Believe it or not!

Cedarman · January 25, 2007, 08:10:56 AM

Monday I visited with the production manager of Cedarworks. A year ago several hundred people were employed in Peebles Ohio making birdhouses and birdfeeders. Today none. Now some of the production is done by the Amish and the rest is in China. Cants are being shipped from Bloomsburg Ky and Arkansas to China for resawing and making the small birdhouses and birdfeeders. The larger Gazebo feeders are coming back as a package of parts that are assembled here in the US.

I am looking at making the bird feeder posts. I have a target price that I will get. My big advantage is I can use a good bit of wood that does not have a home. The down side is the labor involved. Plus no shipping charges except for the final product is another plus. When they did the work in Peebles they had about 6 minutes of labor per post. I will have at least 10 minutes per post when I start out. I am sure we will get more efficient as we go along. So I will have about $2.00 to $2.50 labor per post while the Chinese would have 10 cents or less.

treebucker · January 25, 2007, 08:46:26 AM

It seems a slap in the face to the local peoples that are victim of this. The people in the Central/South American country should have processed the cherry wood into flooring before it left their shores. Shipping cedar logs from the neighborhood 12,000 miles to china then 12,000 miles back to the same neighborhood is the dumbest thing i've heard of since that cartoon that showed an entire log being consumed to make a single toothpick. It's not just the people in the contry of origin that pays for this stupidity - it's everyone who uses energy resources to survive. (That's everyone!) What a waste.

Would there be anything unethical about denying export of raw lumber products to contries that process those products for export back to their country of origin?

farmerdoug · January 25, 2007, 01:04:02 PM

Tariffs and duties are not allowed anymore unless you want to fight the WTO. Just look at our stupid attempt with lumber from Canada.

The only way is for us as consumers to use our dollars to vote with. Like it has been said the businesses will go where the money is so if we purchase products made in the USA or other countries in the Western Hemisphere then that is where they will be made in time. We have voted for chinese products because we purchase the lowest prices so that is where the companies go. I for one will buy American products if available at a reasonable price. The lowest price is probably the low quality too.

Farmerdoug

leweee · January 25, 2007, 01:10:30 PM

:D :D :D WELCOME to WALMART :D :D :D

farmerdoug · January 25, 2007, 01:28:18 PM

I am very fimilar with Walmart. ;) We have one of the first stores in Michigan here. They just moved down the road a half mile to a new supercenter store. :

Farmerdoug

treebucker · January 25, 2007, 01:33:07 PM

I don't put any faith in consumer habits. They are, generally, not going to know this kind of shenanigan is going on. Even if they see "cedar" and "Made in China" on the bird house they are not going to understand that the cedar came from their own back yard and hidden in the costs is an severe energy charge that will also indirectly raise their costs of electricity and fuel.

As far as the WTO is concerned, I don't feel they would get involved in export issues so much as being concerned with import issues and their regulation. I'm saying the country of origin should control the export of their logs. The import will take care of itself. If it don't, the country of export can simply start building the products and processing the material locally to cut the problem off at its knees.

It would be a great incentive to keep the offending country in line. But, this answer makes too much sense :

and should be labled idealistic.

smiley_ignore

Cedarman · January 26, 2007, 08:30:54 AM

I have just been asked to provide 250,000 feet of 1x6, 1x8 and 2x6 and 2x8 for export to China this year. At a price that is well above what industry pays in the US. He also said he would sign a PO for 1 million feet for 08. My first respose is to get the hipboots out and the BS detector. But I will investigate and find out what is going on.
As far as shipping logs and lumber to China. I am in favor of selling to the person who pays the most money. Why should I suffer? Europe pays a lot for veneer logs and the US veneer mills complain. Why should the timber grower sacrifice price so US mills can have it cheaper?

I also heard that China is going to impose a 10 per cent tax on incoming cedar. Just a rumor, but from a reliable source.

Strange things are happening in the cedar business.

treebucker · January 26, 2007, 09:57:29 AM

Congradulations Cedarman,
I hope he is legit. Those are big orders. I hate to sound contradictory but I would'nt turn it down if I were you. Besides, 1x6s, 8s and 2x6s and 8s don't sound like birdhouse material. Anyway, you have no way of knowing where the end products will be shipped. If you did would it change your decision?

That 10% tax rumor suggest there is more going on here than meets the eye. I wonder if they have a native wood that is comparable to ERC? This is one of those cases that suggest some back-room deals that wouldn't stand the light of day. Maybe I'm better off not trying to make sense out of this?

farmerdoug · January 26, 2007, 01:51:00 PM

I think that the higher energy costs are going to help the local economies in the long run. It will cost more and more to ship the wood by truck to the west coast then by ship to China and back then on trucks again to the markets. As these costs skyrocket it will become more economical to produce products locally for local markets.

If China and Europe pay better for the wood then sell it to them but also try to open new markets for local products from local woods also. I think duties and tariffs are the wrong way to go. It is like a bandage on a severed limb. Good for the short term but you will still bleed to death in the long term if you do not fix it right quickly.

Farmerdoug

jrokusek · January 26, 2007, 01:53:41 PM

Quote from: Dana on January 25, 2007, 06:50:30 AM
............... They shipped it to the west coast, loaded it onto factory ships that went into International waters (10 miles I believe) and processed it there.
This guy's story seems to be in agreement with Beenthere and FlaDeadheader. ;)

I'v done some internet searching and couldn't find much on this. If you have a chance, check out www.snopes.com to dispel some internet rumors.

Here's an interesting lumber-related story! http://www.snopes.com/photos/automobiles/lumber.asp

cptbob06 · January 26, 2007, 09:18:42 PM

I sat here for over an hour typing m.h.o. about the China trade. When I went to post it, the forum had logged me out and I lost all my humble input. So here I begin again.
I have been following a internet auction site at www.irsauctions.com. For all of you interested in woodworking and sawmilling it is a great site. You'll feel like a kid in a candy store looking at all the tools and machines that are for sale. Many of the sellers posting are whole furniture plants that are closing. After following this site for several years and always seeing furniture plants continually closing, it made me real curious to find out why. I did a internet search on some of the plants closing and the common response was "moving operations to China". One article said that over 60,000 jobs had been lost in the furniture business. That was several years ago. One article about a family owned hundred plus year old business stated they couldn't compete any more. It sure looks like the end of the furniture business to me. Hardest hit is the southeastern U.S. but there are plants all over closing their doors.
As all these plants close, what is going to happen to the timber and lumber business? Are they far behind? My uncle closed his sawmill several years ago. He said it wasn't profitable any more and there was to much competition. They had been in business for nearly thirty years so I don't think you would call it a fly by night operation. They provided income for four families. Luckily they got jobs in the forestry industry and were never unemployed. But if the market for processed wood decreases when all these plants close, how many sawmills will the market sustain? I just think a lot of really good hard working lumber people are going to get steamrolled under. Some will learn to adapt to a global market and some will find a small niche and survive. Maybe the answer is to find your foreign market now.
One only needs to look at the American tool manufacturing industry to see where this is leading. How easy is it to find an American made tool any more. I am sure many of you are like me and have a fair collection of power tools at home. Few if any of my tools are U.S. made. I didn't start out to buy foreign and would prefer to keep my money for U.S. products. The reality is that when you find a good tool at a reasonable price you buy what you can afford. As long as the big boxes fill their shelves with foreign goods we will continue to buy their goods. We feel great when we actually find something American made. We feel sorry for the guy who lost his job but helpless to even think there is anything that we could do to help. I don't have any answers but are we going to lose most of our manufacturing jobs. Maybe these jobs will come back when the only pay will be minimum wage and no benefits.
I will get off of the soap box now but the China thing touched a bit of a nerve.

WH_Conley · January 26, 2007, 10:23:08 PM

One thing that I have been wondering about is like what happened in this area, this is just an example, it is happening all over the country.

We used to have 2 shoe manufacturing plants here in town and one in the next county, all went to South America, cheaper labor. I understand about about that, but, when all the jobs leave what are the people out of a job going to buy that cheap product with? Seems like somewhere along the line somebody is going to have to spread the wealth around a little or be sitting on a warehouse of their product that nobody can afford. Course I'm just poor ole country boy, what do I know.

Tom · January 26, 2007, 11:23:49 PM

There aren't too many companies that understand "selling" anymore. They think that Marketing is the thing to do and making is the thing to do, but, a million square foot Wal-mart is supposed to run on two cashiers. When they don't make any money, it must be because the economy is too bad.

Mooseherder · January 27, 2007, 12:18:27 AM

That is exactly right Tom. I have to go do mandatory competition checks at 2 competitors every week for my company. One of them is Walmart. I get to visit 4 different SuperWalmarts around the WPB area, so this isn't unique to one location. Rarely get a third of the prices on the list because the product isn't on the shelf. You could lay down in a couple dozen sections where the product should be.

I laughed out loud at a radio report that Walmart hadn't met their sales goal and were gonna drop some more prices to get more people in the stores. :D
They would kick their goal in the teeth before noon everyday if they just filled the shelves. :D
Seein's we are in competition, I just ;D

Ron Wenrich · January 27, 2007, 07:55:58 AM

I've heard all these arguments before. In the '60s and '70s we heard that all the steel mfg was going to go overseas. It was supposedly high labor costs. My dad worked for Bethlehem Steel. Labor costs were high, but he was working with equipment that was pre-WWI. The only thing that kept Bethlehem Steel in the forefront was that all other major steel producers were bombed during WWII.

Now we are seeing it in other industries. Furniture is the most evident to us, since that has a direct effect on the forest products industry. Again the culprit is cited as high labor costs.

I contend that labor isn't the real problem. For some, its the cost of environmental equipment costs, but that is going to come to play in places like China and India in the near future. But, all those places have been the recipients of new investment money. They are working with new equipment, much of it CNC type, while we are still struggling with technology that is way older.

That is what lead to the downfall of the steel industry. Bleed off profits and give to the stockholders and CEO. Invest your new equipment in other countries where they give you tax breaks or environmental breaks, for the time being.

Look at those equipment sales. How much of it is new equipment? LaZBoy did that to one of our local companies and shipped it all to China. I won't buy any of their products. But, the Chinese have invested heavily in infrastructure while we have left ours decay. Follow the investment and prosperity will bloom.

As for the forest industry, we're still doing pretty well. But, upper quality logs are starting to go to mills that can mill them cheaper. That means better yields, quicker production and (

surprise

) new equipment. Trying to compete with old technology is a losing situation.

Small mills can survive with the niche markets. Large mills aren't designed to handle certain types of logs or cut certain types of lumber. They are too industrialized for that.

Cedarman · January 27, 2007, 08:14:46 AM

With all the manufacturing going overseas, we should have a big unemployment problem. Well, look at the numbers, unemployment is low, and immigration is high to fill job needs. We are manufacturing more in the US than ever before with a lot less people.

As I have said before, we have to become more efficient, use innovative equipment. More goal is to run the mill with no employees. Never happen, but most employers would love to be out of the employment business.

We have more entrepreneurs than ever before. If our gov did anything, it should encourage mom and pop businesses. But no, they give the subsidies to the biggest. Build a big plant and hire a bunch, get all kinds of perks. Put in a small sawmill, and what do you get?

Just had another inquiry for 3 containers of 10" and bigger logs, peeled to go to China. Cedar is a pain to peel green. So anyone interested?

Larry · January 27, 2007, 08:18:53 AM

China builds a state of the art furniture plant in half the time it will take to get an approved environmental impact plan for a new plant in the US. Coupled with high labor costs make perfect sense to me to manufacture overseas.

Many parallels can be seen if you study American history after the civil war.

If you could convince people to vote with there dollars change could be effected overnight.

Furby · January 27, 2007, 09:30:03 PM

Back up the wagon train a bit Cedarman.
We have a HUGE unemployment problem in the areas that were manufacturing based.
MI's economy was based on manufacturing, now MI has almost no economy in a sense.
For more then three years, MI has been in the top three with the highest unemployment rate.
MI used to have more manufacturing then most if not all of the other states.
Last year in Kent County alone, the foreclosure rate was up 74-76% over the year before, due to the lack of jobs.

You've got a long ways to go to convince me that the first paragraph in your last post is even close to being accurate.

Ron Wenrich · January 27, 2007, 09:37:16 PM

One thing about unemployment figures. They don't count those folks that have fallen off of the unemployment roles. That means if your unemployment runs out, you're no longer counted. The chronic unemployed are not counted.

Entrepreneurship is a two edged sword. Are they doing it because they see opportunity or because there is few other options?

We have a lot of consulting foresters in our state that have no experience due to no jobs. Just hang out the shingle and you are employed. Same goes for some of the loggers.

And some of those folks that have found jobs have found them at lower rates than before. My brother worked for a Fortune 500 company in their maintenance department. That was discontinued and subcontracted out. He ended up working for them for a $2/hr paycut. He was too old to move to another company.

Tom · January 27, 2007, 09:49:34 PM

It's not just the chronic unemployed that aren't counted, it's the management positions that are done away with too. Those people work at the pleasure of the company and seldom have access to unemployment compensation, so they don't apply. Downsizing is the nice word. None of those are counted. Neither are military who finish service, self employed that go under, those who are too proud to go on the dole, and a miriad of other's. Actually, only those who apply for unemployment compensation are counted and that runs out, so, those individuals fall off of the end into oblivion.

And, yes, you are right. Employment doesn't mean that those who have found new jobs are continueing the American Dream. A middle manager who replaces his $80k job with a Wal-mart $15k door greeter job isn't exactly what I would call not being unemployed.

The Unemployment figures also don't count those who were forced into retirement when they lost their spot in the work force. As a matter of fact, Retirement covers up the fact that many of them lost their homes, insurance, automobile and are living in destitution.

pigman · January 27, 2007, 10:37:50 PM

Furby, a lot of companies have ran from your state for reasons I think it best to not get into here. Manufacturing jobs in this area and father south have really increased in the last few years. I know some think it is because the managers like grits, but that is not the entire reason. We are not even in a grits eating area. It seems that while one area of the country booms, other areas have a down turn. When all areas have a steep down turn at the same time, we will have a depression. :(

Bob

Furby · January 27, 2007, 10:41:56 PM

Yes Bob, but do you know how many of those companies who ran from MI stayed in the US?

pigman · January 27, 2007, 10:53:12 PM

I have no idea Furby.

Bob

Furby · January 27, 2007, 11:02:04 PM

Not very many, not many at all.
Most operations that left MI, left for other countries, not other states.

Cedarman · January 28, 2007, 06:13:11 AM

I agree that there are all those uncounted ones unemployed. But there were the same types of unemployed, 5, 10, 20 years ago, so I stand by my assertion that unemployment overall in the US is low.

True, some people are forced into entreprenuership. I think that is good. They become more creative when they get hungry. Being creative makes for new ways of doing things which is better for all of us.

The other evening I sat in a restaurant talking with some friends and one of them brings up factory work. He worked as a temp for a while in a car part manufacturing place. He was telling about when the line would go down, many people would he real happy that they could just do nothing for a while. He thought they were crazy. He told them that if they weren't productiive then the company would go broke and they would lose their job. They just laughed at him. The company went out of business because they couldn't compete. My point is that too many people in this country have a "Don't work too hard" attitude. On the other side of the coin are many people in this country that don't know when to quit. Usually they are the entrepreneurs.