Vaughan-Bassett announces reopening of furniture plant in Galax

Vaughan-Bassett Furniture Co. officially shifted from surviving to thriving Thursday.

With the announcement of an $8 million expansion, including the purchase of a closed neighboring plant and adding at least new 50 jobs this year, Chairman John Bassett said the company is reaping the reward from believing in itself and its employees.

In a sign of Vaughan-Bassett's financial strength, it is paying for the expansion in cash.

"I know you can't compete with foreign competition unless we give you the best equipment that money can buy, and that's exactly what we're going to do," Bassett told a group of the company's first-shift workers. Vaughan-Bassett has a workforce of 650 in Galax and 45 at a parts plant in Elkin.

About $4.5 million is going toward new equipment and machinery upgrades. An additional $1.5 million was spent to buy a Webb Furniture Enterprises plant that closed in January 2006, eliminating 309 jobs. Vaughan-Bassett will begin operations there in March.

The company has pledged to create at least 115 jobs over three years.

In return, the manufacturer is eligible for $56,250 in incentives from the city of Galax, $200,000 from the Virginia Tobacco Region Opportunity Fund and $75,000 from the Virginia Jobs Investment program for worker training.

The company said that when the expansion is completed in July, it will have bolstered its production capacity by nearly 50 percent at a time when its sales are up 20 percent.

"We need this expansion because we are growing quickly, and we have reached full capacity in our Galax factory," said Wyatt Bassett, president and chief executive of Vaughan-Bassett. For example, dresser production was humming down the assembly line at one piece every 20 to 30 seconds.

It's a source of great company and community pride that Vaughan-Bassett is the largest U.S. manufacturer of wooden bedroom furniture, with $84 million in sales last year.

About 98 percent of its product is made in Galax, whereas most of the company's U.S. competitors jumped on the lower-cost offshore bandwagon wholly or in large part over the past 10 years only to experience a sales and revenue decline.

Galax Mayor C.M. Mitchell said Vaughan-Bassett's expansion "shows their confidence in the ability of our workforce to produce an excellent product. This is a great company with historic ties to Galax, and we look forward to their continued success in our community."

The expansion also is a testament to John Bassett's passion and old-mule stubbornness, and the employees' ability to lower production costs. Both kept the company profitable long enough to benefit from the global cost scales tipping back in its favor the past 18 months.

Gary McKenzie, a 30-year industry veteran with Webb and Vaughan-Bassett, said he could feel the employees breathe a collective sigh of relief when John Bassett told them of the expansion.

Even though he knew Vaughan-Bassett was doing well, he said it was a little unnerving having the workers called together for meeting, given how many furniture plants have closed in North Carolina and Virginia over the past 11 years.

"The new jobs are great, but just gaining the security that this expansion will bring is a blessing in itself," McKenzie said.

"The people in this plant, and every U.S. plant, have wanted someone to stand up for them and their craftsmanship. John Bassett has done that, and I believe he will continue to do that."

John Bassett said years of competing against the Chinese have taught American manufacturers they "can't be willing to just react, but we have to act."

"In doing so, we have developed a business model that no Chinese manufacturer can beat on price, delivery and inventory."

For example, meeting the company's seven-day delivery pledge can be done because Vaughan-Bassett sources and makes the product internally.

"Most days, we can make and have ready for shipping an order within 24 hours," John Bassett said. "Because of that, retailers don't have to carry a lot of inventory, they get favorable financial terms and consumers get their order in seven days or less.

"Try getting that from an importer."

Vaughan-Bassett's expansion is the latest example of how the made-in-the-USA furniture movement is gaining traction.

Many consumers have either sought the lowest-cost product, viewing furniture as a disposable commodity, or weren't aware they had the domestic option anymore as lookalike wooden furniture from Asia dominated the bulk of retail showroom floors.

However, with shipping, raw material and labor costs rising in China, some domestic manufacturers are convinced the timing is right because of — not in spite of — the recession. John Bassett believes consumers are connecting the dots between local budget shortfalls and the decline in the property-tax base to lost manufacturing jobs and closed plants.

Even though it's rare to reopen a closed plant, the decision to buy the Webb plant is another example of the Bassetts' foresight, said Jerry Epperson, managing partner of Mann, Armistead and Epperson, a financial-services company in Richmond.

"Reopening this factory is a lot cheaper than trying to build a new factory today," Epperson said. "It shows they have the confidence to be ready when our economy recovers and the furniture sector resumes its growth."

Another blessing has been Vaughan-Bassett's profitability.

By staying independently owned, it has been able to resist shareholders' push for short-term profits at the risk of long-term harm to its financial strength and product quality.

"Every company has got to decide what they want to do," John Bassett said. "We were never convinced that staying domestic wouldn't work.

"We're manufacturers, with sawdust in our veins. We're not chief executives and chief financial officers who look at every dollar and say 'This won't work.'

"When we come across something that doesn't work, instead of giving up, we ask, 'How can we change to make it work?' " John Bassett said.

Bassett said while he appreciates President Barack Obama's efforts to encourage the bringing back of manufacturing jobs, "he forgot one thing, that the people in this room never left.

"We never stopped making furniture, and this day is further proof that we never will."