JOB LOSS: LEXINGTON CAN’T COMPETE WITH CHINA

WINSTON-SALEM JOURNAL

Thursday, March 06, 2003

You may never have heard of Dongguan. It’s not one of those places that gets featured on the History Channel or in popular travel guides to China.

Ten years ago, the city wasn’t much more than a farming town in the Pearl River Delta. Now it’s a center of furniture production, drawing poor farmers by the thousands from all over China.
Male and female workers live in company-owned dormitories, 12 to a room, and work long hours in factories making American-style furniture.

Some mothers leave their babies with relatives to travel hundreds of miles for a job that pays $2 or $3 a day. It’s not an easy life.

“The economy is very slow in my hometown,” one young man told a Los Angeles Times reporter last year. “I came here to make money.”

What does his story – in a place that most of us have never heard of – have to do with life here?

Everything.

Just can’t compete

Lexington Home Brands closed a plant in Lexington a year ago, and one in Mocksville in December. Lexington’s announcement last week that it will close Home Brands Plant 12 is just the latest. This time, 350 people will be out of work by the end of May.

Our North Carolina furniture plants are shutting down because they just can’t compete with Chinese labor anymore.

Mayor Richard Thomas and other city leaders have known for a long time that they needed to work on diversifying the city’s manufacturing base. They never planned for the rise of Dongguan.

“It feels like it’s been overnight,” Thomas said. “We don’t know whether the cards have stopped falling or not.”

Textiles moved overseas first. That might have been a warning. But furniture is so heavy to ship and requires such fine craftsmen to make that people here thought that they were safe.

But the entrepreneurs who opened plants in Dongguan knew how to compete. They bought the latest high-tech equipment, and they didn’t have to worry about environmental regulations or workers’ safety. They don’t care about those things in China – at least not yet.

“It sounds like this country in the beginning of the 1900s,” Thomas said. “They came out of the mountains to work in the … plants.”

Big loss of employment

At its peak, Lexington employed nearly 6,000 furniture workers. After Plant 12 closes, the company will have 2,000 employees, with 1,800 in Lexington.

The company’s managers came to the factory last Friday to break the bad news. About 50 percent of the furniture sold as one of the Lexington Home Brands is made in China, much of it in Dongguan. The company hopes to continue making the other 50 percent here.

“What we’re doing is trying to keep as many jobs based in the U.S. as we can,” said Ken Hudson, Lexington’s vice president for human resources. He said that there are no plans to close any more plants. But workers here don’t believe it.

“This whole place is going to be shut down,” said Judy Crotts, who worked for Lexington for 18 years. “This place is going to be a ghost town.”

Crotts said she worries about the people who have worked for Lexington their entire adult lives and who have families to take care of.

“How are we going to live?” she asked. “I’ve got two boys and a grandson, and I’m the only one that’s working. I’m really irritated because they’re shipping everything to China.”

She makes $10 an hour – a living wage in America. But too much to compete with a woman in China who is willing to leave her family for a job that pays $3 a day.