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1-Page Summary of Factory Man

Making Furniture

The furniture industry has moved around a lot in its pursuit of cheap labor. New England used to be the center, but Michigan and New York State took over for most of the 20th century. Then China became the top provider of low-cost goods at the end of that century.

By 2003, 73,000 jobs were lost in the furniture industry. They moved to Taiwan and Hong Kong. The former company towns along US Route 58 are now abandoned factories with empty lots filled with weeds. However, Vaughan-Bassett Furniture Co., Inc., is still running strong and making wooden bedroom furniture since 1919.

The company survived because the president refused to chase cheap labor overseas. Instead, he fought for his workers and got them higher wages.

The Family Business

In 1902, John D. Bassett built a plant in the town of Bassett, Virginia. The company had several advantages over northern manufacturers. For example, it owned a sawmill and 21,197 acres of richly forested land while its competitors were unionized and didn’t have access to as many workers. It also hired black workers at lower wages than white employees because they were desperate for jobs outside their impoverished communities.

John Bassett started his furniture business right before the market expanded, meaning he was able to take advantage of that growth. He benefited from the baby boom and an increase in migration to urban areas, which meant more people were looking for affordable furnishings for their new homes. The Southern US was a big hub for this industry because 23 of 30 largest companies operated along a 150-mile stretch between Virginia and North Carolina.

The Bassett family became a furniture dynasty, owning plants in their namesake town and other places. They owned the power company, bank, church and school. However, by the end of the 1990s they were losing money and had to close down many factories.

Chasing Cheap Labor

As a result of the pursuit of cheap labor, factories in China began to produce furniture. However, this led to the demise of American-owned factories. The companies that were once thriving now had to close down due to their inability to compete with Chinese businesses who used cheaper labor and could sell at lower prices than they could.

In the 1980s, corporate raiders acquired furniture companies and began to change them. They were unfamiliar with the business, so they drained profit from plants that had been bought out. In 1986 alone, 17 factories closed in America because of this phenomenon. However, Vaughan-Bassett was still open because it had not been acquired by a raider yet.

Family Feud

John D. Bassett III ended up living and working in Galax as a result of family feuds that started simmering in the 1960s. Just before John’s father died, he surprised his family by changing his succession plans, passing over John and handing leadership to his cousin John Edwin Bassett, who was married to one of John’s sisters. He named another sister’s husband Bob Spilman second-in-command.

Spilman, the CEO of Bassett Furniture in 1979, was very domineering. He bullied JBIII and ignored his ideas and suggestions. Spilman also derided him as a “child”. JBIII endured the abuse until 1982 when he resigned from Bassett Furniture and left with his wife for Galax where he became plant manager at Vaughan-Bassett, which had been founded by his grandfather in 1919.

New Challenges

The company was facing a lot of problems. There were few employees and management wasn’t doing their job very well, so the owner decided to buy more equipment and change how things worked. He invested his own money in the company stock, which helped him renegotiate deals with suppliers as well as loaned the company money for new machinery. He also opened a new factory in Sumter, South Carolina to make supercheap particle-board-and-paper furniture called “glit” (which is short for “glorified plywood”). The owner took an approach that would help keep costs low by flying coach class and eliminating company cars while enhancing efficiency by offering bonuses for perfect attendance at work. Within five years sales rose from $79 million to $120 million dollars!