Chapter 4
Reinvention in Galax: Building Vaughan-Bassett
John Bassett III approached turning around Vaughan-Bassett with the same persistence and cunning he used when training his hunting dogs. When he arrived in 1983, he faced a struggling company with $28 million in annual sales, $200,000 in losses, antiquated machinery, poor quality, and unpaid bills. Many retailers had dropped their line completely.
Undeterred, JBIII invested $317,000 of his personal money to pay company bills, negotiated new supplier contracts, bought lumber in bulk, and loaned the company money for new machinery-eventually saddling it with $18 million in debt. Unlike the cautious Galax furniture families who "lived out of the business" but "didn't drive the damn thing to the best it could be," John took risks.
To demonstrate his commitment, John moved his desk from the offices to the center of the machine room between the rough end and finishing department. He wanted all 1,500 workers to know he was watching them, examining every number and component traversing the conveyor line. Employees were terrified of him initially, but industry insiders recognized his potential.
JBIII recruited his former superintendent Duke Taylor-a difficult but brilliant furniture maker who was "fanatical about accuracy" and "could make furniture out of Popsicle sticks if he had to and still make money." Together they faced a factory operating only half-time with slow orders. He also brought in Linda McMillian, a brilliant but eccentric product engineer with a photographic memory. To prove Linda's worth, John and Duke initially paid her out of their own pockets until Buck Higgins relented and put her on payroll.
When JBIII wanted to accelerate growth, he created a subsidiary in Sumter, South Carolina-V-B/Williams. He purchased the bankrupt Williams Furniture Company for just $4 million, structuring it as a three-way venture between his family company, Vaughan-Bassett, and local Sumter investors-a strategic move to gain community support. The factory specialized in "glit" furniture-paper designs glued onto particleboard-and became profitable within 60 days by targeting low-income consumers through retailers like Heilig-Meyers.
John's eccentric management style combined blue-collar sensibilities with elite business acumen. Despite his wealth, he connected remarkably well with factory workers while displaying comical blind spots about everyday financial realities-once advising his plant manager to simply demand lower mortgage interest rates. His casual appearance (sweat-stained golf cap, tattered sweater vest) belied his status, though workers always knew he was boss.
By the time John merged V-B/Williams with Vaughan-Bassett in 1998, the Sumter plant was valued at $33 million. Meanwhile, Pat Bassett's legendary High Point Market parties helped quadruple company sales to $79 million within five years of John's arrival. More concerning, however, was the arrival of solid wood furniture from China priced competitively with their cheapest products.
Chapter 5
The Asian Invasion: Furniture Goes Global
By the late 1980s, the American furniture industry was changing dramatically. Larry Moh demonstrated exceptional cultural intelligence in his Asian furniture manufacturing operations, strategically organizing his multicultural workforce based on ethnicity and skills: Indians handled finishing work, Malaysians processed rough lumber, and Chinese workers performed intricate carving and veneer work.
Moh became the first Asian to successfully export furniture from Asia to Middle America, beating American manufacturers with products visually identical to Bassett's but 20-30% cheaper. Ironically, American companies taught him exactly how to compete with them. By 1986, imports had caused seventeen American furniture factories to close as dining room furniture became the next category to fall to Asian competition after occasional tables.
As John Bassett left Bassett Furniture for Galax, he sensed the ground shifting beneath the entire industry. If his small factory stood any chance of surviving against the coming wave of Communist government-backed competitors, everything about it would have to change.
Meanwhile, Bassett Furniture was experiencing internal turmoil. CEO Bob Spilman, nearing retirement and criticized for serving on numerous corporate boards while company performance declined, faced pressure from shareholders. By 1997, with the company sliding to seventh place among American manufacturers and showing no real growth since 1992, Spilman was forced to step down. His son Rob was named president and COO, but the board brought in outsider Paul Fulton, a former Sara Lee executive, as CEO-the first non-family member to hold the position.
Fulton embraced a "blended strategy" combining manufacturing and imports while capitalizing on Bassett's rare brand recognition. The company recruited retail consultant J'Amy Owens, who bluntly characterized Bassett's leadership as "backwoods Neanderthals" out of touch with their primarily female customers. The stores were reimagined with warm colors, "idea coordinators" instead of designers, and a female-focused approach that earned national design awards.
As Bassett pivoted toward retail, manufacturing suffered. Between 1997-2000, Bassett went from operating 42 factories to just 14, with the company reporting $19.6 million in losses on $446.9 million in sales in 1997. Rob maintained that opening stores was meant to "help save the factories," but the strategy alienated thousands of small dealers who'd sold Bassett for decades.
Chapter 6
The Chinese Challenge: Confronting Unfair Trade
In 2001, John Bassett discovered a Chinese-made Louis Philippe bedroom suite from Dalian selling wholesale for just $400-half the price of Vaughan-Bassett's comparable product. When Wyatt Bassett first saw the catalog, he initially dismissed it as an unsustainable loss leader, but the Chinese imports continued, contributing to a 121% rise in Chinese furniture imports between 2000-2002.
John purchased the suite and had his engineers deconstruct it, finding different construction methods and even better quality glue than American EPA-compliant versions. Determined not to close his factory, he rallied his workers to increase productivity and suggest improvements. He implemented the "Thunder and Lightning" incentive program, with a cherry-red Harley-Davidson motorcycle as the grand prize and a high-end Browning shotgun as runner-up. Employees who met weekly goals for attendance, production and safety earned tokens for a year-end lottery drawing.
By 2001, American furniture manufacturers were in dire straits. Vaughan-Bassett's sales had dropped nearly 10%, while competitors faced even steeper declines. Dozens of factories closed, including the J.D. Bassett factory where John had first worked as plant manager. With China joining the WTO and establishing most-favored-nation status, John realized the "Asian invasion" would become his war.
John launched Vaughan Bassett Express (VBX), an unprecedented seven-day factory-to-store delivery model to exploit China's biggest disadvantage: the six-week shipping time across the Pacific. The program required doubling inventory from $15 million to $30 million, spending $10 million on warehouses, and completely restructuring operations. VBX succeeded in attracting retailers who couldn't afford container shipments and appreciated the reduced inventory risk.
In September 2002, John sent his son Wyatt to Dalian to locate the specific factory making the cheap dresser that threatened their business. After days of searching, they found Dalian Huafeng Furniture Company in Zhuanghe, near the North Korean border. The primitive factory employed 800 workers in an unheated cinder-block building. More alarming was what the sales manager showed them next-a massive construction site where owner He YunFeng was building an "American Furniture Industrial Park" with capacity to ship 5,000 containers monthly.
When John Bassett traveled to Dalian to meet He YunFeng, the Communist Party official boldly revealed his plan to become the world's number one furniture maker by selling Louis Philippe bedroom suites at $100-what he called "tuition price" to capture market share. YunFeng even suggested John close all three Vaughan-Bassett factories and put his business entirely in Chinese hands. Back home, John immediately called his lawyer to begin planning his counterattack.
Chapter 7
Taking on China: The Antidumping Petition
With cost-cutting and celebrity endorsements failing to stem the tide of imports, John Bassett considered something unprecedented for the lifelong Republican: turning to the government for help. Trade lawyer Joe Dorn explained that under the Tariff Act of 1930, they could petition the Commerce Department to investigate Chinese factories for "dumping"-selling exports at artificially low prices to drive domestic producers out of business.
JBIII faced the daunting challenge of assembling a majority of the furniture industry to support his antidumping petition against China. This meant convincing manufacturers-many already investing heavily in Asian supply chains-to join his American Furniture Manufacturers Committee for Legal Trade. Opposition came swiftly: retail giants formed the Furniture Retailers of America, threatening to boycott manufacturers who joined Bassett's coalition. Fifty-three law firms lined up against them, painting coalition members as protectionists rather than job-savers.
By mid-2003, John had convinced fifteen factory heads to join his coalition, including family-connected companies like Bassett Furniture, Stanley, Vaughan, and Hooker. But the pressure from retailers and Asian suppliers quickly caused defections. Hooker Furniture withdrew after its five largest customers "expressed displeasure" and concerns about jeopardizing relationships with Asian partners who now provided 50% of their furniture.
In August 2003, with wooden bedroom imports up 54% in just the first half of the year and over forty North Carolina furniture factories already shuttered, JBIII gathered 450 industry colleagues in Greensboro to raise the $1.5 million needed to fund their legal battle. When one supplier worried about alienating Chinese customers, John pointed to the American flag behind the podium: "Because you're an American, that's why. Ladies and gentlemen, you were given your freedom, and you owe something to your country."
For years following, JBIII took his patriotic campaign everywhere-from Rotary Clubs to congressional hearings. In testimony before the House Ways and Means Subcommittee, he memorably compared unfairly priced Chinese furniture to his hometown's illegal moonshine. "Every time he testified, he was completely undeferential," Congressman Boucher recalled. "He was very direct and absolutely unintimidated. When he got in front of a subcommittee, it was magic."
The ITC hearing became a bitter showdown that shattered the industry's traditional good-old-boy camaraderie. Trade lawyer John Greenwald, representing Chinese manufacturers, accused the petitioners of fraud, playing a damning voicemail from a La-Z-Boy subsidiary promising retailers Vietnamese-sourced furniture to circumvent potential duties. The opposition portrayed domestic manufacturers as hypocrites who imported furniture themselves while attacking others for doing so. Despite these attacks, Joe Dorn countered effectively, and the preliminary ruling unanimously favored the coalition, finding that domestic manufacturers had indeed been injured by dumping.
Chapter 8
The Human Cost of Globalization
Between 2001 and 2012, America lost 63,300 factories and five million manufacturing jobs, while China gained 14.1 million new manufacturing positions. This wasn't a sudden collapse but a slow-motion disaster that gradually faded from media attention despite persistently high unemployment rates.
In Martinsville and Bassett, where the Families had historically fought against economic diversification to keep wages low, unemployment remained devastatingly high. The region that once boasted 42,560 jobs now had just 24,733, with unemployment hovering between 15-20 percent. One in three families received food stamps, and three of four public school students qualified for free or reduced-rate lunches.
The human toll was devastating. Former workers like Samuel Watkins went from earning $13.90 hourly to mowing lawns for $8.50 with no health coverage, maxing out credit cards for dental work. The desperation had reached such levels that thieves had stolen brass and bronze from J.D. Bassett's mausoleum and copper downspouts from mansions. As MIT professor David Autor noted, "The people who argue that trade is just great for everyone, that argument is inaccurate." The bitter truth was that globalization's heaviest burden fell on America's working class.
Some companies handled closures more sensitively than others. Hooker Furniture's chairman tearfully looked each worker in the eye when closing their Martinsville plant, even documenting the final shipment in a film called "With These Hands." By contrast, American of Martinsville closed without warning, leaving workers to discover locked doors and lost vacation pay.
For workers like Minnie Wilson and Maxine Brown, the factory closures devastated their lives and community. Wilson bounced between closing factories before finally finding part-time work handing out samples at Walmart after three years of unemployment. When Superior Lines burned down in 2012, former workers gathered to watch, many feeling like they were losing a friend. "It hurt like a friend passed away," said Maxine Brown. "You had worked for thirty-some years with your friends in that building and now, poof, it's gone."
Chapter 9
Victory and Aftermath: The Last Factory Standing
The settlement payment system that emerged from the antidumping case remained controversial. While coalition members defended settlements as the best method to ensure the worst dumpers got audited, opponents called them "clever shakedowns" and "an extortion racket." Despite these criticisms, the ITC voted unanimously in the coalition's favor during the 2010 sunset review, with Joe Dorn proving that Chinese dumping continued and would injure domestic industry if the order disappeared.
The antidumping petition had unintended consequences. It shifted massive production from China to other Asian countries, particularly Vietnam, and created a lucrative "money machine" for law firm King and Spalding. While it saved a handful of privately held American companies like Bassett's from closure, many critics believed public furniture companies cared only about their stock prices.
Most mainstream economists criticized the antidumping duties as harmful to consumers, particularly the poor. Harvard's N. Gregory Mankiw and Oregon's Bruce Blonigen argued that protecting "archaic" industries like furniture manufacturing wasn't worth the higher prices Americans paid. Gary Hufbauer calculated that each factory job saved cost $800,000 in duties. However, MIT professor David Autor offered a counterpoint, noting that while trade benefits were "shallow and widespread," the disadvantages were "concentrated and long-term" for displaced workers.
The furniture case generated an estimated fifty to sixty million dollars in legal fees across both sides. The investment proved worthwhile-coalition companies received $292 million in antidumping duties, and Chinese wooden bedroom furniture imports declined more than 70% from $1.85 billion in 2006 to $538 million by 2013. Three-quarters of reviewed Chinese companies received duties higher than the initial 7.24%, confirming JBIII's suspicions of widespread cheating.
Vaughan-Bassett invested $23 million in new plant equipment, contributed 10% to employee profit-sharing, and established a free health clinic for workers' families. The money saved approximately seven hundred jobs in Galax, helping preserve the town itself. It enabled Vaughan-Bassett to rise from outside the top five wooden bedroom furniture producers to number one in the country.
In 2006, John Bassett tackled rising healthcare costs by creating the Vaughan-Bassett Free Clinic. For $350,000 annually, the company provided free medical care without deductibles or co-pays to employees and their families. The initiative dramatically reduced healthcare costs as workers received preventive care instead of expensive emergency treatments. Despite nationwide insurance increases of 12-20% annually, Vaughan-Bassett's $1.45 million healthcare spending remained flat.
A decade after challenging Chinese imports, Vaughan-Bassett remained viable while other American furniture makers collapsed. The company had made $25 million in profits in 2012, matching what it had received in Byrd Amendment funds, with shareholder equity of $114.5 million. At 75, Bassett continued personally drumming up business across the country, believing "there's nothing that can replace somebody with the name Bassett sitting in front of you."
While economists and Chinese competitors protested, John Bassett remained resolute: "Our critics have never had to stand in front of five hundred people, like I have, and tell 'em they're not gonna have a job. And watch women cry because they don't know what's gonna happen to their families or how they're gonna feed their children."
