21

Factory Requiem

Should I hate a people for the shade of their skin Or the shape of their eyes or the shape I’m in.

Should I hate ’em for having our jobs today No I hate the men sent the jobs away.

—JAMES MCMURTRY, “WE CAN’T MAKE IT HERE”

Just before the preliminary hearings, Bassett Furniture was on the verge of closing its Dublin, Georgia, plant, and Bassett CEO Rob Spilman prepared to deliver the news. The weekend before his flight to Georgia, he showed up at Joe Philpott’s front door with a fifth of single-malt scotch.

“He said, ‘I got bad news. Monday morning, we gotta close the damn plant,’ ” recalled Philpott, the retired senior vice president for manufacturing. “It was like drinking at a funeral,” he said.

Henry County, once home to the largest percentage of manufacturing jobs in Virginia, now had the state’s highest unemployment rate—13.3 percent, three times higher than the state average. And the two executives were about to hold their first factory wake.

That week Joe Philpott’s cousin bet him a hundred bucks that every one of the Bassett factories would be closed within five years. Philpott shook his head as he recounted the story, chuckling at his own naïveté. He had refused the bet. “You’re crazy as hell,” he told his cousin.

It was 2003. Bassett still had six plants in North Carolina and Virginia—including the company’s cash cow, Bassett Superior, the one Philpott had managed himself for decades. His baby.

“I couldn’t steal your money like that,” Philpott had said.

But Rob wasn’t so hopeful. He’d seen what they were up against in China with his own eyes. His first trip to China was as a Bassett Furniture vice president in 1994, back when some Asian managers still rode bikes and wore straw hats. On one of his subsequent thirty trips, he toured Dongguan from the back of Lacquer Craft executive Samuel Kuo’s scooter. “He wanted to sell to me, and it was just mind-blowing how big this factory he was building was,” Rob recalled. “We had big factories here, but this was three times the biggest factory I’d ever seen. There were so many workers huddled around the furniture, they were like bees.

“I thought, My God, these guys are planning to take over the world, which of course they were. They were like we were in the fifties and sixties,” he said. “They were like my great-grandfather Bassett… and, man, do they work.”

His father was incredulous when Rob reported back on the lack of safety measures in the Dongguan finishing rooms—no fans, no masks, nothing. Rob actually had a fondness for the smell of finishing material, but these fumes were so strong he had trouble catching his breath. “How do they stand it?” he had asked the plant manager, choking as he spoke.

“Spray two years and die,” the manager said.

At which point there would be twenty more lined up to take the fallen worker’s place.

“How you coming along with my nephew?” John Bassett asked me. Halfway through the writing of this book, I’d spent weeks camped out with my laptop and notebook in Bassett but had not once penetrated the Taj Mahal walls. So I wasn’t coming along too well with his nephew. Still angry about a 2012 newspaper series on the aftereffects of globalization I’d written a year before, Rob ignored my first several interview requests.

Behind the scenes, a relative intervened on my behalf, pointing out that my book would be published regardless of whether he cooperated or not. That same relative (who asked not to be named) then coached me to e-mail Rob again and explain that, yes, this was my first book, and, no, I wasn’t really a business writer, but I had won more than a dozen national journalism awards, as well as a yearlong Nieman Fellowship in Journalism at Harvard in 2010.

“He doesn’t take you seriously,” the relative said.

So, reluctantly, in an e-mail, I dropped the H-bomb.

A day later, Rob agreed to meet with me—for exactly one hour, preferably after his workday, the implication being that he would not waste work time on the likes of me.

When Rob gave me nearly three hours the first time we met, I understood immediately why industry insiders described him as being more likable than his mom, dad, and uncle combined. “I’ve been around a lotta heat my whole life,” he said. “Hell, everybody can’t be that way.”

When he first became CEO, his dad called him regularly, never saying hello but simply launching into a tirade about some decision Rob had made, a tirade that usually began with “What in the hell were you thinking?”

Months into it, Bob Spilman caught his son on a bad day.

“Dad, are we friends?” Rob stopped him mid-rant.

“Uh… well… yeah, I guess we’re friends.”

“Look, Dad, as a friend, get off my fuckin’ back!”

Astonishingly, once Rob stood up to his father, he did.

Rob described how the task of plant closing fell mainly to him when he became CEO in 2000. It was part of a wholesale strategy shift that favored imports and retail stores, but it resulted in the laying off of thousands. He had initially been optimistic about joining his uncle’s coalition, hoping the antidumping duties might stave off the last of the plant closures—and maybe even keep the smokestacks humming at Bassett Superior Lines, by then the only furniture factory still operating in Bassett.

But unlike Vaughan-Bassett, Bassett Furniture was a publicly held company directed by a board filled with figure men, as Spencer Morten referred to them—high-powered CEOs who were a Who’s Who of Southern commerce. “We’ve been a public company since 1930, with shareholders that have to get profits,” Rob said. “At the end of the day, we are not a social experiment.”

The first round of antidumping duties, or Byrd money, was disbursed to petitioners in 2006, and Bassett Furniture’s share would amount to $17.5 million over the next six years. “The duties helped some, no question, but I felt like the horse was already out of the barn by the time they arrived,” Rob said.

The ITC decision made the duties possible, but the ITC could not stipulate what the recipients of the cash had to do with the money. Bassett Furniture directed much of its Byrd money toward reinventing its retail operation, Bassett Home Furnishings. “A lot of it was perpetrated by the unfair advantage that the Asians had,” Rob explained. “Our customers gleefully went over there [to Asia] and started buying directly from them so they could get it cheaper, just like Walmart’s done.

“It wasn’t our idea to change that model of prosperity we’d been operating under for decade after decade,” he added. “The world changed. And it’s been painful for us as a company to change. It’s been emotionally taxing.”

The evening after one of the plant closings, Rob called his school-age children together to watch the local cable-television news. The station was known for its populist bent, and Rob knew the story would make him look bad. He told them, “Forget your homework and sit down and watch this with me tonight because your dad’s gonna get crucified.”

His daughters cried, and his son was furious. Rob told them, “People are scared; they’ve lost their jobs. And I want you to realize what we’ve had to do, how serious this is. You’ll hear about it at school. You’ve got to be sensitive to what’s happening here. You’ve got to understand it and know y’all are fortunate kids. This is serious stuff.”

Down in Dublin, retired plant manager Buck Gale felt sick to his stomach as he watched his former workers file out of the factory for the last time. Retired for two years, he’d had Bassett’s Dublin plant earning seven-figure profits annually on his watch, surpassing even Bassett Superior Lines. Gale said he personally reinvented the production process for the low-end line of Bassett’s products—only to be stymied by the company’s new interest in higher-end products and its growing Ethan Allen–inspired retail program. (By 2003, Bassett Furniture had doubled its number of stores in five years, to 101.)

“Our product was priced so much lower than the other Bassett bedroom lines, it didn’t blend with the image Bassett wanted,” Gale said. “I wanted to, just pardon my French, kick somebody right in the damn teeth,” he added.

Buck had grown up in Bassett and still owned property there. As a child, he’d worn John Bassett’s hand-me-down clothes, passed down to his mother by John’s mother at Pocahontas Bassett Baptist Church.

“They lost the fight, but they lost it not because of the factory workers in those plants. It wasn’t nothing but greed,” Gale said, so angry both times I talked to him on the telephone that he sounded near tears. Paul Fulton, the CEO who was supposed to be the placeholder until Rob Spilman grew seasoned enough to assume the mantle, had closed or sold off twenty-eight plants during his three-year reign.

Fulton eschewed the style of the old-line misters, who’d run the business as a model of efficiency—working weekends, sweating every detail, hiring people “who got up with the chickens and went to bed with the chickens,” as Mr. Doug liked to say. He replaced them with marketing guys who emphasized short-term stock-market gains and profit margins and gobbled up what the economists, bankers, and business schools were saying about creative destruction.

Retired now for twelve years, Gale said he loves Rob Spilman like a son. But he still wakes up every morning “tee-totally mad” over the factory closures, which he sees as an intentional failure to compete and a total disregard for the generations of factory workers who made the Bassett family and other shareholders rich. “Paul Fulton couldn’t make a toothpick!” Gale shouted into the phone. “The little people were just used and abused.”

Instead of modernizing and adopting lean manufacturing principles to keep its factories efficient, North Carolina State University furniture expert Steve Walker recalled, Bassett Furniture and others “took the easy way out. Barring some big effort on the part of the government to protect industry… if you were a public company, it was a whole lot easier to just shut ’em down and go buy the product.”

Meanwhile, the smaller, privately held Vaughan-Bassett was pouring millions into new machinery to keep the plant efficient and up-to-date. It was a gamble, to be sure, as JBIII watched his sales plummet, going from $168.2 million in 2000 to $83.9 million in 2011, a period when the company received more than $21 million in Byrd money, most of which John funneled into computerized routers and kilns and a new rough end.

It wasn’t a social experiment per se, as Rob Spilman might have put it. But with much of his personal wealth tied up in the business, JBIII had no choice but to fight to protect his family and company assets, his nephew and other industry watchers argue.

“If I had forty percent of my company’s equity, and I had no brand name, and I only made one product—bedroom furniture—and my alternative is to close all my factories and import, that would be a death sentence for me,” Rob said. “But if I wanted to keep the value I had in my private company, I would fight tooth and toenail, and get the U.S. government and whoever else I can think of to help me keep the value of my company.

“So everybody picked their poison.”

In 2004, Rob Spilman still believed he could keep the last of his factories going—the Superior Lines cash cow. Asked to recount what his father thought of the closings that followed Bob Spilman’s 1997 retirement, “He just said, ‘I feel so sorry for you son of a bitches, I can’t stand it. I was there when the easy money was made.’ ”

By that point, a rare form of leukemia had zapped the fire out of the hard-charging, expletive-dropping businessman, a man his son fondly called “the best ass-chewer in history.” A man who had fully and inimitably articulated what he thought about everything and everybody, from his quirky corporate pilot to his cocky brother-in-law.

Like many of his underlings, I had a hard time grasping the essence of Bob Spilman. Was he a tough-guy genius motivated by the art of deal-making and loyal to his card-playing cadre? Or was he just a selfish narcissist, broken by his own lousy childhood and compelled to control the movements of everyone around him?

During my only trip to the Taj Mahal, when I asked Rob these questions, he chuckled and shook his head. “God Almighty, he was hard. But he did mellow as time went on,” he said. “He had a charm about him that was endearing, and this extended to everyone from the guy pumping his gas to the Wall Street guy.”

He then told two stories to illustrate his point.

The first was about a table-plant manager named Dick Rosenberg whose wife was a city girl and refused to live in Bassett; she made Dick return to their home in Atlanta on weekends, which irked Sweet Ole Bob to no end.

So much so that the CEO became positively obsessed with making sure that Rosenberg never left early on Fridays, even if he’d already put in well over forty hours that week. Spilman called Rosenberg’s secretary every Friday afternoon at four to make sure he was still there. One Friday, Dick had already sneaked out when Spilman phoned and barked, “Where the hell’s Rosenberg?”

When his secretary told him Rosenberg had left, Spilman made another call. He ordered Virginia State Police patrolmen to put up a barricade across the Virginia–North Carolina line to stop him. The troopers hauled the poor guy back to the Taj Mahal, where Sweet Ole Bob was standing in his office, making a big show of looking at his wristwatch.

“Well, it’s five o’clock. Time to go!” he said, beaming. “Have a good weekend!”

The SOB was shrewd. He was funny—though usually at someone else’s expense. And he was a master showman, as illustrated by a grand gesture Rob described him making at a High Point reception in the late 1990s.

Bob Spilman vented his rage about Chinese imports—on an innocent suckling pig. He picked up a carving knife, shouted “Larry Moh!,” and stabbed the porcine centerpiece so hard the apple in its mouth quaked.

He was sick and tired of hearing Moh’s name.

He may have been the puppeteer manipulating the factory closings, installing Fulton as his replacement until his son grew ready for the challenge. But the Spilmans were not the only factory men drowning in their scotch. The next people hit with pink slips were John Bassett’s 385 workers in Sumter, the glit makers who had, over the course of almost two decades, added mightily to his company’s profits. Until 2001, when the profits turned to losses. If the Chinese were hammering the wooden-bedroom-furniture market, they were positively killing the paper-on-particleboard sales. Why buy a printed product when you could now buy a wood one at the same price? Even the masses knew that much.

John Bassett closed the V-B/Williams plant in Sumter at the end of June 2004. To stop the hemorrhaging and keep the rest of his plants viable, he had no other choice. As he told a Sumter newspaper, “The government has determined China is cheating, but it’s coming too late to save our Sumter plant.”

Still, he worried about people like Roger Plock, a longtime maintenance man who couldn’t afford to retire and was still healthy and eager to work. Who was going to hire a sixty-four-year-old in Sumter, especially with a job market already flooded by the closing of two nearby automotive-supplier plants that had moved operations to Mexico?

Twelve years had passed since Ross Perot warned Americans about the “giant sucking sound” of NAFTA. But people now saw firsthand that the fallout from all those trade-policy acronyms written years ago in faraway Washington, Doha and Uruguay eventually trickled down to small towns like Sumter, South Carolina, and Bassett, Virginia.

Back in Galax, the muttering reached new heights. So did the questions. Sheila Key, John’s assistant, had to calm down nervous employees waiting to speak to him after their shifts. They wanted reassurances that the flagship Galax plant wasn’t going down next.

“He wasn’t sleeping at night,” Sheila told me. “You could tell by looking that it was weighing heavily.”

What happened next should have killed him. If you saw the photograph of his Lexus sedan, mangled from bumper to bumper, you’d wonder how he’d survived falling asleep on the Blue Ridge Parkway and crashing into a tree with only a sprained hand, bruising, and copious shards of glass embedded in his skin.

When he woke up moments after the impact, the airbags had all deployed. The first thing he noticed was the odor of cordite, the propellant that forced out the airbags, and it smelled exactly like hot shotgun shells. John Bassett was so tired and so embattled, so worried about angry retailers and legal fees and coalition members calling left and right, that it didn’t occur to him that he had fallen asleep during his morning commute.

He thought somebody was trying to kill him.