Sunday, July 14, 2024

Would work

Would work

Manufacturers say they can’t afford to make furniture in
America. Bob Timberlake makes sure some of his is.
By Amanda Parry

Stacks of headless bedposts and orphaned dresser drawers exude the acrid aroma of cut, cured hardwood. The screeching of planers, sanders and saws bounces off cavernous walls that echo workers calling one another from around the room. Despite the scent and sound, the place seems empty. Rows of machinery lie quiet. Most of the floor and all but one office are dark. In Plant 2’s prime 20 years ago, every machine would have been humming, every square foot of factory flooded with light.

Many of Linwood Furniture Inc.’s 135 employees were among the 500 people who worked here then. For them, this isn’t a matter of whether the glass is half-empty or half-full. Little more than two years ago, the glass was drained. Lexington Home Brands closed the plant in December 2005, moving the last of its case-good manufacturing to China. More than 360 men and women were out of work. For those who have jobs now, the glass is overflowing.

North Carolina has lost more than 26,000 jobs in furniture manufacturing since 2000. In the 1980s, about half the furniture sold in the U.S. was made in this state; employment shriveled 41% from 1990 to 2006. Linwood represents a rare instance when someone who had the power to save jobs did. The company got its start when artist Bob Timberlake refused to allow one of his furniture lines to be made overseas. This stance left the licensee scrambling to find a domestic manufacturer. A group of investors — including Timberlake’s son — bought Plant 2, signed a contract to make The World of Bob Timberlake line and in March 2006 opened Linwood, named for the community where the factory sits.

It was — and is — a gamble for Timberlake. He licenses rights to produce the collections to Lexington Home Brands. If the furniture giant had stopped production, he would have missed out on thousands, possibly millions, of dollars in royalties. But it was hardly a David-versus-Goliath scenario. Bob Timberlake, 71, has more than a slingshot in his arsenal. He has a huge following — “limited edition” prints of his rural North Carolina landscapes sell in batches of 50,000 — and his name has become a brand unto itself. Bob Timberlake Inc. works with more than 25 licensees on products ranging from molding to menswear — the latter, incidentally, made in Asia. In squaring off with Lexington, he wielded the ultimate weapon: The World of Bob Timberlake is the most successful furniture line ever, with sales of more than $1 billion since its debut in 1990.

The risk was much greater for the people who formed Linwood. Spearheaded by Dan Timberlake, Bob’s son, and local businessman Jimmy Kepley and backed by 23 investors, including NASCAR team owner Richard Childress, the venture flew in the face of conventional wisdom. With nearly every other company shifting production overseas, it is trying to compete against the cheap labor of Asia and Latin America. “People asked us if we were crazy,” says Brian Starnes, senior vice president of operations. “They still do.”

The city of Lexington, population 20,927, has hundreds of acres devoted to an industry that’s barely there anymore. Once furniture was as ubiquitous as its barbecue. Off South Main Street sits a million square feet of factories, none of it used for manufacturing anymore. Side roads around town end at entrances to shuttered plants, empty parking lots sprawling like gray puddles around them. Lexington Home Brands Plant 1 covers nine city blocks, its buildings peeling paint, one sprouting weeds as thick as grass on the roof. “In its heyday, there were probably 4,000 jobs alone attributable to what became Lexington Home Brands,” says Redford Thomas, president and CEO of Lexington Area Chamber of Commerce. That doesn’t count the smaller operations.

For those like Thomas who grew up in or around the town, the industry was a constant, with generations of families working in the same plant. A furniture job was pretty much a given, even if you didn’t want one. Starnes knows. In the early 1980s, he took one with one of four local furniture manufacturers. At 20, having spent two years at Central Carolina Community College in Sanford, he had nine months to kill before he could join a Navy program that would enable him to finish his degree. “My beloved mother informed me I was not going to sit on my keister for nine months,” he recalls. A bookkeeper for Dixie Furniture, she got her son a $5-an-hour job in the veneer department. He didn’t enjoy the work and gladly departed for the Navy.

While he was gone, Taylor, Mich.-based Masco Corp. bought up the local companies and merged them into Lexington Furniture Industries. In 1988, after Starnes had finished his hitch and graduated with a bachelor’s in communications from Old Dominion University in Norfolk, Va., a friend who had become a manager at Plant 1 invited him to lunch. “I said, ‘There’s no way I’m coming down there and running a machine for you for $5 an hour.’ And he said, ‘You don’t have to be so grouchy about it. Why don’t you just come have lunch with me.’” Two weeks later, Starnes was back in the veneer department — making $5.90 an hour.

During the next 10 years, he saw the company change hands and the local industry begin to fall apart. In 1996, Masco spun off its home-furnishings division into a company it named LifeStyle Furnishings International. Almost immediately, LifeStyle began to feel competition from overseas. It wasn’t from just the trade agreements. In the 1990s, Chinese manufacturers discovered a domestic supply of cheap lumber — rubber trees. After 20 years, their sap is no good for making latex, but the wood is comparable to the hardwood that furniture makers were importing from North America. Coupled with their low wages — less than a dollar an hour — and tax breaks, they could make American companies offers they couldn’t refuse.

As Starnes progressed through the ranks, eventually becoming director of manufacturing in 2002, he got to see things unfold from both sides of the world. In 2000, LifeStyle began closing domestic plants and moving work abroad. Two years later, he spent eight weeks at the company’s factories in Guandong. Labor was so cheap that 10 people would be assigned to a job that would take one or two in the U.S. One day, he found workers wearing off the blue paint on a group of tables. The group was part of a collection that came in four colors, three of which had the paint worn off around the edges, a technique used to make furniture look older. The paint wasn’t supposed to be worn off the blue ones. The supervisor said he knew but didn’t want to change the setup: It was easier to have the blue furniture repainted by another group of workers.

Back in North Carolina, LifeStyle continued to close plants and lay off people. In 2002, a group of executives bought the Lexington Home Brands division. They began concentrating more on importing and less on manufacturing, but Starnes was confident that jobs would stay in his hometown. “I thought, ‘There’s no way they’ll close Plant 1,’” he says. They did, in 2003, and Starnes was moved to Plant 2, the company’s last major factory in the city. In October 2005, the final ax fell: Lexington announced it would close the plant; 360 would be out of jobs by Christmas.

Starnes didn’t make the announcement, but he stood next to the man who did, CEO Bob Stec. After the speech, an employee who had worked there 40 years approached Starnes. “He said, ‘What am I going to do? Who’s going to hire a 59-year-old man who’s done nothing but furniture his whole life?’” Starnes went back to his office, sat down and told a co-worker: “I’m never doing that again. If someone wants to close a plant, don’t call me.”

Across town from Plant 1 sits Bob Timberlake’s Lexington gallery — he has another in Blowing Rock — which towers over a road into town from Interstate 85. At 15,000 square feet, it looks, inside and out, like the Versailles of log cabins, complete with a giant fireplace, wooden furniture, woven rugs and, of course, paintings. As befits a local hero, his story is found in tourist literature associated with the town: how he took up the brush at 28; how he quit his job at the family business to paint full time after an encounter with artist Andrew Wyeth; how his artwork went on to show in galleries around the world; how he has won awards ranging from the Albert Schweitzer Medal for Artistry to North Carolina Public Servant of the Year.

In a region where furniture was king, Timberlake inevitably ended up with a hand in the industry. It happened in the late ’80s when a friend who was also a Lexington exec came to visit his studio and saw potential for a line that would evoke Timberlake’s rustic works. While these days it’s common to brand a collection with a celebrity’s name — Donald Trump got a line last year — it was a groundbreaking concept at the time. It also was one that worked. In its first 12 years, the collection brought in more than $1 billion wholesale, including $70 million in 2002, the last year in which Lexington released sales figures. Though Timberlake won’t reveal details of the licensing agreement, he has earned royalties since Day One.

In the conference room of Bob Timber- lake Inc., with his paintings on the wall and samples of his clothing line hanging from racks, the artist says the endeavor is more than just business — it’s personal to him. One of his grandfathers ran Piedmont Furniture Co. and made coffins on the side. As for the folks who lost their jobs, he claims he’s “kin to half of ’em.” And he’s not shy about sharing why he thinks this effort will succeed. “What I observed in the industry is that they’d introduce something, and they’d really give it a big kick. They’d really kick that ball at the market and, you know, promote it. And then they’d sit there and watch the ball roll to a stop. And I’ve never done anything in my life like that. I’m always running along with the ball, kicking.”

When the company began closing plants, people often asked him to use his clout to do something about the offshoring. He tried, first by compromising. In 2004, Lexington introduced a new Timberlake line, Studio Traditions, which was manufactured in Asia and priced as much as 40% lower than his original line. The idea was to give younger consumers a taste of Timberlake products so that they would eventually buy the domestically made original line.

For its part, Lexington seemed amenable to keeping some manufacturing jobs local. A year before introducing Studio Traditions, the company ran an advertising campaign promoting Timberlake’s collections and touting that most were made in North Carolina. “With all the challenges facing our country from abroad,” Stec said then, “we want to do what we can to promote this authentically American product along with the jobs and skills that it supports here in the United States.” In a trade-press interview, he called sending work overseas part of the company’s strategy to stay viable and keep some local jobs: “For every product, there’s a best place to make it. For a Timberlake or mass-market collection, the United States is the place to be, but for some of the more labor-intensive products, it’s not.”

But it wasn’t long before the strategy was abandoned. In 2005, the company told Timberlake it would focus on importing and no longer manufacture collections in the U.S. Neither side will discuss details — Lexington declined to answer questions for this article — but the story played itself out in the press. Timberlake bemoaned Lexington’s attempts to shift his line, and Stec — who would leave the company in June 2006, a month after it moved its headquarters to nearby Thomasville — implied that the artist was being unrealistic. “When the Titanic goes down, you try to save as many people as you can. We used to be a 100% domestic producer, and we were a financial disaster. Now we are importing, and I’d put our financial health up against anyone.” Timberlake dug in his heels as well. Either way, the outlook seemed bleak for employees at Plant 2. If the line got outsourced, they would lose their jobs. If Lexington dropped it, they would still get laid off.

Though executives hadn’t changed their mind about getting out of manufacturing, they had begun to show signs by fall 2005 that they were willing to keep production local. When Jimmy Kepley, owner of Kepley-Frank Hardwood, looked into buying Plant 2 as a site to dry lumber, executives asked if he would be interested in manufacturing the Timberlake lines. In other words, it would outsource production — only this time the jobs would stay in Lexington. What they didn’t know was that Kepley and Dan Timberlake had been discussing that same idea. Finding investors wasn’t a problem. As soon as word got out about what they were trying to do, people began calling. City and county officials kicked in incentives worth $22,000 a year for the first years.

Timberlake and Kepley knew they needed someone who knew the business inside out. Kepley had met Starnes when he toured the plant and suggested him to Timberlake. It was a gamble for Starnes. Lexington wanted him to work from its corporate office and make frequent trips to China. Other furniture makers had made him offers, but taking any of those would have meant moving. Though the salary was lower than he could have gotten elsewhere and there were no guarantees a startup would survive, he took the job as senior vice president of operations. “I feel like, as Linwood grows and gets successful, there’s gains for everybody down the road,” he says. Starnes left Lexington in January 2006. On Feb. 1, he was on Linwood’s payroll.

His first step was to find employees, starting with supervisors. Laid-off workers from Lexington and other manufacturers began showing up at the plant. Starnes says he received about 500 applications a week. That’s trickled off to about 15 to 20, though it swells whenever he’s hiring. His first hires — 27 employees — began preparing lumber in March 2006. Within the next few weeks, other workers came back, and by June they had produced their first pieces for Lexington. Seeking advice, Kepley and Timberlake kept calling Bob Shaak. The Pennsylvania native, who had been senior vice president for sales and marketing at Hickory White and previously held high-ranking jobs for Thomasville and Lexington, had taken early retirement in 2004. Bored with golf, he advised them on sales and marketing. In December 2006, he came aboard as senior vice president of sales and chief operating officer, reporting directly to Kepley. Last November, he succeeded Kepley as president and CEO.

In Linwood’s conference room, Shaak points to a series of ads on the wall, each featuring a smiling employee. The strategy is simple: Companies such as Linwood must make their mark by emphasizing their mission. They can craft heirloom furniture and find a niche in the market selling to consumers who want American-made products. The company also has expanded beyond the Timberlake license. Its own lines now account for 35% of production, and it does contract work for other manufacturers. During its first year of operation, it had $7.2 million of revenue. It anticipates sales of $12 million for the fiscal year that will end in July.

The company is not yet profitable, but Linwood executives hope to change that within two to three years. The goal is sales of $25 million to $30 million. Anything bigger and it would be hard to stay in its niche. It’s an aspect of the business on which all of the company’s founders are clear: They’re not trying to revive the furniture industry in North Carolina — they’re just trying to hold on to a piece of it. In Dan Timberlake’s opinion, furniture companies that shift all their manufacturing abroad are taking a big risk. “They’re putting all their eggs in one basket,” he says. His father chimes in: “And putting that basket in China.”

The Timberlakes are not wrong, according to Jerry Epperson, an industry analyst with Richmond, Va.-based Mann, Armistead & Epperson. The dream deals that China was offering furniture manufacturers aren’t quite as dreamy as they once were. For one thing, the government has cut tax breaks for furniture makers in favor of high-tech industries. Also, the rising price of fuel has pushed up shipping costs, and there’s the problem of transit damage and defective goods. If an order arrives damaged, it can cost more than it’s worth to ship it back. A few years back, Crate and Barrel received a shipment of 600 tables from Asia, each with the same defect. The company turned to Boone-based Charleston Forge for help. The tables were ready within the week, according to Epperson. “I think people are starting to recognize that there is a place for domestic manufacturing.”

As Starnes makes his rounds, the mood is upbeat on the factory floor. When he stops by the stockroom, 61-year-old Sam Hendrix looks up from checking orders to say hi. Hendrix was the man who approached Starnes in desperation after the announcement that Plant 2 was closing. That wasn’t his only connection with the factory boss. It was his wife who trained Starnes in that job he hated so much all those years ago. “It kind of hurt to watch all the factories shut down,” Hendrix says. “It’s good to be back.”

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