Tuesday, July 29, 2014

In "Factory Man", journalist Beth Macy documents the demise of the mainstream U.S. furniture industry

Despite the somewhat less than exciting title of this post, the book is truly a fascinating story, well written, and told from the perspective of the people whose lives were affected.  By the middle of the twentieth century, the core of the U.S. furniture industry was along the mid-western Virginia and North Carolina borders, and at the center of it all was Bassett, Virginia.  The history of the Bassett family, Bassett industries, the unincorporated town of Bassett, and the story of one incorrigible, intuitively smart, and determined black sheep of the Bassett family who managed to defy the odds and maintain his U.S. made furniture company to this day in Galax, Virginia, all of this is the core of the tale.

To end any doubt about what happened,  Chinese manufacturers and other Asian manufacturers simply supplanted this basic industry for the area with their cheaper labor, products that were at first cheap but inferior but later became better made but still cheaper than what could be done profitably in the U.S, and benefiting from the support of Chinese government  subsidies.  The Chinese products were still not finely handmade products and dresser backs of linerboard, not wood, were common, but their price seriously trumped most U.S. products and on the surface they looked the same, or from this perspective that values antiques, they looked similar.    U.S. companies were hugely complicit in the Chinese takeover of the industry by not taking their threat seriously at first and giving away their techniques to those unusually interested foreign observers, then later selling all of the advanced U.S. products, designs, flourishes, and finishes to the Chinese for the inevitable profit to the owners of the U.S. companies, and finally almost universally just putting their long established U.S. names on imports.  This was hugely profitable for many owners but did not benefit the many workers at these companies whose livelihoods depended on jobs that slowly and then quickly disappeared.

While this book is about the furniture industry, it could just as easily be written about participants in the U.S. textile industry, shoe industry, or many other labor and quality intensive industries with embedded ownership that had either ignored the threat, taken advantage of it, or had been simply unable to honestly compete with it.  Globalization has many facets, many worthwhile broadly, some that benefit overall economic progress, but few if any that benefit the generations of meagerly paid workers that had depended on industries like these for generations for their lifestyle, culture, health care, and family cohesiveness.

The writer of this post has some biases and experience related to this book.  My hometown is Danville, Virginia, once a textile and tobacco town that is 60 miles from Bassett and 30 miles from the just as hard hit furniture town of Martinsville.  In 1950 Danville's huge Dan River textile mill employed 17,000 people.  By the mid-2000's it employed none.  It had been demolished by both Asian competition, shortsightedness, and chronic mismanagement that benefited those at the top.  Regardless of its management flaws, it faced a tidal wave that overwhelmed Burlington, Cone, Fieldcrest, and most if not all of the leading U.S. textile manufacturers that existed in the 1950's and had been the leaders for many years previously(a favorite management story of mine is that when I first started working in New York City in the early 1980's my parents came to visit me.  With the not so minor title of assistant controller, my father had occasional contact with the insular Harvard educated and none too aware President of the company who kindly offered my parents the Dan River company suite for their stay.  He also recommended that they eat at the Four Seasons restaurant nearby, his "favorite".  The company three bedroom suite turned out to be in the exclusive and small Regency hotel and condo complex at 63th street and Park Avenue, quite the address for a competitively stretched and marginally profitable company like Dan River.  The company leader's suggestion of the Four Seasons as a place to eat would have probably taken at least two weeks of my father's take home pay if the three of us had gone there for a modest dinner).

There I go venturing into my own stories while trying to comment on a real author's excellent book.  Beth Macy's story is at times a bit too detailed and a few times could have used a better editor due to some repetition.  Those are minor flaws compared to the pleasure and empathy this reader experienced reading this unusual book that writes about those who for the most part are not focused on by most economists or pundits, and they are those people whose generational lifestyles are uprooted and for whom any government training is hard to apply in towns and areas with no other industries.

While hometown Danville was walloped by the loss of Dan River Textiles by imports and by the loss of Dibrell tobacco company due to tobacco industry consolidation and more efficient management by their major buyers, mainly cuttting out middle men like Dibrell as much as possible, the city still survives, not at all prosperous for many but with some prospects and longevity ahead.  With still 42,000 people, a major regional hospital,  a contracting but still important union based Goodyear factory, a small but longstanding and growing four year college, a thriving community college, shopping malls and chain restaurants that serve a huge surrounding rural area, my hometown survives with some hope and some improvements.  For those many much smaller almost single industry furniture towns, the present has been bleak, and seeing a better future requires real faith.  Sometimes faith can be powerful, but it is rarely quickly rewarded.

There I go again, using comparative references rather than just commenting on "Factory Town".  This book is well worth reading to see a side of the Thomas Friedman's "The World is Flat" thesis that is largely ignored as a fact in the U.S., something Macy reminds the reader of several times.  The people that it focuses on are those on the unemployment and disability lists that many politicians decry but few try to understand.   Beth Macy does not focus on what many macro economists say about the future.  She understands what has happened now and the impact of major dislocation on individual people and families.  She writes about the hardships faced thoroughly and thoughtfully, and details familiar reasons or she might say rationales for globalization of business competitiveness but does not break new ground on the causes of these dramatic changes.

For different unexpected and creative thoughts, try George Packer's "The Unwinding, an inner history of the New America."  It may or may not be as entertaining and engaging as "Factory Man" depending on a reader's bias, but it is both exceptionally well written and also profound in some of its insights.  


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