Twilight In Italy

What happens when a traditional European industry faces Asian competition? A crisis. Welcome to Manzano, Italy's chair capital

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Manzano's giant 23-ton chair is a reminder of the town's more prosperous times

The biggest chair in the world stands seven stories tall, weighs almost 23 tons and is found just to the left of the second traffic light in the tiny town of Manzano (pop. 7,000) in the northeastern corner of Italy near the Slovenian border. The red pine monument is not some avant-garde artistic statement. It's an oversize acknowledgment by the community of the industry that brought immense prosperity to Manzano and 10 small burgs around it over the past half-century. Known as the "chair triangle" (il triangolo della sedia), this district every year produces as many as 40 million chairs of all shapes and sizes--typically of beech and oak wood--for offices, homes, hotels, cruise ships, hospitals and restaurants around the world. Locals like to boast that the district in its heyday made 1 of every 3 chairs sold. The demand provided ample work for a tight-knit network of 1,100 highly specialized small firms. And it transformed a once modest rural area into one of Italy's richest and most dynamic commercial zones, a district with virtually full employment and a chronic shortage of skilled labor. "We were the China of Europe," boasts Giulio Fanin, an entrepreneur who makes machine tools for chair manufacturers.

But these days, the real China is making Manzano's prosperity as precarious as a two-legged stool. In a perfect example of globalization at work, ferocious competition from Chinese manufacturers is snatching away Manzano's customers--and its life. Over the past three years, about 200 Manzano companies have closed, and a worrisome number of the remaining 900 are struggling. The cheap labor isn't just in China. Sawmills have moved to Croatia, Poland and Romania, where an increasing amount of prefabrication is carried out.

Manzano's once dominant share of the market for no-frills office swivel chairs has collapsed because Chinese producers churn them out with almost the same quality at a fraction of the cost. Now the Chinese are stepping up to more sophisticated chairs in wood and leather too. Talk about "the crisis" is ubiquitous in Manzano--even the executives of thriving companies are worried that the unique industrial fabric of the area is fraying. "We see people with tears in their eyes, not knowing what to do next," says Simone Focacci, manager of one of Manzano's three principal banks.

Valerio and Lucio Minin are two of those shedding tears. During the 1990s, the company their father founded a half-century ago, Mininsedie, produced up to 500,000 chairs annually. But last year Mininsedie made just 130,000. Revenues have declined 50% in two years, and with losses mounting, the Minin brothers recently laid off five of their 15 employees. "The situation here is tragic," says Valerio, 51. "I just don't know how we're going to continue. You keep banging your head against the wall, and either the wall falls--or you do."

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