By Norm Heikens
Indiana's sprawling corn and soybean fields have nothing on
its forests, a new study of Hoosier agriculture shows.
Employment and wages in the state's sawmills, furniture
factories and other sectors of the hardwood industry rival
those of the farms, grain elevators and food manufacturers
that drive the most visible aspect of agriculture, according
to an interim report released this month by BioCrossroads, a
life sciences economic development nonprofit.
Last year, one in 15 Hoosier workers -- 190,000 -- made a
living from agriculture, the report says.
One-fourth of those work with hardwoods. And the nearly $1.4
billion they earned in wages was virtually identical to the
total salaries paid to state workers in the past fiscal year.
Not only is hardwood big, but it's surviving the onslaught of
Chinese exports better than Carolina residential furniture
makers, the study found.
"Very few people understand how important the hardwood
industry is to Indiana," said author Ron Meeusen,
BioCrossroads special projects director.
"It's one of our jewels. Nobody can ship our forests to
China."
Economic development experts long have known Indiana is as
much a center of office furniture making as North Carolina is
to residential furniture.
Indiana's epicenter is Jasper, a southern Indiana community
that the local Chamber of Commerce estimates is home to 40
furniture firms.
But BioCrossroads discovered hardwood's towering stature
almost by accident.
An earlier study lumped agricultural biotech in with
cardiovascular, protein analysis and five other human-oriented
life sciences segments deemed to have the most potential to
grow in the state.
But when Meeusen began asking deeper questions about ag
biotech, he realized no one understood the extent of even the
most basic agricultural sectors and how they affect each
other.
By parsing the jobs into "clusters" of interdependent
businesses Meeusen and collaborator Rob Swain, a consultant
and former ag banker, realized 84 percent of the state's ag
jobs and wages were driven by hardwood, grain, canning, pork
and beef, and baking.
Hardwood's 47,000 jobs represented 31.4 percent of all ag
employment, excluding farmers.
Agriculture accounted for 190,000 jobs and $5.1 billion in
wages in 2003, both about 5 percent of the state total. That's
not close to pharmaceuticals and human health.
Wages and jobs grew in both hardwood and in agriculture in
general in the decade from 1993 to 2003.
Hardwood grew slower than grain because it was hit by the
recession that clobbered other manufacturers four years ago.
Ag is critical for rural areas that attract fewer well-paying
white-collar service jobs and are having trouble replacing the
loss of manufacturing shop floor jobs.
"Ag really ought to be part and parcel of rural economic
development," said Meeusen, formerly chief of research and
development of plant genetics and biotechnology at
Indianapolis-based Dow AgroSciences
The Hoosier hardwood industry is scattered across the state,
although virtually none of it is in Central Indiana.
Most activity centers in southern Indiana's forests of oak,
hickory, cherry and walnut. A secondary pocket is in northern
counties, including the Mishawaka area.
Potential for hardwoods is so great that half of the six
recommendations for helping agriculture will focus on the
industry, Meeusen said.
When released in January, the detailed hardwood
recommendations will promote global marketing and branding as
well as improving forests and manufacturing technology.
Forests may be entrenched in Indiana, but the wood isn't.
Indiana hardwood companies need all the help they can get to
compete against China, which imports wood from Indiana and
other parts of the United States and turns it into furniture
in some of the world's most advanced factories.
Imports, mostly Chinese, have eliminated a third of domestic
furniture production since 2001. Chinese workers are paid as
little as 60 cents a day, and plants are funded by the
government.
And Indiana hardwood companies are woefully short of marketing
and technology prowess, said Del Schuh, president of Indiana
Business Modernization and Technology Corp., a private
nonprofit in Indianapolis that helps businesses adopt
technology and improve business practices.
"They can't see the problem, even though it's hitting them in
the eyes," Schuh said. "They aren't motivated to do anything."
For more than a year, Business Modernization and Technology
Corp. has encouraged hardwood businesses to share ideas to
prepare for the growing threat of Chinese imports.
But Schuh is frustrated at resistance to change that has some
boasting of "state-of-the-art equipment built in 1968." At one
company, he noticed an employee measuring veneer not with a
precision instrument but with a ruler.
In September the organization received a federal grant to help
Indiana hardwood companies update their marketing plans, but
only 15 of 400 members of the Indiana Hardwood Lumbermen's
Association have signed up.
It won't be long before Indiana hardwood businesses are
reduced to importing Chinese goods, and then the Chinese will
start their own distributorships, and one of the state's
strongest industries will vanish, Schuh predicted.
Ron Beck, who heads manufacturing at chair-maker Jasper
Seating Co. in the state's hardwood capital in the southern
Indiana community, said many business owners are too proud to
let someone help.
"I see a lot of stubbornness. Those companies are not going to
survive," Beck said.
But he doubts more than 15 percent of the industry's business
has been overtaken by Chinese competitors.
Offshore competitors found residential furniture easy pickings
because most of it is mass- produced, Beck said. Office
furniture usually is ordered in custom dimensions, styles and
colors.
For example, Jasper Seating typically supplies a certain look
for executives and another for managers.
Equipment investments exceeding $3 million in the past couple
of years have improved the amount of work turned out by each
Jasper Seating employee at least 15 percent, he said, and the
productivity gains are just beginning.
Jasper Seating will use robots instead of people to spray
finishes, for instance.
The recommendations will be passed to Gov.-elect Mitch
Daniels, who emphasized agricultural development as part of
his campaign and said the industry will have a seat on the
Indiana Economic Development Corp. board.
BioCrossroads probably will focus on biotech aspects of the
study and hand off the rest to the state or another
organization to pursue.
Meeusen is encouraged that the Jasper area has recognized the
rise of imports and began to respond through the modernization
group, even if progress is slow.
"It's a lot easier to put some juice behind an existing model
than create something from scratch." |
|
