Furniture Brands International Announces Strong Opposition to Anti-Dumping Initiative

Business Wire, Nov 4, 2003

Business Editors

ST. LOUIS--(BUSINESS WIRE)--Nov. 4, 2003

Furniture Brands International (NYSE: FBN), the largest residential furniture manufacturer in the United States, announced today it will strongly oppose the efforts of a group of furniture manufacturers to have tariffs imposed on residential bedroom furniture imported from China.

W.G. (Mickey) Holliman, Chairman, President and Chief Executive Officer of Furniture Brands, stated, "Lawyers representing a group of domestic furniture manufacturers have filed an 'anti-dumping' petition, seeking imposition of tariffs on residential wood bedroom furniture manufactured in China and exported to the United States. We have examined carefully all of the issues surrounding this effort, including the applicable trade laws and the effects this effort might have on our industry, our employees, our customers, and consumers in general, and we have concluded that we will strongly oppose any efforts to seek imposition of such tariffs. This will include registering our opposition on any International Trade Commission or Department of Commerce questionnaire presented to us and, if called upon to do so, testifying before appropriate governmental and trade bodies to explain the negative effects of this initiative.

"While this Petition's stated goal of job preservation is noble, it is misleading," Mr. Holliman continued. "The jobs we seek to preserve are dependent upon our ability to become and remain competitive in the international marketplace. Seeking government assistance or building trade barriers will not serve that goal. 75% of Furniture Brands' products are made by our outstanding domestic work force - some 20,000 strong - and we know they can compete freely and fairly with any workforce in the world. In fact, we are actively designing several lines of furniture configured to be manufactured only in our domestic plants, a concrete example of our intent to preserve domestic jobs. To protect these jobs Furniture Brands must remain competitive as a company, and our import programs - as a supplement to our strong domestic manufacturing base - are a competitive advantage for us over those who lack the resources to compete globally. A stronger Furniture Brands means greater possibility of job security for our domestic employees.

"Our reasons for opposing this effort are many, but are based largely on our belief that this effort will - and should - fail. Since the prices we are paying for products out of China are generally comparable to those being paid for products out of other countries in the Far East, the assertion that Chinese manufacturers are engaged in unfair pricing is of questionable merit. The stated purpose of this action is job preservation. However, even if this effort were successful and tariffs were imposed, it will not stop imports and will not bring jobs back to the United States. If tariffs are imposed at a modest rate, we will likely pay the tariffs and will continue importing from China. If tariffs are imposed at a higher rate, we will expand our current sourcing initiatives in Indonesia, the Philippines, Malaysia, Vietnam and India - and we may look to other countries as well.

"The only meaningful effect of a successful anti-dumping effort will be an increase in the price of furniture for the retail furniture consumer. As a manufacturer, we will add the amount of the tariffs to the price we charge our retailers, and the retailers will likely add that additional cost to the price they charge the consumer. In an industry now showing signs of emerging from one of the most sustained downturns in its history, we do not need the threat of sharp price increases to dampen demand. A successful effort to impose these tariffs may well have that effect."

Mr. Holliman concluded, "This anti-dumping effort is not in the best interests of our employees, the consumer, or our industry as a whole. Blaming the Chinese for the inevitable consolidation of our industry is merely a distraction from our real challenge of remaining competitive. We will not lend our support to an effort that, while espousing concepts of free and fair competition, is actually inconsistent with those ideals."

Furniture Brands International is America's largest home furnishings manufacturer, manufacturing and sourcing its products under six of the best-known brand names in the industry - Broyhill, Lane, Thomasville, Henredon, Drexel Heritage and Maitland-Smith. The company markets its products across a broad spectrum of price categories and distributes its products through an extensive system of independently owned national, regional and local retailers.

This release includes forward-looking statements, which are subject to risks and uncertainties. Factors that might cause actual results to differ materially from future results expressed or implied by such forward-looking statements include, but are not limited to, general economic conditions, the consumer spending environment for large ticket items, competition in the retail furniture industry and other uncertainties detailed from time to time in the reports filed by the company with the SEC.