Supply Chain Shortages Help a North Carolina Furniture Town

on Nov28
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HICKORY, N.C. — Six months into the coronavirus pandemic, as millions of workers lost their jobs and companies fretted about their economic future, something unexpected happened at Hancock & Moore, a purveyor of custom-upholstered leather couches and chairs in this small North Carolina town.

Orders began pouring in.

Families stuck at home had decided to upgrade their sectionals. Singles tired of looking at their sad futons wanted new and nicer living room furniture. And they were willing to pay up — which turned out to be good, because the cost of every part of producing furniture, from fabric to wood to shipping, was beginning to swiftly increase.

More than a year later, the furniture companies that dot Hickory, N.C., in the foothills of the Blue Ridge Mountains, have been presented with an unforeseen opportunity: The pandemic and its ensuing supply chain disruptions have dealt a setback to the factories in China and Southeast Asia that decimated American manufacturing in the 1980s and 1990s with cheaper imports. At the same time, demand for furniture is very strong.

In theory, that means they have a shot at building back some of the business that they lost to globalization. Local furniture companies had shed jobs and reinvented themselves in the wake of offshoring, shifting to custom upholstery and handcrafted wood furniture to survive. Now, firms like Hancock & Moore have a backlog of orders. The company is scrambling to hire workers.

“Not to sound trite, but it’s unprecedented,” said Amy Guyer, vice president for human resources and benefits for the parent company that includes Rock House Farm furniture brands such as Hancock & Moore and Century Furniture.

Yet the same forces that are making it difficult for overseas manufacturers to sell their goods in the United States — and giving American workers a chance to command higher wages — are also throwing up obstacles.

Many of the companies are dependent on parts from overseas, which have been harder — and more expensive — to obtain. Too few skilled workers are seeking jobs in the industry to fill open positions, and businesses are unsure how long the demand will last, making some reluctant to invest in new factories or to expand to towns with bigger potential labor pools.

“We would love to expand capacity,” Ms. Guyer said, “but we’re the furniture mecca of North Carolina — every other furniture company is in the same boat we are.”

Even if there were enough workers, said Alex Shuford, the chief executive of the company that owns Rock House Farm furniture brands, “the surge isn’t going to last as long as it would take to go to a completely trained work force and get them up to speed.”

On a wet morning in late October, the sound of electrical sanders whirring and the steady thunks of a craftsman planing a chair leg echoed through one of Century Furniture’s cavernous warehouses. The factory once housed 600 workers tending assembly lines. Now about 250 busily construct tables, chairs and desks.

The plant typically has 2,000 orders in the pipeline, but these days that is more like 4,000, said Brandon Mallard, its manager. Deliveries of ordered furniture used to happen within six to eight weeks; now they can take six months.

The same supply chain problems afflicting nearly every industry are also hitting Century. Dresser drawer handles are trapped on container ships somewhere between Vietnam and North Carolina. For some products, imported wood has faced delays.

Component delivery dates “just keep moving out,” Mr. Mallard said.

Labor has also been a challenge. Employees at Century have been working overtime to catch up with the backlog, but workers burn out, and furniture margins are so thin that paying overtime labor rates can eat into profits. Several of Mr. Shuford’s brands have been raising prices, but because pieces are preordered weeks or months in advance, they have sometimes failed to increase them quickly enough to keep up.

The experience in Hickory is a microcosm of what is playing out on a larger scale across the global economy.

The White House has also been pledging to foster more domestic manufacturing. This moment could help that agenda as it exposes the fragility of far-flung supply networks.

But pandemic employee shortages, which are happening across the United States in part because many people have chosen to retire early, could also serve as a preview of the demographic shift that is coming as the country’s labor force ages. The worker shortages are one reason that ambitions to bring production and jobs back from overseas could prove complicated.

Hickory’s furniture industry was struggling to hire even before the coronavirus struck. It has a particularly old labor force because a generation of talent eschewed an industry plagued by layoffs tied to offshoring. Now, too few young people are entering it to replace those who are retiring.

Local companies have been automating — Hancock & Moore uses a new digital leather cutting machine to save on labor — and they have been working to train employees more proactively.

Several of the larger firms sponsor a local community college’s furniture academy. On a recent Thursday night, employers set up booths at a jobs fair there, forming a hopeful ring around the doorway of the school’s warehouse, welcoming potential candidates with branded lanyards and informational material. It was the first furniture-specific event of its kind.

But progress is slow, as companies try to assure a new — and smaller — generation of young people that the field is worth pursuing. Corporate representatives far outnumbered job seekers for much of the night.

“It’s such a tough market to find people,” said Bill McBrayer, human resources manager at Lexington Home Brands. Companies are turning to short-term workers, but even firms specializing in temporary help cannot find people.

“I’ve been in this business 35 years,” he said, “and it’s never been like this.”

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