Company’s revival in U.S. has meaning worldwide
Cost advantage of taking jobs overseas is shrinking
Sunday, April 8, 2012
LINCOLNTON, N.C. -- When Bruce Cochrane’s family furniture company became an empty factory, he wouldn’t drive by the building near his home. There were just too many memories of what he was sure would never be again.
Five generations of Cochranes had made furniture, starting with his great-great-grandfather, William, who built church pews in the 1850s. By the mid-1990s, though, the proud family tradition appeared to be at an end. Like so many other American industries, the furniture trade was moving to China, land of cheap labor.
Cochrane headed there, too, consulting with Chinese furniture makers. Back in North Carolina, he saw globalization taking its toll. First, fewer and fewer workers in the plants. Then, shuttered factories. But it took a while to grasp the scope of the loss.
“I didn’t give that a lot of thought at the time,” Cochrane says. “I was making so much money that I did not really dwell on the implications of what I was doing, of what other people were doing. … Later on, I saw how sad it was to see a $50 billion industry move offshore and all the thousands and thousands of jobs that were lost. And I was part of it.”
“That,” he says, “probably bothered me more than anything -- seeing the jobs go away.”
More than three years after the factory closed its doors, Cochrane reopened them for a new venture, Lincolnton Furniture Co. This year, a small workforce of about 55 -- including several who’d toiled for his late father under the same roof -- built the company’s first bedroom and dining room pieces, shipping them with a flag-decorated “Made in America” tag.
Lincolnton is part of a small but growing trend, “reshoring” -- a reverse migration of U.S. manufacturers from the Far East (mostly China) to West. With labor and shipping costs rising in China, it makes economic sense to move some (or all) manufacturing back.
Cochrane knows he’s doing something risky, that some folks think he’s a bit crazy and believe the furniture business in the U.S. is mostly gone. He’s confident, though, this is a smart move, and not just because it feels good -- which, by the way, it does.
“To do something like this has to be a business decision,” he says, “but it is emotional and it is sentimental to be able to come back and make something again and to impact people in such a positive way.”
What happens in the cavernous factory on Cochrane Road could bring economic security to workers in a state that, by one estimate, has hemorrhaged tens of thousands of jobs to China in the last decade.
But what happens here could also offer larger lessons about U.S. workers in a global market, the appetite for American-made goods and the future of an industry decimated by foreign competition.
Bruce Cochrane was in China when he first began thinking about reviving the family’s business three years ago.
Over a decade of consulting, he’d witnessed dramatic changes in China’s economy. Manufacturing workers’ wages -- 58 cents an hour, on average, in 2001 -- were approaching $3. The once-abundant labor supply was drying up. Shipping costs were higher because of rising fuel costs. Quality was suffering because of high turnover. It could take three or more months to get a piece of furniture after it was ordered -- compared with 30 days or less in the U.S. The clear-cut advantages of manufacturing in China were disappearing.
A father’s word
Bruce Cochrane started learning the furniture trade as a teen. He worked with his father, Theo -- also known as Sonny -- who ran the company with his brother, Jerry.
“He always instilled in me that it was OK to take chances,” Cochrane says. “He’d always say, ‘If you aren’t fishing, you aren’t catching anything.’”
Cochrane remembered those words when trying to decide whether to take the plunge. “I actually had a dream of him telling me that and he was in his fishing gear. At that point, I said, ‘Yep, I’m going to do it.’”
That decision came more than a decade after the Cochranes got out of the business. In 1997, the family sold the company to another U.S. manufacturer; the factory remained open and the workers continued to make furniture with the Cochrane name. Over the years, though, more and more work was done in China. The plant finally closed in late 2008, the building was sold and the equipment auctioned off.
Cochrane carefully developed a business plan, and by 2011, he was ready -- thanks, in part, to financing from a local bank. The president turned out to be a former company worker.
Starting over, Cochrane also looked to the past, recruiting former company workers.
When he phoned the first two -- both weren’t working -- he heard doubt in their voices.
“Both of them said, ‘I don’t think I can do that anymore,”’ he recalls. “They had lost their confidence. It (joblessness) puts people in such despair. They think there’s something wrong with them rather than the circumstances.”
Karen Padgett was one of those first calls. She’d worked her way up from the shipping department to human resources manager, spending 35 years with Cochrane and its successor. When the factory closed, Padgett was adrift.
She was in her 50s, jobs were scarce and a lifetime of working with folks who’d become good friends was suddenly gone.
“It was such a loss,” she says. “If you have a death in the family, you feel like you just can’t pick up and go forward. That’s how I felt. … I knew I needed to work. I knew I was still vital enough to do something, but I didn’t know what I would do.”
Padgett is now on the other end of the job search, fielding calls and conducting interviews. She’s received about 1,400 applications for what eventually will be about 130 jobs. (Starting salaries range from $9 to $16 an hour.)
North Carolina lost nearly 60 percent of its furniture jobs from 1999 to 2010, as the percentage of imported furniture sold in the U.S. doubled.
It was so traumatic that when Cochrane asked Pat Hendrick to return as purchasing manager, she was thrilled but had one question: “‘Will you be importing anything?’ I didn’t want to be involved with anything like that,” she says, “because that’s how I lost my job.”
In January, Lincolnton’s first piece of furniture -- a cherry-wood nightstand -- came off the line. All the workers signed it.
That same month, Bruce Cochrane sat in the first lady’s box at the State of the Union speech, where President Barack Obama spoke of a manufacturing renaissance. (For the record, Cochrane says he’s never voted for a Democratic president.)
Cochrane thinks there’s an appetite for U.S.-produced goods. He attaches a “Made in America” tag to each piece of his company’s furniture, with a message: “We take immeasurable pride in the fact that our furnishings are made of select solid American hardwoods,” and his name.
Bud Boyles, owner of the Carolina Furniture Mart in Lincolnton (where the nightstand is displayed), senses a similar mood.
“Timing is everything and he’s definitely got the timing right now,” Boyles says. “It might be a hard first year for him but people are saying, `We’re going to have to take a look at what we’re doing. We have to go back to our roots and help our neighbors.””
Within three years, Cochrane hopes to do $25 million in business a year. For now, he’s determined to prove the naysayers wrong.
“People in this industry still don’t believe this can be done,” he says. “I don’t have any doubt at all.”