China Polishes Off Rivals in Furniture Production

In a vast climate
Rows of young Chinese women are far from the dust and noise of woodworking machinery, making exquisite patterns with fine strips of wood.
Fingers are flying and they shape the veneer into a complex pattern of contrasting textures and colors, with wooden tapestries designed to turn the cabinets into artwork.
The worker who made these designs paid 40 cents an hour, which made the factory owner Samuel Guo
The American consumer\'s Furniture Price is 30% lower than his American consumer. S.
Competitors can.
Gou helped turn rice fields in remote areas of the Pearl River Delta into furniture by tapping the aspirations of the Chinese poor --
Manufacturing power.
His factory is one of thousands of factories that produce restaurants, sofas, Chinese cabinets and coffee tables.
In less than a decade, China has become one of the world\'s leading furniture producers and the largest furniture exporter in the United States. S.
Guo, 47, said: \"China will become a manufacturing base around the world in the next 10 or 15 years . \" His lacquer manufacturing company.
Furniture for 1,400 containers-
Equivalent to 18,200 bedrooms-
Go to America every month.
\"Anything that involves the people, China is the most important thing.
The emergence of Chinese products is reshaping the global economy.
Around the world, manufacturers of all kinds of products from bicycles to bath towels are trying to survive, the competition is fierce, the price is low, the price is expensive
Good quality Chinese goods.
Thousands of factories have been shut down as production jobs move to China.
Most importantly, this migration is driven by low wages.
In the furniture industry, for example, the labor force accounts for 30% of the cost of production in the United States. S.
This figure is less than 7% in China.
As furniture factories move to China, so does their suppliers and related businesses, making it an efficient place to operate.
Aksu Nobel of the Netherlands
The Swedish group is one of the largest suppliers of furniture finishes and has closed factories in the United StatesS.
And opened three factories in China.
\"Our expansion is not fast enough,\" said Michael Keith Estes, managing director of Aksu Nobel . \".
He predicted 90% of American citizens. S.
Furniture production will be transferred to China within five years.
\"This is a sleeping dragon. it wakes up.
The first to come to China were furniture producers from Taiwan, squeezed by rising domestic wages and land costs.
His family made wooden pool clues in Taichung, a central city in Taiwan, and was one of the pioneers.
After completing his military service, Guo took over the family business, expanded to the furniture industry and began looking for a cheaper place to operate in the Taiwan Strait.
It was in early 1990 that China was keen to attract foreign investors.
The government hopes to transform the southern city of Dongguan, 50 miles north of Hong Kong, into an industrial zone specializing in exports.
Officials there provided tax relief for Guo, cheap land and light supervision. Long-
The long-standing hostility between Taiwan and Beijing complicated the move.
Taiwan banned direct investment in the mainland.
But entrepreneurs have designed some methods around the rules, and government is usually another way.
Guo set up a factory in Dongguan and began to make simple wooden tables, which he transported to the United States. S.
Cheap price.
Quality is unpredictable.
Inferior packaging is loose during transportation with scratches and dents on the furniture.
It\'s hard to find a stable supply of top products
Because China\'s forests have been exhausted by years of uncontrolled logging.
Gradually, Guo turned the situation around.
He imported high
Quality Wood, upgraded his machinery and brought in experienced managers from Taiwan and USAS.
Soon, his Dongguan factory met the standards of more and more American factories. S.
Customers include well-known brands such as Ashley, standards, and progress.
In 1994, he closed his factory in Taiwan.
The competitor noticed Guo\'s success and followed him through the Strait.
Today, there are 2,000 foreign furniture companies in South China, 350 of which are owned by Taiwanese investors.
Those Taiwanese
Have nearly three factories
Chinese wooden furniture exports in the quarter.
Guo hopes this mutual dependence will reduce the possibility of a military conflict between Taiwan and the mainland.
\"We speak the same language,\" said Guo, whose wife Grace handled the company\'s finances while his teenage children were in school in Taiwan and Australia.
We are all Chinese.
\"* Economy and quality the roads of Dongguan Dalingshan Guo factory are lined with small shops selling wood, paint and furniture --Make supplies.
The lacquer craft is a huge complex of blue. and-
White building, providing several huge manufacturing, assembly and warehouse facilities as well as four dormitories for Guo\'s 5,000 staff.
The factory was bustling in the early hours.
The young man wearing goggles sent the wood into the precision cutting machine, and the machine kept making a harsh sound.
The worker drives a motorized trolley between buildings, offloads supplies, and moves the furniture to the next step in the production process.
At the end of the assembly line, workers packed the restaurant\'s chairs and dressers with padding and plastic for long-distance sea voyages.
When furniture arrives at the showroom of Macy\'s or lewiz, the price of furniture ranges from $300 for the final table to $4,000 for the restaurant.
At every step of the manufacturing process, Guo tries to reduce the cost without affecting the quality.
He combines modern technology with manual labor.
He bought some of the most expensive wood in the world. measuring and -
With less waste, furniture parts can be assembled together seamlessly.
However, he relies on his hands to complete fine decoration or rote Labor, which can be done at low cost in China.
For example, Guo cut the section by buying cheap wood for certain uses and paying for workers, thus saving raw materials.
In the veneer room, hundreds of women pieced together intricate designs.
This decoration makes the appearance of the cabinet or bureau more beautiful, so it has market value.
This is not the only reason Guo likes veneers.
Each piece of wood is used so much less waste and the same amount of wood can make more furniture.
\"He has the best veneers in the world,\" said Winsor White, an American furniture designer living in the Philippines.
Retired to work for Guo.
\"No one in the United StatesS.
That\'s what we can do today.
\"Once a piece is finished, it will go down a mile --
With 19 spraying stations and a long winding finishing line of 300 workers, it is more than double that of the United States. S. factory.
Each item has extra sanding, polishing and finishing to keep an eye on only the most expensive furniture in the US.
Mr. Guo has no trouble filling his job.
It is estimated that more than 10 million laborers from all over China, more than 60% of whom are women, are looking for jobs in Guangdong province.
They work very long hours, work very hard, sometimes very dangerous.
They continue to do so because their paychecks help feed the families they leave behind.
Dai Zhiying, 23, is from a village in central China\'s Hunan province.
Dai Xianglong\'s education ended in primary school.
In her teens, she found a job driving a truck at a cement factory for $36 a month.
Six years ago, she followed her relatives to Dongguan, where she did a series of work at the garment factory, with a fraction more money per hour than before.
In last December, a job was found on Guo\'s drawer assembly line.
Lacquer stands out from other export factories in the city as it regularly raises wages and performance bonuses.
* 2,000 drawers per shift start at 7: 30 working days. m.
Until 8 in the evening. m.
Rest time for lunch and dinner.
On each shift, Dai and her colleagues
Workers assemble 2,000 drawers, more than 3 per minute.
The staff lives in six or eight rented rooms.
Free corporate dorm, pay $7 a month for three meals a day.
They relax by watching TV or rented movies in the public screening room, or playing basketball in the yard.
Dai and her husband, a lacquer painter, have moved into an apartment outside the factory with their year --old baby.
She now earns $50 to $60 a month, 25% more than she earns at the Hunan cement plant.
\"These factories are the same,\" she said . \"
\"But my friend told me that if you stay at the lacquer company, your salary will rise.
Guo said the average wage for lacquer workers was $100 a month.
After six years of working in the company, Mei Xiaoli, as the head of the computer room, earned $240 a month, 12 times the average income of Chinese farmers.
Every New Year, May, 25, returns home to villages in Henan province in northern China.
But he said he was always eager to come back after visiting his family.
\"The economy in my hometown is very slow,\" he said . \"
\"I\'m here to make money.
No matter how gradual, it is in his interest to let his workers move towards a better life, Guo said.
A well-treated employee is unlikely to be one of his competitors.
Lower turnover reduces training costs.
\"Under the communist system, people are paid the same,\" he said . \"
\"Now, people will move to another job for a penny an hour.
\"* As competitors flood into China, Guo realizes that it is impossible to compete by low prices alone.
After studying the United StatesS.
In the market, he is convinced that having his own brand is the best way to increase sales and profits.
As a supplier, Guo has no control over his production.
His main client is the big furniture brands in the US that tell him what to do and how much.
Guo wants to sell directly to retailers.
But he knows that an unknown Chinese brand has little chance of success.
Then Guo heard that one of his biggest clients, Universal Furniture Co. , Ltd.
Based on the High Point, N. C.
Ready for sale.
Last year, Guo paid an undisclosed amount, which was considered by industry analysts to be at least $25 million, to acquire the global brand name and its sales and marketing network.
He does not want its factories in the United States and Asia to be sold or closed.
The name of General furniture and Guo Low\'s marriage
He reported that the cost production base was profitable.
Despite the overallS.
Furniture sales have been declining, Guo said, and his demand for gorgeous carved restaurant suits and paneled cabinets is very strong, and he plans to spend $20 million to build new production capacity in China.
Furniture manufacturing will remain in China, Guo said.
One of the reasons is the population of this country. -at 1.
3 billion the largest in the world--
Ensuring the supply of cheap labor is almost endless.
Millions of farmers will travel across the country for a modest salary.
With wages rising in industrial areas like Dongguan, manufacturers can open factories elsewhere.
Guo has begun building a second factory near Shanghai, where wages are lower than in southern China and government incentives are more attractive.
\"China is getting stronger and stronger,\" Guo said . \"
\"It has 10 to 15 years left before it reaches the next level.
But it has come a long way compared to 10 years ago.
This is the second of three articles on China\'s rise as a global manufacturing power.
To read the first part, visit www. latimes. com /china.
Tuesday: Semiconductor, the next frontier in China.