solely by tariffs, the revenue tariff remains the least oppressive form of taxation that can be imposed by government. A relatively low revenue tariff of 10~15% should be imposed to further reduce other, more onerous forms of domestic taxation.
With transportation costs from China, you could have the $17/hr worker compete quite easily. There's only one problem. That worker doesn't cost the company $17/hr. That worker costs the company 2.5-3 times that much, probably about $45/hr. You have to add in the health insurance, worker's compensation insurance, "employer contributions" to social security, medicare, medicaid, and any additional state or local payroll taxes, plus employer 401K contributions, etc. Then you have to hire a staff of "human resources" and "regulatory compliance" professionals to manage the mountain of paperwork that goes with all these additional payments, and pay for their salaries and payroll taxes, too.
If the furniture factory just had to pay $17/hr for workers to make furniture in America, for sale in America, imports would cease tomorrow.
Why is it that our so-called representatives don't understand what "made in China" means to our manufacturing base? Ross was right, "there's a great sucking sound going SOUTH, EAST, NORTH and WEST. It's called American manufacturing jobs and with them go our wealth and way of life.
Your point is very true. It's a nightmare to hire an employee in this country -- I'm surprised as many take the risk as actually do.
GM has a huge engine plant here in Buffalo. In the last 2 years they've invested $850,000,000 in it. Without creating one, single, new job.
It's just too expensive to hire a union employee in New York State. The high taxes, regulations, and union wages encourage companies to invest in more equipment when possible -- or to send work overseas. Thus, the jobless recovery continues.
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