Globalization Comes to Mebane, North Carolina
Dec 23, 2018
By Rob Williams
The only constant in modern economics is change. Closing: The Life and Death of an American Factory is a story about the closure of White Furniture Company in Mebane, NC but also serves as a microcosm for the greater U.S. furniture industry. Bill Bamberger and Cathy N. Davidson chose to take an up-close look at one factory, in one industry, in one town. Together, they combine to humanize the story so that the average American can understand the decline of the furniture industry as a new global economy takes root. Many people choose to see a victim in this story. However, the data suggests that what happened in Mebane is simply part of life. Business ebbs and flows like a river in time, and globalization had come to North Carolina.
Both founded in 1881, White Furniture Company was as integral and vital to Mebane as any central business in any small American town. The factory and the town had been synonymous since birth, and this is illustrated perfectly on page 59 in a photo depicting workers walking home at the end of the day. It seems rare nowadays to find any workers walking to and from factory work, and this demonstrates the physical and literal closeness the factory had to the community. According to Davidson, “Nearly one in twenty residents of Mebane worked at White’s, and virtually everyone knew someone who did. White’s generated much of the town’s economy and regulated the rhythms of the town.” This factory was the heart, and any significant change to the facility would affect the entire town. Unfortunately, the state of North Carolina would experience a monumental economic shift. As early as 1970, one-third of the North Carolina workforce was in the manufacturing industry. By 2005 that number fell to one-sixth, while the service sector doubled. Davidson adds that the furniture market saw imports rise from four to twenty percent of the market during the 1980s. Economist Robert Lacy explains further, “Rapid growth of the furniture industry in China and a surge in exports from that country to the United States, in particular, have contributed to plant closings and consolidation of operations.” White Furniture Company was not the only factory affected, but because its closing occurred at the onset of this new era, it subsequently serves as a warning about the effects of globalization.
Globalization, loosely defined, is an increased global economy due to free trade policies opening more trade partners to all nations. According to journalist Beth Macy, leading experts at the time predicted that this new world economy would benefit the American worker; assuming that U.S. goods could now be sold in foreign markets, specifically the growing Chinese middle class. Unfortunately, the predictions were incorrect, and Chinese companies began undercutting their American rivals (Macy). The difference in labor costs is staggering; Lacy explains that “the average wage of furniture production workers in China is about 4% of that of furniture workers in the United States.” Moreover, making high-quality furniture is not a cheap endeavor, and the White Furniture Company prided itself on having stylish pieces. Former CEO Steve White once told a reporter in 1981 that “….Our furniture is not for everybody. It wouldn’t fit everybody’s bedroom. Ours is very high-styled. It’s expensive. It has to be.” White used high-quality materials and employed a process that kept a hand-made feel to its furniture, both of which incur much higher costs than their Chinese rivals. Cheap imported products began to hit the market during the 1980s and 1990s due to a reduction in trade barriers, more affordable transport of goods (both raw and finished), and containerization. These simple factors made furniture readily available all over the nation at a fraction of the cost. The effects of globalization were taking their toll on the U.S. furniture market.
Bamberger and Davidson depict an immensely dedicated company with equally loyal employees that fostered an incredible sense of community and camaraderie within its walls. By the end of the nineteenth century, furniture powerhouses began to spring up throughout the American south, particularly the Piedmont region of North Carolina and Virginia. This coincides with the founding of White’s. The south remained the primary manufacturer of furniture for about a century and during that time the White Furniture Company was an integral cog in that machine. The feelings of loyalty and community are on display the moment the reader picks up the book and gazes upon the cover. Bamberger chooses to adorn the cover with a photograph of the vast emptiness of the factory after closing. Within this picture is a lone worker, perhaps the last man to work at the plant, meticulously cleaning his workspace- despite the impending closure and real possibility that nobody will ever appreciate his final work. Unfortunately, the company struggled to keep up as the economy shifted and their seemingly unmatched loyalty turned out to be no match for the global economy that was unfolding around them.
The opening series culminates with another photo of this man, Avery, staring into his empty, now clean, work space. He is seemingly taking it all in one last time before leaving. The company was so well loved by its workers that, according to James Gilland, “no one quit, no one was ever laid off, the only job openings at White’s resulted from death or a retirement.” Gilland speaks to just how family-oriented White’s Furniture Company truly was. Here was a company built upon the values of trust, loyalty, and respect. White’s was the type of company with which the town of Mebane was justifiably proud to be associated. White Furniture Company was not the kind of company one would expect to outsource just to keep the family name alive and dollars flowing in. They certainly didn’t seem to have the stomach for the cutthroat world of global business.
The basic principles of globalization are nothing new. The furniture industry always seems to follow the path of cheap labor, and as such, change is a fact of life. What is new, however, is the ability to move products across oceans efficiently and quickly and this allows new markets to emerge across the ocean where labor is cheaper. The American furniture industry began in the cities of New England in the first half of the nineteenth century. As labor costs increased during the latter part of that century, the south, with its cheap labor, became the preeminent location for furniture manufacturing by the end of the 19th century. After the founding of White Furniture during that time, it became well known for its quality and craftsmanship. But as the American economy changed, and labor costs grew, the overall cost of manufacturing furniture rose with it, and so then would the prices. If the manufacturing industry follows the path of least resistance in the name of higher profit margins, this means whoever has the least expensive labor will see the largest profit.
Throughout the 1980s and 1990s, cheap labor became increasingly more accessible throughout the world (particularly Asia), and businesses in the United States were scrambling to remain competitive. Be that through modernization, systems improvement, or even using cheaper raw materials; it usually resulted in drastic attempts to slash labor costs. One such company was the Bassett Furniture Company of Bassett, Virginia. As the global economy shifted, Bassett turned to outsourcing their products and now sells imported furniture in their stores under the Bassett name. These products are made in “lower-wage factories” in China and Southeast Asia. A company that once employed ten thousand people now only employs about fifteen hundred workers. White Furniture Company was a small, family-owned business that only employed 203 people in Mebane at the time of the plants closing. Outsourcing simply wasn’t viable for such a small company that prided itself on the manner in which it treated its employees.
Receiving their papers (Bamberger and Davidson pages 94–95)
Mr. Martin Eakes proposed an “employee stock ownership plan” in 1985. Statistically speaking, this may have only delayed the inevitable, as it’s hard to envision such a small company being able to survive during that time. Because of this, the buyout by Hickory gave the workers seven more years of meaningful employment that may not have happened if the stock ownership purchase had occurred. It is a very simple dynamic that led to the closing of the White Furniture Company: high manufacturing and labor costs resulted in high prices for consumers. When presented with cheaper, marginally less desirable options, the customer chose to save their money and thus purchase an imported piece of furniture. Before the buyout by Hickory, the statistics showed growth in the international furniture market and a decline in the domestic market. Therefore, White’s leadership had choices to make: modernization of their equipment, a more efficient system, or even a reduction of overhead cost from raw materials and labor. White Furniture Company had always been on the forefront of technology, becoming one of the first southern furniture makers to use electric powered machinery. The company could have also chosen to try and outsource to follow the path of Basset Furniture. The costs of modernization or outsourcing did not seem to outweigh the potential profit.
“Robert” (Bamberger and Davidson, page 211)
Ultimately, the purpose of a business is to make money. Shareholders want to earn money and do not care about loyalty or other people’s jobs. A sad but true reality of the global economy. Anytime a business closes, sadness will ensue, and Bamberger does well to expose the feelings of sorrow, disbelief, and loss of identity felt in those affected by the plants closing. His work allows the reader to feel the community tear apart as each photograph passes. One such photo shows workers sitting with their pension papers. From right to left, are four different men with four different expressions: the first is staring intently at his pension, seemingly reading every last word; the second man is reading it while hunched over in a more relaxed posture, perhaps accepting of his fate and not willing to make much fuss about it, possibly feeling ready for retirement; the third, Peanut, seems a bit younger than the rest, has apparently finished looking at his own and looks to be reading over the shoulder of the older man on his left, perhaps comparing pensions; the fourth, Robert, has rolled his papers into his fists, staring dejectedly out through the window, pondering his future after losing the only job he probably had. As the book comes to an end, on page 211, Robert looks just as dejected and downtrodden here as he did in the pension photograph. His eyes are looking down, almost as if he can’t bear to face the camera from the shame he feels at no longer having his identity. Fortunately, Mebane continues to reinvent itself in the post-White’s era through renewed investment as a bedroom community for commuters to the technological hub that is the Raleigh, Durham, Chapel Hill metro area. The old White’s Furniture Company building has been labeled with a historical marker and is currently being converted to loft style apartments and shops.
Globalization connects the world in ways never before dreamed. However, small family-owned corporations like White’s simply do not have the resources or forward thought to take advantage of this new reality. White Furniture Company was a proud organization, perhaps too proud to fundamentally change, and ultimately approved the buyout to the tune of $5.1 million. Hickory attempted some modernization and cost saving measures, but at that point, it was too little, too late. The Mebane plant would never recover; an unfortunate end to an iconic southern furniture maker that marked the beginning of the decline of American dominance in the furniture industry.
Mebane Mayor Glendel Stephensen at the unveiling of a historical marker at the old factory Dec 8, 2016 (Mantilla and Groves)
Bamberger, Bill and Cathy Davidson. Closing: The Life and Death of an American Factory. New York, NY: W.W. Norton & Company, Inc., 1998. Print.
Drayse, Mark H. “Globalization and Regional Change in the U.S. Furniture Industry.” Growth and Change 39.2 (2008): 252–282. Print.
Lacy, Robert L. “Whither North Carolina Manufacturing?” Working Paper Series 04.07 (2004): 1–21. richmondfed.org. Web https://www.richmondfed.org/~/media/richmondfedorg/publications/research/working_papers/2004/pdf/wp04-7.pdf
Macy, Beth. “The Decline of an American Furniture Maker.” newyorker.com. The New Yorker, 10 July 2014. Web. 7 July 2017. https://www.newyorker.com/business/currency/the-decline-of-an-american-furniture-maker
Mantilla, S., & Groves, I. (2016, August 12). White Lofts, once White Furniture factory, gets historic marker. The Times News. Retrieved from http://www.thetimesnews.com/news/20161208/white-lofts-once-white-furniture-factory-gets-historic-marker.
Walden, Michael L. “North Carolina’s Economy in the Latter 20th Century: Change and Challenge .” Institute for Emerging Issues. NC State University, Mar. 2010. Web. 7 July 2017. https://iei.ncsu.edu/wp-content/uploads/2013/02/Walden-Economic-Trends.pdf