`

Housing slump hammers hardwood industry

December 20, 2007

By Norm Heikens

Cabinet and furniture makers are experiencing their most harrowing times since the Rust Belt recessions of the early 1980s as homebuilders cut back in the wake of the subprime credit crunch.

John Land, chief financial officer of Cole Hardwood Inc. in Logansport, said his company has tried to counter the slump by boosting lumber exports. He said the industry overall might have seen as much as a third of its revenue evaporate in the past year.

"The hardwood industry is in the doldrums," said Land, a former president of the Indiana Hardwood Lumberman's Association, a trade group. "It's a bad one."

The industry, which ranges from logging to finished products, is spread across the state but is particularly concentrated in forested southern counties.

About 38,000 Hoosiers are employed by the industry, said Rob Swain, a consultant who is finishing a study of the industry for the Indiana Department of Natural Resources.

That's about 1.3 percent of total employment in the state, but Swain said the industry generates more revenue than its headcount implies. He would not discuss specifics because the report hasn't been vetted by DNR.

Specifics about the current downturn are difficult to obtain because the industry is overwhelmingly owned by individuals and families who don't divulge their financial results. Moreover, many downsizings have come in small numbers that attract little attention.

An exception is a sweeping layoff announced this week by MasterBrand Cabinets Inc. in the southern Indiana city of Jasper. The company is laying off 260 workers in Dubois County - at plants in Jasper, Huntingburg and Ferdinand. It closed a plant in Cumberland County, Tenn., in February.

MasterBrand has been manufacturing cabinets in Dubois County since 1954. It manufactures 13 brands, including Aristokraft and Decora.

Companies that make furniture for offices and institutions are faring much better.

Jasper Seating Co., which focuses on office and institutional furniture, actually has seen its bottom line swell as cabinet makers ease production and reduce competition for lumber. "We're kind of raking it in," said Engineering Manager Dan Herman.

The company employs 600, including 100 who came with its September acquisition of Blanton & Moore, a Barium Spring, N.C., maker of library furniture.

Another year could pass before the industry regains momentum.

Many experts believe the housing market will have bottomed and started its own recovery by the middle of 2008, pointed out Lumberman's Association Executive Director Ray Moistner. The hardwood industry tends to trail the overall housing market by six to nine months, meaning the Indiana companies could see their upswing begin well into 2009.

The Associated Press contributed to this article.

Source: XMLFULL/XMLFull9054.xml
ADVERTISEMENT

Recent Articles by Norm Heikens

Comments powered by Disqus