[00:00:00] Betsy Natz: It's around the House. P 20, the International Trade Commission voted five to zero in favor. Um, essentially saying the domestic cabinet industry had been materially injured as a result of unfair trade. And that includes companies dumping product at below market value and the People's Republic of China.

[00:00:25] Betsy Natz: Subsidizing the industry with 20 different steps. It includes a lot more than just like, you know, um, labor. Um, very, very cheap, but also lots of other subsidies and their mo. China's is to go in at all costs. Take over an industry, give it away.

[00:00:53] Eric Goranson: The around the house show, this is where we talk, everything about your home every single week. Thanks for joining us. You [00:01:00] know, I have been in the kitchen cabinet industry for about, geez, I'm gonna date it myself, 30 years now, I think next month. And this is an organization that I have worked a lot with, whether I was on the design or the manufacturer side.

[00:01:13] Eric Goranson: And we're gonna talk with the Kitchen Cabinet Manufacturer's Association, and Betsy Nats, welcome to Around the House, Betsy.

[00:01:20] Betsy Natz: Well, thanks so much, Eric. It's a pleasure to be here. I wanna just say thank you on behalf of the. Kitchen Cabinet Manufacturers Association for giving us this opportunity to share a little bit about who we are.

[00:01:34] Betsy Natz: There

[00:01:34] Eric Goranson: is so much going on with you guys protecting the, the consumer and the, the cabinet manufacturers out there that are in everybody's neighborhood or around the corner. And you guys have been doing such a great job of fighting this battle on so many different fronts.

[00:01:54] Betsy Natz: Uh, yes, we have. Indeed, I'm happy to jump into our trade case if that's [00:02:00] what you'd like me to do.

[00:02:01] Betsy Natz: Yeah.

[00:02:02] Eric Goranson: Let's, let's give a a just a little bit about what you guys do out there, and a lot of people will maybe go, ah, is that that sticker on the inside of my Sink

[00:02:10] Betsy Natz: base cabinet? Yeah. So the Kitchen Cabinet Manufacturers Association was created almost 70 years ago by some real pioneers in the industry.

[00:02:20] Betsy Natz: Whom you probably know, the game family and the Wellborn family and the March family. And then of course later on you've got the bells and you know, and so and so forth. So, um, not soon after, uh, the founding of the K cma, those leaders in the. Industry on the board said, you know, we need to, we need to make sure our cabinets stand the test of time, and so let's come up with a certification program that is as rigorous as as it can possibly be.

[00:02:56] Betsy Natz: And if your company wants to [00:03:00] participate, then you can certify into the program. And if you actually pass the rigorous certification testing, then you're allowed to carry our brand, our sticker on the inside of your basin. Kitchen cabinet, which is where it normally goes, uh, which where most companies place it.

[00:03:20] Betsy Natz: Uh, you are allowed to carry our seal on all your advertising in your dealers, with your designers and all the various other channels, big boxes, loaves and depot, who always look for these seals. And so the way that, the real quick, the way that that program works is that, A third party goes in and randomly pulls a cabinet off a factory line takes, I've seen it happen.

[00:03:48] Betsy Natz: That takes it to one of the three third party testing labs. They're not our testing labs. Mm-hmm. . And then they test it and they do several tests, weight tests where [00:04:00] they put weights on the door and open and shut the door. 25,000 times or whatever the, the, the, the program requires, they weight the drawers and open and shut those many times.

[00:04:13] Betsy Natz: Uh, the weight bearing test on the wall hunt cabinets is 600 or more pounds of weight to make sure that. You put, and I have very heavy dishes, . Um, I always wondered, is that gonna, is that gonna fall? The fall? Um, and then the spill test where, you know, you, uh, you're always concerned about spilling mustard or when my son was little, he spent, he, he spilled, uh, the egg dye from Easter egg dye.

[00:04:44] Betsy Natz: Oh, that was, makes you nervous. Brand new country home cabinets . And sure enough, it came out anyway, so they test it to mustard and all sorts of other, uh, substances. Uh, we have a heat and humidity test to make sure that if you're shipping cabinets [00:05:00] from an aired place, say in the Gulf, Uh, coast of the US up to somewhere, say in Minnesota that it'll, it, the cabinets won't, you know, warp or expand.

[00:05:13] Betsy Natz: And as you, you know, way more about wood than I do it, uh, has unique properties that way. And then, um, edge banding tests to make sure that the edge banding doesn't come off of those cabinets that are edge banded. And so, Companies that have their cabinets tested the first time don't pass. Mm-hmm. and, uh, 50% actually.

[00:05:36] Betsy Natz: And the first year you have to test twice. And then each year after that, an annual testing. And I can tell you that I just went and met with about 40 sales people, uh, last week in, uh, in our industry. And I used that opportunity to talk about our certification program. Uh, as well as a trade case and asked for just a show of [00:06:00] hands of how many knew about our program.

[00:06:02] Betsy Natz: All of them did. All of them asked for it. And then I went on to talk about our environmental stewardship program, which is another, a major pillar. Uh, yes, pretty huge. KC A and, uh, but on our certification program, both we. Started over the past couple of months, a major marketing effort, uh, that, uh, has reached now probably 600 different magazines and news outlets.

[00:06:31] Betsy Natz: Um, whether it be architect specifiers, builders, designers, dealers, distributors, big box stores, retailers, and, uh, we're really, uh, making a new concerted effort to really, uh, You know, make sure that as people are picking their cabinets, especially right now as we're going into this serious economic downturn mm-hmm.

[00:06:56] Betsy Natz: our, our, our consumers want to know that they're gonna buy cabinet that's gonna [00:07:00] last. So we're real proud of that program. As a matter of fact, John Game and I were emailing about it yesterday, and he had said he, he. Said, you know, it really is the crown jewel of the K cma. And I said, can I, can I use that?

[00:07:14] Betsy Natz: Can I use that quote ? So here you go, Eric.

[00:07:19] Eric Goranson: That is awesome. Yeah. What is that? That is a 1 6, 1 0.1, if I remember

[00:07:24] Betsy Natz: right. Impressive. It is. It's, it's for the Antsy American National Standards Institute Program. Yeah, exactly. So we're real proud of that program. And

[00:07:34] Eric Goranson: you should, because I don't know how many times, you know, I've been in the design and and cabinet world, you know, for way too long.

[00:07:40] Eric Goranson: And you're right. I mean, I could order cabinets from, and I'm in Portland, Oregon. I could order, you know, cabinets from Aniston Alabama, from Paul Wellborn. He's gonna send up from Clay County to my house and not worry about him being a warped piece of mess when it got here.

[00:07:57] Betsy Natz: And, and, you know, vice versa, you know, you [00:08:00] could Yeah.

[00:08:00] Betsy Natz: Order something from, you know, out your friends at Belmont or Yep. Who ship it to, to a cold part of the country or, you know, so it is exactly, it's a, it's a real important, uh, program. And we have 150 cabinet companies that are members of K cma, the other 150 supply to our industry. So their paints and coatings or wood products or, you know, hardware hing knobs, and.

[00:08:26] Betsy Natz: And we have about, we have some, some non-members in the program. I think we're about 170 companies. Nice. That certify into our program. So it's, uh, it's impressive. And that's

[00:08:39] Eric Goranson: a lot of the names that you know out there. That's the good part. So it's, it's something that's very important. Look for that. If you're out shopping for gats, that means that it's past that standard and that you're looking good on that part.

[00:08:51] Eric Goranson: Yeah. Thank. Yeah. Well, let's talk about the, the, the legislation side before we get over to the E S P, uh, environmental Stewardship [00:09:00] Program. Legislation has been such a big deal, even more so over the last number of years because you guys have been going to war in trying to defend the American cabin industry.

[00:09:15] Betsy Natz: We sure have. Eric, you know, when I started seven years ago and I had come. You know, my background working for Ronald Reagan, and then I worked in the Senate for a couple members of the Senate and then went on and for 25 years ran Petro Chemical Association. So when I started here seven years ago, um, it was a whole different landscape.

[00:09:36] Betsy Natz: Uh, and the first thing I did was I went around, I started meeting with companies and their executives, and what I heard was there was a lot of rumblings about China and the concern about, uh, the industry. Loss of market share. And so that was, uh, early in 16 January. And so by the early 17 [00:10:00] I started, I worked with a group of companies that you know very well.

[00:10:04] Betsy Natz: There are about seven of us, seven of them and me. And the first thing I did was I reached out to John Bass at the third JB three. If you don't know about you, I'm sure you do know about John. Yep. Read his book. Factory Man went down to gay a. Invited him to speak at our meeting in p Vira Beach earlier that year.

[00:10:25] Betsy Natz: Started meeting with the Trump administration, will Ross and Peter Navarro, and so on and so forth. And, uh, There are a lot of different trade remedy laws out there. There's the three oh ones and the two oh ones, the 2 32 s, and they're all aimed at different things. Yeah. And so I knew nothing about trade, as you can imagine.

[00:10:44] Betsy Natz: I lobbied a lot with EPA and OSHA and fda. But, um, And so in early 17, I started looking at which trade remedy law would be best for us. And so it was clear that the, the law that had the most [00:11:00] teeth and the most staying power were, was called the anti-dumping countervailing duty law. And so what that is, is it is, um, a statute within the, the, the, the.

[00:11:16] Betsy Natz: Law that says you can file cases if you believe and have substantial data to support it. If you believe that the domestic US industry, in our case, Kitchen cabinets, component parts thereof, um, have, uh, been materially injured, your industry as a result of unfair trade. And so we started looking into that and what we found out was that we had lost the domestic cabinet, industry had lost 40% market share from 2016 to 2018 to China.

[00:11:49] Betsy Natz: Wow. And so I hired a law firm for, as a matter of fact, and we've found the right, found the right one when we filed March the sixth of [00:12:00] 2019. I will tell you that an industry has to practically be on life support hanging by their fingernails before you can file, because you have to show that the previous three years, which they call the period of investigation, That there is not material, that there is either a threat to injury or that the actual, the industry has actually been injured as a result of this unfair trade.

[00:12:27] Betsy Natz: So you file two petitions. You file one at Department of Commerce and you file one at the International Trade Commission, and you have to win at both places. And so the International Trade Commission spends 13 months, we file on the 6th of March, 2019. And hearings, and I just can't even tell you , what went into, you know, leading up to filing and then that year that followed the, the, the amount of work and resources was truly unbelievable and it cost us about 4 [00:13:00] million.

[00:13:00] Betsy Natz: And for a trade association that's revenue is 2 million. 2 million a year, you can imagine. So before, yeah. So while I'm on that tangent, you know, let me just say that here we are in the United States of America, and in order to keep your industry and not lose it, in this case to China, You have to, you have to go.

[00:13:23] Betsy Natz: To say that you have to go through hoops is, is such an understatement. Um, and to protect your own industry and your workers. We represent 250,000 American workers, 40% minority, underserved, community communities, single women, many whose jobs and livelihood and their family's livelihood depends upon it.

[00:13:49] Betsy Natz: Uh, to, to just be able to stay in business. Otherwise, you go the way of furniture, textiles, toy, the list goes on and on and on. Oh, [00:14:00] it's a massive list. We have given our manufacturing base to China and other Asian countries, um, because of flawed laws. And, you know, people might like not like to hear what I'm saying, but it's the truth, the laws that, that, that absolutely, um, favor.

[00:14:18] Betsy Natz: Other countries and not ours. So anyway,

[00:14:22] Eric Goranson: yeah, I'll, I'll jump on the soapbox here. I, I'm, I'm with you. I mean, and I'll take it even a step further there, there is no reason why a trade organization who is out there defending the American worker should have to sit there and spend 4 million to help an industry that's already on life.

[00:14:42] Eric Goranson: to be able to do that. I mean, it's not like you guys had 4 million bucks sitting around as an organization. That's a couple years of, of budget. That should be something if, yeah, they should have been able, where you come in and say, okay, here's our report. This is what's going on. And if they were doing their [00:15:00] job that these people are supposed to be doing, they should be able to take that ball and run with it and not do the opposite of what they've been.

[00:15:09] Betsy Natz: And we can talk about a, a, a, a remedy that we we're just exploring or we just started to work on recently, to your point, but Absolutely. And the 4 million was for that year. We spent, we spent a lot of money leading up to that year and we're two and a half years post, which. So we're 6 million in, and a lot of that, at least for the initial case, was self-funded.

[00:15:33] Betsy Natz: So you had wonderful 50 amazing domestic manufacturers that said, you know, the view is worth the climb. Here. We're gonna ship we're we believe in. We believe in America,

[00:15:45] Eric Goranson: who had already lost 40% of their business and still turned around and wrote that

[00:15:52] Betsy Natz: check. Yeah. And then, and it was not cheap, but so you file, you know, so you file with [00:16:00] Department of Commerce who looks at the tariff margins.

[00:16:03] Betsy Natz: I'll keep it simple. Yeah, yeah. And then the International Trade Commission, who at the time had five commissioners and they are rotating and they're nine year, their nine year. Appointments. And so you had Biden, you had a Bush guy, you had Trump guy, and maybe a couple Biden, I mean, yeah, Obama. Sorry. Yep.

[00:16:25] Betsy Natz: Obama. I get those confused sometimes. But anyway, um, same. And so in the end, in March of 2020, The International Trade Commission voted five to zero in favor. Um, essentially saying that the domestic cabinet industry had been materially injured as a result of unfair trade. And that includes companies dumping product at below market value and the People's Republic of China.

[00:16:54] Betsy Natz: Subsidizing the industry with 20 different subsidies. It includes a lot more [00:17:00] than just labor, you know, um, labor. That's, um, very, very, Cheap, but also lots of other subsidies. And their mo. China's is to go in at all cost, take over an industry, give it away. I mean more than give it away. And then once you've taken over the industry, just jack up the prices.

[00:17:22] Betsy Natz: And so then at the Department of Commerce, commerce said, um, so here are the, the. They call 'em margins, but here are the tariffs that we're gonna put in place. So they put in place for dumping, 5% for a company called Ancient Tree. And then they applied Total Adverse Facts, available the highest rate to DA and Micin at 262%.

[00:17:51] Betsy Natz: And then those companies that cooperated got a hundred percent, um, which is in the middle. Of the two. And [00:18:00] then, um, the companies that cooperated got a 50%, and that's on the dumping, and they're about 25% on countervail. So this, the, the lowest amount that any company was given with those combined tariffs was about 70% all the way.

[00:18:22] Betsy Natz: 400% or whatever was. Yeah. And then if you add presidents Trump's 3 0 1 s, you're at a hundred percent at the lowest and then way up. So what, so what that did from when the orders were put in place in April of 2020 until this past April, um, I mean the industry just exploded. Not only did they gain that market share back and then some, and so it was the largest trade case ever filed in US history against one country and our, our industry just flourished.

[00:18:53] Betsy Natz: Mm-hmm. , Mont expanded country wood products expanded, um, you know,

[00:18:59] Eric Goranson: well borne, expanded [00:19:00] good on the

[00:19:00] Betsy Natz: list. Yeah. Well, , it just goes on and on and on. And, uh, show play, sat in Sioux Falls anyway, so then what? Is at the end of each year. The Department of Commerce does an annual review every year, right? So at the end of 2021 in a, in April of 2021, they started this whole annual review process that takes a year.

[00:19:26] Betsy Natz: And so in April of this year, the Department of Commerce came out with its preliminary findings on the first annual review for all the companies that had filed a request to to be review. Long story short Commerce gave one company a zero key fus in you, um, and then, uh, applied total adverse facts available to Beauty Star at 251%.

[00:19:55] Betsy Natz: And then they said the, the 15 companies that cooperated, the [00:20:00] 15 companies that they didn't look at, yeah, they're gonna give a zero two. What, and the way that the statute reads is really what you're supposed to do or, or clearly the best option is to take the company that got zero and the one in this case that got 251 and you average.

[00:20:18] Betsy Natz: And so for those 15 other companies, they get 1 25. Yeah. So they, they come out with this prelim in April, we spend, or may, June, July, August, September, October. You know, working with our friends on Capitol Hill, Republicans and Democrats, it's not a bipartisan issue. And it's not bi camera issue. Senate House.

[00:20:40] Betsy Natz: Yep. Yep. Unions weigh in. Former governor and senator and close friends of Mr. Biden, Evan bi, op-Eds and Newsweek all over the country. Interviewed on radio. I mean, the, the list goes on and on and on. Appealing to the US government to [00:21:00] not give these 15 companies a zero, because not only will they ship in at zero, all their friends will ship in through their name.

[00:21:07] Betsy Natz: It creates a huge funnel. So

[00:21:09] Eric Goranson: here we are. We just opened the door basically.

[00:21:12] Betsy Natz: So here we spent all this time enough for money. We finally got back to where we're we should have been in on our own soil selling our own domestic product. And look, our companies will tell you, and you know this Eric, they can compete all day long with the, with, you know, marsh, with wellborn, with whomever.

[00:21:33] Betsy Natz: As long as there, there's a level playing field. And that's what it always been. And you know, you don't always win every bid or every house. Sure. But you know, you know that you did it based on some small margin. Not when I went into the White House with a group of members. We took in two cabinets. Chinese one domestic, identical and not identical, and finishes wood inputs, slides, [00:22:00] everything.

[00:22:00] Betsy Natz: Yeah. The Chinese cabinet was a hundred, the domestic cabinet was 300. You can strap, you strip out labor, you can strip out material. You can't get to that. No price point. And so anyway, in there on final determination, and this was, this crushed the industry. A week and a half ago, commerce came out and said, we're gonna side with China.

[00:22:25] Betsy Natz: We are, we, we, we've made a decision to side with the People's Republic of China, uh, appall. Really appalling. So, and you know, our industry is extremely concerned about it and you know, so we look for the second annual we could appeal, but appeals take a year, two or three, but we're already in the second annual review.

[00:22:49] Betsy Natz: We be Oh,

[00:22:50] Eric Goranson: and then it's like the sloths are running the process,

[00:22:53] Betsy Natz: right? And then we get to look forward to the five year sunset review, which is a whole nother adc. It's [00:23:00] a whole nother petition process, which cost another couple million dollars. But anyway, so that's what's going on on that front. But what happens, um, you know, when you file and we, we cut off China, China went from four and a half billion to 60 million a year.

[00:23:17] Betsy Natz: Done. Yep. Until, just wait until next month's trade. It'll be different. But what's happened is we've seen the rest of the world, Vietnam, Malaysia, and Indonesia, Mexico in particular, go like this. So China's gone. Sure. They've gone like this. And so, you know, we get tips and leads saying, you know, we know that this company X is taking product and they're ship trans shipping through a third country and they're shipping in.

[00:23:45] Betsy Natz: So we filed five EPA allegations to Customs and Porter protection, which is. Called, um, defined as the Enforcement and Protect Act. And so four have finalized, they take about 18 [00:24:00] months and a lot of money. We won three, well we won four. Yeah. Um, three in the final preliminary, very solid cases. The Chinese appealed and the higher ups at Customs and Border Protection overturned and went to FA China.

[00:24:23] Betsy Natz: And so we have one. One. We won one, but. We just won that one. And so they could appeal that too. And what's crazy about these, and if you look at the, the first annual review is that this is happening at the various highest levels of government. So it's the head of the AD C V D unit, which is a Biden appointee.

[00:24:44] Betsy Natz: Her boss is Secretary of Commerce Rendo. They all, they, they, they were sent letters from their colleagues on the hill and friends and so on and so forth. So this wasn't made at some bureaucrat level. [00:25:00]

[00:25:00] Eric Goranson: Yeah. This is all appointed people that don't work in the industry, that don't do this. Typically from day to day.

[00:25:06] Eric Goranson: They're people that, Hey, guess what I get to do for four years or two years, or whatever their stint is in that

[00:25:11] Betsy Natz: position. Well, I can tell you this, by working in this town for 35 years or whatever it's been. And being a native that, um, the only administration that I've ever known to stand up to China was the Trump administration.

[00:25:29] Betsy Natz: The only one. And that means Democrat, Republicans, the whole shebang. Yep. And, uh, you know, it is just very, very sad. But anyway, the other thing we're doing, and the last thing I'll talk about on trade is our petitions, um, against China. For trans shipping, uh, and circumventing the orders through Vietnam and Malaysia.

[00:25:54] Betsy Natz: And so this is called, there are [00:26:00] petitions that you file at the Department of Commerce. They are anti-Asian scope and circumvention petitions. And so essentially the burden is placed on the US government, in this case, department of Commerce, to essentially go in country in Malaysia and Vietnam and say to these companies that are shipping into the US.

[00:26:20] Betsy Natz: You have to prove that the products that you're shipping in, be it flat packs or component parts thereof that are in the scope of this ad C V D, um, are coming into the United States legitimately and are not originating from China. And so we file that case and we had two companies that were not happy with that.

[00:26:45] Betsy Natz: And I'll get back to that. And then the then. Hardwood Plywood decision came out that was just, just the same, um, uh, trade remedy law they used [00:27:00] and theirs just came out. Their decision came out August before hours. Ours won't be out until January, march. And essentially, one of our large companies said, who had been with us through thick and thin said that.

[00:27:18] Betsy Natz: A supplier or more, I don't know. Um, but I know they said one supplier that they were purchasing from, they domestically being the importer record, the Department of Commerce said that they were not going to certify them, that they believed that they were either straight trans shipping or sending the product through.

[00:27:42] Betsy Natz: Vietnam doing some minor third country processing and then shipping it in. And so then this company became very concerned because the concern that the three companies had have is that during the certification process [00:28:00] for flat packs, RTAs component parts, as that process moves through, these three companies are concerned that.

[00:28:11] Betsy Natz: Suppliers might get dinged and that they may ha be on the hook to pay these tariffs as the importers of record. Now, one could say, if you know your suppliers as everyone should, then you, you would make sure that those products are originating from, in this case, Malaysia or Vietnam, and. Coming from China, their point was that we are quite sure of our supply chain and that these companies either didn't fill the paperwork out correctly or left a blank, or I, I don't

[00:28:51] Betsy Natz: And so, and that could very well be true. I'm, I'm not here to, uh, make a judgment call either way, but I will say [00:29:00] that the three C. Came to me and to the board, uh, starting in August and said, look, you've gotta drop your petitions because we're concerned. And so it was very long. Three months. The board met in October in Sioux, Sioux Falls, South Dakota, and the, the motion was on the board on the screen that to, uh, drop the petitions against Vietnam.

[00:29:30] Betsy Natz: And, uh, Malaysia and the board, after a lot of very thoughtful deliberation, said in a vote of 12 to three, we're not going to do that. We're going to stand with the domestic industry. And, um, and so they left. They actually got up and walked out of the board meeting. As a matter of fact, one of the companies was supposed to give a plant tour.

[00:29:54] Betsy Natz: We had 300 people sitting there waiting for a plant tour the day after that. Yeah. And [00:30:00] um, They said, we're not opening our plant to you now. So we show place was fabulous. They went in their,

[00:30:08] Eric Goranson: oh, they're rock stars in there. They are. I love those

[00:30:10] Betsy Natz: guys. Yeah. They are top notch. And then our staff person, Chuck, figured out how to reconfigure the buses and we just went on all three Showplaces frame, frameless and door.

[00:30:23] Betsy Natz: And then went up to , to Woodland and it worked out beautifully. But um, and so I hope the companies will come back. But we did have an occasion to meet with the members over those three days in Sioux Falls, and we shared with them Perry Miller, the president of K CMAs board, and I shared with the membership what had happened and the support from every member there was overwhelming.

[00:30:50] Betsy Natz: You did the right thing for the. Thank you for defending the industry. And so it, uh, we'll see how it turns out, [00:31:00] uh, in the end. But the one thing I will say is this, is that, you know, we were talking about our certification program and it has such history and widespread recognition that one of the companies that pulled out of the K cma, one of the three large companies, um, I guess they were upset with the.

[00:31:22] Betsy Natz: So they've decided to go out and create a competing certification program to the KCS program. And I don't know how they're gonna build credibility if they're the only one in the certification program, but, um, that seems

[00:31:40] Eric Goranson: hokey to me in my personal opinion.

[00:31:44] Betsy Natz: Well, I think it's, I think it's really too bad to use, you know, to go to that level.

[00:31:51] Betsy Natz: You know,

[00:31:52] Eric Goranson: that's crazy.

[00:31:53] Betsy Natz: And decisions don't always go your way. I mean, I know in my life I'd love for everything to go my way, . [00:32:00] Right?

[00:32:00] Eric Goranson: Well, and you know, in, in my opinion, and this is not a K CMA opinion, so I wanna make really clear what I'm saying here is those companies that bailed, um, I've worked with some of them before and they were bringing in a lot of parts from overseas that they were assembling here in the us.

[00:32:20] Eric Goranson: Where the other members were taking parts in, they were cutting 'em in a house. These guys were getting containers of cut parts. Maybe they were shipping their materials overseas to be cut. But it tells you how cheap it was when you can take material, ship it all the way across Pacific Ocean, cut it, ship it all the way back, and it's cheaper than running through your saw.

[00:32:41] Eric Goranson: That should tell you something right

[00:32:43] Betsy Natz: there. So, and you know, Having been in the industry so much longer than, than I have, but assembly is 5% of the cost of the cabinet. Mm-hmm. , all the value add that they're taking over are these [00:33:00] not, you know, not just pointing to these companies, but all the value add when you're doing that is taking place.

[00:33:07] Betsy Natz: We're giving all that money, all those jobs to another country. They come in here and then, you know, Assembling stock cabinetry is what it is. Yeah. And I have seen, we have seen huge, if you've just watched the news industry news, um, that a lot of these companies are moving towards stock cabinetry. Yeah.

[00:33:32] Eric Goranson: Yeah. It's gonna be interesting to see what's happening here with this. And I think, I think that we're gonna start seeing more and more as we. You know, educating the public out there with some of this stuff and, and what they're getting. And I'm hoping with, with the stuff through all the covid and everything else that the public really starts going, okay, I wanna really know what I'm putting inside my house.

[00:33:54] Eric Goranson: You know, I had an episode that, uh, we aired a little bit ago that some of the, you know, some of the [00:34:00] cabinets that were coming in from China, it was coming in as birch, but being shipped out as maple. So as crazy as that is,

[00:34:07] Betsy Natz: So that's DA and Micen. Mm-hmm. and essentially DA and Micen had, were the, they're the company that got total adverse facts available in the initial case.

[00:34:19] Betsy Natz: And they were shipping in cabinets, telling the customers that they were maple and in fact they were birch. And so they got dinged on that. They appealed to the court of international trade in new. And the judge said, well wait, you were just deceiving your customers and you ought to take it to the Federal Trade Commission or the, you know, whatever the agency is that handles false claims or, but we are the agency that handles, uh, you know, Trade related issues, in this case Navy, C B D, and so they remanded back to commerce.

[00:34:57] Betsy Natz: But what's funny, and I wish, you know, you could talk to [00:35:00] our lawyer cuz I'm not a lawyer. Oh, that's okay. But, but the, the thing, the funny thing about that particular case is that it's not, it was not just deceiving the consumer because what the Department of Commerce does is they have to figure out, Um, values, quantities, and values, and if the price that they're looking at when they're doing all their calculations is maple.

[00:35:27] Betsy Natz: But the reality is the product is birch, then the product is way overvalued so that the, you know, you look and you see, well, you know, they're not dumping it cheap because, you know, you know, and again, I'm not a lawyer, but No, um, so, you know, so it, it, the judge was actually, I'm gonna say he was incorrect and Congress is defending itself, but that it's, it was more than just deception.

[00:35:55] Betsy Natz: It. The way with which commerce has to calculate it to have [00:36:00] an apples to apples comparison. So

[00:36:02] Eric Goranson: yeah, there could have been a 20% difference there between whatever the current wood pricing was between that birch and that maple. So that could have, that could have protected that Chinese company by 20% on their costs.

[00:36:16] Eric Goranson: Just because of the Oh, we're not actually bringing in maple. We're bringing in birch. Exactly. Yeah. That's just. That's wild to me. And you know, somebody, and, and I, what I feel bad is, is if, if a, a homeowner goes down and goes, okay, I've been looking at three different brands of cabinets and I want cabinet A, cabinet B, cabinet C, and I'm looking at maple.

[00:36:39] Eric Goranson: And wow, this one's so much cheaper in their uneducated mind of the cabinet business, they go, oh, well let's Maple, it'll, it'll go great. Unfortunately they were getting something that might not have even been maple. You're right about that. Yeah. Ah, so what do we see in the, in the future with this? I mean, you know, you guys [00:37:00] have a long road ahead of slugging through this Of course.

[00:37:03] Eric Goranson: But I hope that we can get some new people in there, hopefully one of these days to, you know, by the time we get through this to, to hopefully change this around. Man, it seems like there's a, a, a land of bad decisions at the top right now on this stuff.

[00:37:20] Betsy Natz: Well, I, um, I agree with you. I think that, um, and I, you know, I, I don't, I don't know that it would lead anyone else to any other conclusion when you are favoring a regime like China over our own domestic industry where we.

[00:37:38] Betsy Natz: It's 250,000 jobs who are, and these jobs are in rural America. I mean, you take Walburn cabinets out of the mix, um, who are, you know, close to Walburn Forest and, and others right there. I mean, you know, clay County, rural Alabama. I don't even know. I think the closest place of employment is like [00:38:00] Walmart 45 minutes away.

[00:38:01] Betsy Natz: But what do these people do for jobs and beyond? You look at the tax base that that creates and just picking on Wellborn, they have daycare for their workers. Yep. They have a onsite wellness sy onsite wellness center with nurses and a doctor that comes in. And Jim. Jim, they have two buses. It's crazy. Hot lunch.

[00:38:27] Betsy Natz: They provide transportation. I mean, you know, it's not the, the, the, and these are not low tech industries. These are, you know, you know this again, better than I,

[00:38:37] Eric Goranson: the well borns. The Well Borns cafeteria is the largest food service in Clay County. Think about that. That's cause Paul told me that ,

[00:38:49] Betsy Natz: I love her cooking.

[00:38:50] Betsy Natz: Oh yeah. But it, it, but so where do we go? I mean, sadly, um, you know, we just have to. Slogging it out and [00:39:00] frankly, you know, we're gonna have to wait for a new administration, in my view. Yeah,

[00:39:04] Eric Goranson: yeah, unfortunately. Well, let's jump into something more positive here, cuz I'm still bummed about that. But, uh, Environmental Stewardship Program, p.

[00:39:16] Eric Goranson: This is fun stuff. I remember when this first came out because I was selling and designing cabinets a lot, I just stopped working at a manufacturer and it was really cool to see a program because it was all over the board on what green was, right, and there was no

[00:39:37] Betsy Natz: program. . So Chuck Arnold, who's our vice president of, um, standards and certification is much better versed in both of these programs than I do.

[00:39:47] Betsy Natz: Sure. He lives and breathes it every day. So the, you're right, it, it was, um, first launched in 2006, so that's what, 17 years. And um, the way that it works [00:40:00] is there, it's a point system and, you know, be it environmental regulations or you know, Or, you know, recycling or community involvement. And I, I don't have the various, um, I don't have the point structure in front of me, but there is a possible 110 points, and if you can get 80, then you can carry our seal.

[00:40:23] Betsy Natz: But it is not easy to get those 80 points and you have to provide Chuck with very thorough documentation, um, that. You know, proves that you are doing all these things that you're saying, say you're doing. And so, um, that's another great program, another program we're very proud of. And, um, and I, you know, I think that, uh, I think that, I think that the consumer, many of the consumers do look for.

[00:40:55] Betsy Natz: Uh, and envi environmentally sound products. I do [00:41:00] worry a little bit about greenwashing. Sure. You know where, you know. Um, but one of our newest, one of our newest, um, it's not a program, we hired a firm who is very credible in the field of carbon. Mm-hmm. . Um, and so he put together a paper for us, which essentially says, Um, and he had already been working with the Composite Panel Association, a couple of our members, but says that wood products, and in particular in this instance, kitchen cabinetry, sequesters a lot more carbon than it ever puts off in the production process, and it keeps sequester.

[00:41:46] Betsy Natz: Uh, carbon through the life of the cabinet. And so it's a very, it's a great carbon positive message, so we are just starting to really promote that as well. Yeah. To, [00:42:00] to the public. What I liked

[00:42:02] Eric Goranson: about the P program is it wasn't just, Hey, I'm putting in green ply. You know what I mean? It's, it really jumped into where the manufacturer, you know, has to have a documented energy conservation program.

[00:42:15] Eric Goranson: You know, they've gotta have all the right declarations, they've gotta have all the waste management. I mean, it's not just a, Ooh, we're using a water-based finish and we've got some really cool plywood. Off we go. There's a lot more to it.

[00:42:30] Betsy Natz: You were right about that. And it's, um, You know, we have been just very, very steady with that program, and I don't know how many companies participate, but I would say most of our, especially our, our semi custom to custom seems like that's the audience that, you know, oftentimes really looks for that.

[00:42:59] Betsy Natz: That [00:43:00] seal in this case though. Yeah,

[00:43:01] Eric Goranson: it's, it's cool. I mean, it does obviously cost a little more to produce, you know, cuz as always is, you know, when you, when you have to go into that detail, it costs a little more to produce, but you sure get a lot back out of it. And that's the, the cool part. But unfortunately, if we get back into the legislation stuff, none of that's happening on these imported cabinets at all.

[00:43:20] Eric Goranson: So this is a, a really good thing here. And one of the thing I wanted to note about that whole thing about people do. The, uh, the tariffs and things. I saw this happen in the kitchen countertop industry with the Chinese courts. Uh, I was working with the company that I won't name, and they got hit with the tariffs outta China on the countertops and the day that hit.

[00:43:45] Eric Goranson: They bought a place in Southeast Asia and within a week and a half to two weeks, that whole place was packed up and moved down there. All the employees, all the stuff, everything got moved down there [00:44:00] so they could get around that. But it was the same price. It was the same, you know what I mean? They just, they didn't change, but they went, oh, cool.

[00:44:06] Eric Goranson: We're. Yeah,

[00:44:08] Betsy Natz: so our friend, um, who I've met with a couple of times, Marty Davis, CEO of Cambria, uh, is, as you know, the, the, the person that filed that case. Initially it was China, then it went on to Indian, Turkey and some others filings. But, um, Luke Meisner, who is our attorney with Sharin Associates is their attorney as well.

[00:44:31] Betsy Natz: As a matter of fact, that's how I got to know Luke was through Marty. Um, and they've been very, very successful in fighting back unfair trade. And so I'm, uh, So happy to hear that. And a lot of, a lot of our companies, when you go into their showroom, it might be, I have to start picking on another company.

[00:44:51] Betsy Natz: It might be Du Supreme. Yep. And um, and I'm not saying that they do this or not, cause I can't remember, but in their showroom, they'll have their [00:45:00] cabinets with all the Cambria samples. Yep. And, um, I've seen that in a lot of places. Um, so it's, uh, it's been a, I think there's a great partnership there. Yeah.

[00:45:10] Betsy Natz: Where, where, where they. Buy and buy American. And you know, the unfortunate thing, and I I, you know, it just drives me crazy all the time, is you go onto Amazon and you cannot find the country of origin until the product hit hits your steps. Yeah. And so there is very serious country of origin legislation, which I was very supportive of.

[00:45:34] Betsy Natz: Mm-hmm. , which would require these online, um, outlets to. Show and clearly indicate where the product was made. Well, you've got a very large retail lobby in Washington, maybe the largest, I was gonna say it. Huge. And so we, the Walmarts and the Amazons and you know, the big ones, and they fought vigorously against [00:46:00] country of origin legislation.

[00:46:01] Betsy Natz: So it's just gone.

[00:46:02] Eric Goranson: Yeah, and I will say this, and this is again me speaking, not K CMA speaking. So if you walk into a home center right now, and you look at the cabinet brands that are in most of the two big, big box retailers out there, and if you look around at those cabinet companies, their entry level, mid-grade cabinet stuff, a lot of that stuff is not machined in the us.

[00:46:23] Eric Goranson: That's the stuff I'm talking about that's coming in in containers and they're going down the assembly line and going that direction. So, For our consumers out there. That's where

[00:46:32] Betsy Natz: that is. And I, I agree with you. Um, again,

[00:46:37] Eric Goranson: so I just, I just wanna, I just want to educate the consumers out there, because there are so many great American cabinet companies that are lots of great people.

[00:46:46] Eric Goranson: They treat their employees so well. I mean, I can tell you so many people that I've talked to in the cabin industry that are in there on the assembly line, that are putting stuff together every week. And [00:47:00] the, the success stories of the single moms raising four kids and the company is helping them along and doing all the things that they need to do.

[00:47:09] Eric Goranson: I don't wanna see that go

[00:47:11] Betsy Natz: away. Thank you. I know that, uh, our, our members are fighting hard and they're really fighting for their companies and their employees and, you know, it is not an exaggeration. All you have to do is look at that part of Virginia, North Carolina. It's annihilated. And so what China did, and John Bassett will tell you this, is that they come in and they, you know, go to the manufacturers and they say, Hey look, you know, we can manufacture your, your table cheaper.

[00:47:46] Betsy Natz: And we can send it in and you can make more profit. All you have to do is shut your company down and get rid of all your employees, which is what a lot of companies did. John Bassett fought

[00:47:57] Eric Goranson: my advice to everybody out there. And, uh, I'll let you [00:48:00] give your 2 cents your two Betsy, but. Make sure when you're out shopping for that cabinet, for your new house, for your new remodel, whatever you're doing out there, ask a few questions, take a look for that K CMA stamp.

[00:48:12] Eric Goranson: Make sure that you're getting what you're paying for out there because so many of these RTA cabinets out there, um, they raise my warning lights on with some of the materials coming in there. And I just want everybody to really be able to, one, support American industry and two, Get something that's healthy and going in your home that you know where it came from.

[00:48:33] Betsy Natz: You know, I couldn't have said it better. Um, Eric, and the other thing I'd say is, you know, look for, look, look for the seals. Look for these companies that American made. If you're wondering who our members are, just go to our website and there's a company search. But also, you know, as you engage in, um, with.

[00:48:56] Betsy Natz: Congressional local state Congress, uh, [00:49:00] federal legislators. Mm-hmm. , you know, this is important when you have opportunities, if you see them or if you, you know, have an opportunity and would like to write to them. Just express how important it is, um, for you that we protect not only the cabinet industry, but all domestic industries here in the us.

[00:49:22] Betsy Natz: So, yeah. Thank you so much.

[00:49:25] Eric Goranson: No problem. It's so funny, I was thinking about how many, over the last 30 years, how many k CMA cabinet companies I've been through like Dura, Supreme Canyon Creek, crystal Wellborn. I haven't been through Country Wood products. You know, Belmont, I helped, I was on their executive committee for a while.

[00:49:43] Eric Goranson: So the, the list goes on and on. You know, crystal, I've worked with contact. Have you been the kitchen contact show place? Yep, exactly. It's, it's funny, I mean, I, I used to go to, on the pheasant hunts with Du Supreme, they'd fly us out, out in South Dakota and do that, so.

[00:49:59] Betsy Natz: [00:50:00] Yep. Yeah, we did, we did one. We have some funny pictures we could show you.

[00:50:05] Betsy Natz: Did a hunt, uh, with the show place, uh, back not too long ago. But, uh, they're a wonderful group of members and the large majority of this industry really are family owned, family operated, multi generat. Companies who, um, you know, who not only their livelihoods depend on this industry surviving, but all their employees, you look at, you know, you look at some of these companies, they employ 700, a thousand, 1500 employees or more.

[00:50:39] Betsy Natz: Yeah.

[00:50:41] Eric Goranson: I'll tell you one quick story before we go. That was interesting. And I was at the kitchen of bass show one year and I was literally standing in the Wellborn booth talking with Paul Wellborn and his kids and Angel and them were, there is, you know, hanging out right at the beginning of the show and one of the security guards comes up [00:51:00] and says, Mr.

[00:51:01] Eric Goranson: Wellman notice this. And he goes, yeah, that's our big huge thick idea book cuz it had their picture on the. Oh no. Somebody had reprinted it and it was in the Chinese cabinet section over there and they were selling the cabinets using the printed book where they shipped off the Wellborn book had it a hundred percent copied down to the family picture in the back.

[00:51:27] Eric Goranson: Cause I was standing there and looked at it and all they did is put a new cover on it and it was a hundred percent copied and they were trying to

[00:51:34] Betsy Natz: find designs ruthless, they'll do anything and there's no re.

[00:51:39] Eric Goranson: Yep. It's just outta control. Outta control. Betsy, thank you for all you do for the cabin industry and the American workers out there.

[00:51:47] Eric Goranson: You and the K cma great to sit down and

[00:51:50] Betsy Natz: talk to. Thank you so much. We appreciate it. And um, again, thanks for having us. And if. Do you ever wanna bring myself back or one of our members? Let me [00:52:00] know and we'd be happy to do that. Eric, thank you for the time. We'll,

[00:52:05] Eric Goranson: we'll do it again. I'm Eric G and you've been listening to Around the House