Manufacturers cannot get comfortable at home.

• Position: Furniture

Most Tar Heel furniture makers would just as soon forget last year. Recession and war jitters have kept many consumers out of showrooms in the past two years, and imports, particularly from China, forced manufacturers to trim costs and shut plants. Early indications are that 2004 will be better, but nobody is sitting comfortably. "It is really hard to say whether we have leveled out or not," notes Ken Smith, a furniture analyst with BDO Seidman LLP in High Point. "Some believe we have, some believe we haven't."

St. Louis-based Furniture Brands International is the industry's largest employer in North Carolina, with about 13,735 workers here, but that number could shrink as the company cuts costs. Since 2001, the company has closed 19 of 58 domestic plants, and CEO Mickey Holliman said in October that it will continue reducing domestic capacity and adding foreign production. The company expected to make about $1.70 a share in 2003, down from $2.11 in 2002.

The Thomasville Furniture Industries subsidiary has been among the hardest hit. Since early 2002, it has cut about 1,000 jobs--many in Thomasville--leaving it with about 5,000 employees in North Carolina and Virginia. CEO Chris Pfaff quit in April, frustrated by the layoffs and hard times in the industry. In June, he was replaced by Tom Tilley, who had been president of Pennsylvania House, a division of Michiganbased La-Z-Boy.

Thomasville isn't the only town that's hurting. Lexington took a double hit last year. In March, Stanley Furniture of Stanleytown, Va., announced it was trimming 150 of the 525 jobs at its plant there. In August, Lexington Home Brands said it was closing one of its two plants in town, idling about 400. Virginia-based Hooker Furniture said in May that it was closing its Kernersville plant, which employed 270.

Competition from cheap imports is a key reason. China's furniture exports to the United States have more than doubled since 1997, reaching $1.7 billion in 2002 and rising through the first half of 2003. Other Pacific Rim countries also have boosted exports. In 1993, imports represented about 25% of wood furniture and 6% of upholstered furniture sold in the United States. By 2002, those numbers had jumped to 47.7% and 13.7%, respectively. In testimony before Congress in July, Edward Tashjian, vice president for marketing at Century Furniture Industries in High Point, said China's low labor costs give its manufacturers an advantage over American counterparts. But...