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

by Macy, Beth

  Stanley flipped what it made domestically, betting that nervous upper-middle-class parents (and doting grandparents) would be willing to spend more on made-in-America baby cribs—eight hundred dollars versus four hundred dollars for a near identical imported crib. The American-made cribs are Greenguard-certified by an independent public-health nonprofit that monitors air quality and chemical emissions, and they come in more than one hundred finish choices, from surf blue to chili pepper.

  Stanley also named Micah Goldstein, a Dartmouth-educated MBA, as its chief operating officer. Goldstein, forty-three, had previously managed the manufacturing of hydraulic-equipment trailers and cardboard boxes. He knew a lot about lean manufacturing but virtually nothing about furniture, and what he did know about the industry didn’t impress him. “The world-class companies ask the workers for advice. But in furniture, the families had always dictated how things were done,” he said.

  The Ivy Leaguer seemed a fish out of water in rural North Carolina. The day I rode from Asheville to Robbinsville with Stanley marketing director Neil MacKenzie, Goldstein had Neil bring him a soy latte from the Asheville Starbucks. It was no longer warm when we arrived two hours later, of course, but a cold Starbucks beat the weak coffee offerings of the Robbinsville McDonald’s any day.

  Goldstein was energized by the challenge of rebooting the old Robbinsville factory, which had been a Burlington carpet plant before the company bought it in the early 1980s. State-of-the-art equipment allowed him to reduce the number of lumber cutters in the rough end from forty-two to eleven. The efficiencies were part of a downsizing strategy that shrank the workforce from 460 to 340 (due to attrition, Goldstein said, not layoffs, which have not occurred there since 2007).

  Flat-screen TV monitors hang from the ceiling, allowing workers to track every piece of wood and maximize lumber yield. Part of a new $3.5 million rough end, the technology is coordinated by a twenty-something high-school grad, Chase Patterson, whom Micah refers to as “mission control.”

  He plucked Chase out of the packaging department because Chase wasn’t afraid of new technology, and had him trained by the Germans who’d made the machinery. In a booth overlooking the factory floor, Chase manages orders and inventory with the help of three computer monitors and a headset. Highly skilled workers here earn $32,000, while the average Stanley production worker makes $26,000, and the best among them are recruited to join Goldstein’s Continuous Improvement team.

  “People were skeptical at first,” said CI team member Al Jones, recalling longtime workers who were upset when their staple guns and screwdrivers were moved. “But now that everybody’s in survival mode, they realize there’s no other option. There’s no plan B left here in Robbinsville,” as Stanley Furniture is the largest employer for miles around. People in Graham County, home of North Carolina’s highest unemployment rate, now understand: The skinny MBA toting the tepid soy latte may very well be their best hope for making it in America.

  I thought of displaced Stanley worker Wanda Perdue, who was still searching for her plan B more than a year after we’d met. Despite the Herculean effort it took for her to get her associate’s degree, paid for by TAA funds (she was also helped along by a softhearted math tutor who was once a displaced worker herself), Wanda, fifty-eight, was still looking for full-time work almost three years after her Stanleytown plant closed, cobbling a living together on part-time Walmart work and her husband’s disability check. After thirty-seven years with Stanley, she no longer had health insurance and could afford only store-brand foods and cheap cuts of meat. She had to be practically dying before she went to a doctor, as paying a doctor’s bill meant her utilities wouldn’t get paid on time.

  The most scarring event in her unemployed life so far? The day she swallowed her pride and called a Smith Mountain Lake church to ask if she could use its food bank.

  “Sorry, you’re out of our jurisdiction,” the secretary informed her.

  “I might be out of your jurisdiction, but I’m not out of the Lord’s jurisdiction,” she said, then she thanked the woman and hung up.

  Wanda had asked me to follow her story all the way to Surabaya, Indonesia, where her replacements now worked, not in a single factory but in ten separate facilities, all Indonesian-owned and subcontracted through Stanley and various competitors, including Pottery Barn, Bassett, and Ethan Allen.

  She seemed genuinely curious about the Asians who’d replaced her and her Stanley brethren, part of the three hundred thousand American furniture workers who’d lost their jobs to offshoring—first in China, then in Vietnam, and now, following the cheap-labor waltz, to the world’s most populous Muslim country. I was curious too.

  Were the Indonesians’ lives better than hers? Did they struggle to feed their families, go to the doctor, send their children to school? And what exactly did her old bosses at Stanley do on the other side of the world?

  Coaxing Stanley to let me tour the factories where its adult furniture is manufactured took several months. I began asking in the spring of 2012, which was lousy timing—it was soon after the mass suicides to protest working conditions at the Foxconn factory in the Chinese city of Wuhan. Micah Goldstein made it clear: He didn’t want a story about working conditions in Indonesia. “We don’t own the factories there,” he said repeatedly.

  When I landed in Surabaya in March 2013, I had already Skyped with Stanley’s vice president for Asia operations, a British-born factory man named Richard Ledger whose career perfectly mirrored the arc of globalization in the developing world. He’d met his wife in the Philippines in 1997, back when the furniture workers he supervised there were earning twenty-five dollars a month. In 2005, he ran logistics from white-hot Dongguan, China, where migrant laborers worked seven days a week, lived in dormitories, and earned eighty dollars a month.

  In 2008, when rising labor rates in China cut into profits, Stanley sent Ledger to Vietnam. Though the company still contracts with factories in Ho Chi Minh City (from an office staffed by fifteen employees), the bulk of its adult furniture is now made in and around Sidoarjo, outside of booming Surabaya. Indonesia has a centuries-old history of furniture-making, government-managed mahogany forests, and labor rates that are among the lowest in the world.

  How does Ledger live in Indonesia? In a golf-course community, with a chauffeur on call and medical needs that are taken care of by a quick flight to Bangkok, where his two youngest children were born. He also has two armed guards outside his home at night, posted there following a frightening late-night break-in. When his chauffeur drove us into the Shangri-La Hotel Surabaya plaza for lunch one day, guards checked the undercarriage of the SUV we were riding in for bombs, as has been standard practice in upscale hotels since the 2002 Bali bombing, which killed 164 international tourists.

  I thought of Rob Spilman recalling his first trip to Indonesia several years earlier, before there were any five-star hotels designed to cater to Western businessmen. With the Bali bombings fresh, Rob said he had slept in his clothes and barricaded his hotel-room door at night with a dresser.

  The first time I interviewed Ledger, in 2012, an Indonesian furniture worker was earning about a hundred dollars a month. By the time I landed in Surabaya, a year later, the national minimum wage, owing to a cluster of strikes in Jakarta, was neck and neck with Vietnam’s. A worker now made around a hundred and eighty dollars a month.

  Stanley’s importing office is in a booming suburb called Citra Land, which bills itself, aspirationally, as the Singapore of Surabaya. It’s staffed by a couple dozen yellow-polo-shirt-wearing engineers and logistics people, including two Filipinos who engineer parts for the furniture designs that are e-mailed to them from the High Point corporate offices. They all work late so they can Skype across the twelve-hour time difference. During the day, they troubleshoot problems in the ten factories where their products are made.

  Most sit in a row of computers surrounded by glass vases filled with calla lilies. The place is run by a highly efficient office ma
nager named Dini who reminded me of Sheila (both stylishly approaching middle age and married to their work, although Dini commutes on a motorbike while Sheila drives a much cushier Acura).

  I accompanied American-educated Indonesian Jim Febrian, Stanley’s thirty-year-old sourcing supervisor, as he hopped from factory to factory, consulting his smartphone constantly and relying on his driver to maneuver through the narrow rural byways and around the occasional rickshaws—not to mention the throngs of motorbikes, some with entire families heaped on top. Every afternoon it poured, giving the steaming countryside, still dotted with rice paddies, the aroma of wood fire and wet dog.

  Jim’s driver was a cheerful twenty-something named Eko Hadi. The company had hired him away from the Shangri-La Hotel, where he had been a bellman, because, as Jim explained, he was friendly and spoke a little English, sort of. (“Are you taking us to the hotel?” I asked when he met us at the airport. “Yes,” he said. “Or should we go to the Stanley office and see Richard first?” “Yes,” he replied.)

  Motorbikes are the hot economic indicator of Indonesia, which has been growing annually by 6 percent. You can get one for fifty dollars down, and the motorbike is usually a rural Indonesian’s first credit purchase. Sometimes workers double up on a single motorbike to commute to work, not unlike the original Bassett workers’ building and sharing rowboats to get across the Smith River.

  In the office, Dini and Jim were accustomed to Westerners in general and Virginians in particular. But that wasn’t the case inside the factories; I was the first white person many of the line workers had ever spoken to at Multi Manao, a sprawling, twenty-five-hundred-worker factory where Stanley furniture is made alongside pieces for Pottery Barn, West Elm, and Pier One. Employees clustered around benches and worked several people to a chair, mostly sans conveyors or machines, which reminded me of photographs the Bassett barber had given me from Stanleytown circa 1925. I spoke to a field hand turned ripsaw operator named Kusnun Aini who had ridden his motorbike to the factory. Aini, forty-three, used to earn forty dollars a month working a farmer’s rice fields.

  Elok Andrea, twenty-six, had taken a similar path, though this was technically her first paying job. She’d been a subsistence farmer working a tiny family-owned plot of rice and corn but had recently been hired on to feed boards into a rough-end saw. She’s now able to send her six-year-old to school; that wasn’t possible before, she said, as tuition is thirty dollars a month. “She wants to send her to college one day,” the Indonesian translator said, clapping her hands in approval.

  Asked why she prefers factory work to farming, Elok said, “Here, we work under a roof.” There’s a free clinic on-site if she gets sick, as well as a hut for after-lunch prayers.

  In a state-of-the-art factory an hour away, Panca Wana was fulfilling an order for Ethan Allen, its largest customer, according to managers there, though it also makes furniture for Lexington, Stanley, Century, and several other American-owned brands. The factory is owned by an Indonesian real estate mogul who thinks nothing of dropping $700,000 on an Italian-made router. Without question, numerous people in the industry said, it’s the most modern furniture factory in the world.

  “When everyone else here is employing two hundred carvers, he’s buying machines,” Ledger said. “He loves machinery, and he knows it’s not wise just to rely on cheap labor.”

  The legions of villagers who apply to work at Panca Wana take psychological tests designed to gauge their stability and critical-thinking skills, Panca Wana’s quality-control manager Allen Jubin told me. A North Carolina native, he worked stints for Broyhill, Kincaid, and Henredon before moving to Asia, first China and then Vietnam.

  He golfs regularly with the growing number of North Carolina and Virginia furniture expats, most of whom inhabit a realm that is not quite American and not quite Indonesian. One of Jubin’s golf buddies, for instance, is Jerry Hall, an affable forty-five-year-old who heads quality control for Stanley. During Hall’s nine years of Asia-hopping, he’s never once driven his own car. He’s learned to love spicy food, except at breakfast, and he maintains homes in both Vietnam and Indonesia. Hall likes the golfing better in Indonesia but prefers the food in Vietnam, where it’s possible to order his native chicken-fried steak and gravy via his computer and have it delivered to his apartment door in Ho Chi Minh City—in thirty minutes.

  After the Bali bombings, Hall swore he’d never go to Indonesia, and that was before he knew about Febrian’s family home in a Christian enclave on Sulawesi being burned by Islamist radicals in 1996. But now that Hall lives here part-time, not far from Ledger in Citra Land, he prefers Indonesia.

  “I really miss biscuits,” he told me. Never married, he worried about his eighty-eight-year-old father, who lives in rural Virginia. He wished his dad would learn to Skype on the iPad he bought him for Christmas. Stanley’s Filipino engineers, who see their families a few times a year, shared similar feelings about being so far from home.

  Wanda Perdue might still be looking for full-time employment, I thought, but at least she has her family nearby.

  Though talk of reshoring manufacturing is heating up—and companies like Ford, Apple, GE, and Caterpillar are bringing some production back to the United States—economists and furniture analysts alike doubt that low-skilled furniture-making will ever be what it once was in America. The exceptions? Niche markets like high-end furniture, hospitality, upholstery, and cabinetmaking, all of which tend to rely on made-to-order specs.

  The exceptions also include the few companies that never moved offshore to begin with, such as Vaughan-Bassett, Mississippi’s Johnston/Tombigbee, and a growing number of small, Amish furniture-making enclaves. The last, predominantly in Ohio, Pennsylvania, and Indiana, capitalize on their own version of low-cost labor—their families and children. (My retailer buddy Joel sells several Amish-made lines and says 60 percent of his inventory is now American-made.)

  In October 2011, a North Carolina furniture maker named Bruce Cochrane tried to ride the reshoring wave, resurrecting a high-end furniture factory that had been in his family for four generations. He grabbed both headlines and accolades, including an invitation to sit next to Michelle Obama at the president’s State of the Union address. Lincolnton Furniture lasted little more than a year before Cochrane closed it, citing the slow economy, price competition with Chinese imports, and unanticipated costs to retrofit the old plant.

  I asked Ledger and Hall how they had handled the political hot potato that was the antidumping petition. They supported John Bassett’s efforts, they said, but found it expedient not to inquire about the details. “To be honest, I just never asked about it,” Hall said. “I wanted to always be in a situation where if a factory owner [in Asia] brought it up to me, I could honestly say, ‘I don’t know.’ ”

  Ledger predicted during my 2013 trip that Indonesia had a “good ten years” before the cheap-labor dance sends furniture-making on the move again in the developing world. “Indonesia has two hundred and forty million people, and you gotta feed ’em somehow,” he added.

  Jubin, who was working in China when the petition was filed, called it “a bunch of horse hockey” that did nothing but spur furniture-making in Vietnam, Malaysia, and Indonesia. “A lot of people made a lot of money off it, but nobody got their jobs back as far as I know.”

  When I ventured that workers at several American plants were able to keep their jobs, he dismissed the petition anyway, saying the bulk of furniture-making was still destined to move to countries with cheaper labor.

  The mud turtle and his seven hundred workers apparently didn’t count, nor did the twenty smaller furniture-making petitioners from Mississippi to Vermont.

  “Furniture may come back to the U.S. but it will be much smaller and much leaner, and it may not happen in our lifetime,” Jubin insisted.

  Furniture-making returning to the United States was not a scenario any of the Indonesian line workers I spoke with wanted to entertain. At a factory called Romi Violet
a, barefoot men etched designs onto mirrors for Neiman Marcus, and a few lumber sorters also working shoeless stood amid splintery piles of lumber culls. Workers crouched on the floor to carve and distress pieces for Stanley that combined wood, metal, and leather. It was over a hundred degrees inside the factory, but the only person sweating seemed to be me.

  A particular piece they were working on looked similar to a Stanley piece I had admired at the High Point trade show a year earlier. Stanley’s Atlanta-based public relations consultant had been guiding me through the company’s showroom when she stopped to elaborate on the distressed heirloom-cherry sideboard with leather straps and brass handles that retailed for $2,079. “We want it to look like you found it in an antique market in Paris,” she said.

  It took flying to Indonesia to figure out exactly how that furniture was antiqued. To artificially age the wood, Romi’s marketing manager told me, workers keep it for months at a time in pools of disaster mud, a dark sludge that flows from a nearby mud volcano. The volcano was caused by a natural-gas drilling accident in 2006 that killed fourteen people and displaced thirty thousand. (The well operator claimed, falsely, that the eruption was prompted by an earthquake.)

  The process gives the wood a richer hue and pocks it with holes drilled by insects that live in the mud. “It was weird to us at first, messing up good furniture on purpose,” a Romi sample engineer who goes by the single name of Fachrudin said, shrugging. “But if that’s what the Americans want…”

  When I asked Fachrudin if he ever thought about the Appalachian workers he had effectively replaced, he abruptly answered no. Then he giggled nervously, not wanting to appear impudent.

  “What I do worry about every year is the future of this factory,” he offered. “I worry that someone somewhere else, somewhere cheaper, will start to make furniture, and that will be that for us.” In the office the next day, Dini said a very similar thing.