Factory Man : How One Furniture Maker Battled Offshoring, Stayed Local - and Helped Save an American Town (9780316322607)

by Macy, Beth

  Rob dismissed the condescending call with a simple thank-you. But now, with John trying to make inroads in his labor market, Rob was done with family pleasantries. “John plays by his own set of rules, so I was sure he’d try to take every manager we had and offer ’em more money and further split the diminishing labor pool here,” he told me.

  Despite all the textile-plant layoffs hitting the news, Rob insisted the furniture labor pool was tight then; that textile workers had never transitioned well to furniture-plant work. “Hell, we were already busing people in from Danville!” he said.

  That weekend, Bassett executives circulated a petition opposing the sale of the W.M. plant to Vaughan-Bassett to all the leading citizens in town. “We knew they’d be over there Monday morning to put down their earnest money with the city, so we got there at six in the morning to cut ’em off at the pass,” Rob said.

  The new finishing room John had wanted so badly, with its grandfathered-in permits? His relatives at Bassett made sure he didn’t get it. So he bought the hog—the machine that grinds scrap wood into smaller chips—at auction instead, a reminder of his grandfather’s advice on getting what you inspect, not what you expect.

  But the machinations of Martinsville’s good-old-boy network was not some blunder that could be culled from the record like a miscut bed rail thrown into the hog. Most of the line workers in town understood what had really happened—that egos and the long-simmering family feud prevented the sale of the W.M. plant to Vaughan-Bassett and, more importantly, the reemployment of four hundred people.

  Many of them came to watch when the W.M. Bassett smokestack was toppled and the plant razed the following March—at a cost to taxpayers of $840,000.

  Even Howard White, the former W.M. plant manager—the one who’d scolded me not to put anything negative in my book—said he was disappointed and dismayed. White stood there as the cranes and the bulldozers turned the building into bricks and dust.

  “Bassett didn’t like the idea of having a competitor in town,” White recalled, shaking his head. “I couldn’t understand them tearing it down; it had a brand-new finishing room.

  “There was no point in them doing that, in my opinion.”

  Mary Elizabeth Morten agreed. She had stood with tears in her eyes and witnessed the toppling of her father’s legacy. An old man who’d been a foreman at W.M. noticed her there, walked up, and handed her a keepsake brick.

  The following year, 1998, President Bill Clinton touted a national unemployment rate of 4.2 percent, the lowest since 1969. But a few months later, Martinsville posted the highest unemployment rate in Virginia, 15.2 percent—on the same day another apparel plant in that city announced 120 more jobs were going away.

  By that time, grass was already growing on the vacant lot that was once the W.M. Bassett Furniture plant, and for fifteen years now, grass it has remained.

  17

  Stretching Out the Snake

  More than a few Chinese friends have quoted to me the proverb fu bu guo san dai (wealth doesn’t make it past three generations) as they wonder how we became so ill-disciplined, distracted and dissolute.

  —JAMES MCGREGOR, FORMER CHAIRMAN OF THE AMERICAN CHAMBER OF COMMERCE IN CHINA

  As the branches on Bassett’s corporate/family tree were starting to rot from the inside out, China barreled onto the scene with a chain saw in tow. In 2001, when John Bassett heard about the cheapest-of-the-cheap Louis Philippe bedroom suite coming out of Dalian, China—the one clobbering every factory in the business, including even the Taiwanese-owned factories in southern China—he forgot all about his nephew. The suite looked as good as the stuff made by Lexington and Vaughan-Bassett, but the set—dresser, mirror, headboard, and chest of drawers—was wholesaling for just four hundred dollars. No one could figure out how the Chinese were pulling it off. The cheapest version Vaughan-Bassett made cost double that, and the company had already slashed its usual price by two hundred dollars just to get in the same ballpark. If the Chinese had their way, the old “shirtsleeves to shirtsleeves” was about to be proven again.

  When Wyatt Bassett first spotted the Dalian importer’s catalog sheet in 2002—a photograph of the suite taken in a spare, poorly lit room with $399 handwritten at the bottom—he was inclined to dismiss it as an outlier. “The first thing your mind does is say, Well, they’re losing money, so you kinda discard it. You think, It can’t go on forever,” he told me.

  But the Dalian suite went on long enough to steal a sizable chunk of Vaughan-Bassett’s market share. It went on long enough to contribute to the meteoric rise in Chinese furniture imports, which had already soared 121 percent, representing half a billion dollars, from 2000 to 2002.

  And it put Wyatt’s father, now sixty-five but nowhere close to retiring, in one helluva fighting mood.

  While he didn’t know which factory was making the Chinese suite, John Bassett knew exactly how much money it would cost him to make it in Galax. As he had in similar situations many times before, John bought the suite himself and had it shipped to his factory, whereupon chain-smoking Linda McMillian and her product engineers deconstructed every inch of veneer, hardware, and glue. Linda found the Chinese glue to be of better quality than the American (which had to meet EPA standards) and said the overall construction was “tee-totally different,” as she put it, in Galax parlance. “Ours was mortised at the joints, but theirs was kinda… I don’t know what you call it. The way they put it together, it looked kinda stabbed.”

  In his sweat-stained golf hat, John Bassett stood atop a conveyor belt and told his workers he had no intention of closing the factory. But he wanted them to know they were now up against some seriously rock-bottom prices from Dalian. The plants in Sumter and Elkin were getting by, but there had already been layoffs at the new plant in Atkins, Virginia, called Virginia House, a smaller operation that made solid wood bedroom and dinette sets. The company had acquired it in 1998 when business was still good, a year before sales began to dive.

  Bassett asked his workers to not only work faster but also suggest ideas for factory-floor improvements. What he didn’t want to hear—what he never wants to hear—was the phrase “It cain’t be done.” If something was wrong with a machine and it was slowing production down, the workers should personally let him know.

  “The Chinese are not superpeople!” he boomed.

  But when the average age of your workforce is forty-six, how much more can you coax out of your employees? A few years earlier, he’d boosted production with an incentive plan that had come to him on Christmas, as if tied with a bow. He phoned his human resources manager on vacation to share the idea.

  Thunder and Lightning, he called the concept. To generate excitement among employees, managers posted teasers throughout the plant in anticipation of the big reveal: IT’S COMING.… CAN YOU HEAR THE THUNDER?

  It was February in Galax, Virginia. What thunder?

  What would possibly get the workers of Galax so fired up that they’d make 210 bedside tables an hour instead of 180?

  John Bassett drives a 2007 black Lexus sedan, coffee-stained and bought used as a point of pride. It’s hard to picture him roaring through either of his resort communities on a Harley-Davidson.

  But a guy in Galax, he knew, would love nothing more than to cruise the hollows of Grayson and Carroll Counties astride a brand-new Harley-Davidson Road Glide. Billed as “the ultimate riding experience” in the company newsletter, the Vaughan-Bassett Conveyor, the Road Glide he bought was all cherry red and sparkling chrome, with a lengthened wheelbase and whitewall tires.

  “Can you he-ah the thunder?” he bellowed as a shipping employee roared into the factory on the bike, and the workers went wild. The Conveyor ran pictures of employees who wanted to pose sitting on the bike.

  Employees who met weekly goals for attendance, production, and safety were rewarded with tokens. The tokens went into a lottery-style box, complete with a motorized tumbling wheel cobbled together by a maintenance-department worker.
At the year’s end, the mayor of Galax was called in to draw the winning names, and the whole town was abuzz.

  “People were so excited, we had to have a security guard standing by as people put their names in the box,” recalled Tim Prillaman, then the human resources manager. “We kept the box in the break room, and we guarded that thing around the clock.”

  The runner-up got a Lightning, a high-end Browning shotgun—John Bassett’s favorite bird-dogging gun. If you won one of the prizes but weren’t the shooting or biking type, the company would give you cash instead.

  That turned out to be good news for Shirley Blair, a fifty-eight-year-old rub-room worker who’d been worried about job security. She’d heard about the factories nearby that had fallen—Bassett had just closed its veneer plant in Burkeville, Virginia, laying off another 103 workers. Months before the lottery drawing, she’d pulled John aside to tell him that her grown daughter wanted to move her family from a mobile home to a house and needed Shirley to cosign for a portion of the loan. She wasn’t asking for money; she just wanted assurance before she signed the note that her job would take her through to retirement. He said he needed some time to think about it. The next day he told her he couldn’t make any promises. “But if we ever do close, I promise that you and I will be the last two people working here.”

  Months later, the mayor drew the Harley winner’s name from the bin.

  Shirley had signed the loan note for her daughter, and she had worked extra hard. And now, almost by a miracle, it seemed to her, she had the cash to pay off the note.

  By the time Shirley retired, things in the American furniture industry were dire. By 2001, no production incentive could compete with dressers as cheap as the ones from Dalian.

  The Chinese imports were cutting into everyone’s sales. In 2001, Vaughan-Bassett’s sales were down almost 10 percent from 2000. Bassett Furniture sales had also slumped over that same period, by 20.1 percent, as did sales at Furniture Brands International (13.8 percent), Hooker (16.4 percent), La-Z-Boy (5.8 percent), and Stanley (26.6 percent). Dozens of factories had closed in North Carolina and Virginia, including the J.D. Bassett factory where John Bassett had first worked as a plant manager, his old #1 tiepins now collecting dust in dresser drawers.

  He bought some of the factory’s joinery equipment at the going-out-of-business auction, which lacked the drama of the W.M. plant ordeal—though he had to scramble to make sure Bassett included a key set of parts that had inadvertently been left out when the machinery was auctioned. (“How did I know [those parts] were missing?” he asked Wyatt on the way home. “Because I’m the one who bought the damn machine in the first place.”)

  Driving back to Galax, he thought about his place in the industry. He was one of the few third-generation furniture makers still left in it. He had worked for or against Bob Spilman for most of his career, and if that full-contact rivalry had taught him anything, it was this: It’s better to think through a problem than it is to panic.

  After the W.M. debacle, after the quadrupling of Vaughan-Bassett’s annual sales over the past twenty years, even the guys at Bassett had to admit it: John’s scrappy little factory was worth worrying about. He was a player now.

  China was about to join the World Trade Organization, overtaking Japan as the largest exporter to the United States and establishing most-favored-nation status. In principle, Beijing was agreeing to follow the global rules governing imports, exports, and foreign investment. In principle, it was promising to do business on a level playing field—judging by the two million copies of the Chinese-language edition of the WTO rule book sold after the formal signing of the agreement in December of 2001.

  But if John Bassett had his doubts before, the Dalian suite was all the proof he needed that the Asian invasion would soon become his war—not Spilman, who was now seventy-five and splitting his time among his three homes, far removed from the plant closings.

  As JBIII told the two-hundred-plus owners of lumber, screw, and trucking companies he gathered together in a rented room of the Galax Elks Lodge on July 30, 2001, he did not intend to go to war with one arm tied behind his back.

  Don’t panic. It was point number four in a five-point speech he gave called “How to Compete in a Global Market.” The speech borrowed from Spencer Johnson’s bestselling book Who Moved My Cheese?, a parable about four hungry mice who discover that the key to their success is being willing to change and improve continually (point number three).

  “He got together all the lumber men and the good-ole-boy sawmillers and the hardware people—guys who were wondering what they were going to do if all the factories closed and there was nobody left to sell to,” Merriman recalled. “They weren’t a big industry in the scheme of things and they knew, ‘Nobody gives a damn about us.’ ”

  Some of the area sawmills had already closed, and several of those remaining, guys who had eight or maybe ten families depending on them for their livelihoods, stood there listening to the self-appointed general, their palms covered with sweat. And they realized: Everything had changed. “They were shaking in their boots,” Merriman said. “Some of them were literally in tears.”

  Garet Bosiger, whose Appomattox River Manufacturing Company sells drawer sides to Vaughan-Basset, left the meeting thinking, Oh my God, what just happened? I might lose my business.

  Ed Sikes, a sandpaper sales rep, was equally stunned by JBIII’s candor—the news that no one’s job was safe. “You already had friends whose plants were shutting down. It was a house of cards, one plant closing at a time. And it was like a whole culture was being wiped out, people who had known each other and their families for three, four generations,” he said. “Eventually, I knew, if I didn’t change or diversify, it was gonna get to me too.”

  So Sikes gradually expanded his business beyond Galax-area furniture to include automotive and construction enterprises across the Southeast. Bosiger diversified by selling drawer sides for kitchen cabinetry, which have to be customized to fit individual houses and are therefore less vulnerable to offshoring.

  Bosiger’s plant also worked with Vaughan-Bassett, its largest customer, to reverse-engineer the company’s own dresser drawers, with the goal of maximizing wood yield and cutting costs. The grooves in the drawer sides and backs were standardized to reduce machine downtime and increase productivity.

  JBIII was putting the furniture-industry suppliers on notice: If I can’t survive the Asian invasion, you can’t either.

  JBIII didn’t ask the suppliers directly for money, but he did encourage them to cut him a deal. He was coming out with a new, cheaper version of the Louis Philippe—this one priced at $599—but he needed the suppliers to do their part. The new suite would be one of his Barnburners, discount promotions he likened to Kmart’s blue-light specials. The Barnburners sold for so little that he barely broke even on them, but they kept the factories running, which was cheaper than running short time—giving workers unpaid days off—and they were critical in protecting the company’s market share.

  “He’d come at you with, ‘Okay, I’m trying to get some volume so we’re coming out with a Barnburner, and I need five percent off your parts for this,’ ” Bosiger said. “He’s trying to break even to keep the factories going, but he’s also trying to make money by managing the scrap, upping the production, nickel-and-diming every little bit.”

  Sales reps were forced to lower their commissions from 5 percent to 3 percent. “We sold the shit out of that furniture,” Philadelphia-based sales rep Hope Antonoff recalled. “We didn’t run a profit, but it kept us open, and in the long run, that makes you money. Because if the plants don’t run, you have nothing left.”

  It was Bassett Furniture 101. Like all the misters before him, JBIII knew how to cut manufacturing corners to get the most out of his wood and lumber. John McGhee said, “When push came to shove, he was just like Mr. W.M. Bassett and Mr. Doug and Mr. Ed Bassett. Only now, he was more Bassett than [the company of] Bassett was.”

  For
inspiration on leadership—point number two on the five-point list—he studied Churchill, whose verbal wizardry he admired. He read and reread Churchill’s speech to the House of Commons on May 13, 1940:

  You ask, what is our aim? I can answer in one word: Victory. Victory at all costs—Victory in spite of all terror—Victory, however long and hard the road may be, for without victory there is no survival.

  That speech, which he likes to deliver in a British/Appalachian accent, punctuated point number one on his list: If you don’t think you’ll win, you will lose.

  The five-point speech became his personal credo, a populist JBIII version of an MBA. He gave it often, to anyone who’d listen, including to his own board. When a board member suggested Vaughan-Bassett develop a five-year plan, the words cut into John Bassett like a ripsaw. A five-year plan? That was the opposite of the five-point speech. That was the same crap the MBA programs were spouting, the same ideas the free-traders at the publicly traded companies were espousing—the ones who’d noticed that every time they closed a factory, their stock prices went up. The ones who’d awarded themselves multimillion-dollar bonuses at the same time they were putting thousands of people out of work.

  Listen, he told his board. Nobody could have predicted the Dalian dresser. “A five-year plan is nothing but an exercise in futility. It’s not worth the paper you’re writing it on.”

  What could he offer to keep the company from sinking further into decline? An organization that embodied one of Churchill’s favorite words: alacrity. “We’re gonna be wide receivers here, not linebackers,” he told the board. “And we’re gonna move with such speed, we’re gonna find the hole in the defense and run around the problems. We’re gonna give you an organization that’s so efficient, mean and lean and well-funded, that I don’t need to explain it to some banker who can add two and two but he can’t get you from Galax to Roanoke.”