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Furniture Makers: Legislators Need To Revise Incentives

President of a trade group says Mississippi needs to simplify its incentive program to help keep furniture-making jobs from moving overseas.

JACKSON, Miss. (AP) -- The president of a trade group says Mississippi needs to simplify its incentive program to help keep furniture-making jobs from moving overseas.

Ken Pruett of the Mississippi Furniture Association says he'd like to see an easier process for companies to apply for grants. The state also could give technical assistance to companies designated as foreign trade zones.

Pruett spoke Thursday to the House Ways and Means Committee in Jackson.

State Rep. Harvey Moss of Corinth said he was disappointed to learn that state incentives passed in 2005 are not helping Mississippi's furniture industry as much as lawmakers had hoped.

"We need to do something to make it easier," Moss said. "Right now it seems that it is too hard for companies to qualify for help."

Over the past decade, several furniture makers in the northeastern part of the state have closed or cut jobs because of competition from foreign markets.

Ken Ranager, chief operations officer for American Furniture Manufacturing in Ecru, explained how foreign trade zone designation could help companies such as his.

Ranager said his company is one of the few in northeast Mississippi to continue to employ a significant number of people to cut and sew -- about 300 of the 1,100 employees in his plant.

The company receives fabric in rolls, primarily from China. In the plant, the cut-and-sew employees convert the fabric to the material that is used in the construction of the furniture. The company has to pay a tariff of about $17 on each roll it receives from China.

But if the company receives the fabric after the cut-and-sew work already has been done in China -- thus eliminating the 300 jobs in his plant -- the company does not have to pay a tariff.

"We want to do the work in our plant because we would like to control the quality, but eventually it doesn't make financial sense," Ranager told lawmakers.

Pruett said if a company has the foreign trade zone designation, it would not have to pay the tariff.

Pruett said the foreign trade zone designation and a $2,000-per-job tax credit for cut-and-sew jobs would bring furniture jobs back to the state and boost the economy.

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