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Case Studies

Thomasville Furniture

Thomasville Furniture Industries is a leading furniture company with a history going back approximately 100 years. The company's main headquarters are located in the Davidson County city Thomasville, North Carolina.

Thomasville Furniture Industries is crucial to the economy of Davidson County. In fact, it employees more workers than any other company in the immediate area. The majority Thomasville's employees live and work in Thomasville. It has a tight cluster in the area.

Like many other furniture manufacturers in North Carolina, Thomasville Industries has been harmed by international globalization. In mid 1993, Winston-Salem's Plant H closed, eliminating appoximately 400 jobs. Additionally, Thomasville's Plant B was scheduled to halt operations in December 2003. Another 300 individuals lost their jobs (Andrews, 2003). In just the last five years, almost 2,000 employees of the company have lost their jobs. These job losses have been spread out over a four state area.

Globalization has significantly impacted Thomasville Industries and other North Carolina furniture manufacturers. While some of the production operations of Plant H will move to another plant within the same town, many of them will move overseas due to lower production costs. Imports are flooding the market and are making it increasingly difficult for American firms to compete. Thomasville must also address other areas for concern. Lack of full-time employees was putting a financial burden on the company. By reducing the actual number of employees, but increasing the number of hours worked by each to full-time, the company should be able to reduce costs. However, these requires laying some workers off (Becker, 2003).

As North Carolina's industries are increasingly harmed by the effects of globalization, the government has taken steps to reduce harm to employees. In fact, similar to what is occuring in the textile and apparel industries, some individuals who have lost their jobs may receive additional assistance in the form of improved educational programs andassitance, longer periods of available unemployment security, and helping in finding other forms of employment.This assistance is available as part of the Trade Adjustment Assistance Act.

Lexington Furniture Industries

Lexington Furniture Industries, located in Lexington, North Carolina, earned over 167.3 million dollars in sales last year. Employing 3,000 people, the manufacturer is the fifth largest in firm in the state's furniture industry. Lexington Furniture Industries has experienced increased competition from Chinese manufacturers and has, consequently, had to change the way it conducts business.

With cheaper products shipped in daily from producers abroad, Lexington has had to consolidate its state factories by allowing only the profitable ones to remain open.
Closings over the last two years have greatly changed the set-up of the company. For example, in April, 2004, Lexington Home Brands will lay off 75 workers at Plant No. 5 in Lexington, North Carolina. In October, 2003, Lexington Corporation closed Factory No. 1, the oldest company plant. Located in Piedmont for over 100 years, the closing left 450 workers unemployed. (Krishnan, 2004) The company has kept all its corporate offices on the site. (Bonner, 2004)

These closings have very personal effects for the workers who now must find new employment. For example, Anita McDanial lost her job in May, 2003, and is currently attending classes at Davidson Community College where she is training to become a medical assistant. (Krishnan, 2004)

Lexington also imports product and components manufactured in their factories in the Far East, Central America, and Europe. (Lexington Corporation Website, 2004) The other countries provide the firm with access to new materials, new expertise, and cheaper labor. Most of Lexington's Chinese factories are located in Dongguan where wages are less than 30 cents per hour and workers live in dormitories near the factory. (Bonner, 2004) By the end of 2003, about 60 percent of company sales came from furniture produced in Lexington factories abroad. (Associate Press, 2003)

According to the Charlotte Observer, Lexington Home Brands recently joined with the American Furniture Manufacturers committee for Legal Trade. The Committee is preparing to file a petition with U.S. Department of Commerce and International Trade Commission in order to stop Chinese "dumping" (selling at artificially low prices) of wood furniture. If the petition is successful, the Chinese producers would be subject to taxes, which could raise the price of furniture by as much as 40 percent. (Associate Press, 2003)

 



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