For a man who just lost his livelihood, Ken Burnette is spending a lot of time in the office.
At 10 a.m. on a Wednesday, the founder and now former owner of East Coast Plywood Co. is tied up on a call with a potential buyer for some of the nearly $400,000 worth of wood stocks sitting in the warehouse next door.
As soon as he puts the phone down, it rings again. It's the Rocky Mount Area Chamber of Commerce asking if he wants to be included on a map it is preparing for local businesses. The plant is closed, he tells them, so no thanks.
Later that morning, Burnette will meet with a pair of businessmen from Lexington who are interested in buying a pair of industrial table saws he still owns. Then he'll look into leasing out the building he owns.
"I'm as busy as I've ever been," he said. "Unfortunately, it's a different kind of busy."
More than a month ago, Burnette made the decision to close the furniture parts manufacturing plant he's owned for 21 years, having squeezed what he could out of an increasingly unprofitable business.
The company's work force has been cut to just two employees charged with cleaning up the largely empty 50,000-square-foot warehouse, where workers once converted plywood into drawer bottoms to be used in office furniture – a niche market if there ever were one.
Burnette's focus is now on selling off the rest of his inventory and equipment, which he expects to get peanuts on the dollar for. When that's done, the business owner of more than two decades will be hunting for a job.
"We're bleeding too much, and what's leaving is the equity it took me 21 years to build," Burnette said. "We had to make the decision. We're out of here."
In permanently closing its doors, East Coast Plywood is penning its own version of a familiar story for North Carolina manufacturers large and small over the last several years.
Since 1990, the number of manufacturing jobs in North Carolina has dropped from more than 820,000 to fewer than 553,000 in 2006, according to data from the Employment Security Commission of North Carolina.
Of the roughly 249,000 jobs lost over that time, more than a third have come since the turn of the century. The number of manufacturing plants and mills dropped from more than 12,500 to fewer than 10,700 from 2000 to 2006.
The trends have been particularly devastating for the textile and furniture industries, once pillars of the state's economy. The number of textile and apparel mills dropped by 40 percent between 1996 and 2006, putting more than 153,000 people out of work.
Furniture manufacturing losses have been smaller, but significant. The number of plants has dropped by 163 for a loss of about 26,000 jobs, about a third of the state's work force in that industry.
The causes are as clear as they are frustrating. The rise in global free trade has sent large manufacturers overseas and across borders in search of cheap labor and less restrictive employment and environmental regulations.
In addition to mass layoffs that come as a result of large-scale plant closings, the impact trickles down to smaller manufacturers that feed into the industry. It's a trend many believe is irreversible.
"It's reasonable to assume we've kind of bottomed out," said Steve Walker, assistant director of the Furniture Manufacturing and Management Center at N.C. State University. "There will certainly be opportunities that come along that somebody will see and fill; but to think that those jobs will come back, I don't think it will ever happen."
For East Coast Plywood, the fall came hard and fast.
Burnette started the company in 1986 using a loan and all the savings he had after spending more than a decade in furniture sales. The operation was small but grew quickly, making a profit in its third year with about $1.2 million in sales.
After a decade, that blossomed into more than $6 million in sales a year. The output multiplied from 7,000 drawer bottoms a day to 54,000, and the plant's work force was up to 22 full-time employees. In 1996, the company moved to a new warehouse five times larger than its original location to accommodate the expanding business.
"I found a niche in the marketplace," Burnette said. "We were doing well."
The boom lasted until about 2002, when Burnette started to notice a gradual downward shift in sales and profit margins.
He didn't have to wonder why – it was on the nightly news.
In December 2001, China became a member of the World Trade Organization, eliminating many of the trade barriers that had prevented manufacturers from doing business there.
Soon after, many of the large furniture manufacturers Burnette counted on as customers began to move their operations to China, and took their business with them. By 2004, East Coast Plywood saw its production drop to 32,000 drawer bottoms a day, a 40 percent cut in business from its peak. Then things got bad.
By 2006, output dropped to 24,000 drawer bottoms a day, and annual sales were down a third from a decade earlier, not accounting for inflation. Burnette had laid off more than half his staff, leaving just eight plant workers on the job with more layoffs imminent.
"You'd pick up a newspaper, and you'd see that another furniture plant was shutting down," Burnette said. "Once the water started coming through the dike, it didn't take long at all."
On Fourth of July weekend, Burnette took a trip with his wife to Emerald Isle, the same spot he was at 21 years earlier when he made the decision to go into business for himself.
The plant was now making just 10,000 drawer bottoms a day with five plant workers – barely more than what it was putting out in its earliest years. It was then that he made the call: When he got back to town, he would start shutting things down for good.
"You feel like you lost. You feel defeated," Burnette said. "You can lose money 10 times faster than you can make it."
The first thing Burnette will tell you when discussing his failed business is that he doesn't consider himself a victim. But wait a minute or so, and he'll begin to talk about the free trade realities responsible for his company's demise – the fairness of which he understandably questions.
He's hardly alone. Since the major expansion of international trade agreements in the mid-1990s, concerns about the equity of a relatively unregulated global marketplace have created one of the most consistent and complex threads of ideological debate in the post-Cold War era.
As it relates to the offshoring and outsourcing of U.S. jobs, domestic opponents of free trade point to the often loose labor and environmental practices permitted in many of the benefiting countries – issues they claim the trade agreements inadequately address.
China in particular, which has been a drag on the U.S. furniture industry, has drawn considerable attention for its growing contribution to global greenhouse gasses, with several studies projecting it to become the world leader in emissions in just a few years.
Moreover, critics say the lower labor costs for which offshoring companies leave are typically the result of unbalanced sociopolitical systems in which workers are exploited for little pay.
Regardless of one's theoretical take on global competition, they say, the reality is a situation in which U.S. industries are punished for having to adhere to stricter regulations.
"It's really a fallacy that these smaller firms should be able to adjust their practices to compete on a level with these developing countries," said Ben Plimpton of the Citizens Trade Campaign, a coalition of organizations that promote free trade reform. "Obviously the cost of labor is a fraction of what it is here, and that's made possible by a repressive political climate."
Free trade supporters point out that the United States' emphasis on labor rights and environmental protection is a relatively recent phenomenon, made possible by a stable middle class. Countries such as China are following a similar model, and improvements – the theory goes – will come gradually as they expand to higher levels of development.
"I think Americans often have a less than complete knowledge of the relative comparisons," said Dr. Mitch Renkow, a professor of resource economics at N.C. State University. "A clean environment is in some sense a luxury good. It's only after you get to a certain level that you're concerned about it."
In addition, many economists say the trend is a natural one that carries numerous benefits – cheaper consumer prices, accelerated global progress and a better quality of life in historically underprivileged parts of the world – even if there are bound to be some losers in the equation.
"Economists have studied this for a long time, and if you add up all the benefits and subtract all the losses from these free trade situations, it's always true that the gains outnumber the losses," said Dr. Donald Jud, an economist at the University of North Carolina-Greensboro. "Free trade is making possible a better life in so many parts of the world. The problem is that not everyone is benefiting at the same pace."
In more than 35 years in the work force, Keith Bennett has never been without a job.
As the plant manager at East Coast Plywood for a decade and a half, he's seen the company's staff grow and dwindle, hanging onto his own position as many of his co-workers were let go.
Now, at 60 years old, Bennett is counting down his final days at the company that's provided him with a livelihood for much of his adult life. He is one of two employees still working at the plant, helping to clear out the warehouse so someone else can make use of it.
Bennett will volunteer that he's no expert on the nuances of free trade. Yet, he said he's seen enough to believe there's something fundamentally wrong about the situation he's now in.
"I'm conservative and old-fashioned in nature, and I just think we need to take care of our jobs before we take care of the rest of the world," Bennett said as he took a smoke break, using an empty Coke can for an ash tray.
"I don't know that I'm knowledgeable of world trade and world organizations and what their thing is, but I know enough to make that decision."
Bennett doesn't know what kind of unemployment compensation he'll receive, though he's certain he will eventually need another job.
Having spent his life in manufacturing, Bennett said he'd prefer something different. But he knows his age could work against him, and he's willing to take what he can get.
"My experience has been in wood manufacturing of one sort or another," he said. "I'm just going to see what's out there."
While activists and economists debate the merits of free trade, the situation on the ground remains as is.
Every plant closing leaves a variable amount of people without jobs, many with only the most basic skill sets. Meanwhile, the manufacturing sector is shrinking, and jobs that remain require more advanced training.
In the wake of several high-profile furniture plant closings in the early part of the decade, the state has stepped up efforts to retrain employees who have suddenly found their talents no longer in demand.
The JobLink Career Center System, run through the N.C. Department of Commerce, has teamed up with the state's community college system to locate displaced workers and assist them in finding a new role in the local economy.
When officials get notice of a plant closing, they will often do onsite visits to register employees in the JobLinks database and assess their interests and abilities. From there, they will try to match them up to training programs in community colleges to make them more versatile.
"There's an ebb and flow in the labor market, and what we have here is a cohort of people who have demonstrated some great skills and great work productivity," said Tom White, director of business and industry services for N.C. Division of Workforce Development. "We're able to take that basic set of skills and try to enhance it and develop it to meet the changing needs of the labor market."
Experts say that approach is critical. While the manufacturing industry in North Carolina is not necessarily dying, observers say it is shifting to more advanced stages, and workers will need to learn how to work at higher levels to gain meaningful employment.
"We've been through this sort of longterm structural change before, and we're going through it again," Jud said. "The junior colleges in many of the rural areas of North Carolina, they're the growth industries. Everybody needs to go back and get retrained."
Burnette will soon test those waters himself as he looks for something to replace his once successful, now defunct furniture parts outfit.
The man who prints his business cards on a piece of ultra-thin plywood said he'd like to find something within the furniture industry, but he's open to all options.
Meanwhile, Burnette's 18-year-old son recently started his freshman year at N.C. State. The former plant owner told him a few years ago there wouldn't be any openings at the family business when he graduates. Beyond that, he offers him only general advice.
"I tell him, 'Son, it's highly competitive out there,'" Burnette said. "If you want to get a job, you've got to be better than the guy beside you."
Not to mention the guy halfway around the world. Original article...
The job outlook for NC has worsened, reflecting declining economic conditions and more companies being uneasy about being overstaffed during uncertain times. A September report in the Winston-Salem Journal indicates only 10 percent of employers in the Piedmont area expect to add employees in the fourth quarter.
