Canadian wood producers want level playing field
By Michael J. Knell -- Furniture Today, August 18, 2003
Ottawa — Canada's three largest wood bedroom producers — Palliser, Shermag and Durham — are supporting the American Furniture Manufacturers Committee for Legal Trade's antidumping crusade in hopes of creating a level playing field in North America.
For all three, sales to U.S. retailers represent the bulk of their business, and top executives say they need to protect their sizable work forces and their investments in the business.
"Looking five to 10 years down the road, I have to make sure that our people have work and that the investments we have made in our company — which have amounted to over C$20 million in recent years — are protected," said John Scarsella, president and chief executive officer of Durham. "I just want to be sure the field of play in North America is level for everyone."
"To a certain extent, we joined to provide moral support," said Art DeFehr, president and CEO of Palliser. "But I also employ over 1,500 people in wood furniture production in this country, so it's also an internal signal I feel I have to send. All case goods jobs are insecure right now, and I have to tell my people that I'm working in their best interests."
Jeff Casselman, Shermag's president and CEO, said, "I see this as a North American issue. It's not a political issue, it's a legal question. Shermag is part of a bigger issue."
'The real issue is currency'
Top Canadian importers, meanwhile, say Chinese bedroom producers aren't dumping product in North America, that is, selling below cost to retailers in Canada and the United States.
"They can't sell below cost and survive," said Mick Verjee, president of Hamilton & Spill, the Vancouver, British Columbia-based importer. "The real issue is currency, and a trade deficit that's getting larger. The Chinese government isn't letting their currency float on the world market and that's not helping reduce the trade deficit."
Richard Magnussen, chairman of importer Magnussen Home, said the situation recalls the early years of free trade between Canada and the United States, which shocked the Canadian industry and raised cries for protection. But over the next decade, the Canadian industry became stronger than ever, he said.
Magnussen was critical of some of those supporting the antidumping move.
"They are fighting (imports) on the one hand, and on the other are working very hard to develop their position overseas," he said. "The real question is: Will the consumer pay more for something made in the United States? I don't think so. They will look at spending the least amount of money or at getting the best value, and that will include products from China."
Redressing imbalances
DeFehr noted that as shipments of North American-made case goods decline, imports of Chinese goods are soaring, and unless action is taken to redress trade imbalances, domestic industries may be irreparably damaged.
John Bassett, chairman and CEO of Vaughn-Bassett and a spokesman for the American Furniture Manufacturers Committee for Legal Trade, said he personally invited Palliser, Shermag and Durham to join the effort because China's actions don't affect only U.S. manufacturers.
"These companies ship a large part of their production to the United States," Bassett said. "They also are impacted, along with other importers such as those from Mexico and other countries in the Pacific Rim. China is not affecting just domestic producers; China is affecting the world."
While the Canadian companies can't sign the group's antidumping petition, they are supporting the effort financially. Bassett said all the committee wants is for trade to be conducted according to the laws and the regulations of the World Trade Organization, "and the Canadians who joined us want the same thing."
Meanwhile, the Canadian Council of Furniture Manufacturers and the three regional factory associations are surveying members to determine if the industry in Canada also should seek protection against Chinese imports.
Furniture West, the Ontario Furniture Manufacturers Assn. and the Quebec Furniture Manufacturers Assn. won't know the results for several weeks.
Terry Clark, president of the CCFM and chairman of Furniture West, stressed the associations are gathering information and aren't currently contemplating any action.
