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Efficiency helps Vernon furniture factory keep its edge

For Sandberg Furniture, one of the state's oldest makers of home furnishings, survival is a matter of adaptability, says CEO John Sandberg, who represents the fourth generation of the family-owned company.

May 01, 2011|By Ronald D. White, Los Angeles Times
  • "In 2003, I discovered that I could import completed and boxed product for less than our material cost. I knew we were in trouble," recalls John Sandberg, CEO of Sandberg Furniture in Vernon.
"In 2003, I discovered that I could import completed and boxed product… (Liz O. Baylen, Los Angeles…)

One in a series of occasional articles.

The streets around John Sandberg's furniture factory are dotted with the shuttered shells of manufacturers that have closed down or left town.

But the Sandberg family, woodworkers for four generations, has found ways to keep Vernon-based Sandberg Furniture Co. going despite foreign competition, the nation's stiffest environmental laws and the housing industry collapse.

For one of the state's oldest furniture manufacturers, a maker of moderately priced bedroom furniture, survival is a matter of adaptability, Chief Executive John Sandberg said.

"We've had to be very efficient. We've become highly automated. We've had to cross-train our workers, in the factory and in the office," Sandberg, 46, said. "But we are very good at what we do, and that's why we are still here."

Companies like Sandberg Furniture remain vital to the Southern California economy, experts say. The five-county region has more manufacturing jobs (669,300) than most states, surpassed only by the entire state and Texas.

"Manufacturers in Southern California have managed to hold on during trying times, but it certainly has not been easy," said a recent report by the Los Angeles County Economic Development Corp., citing a 16.3% decline in local manufacturing jobs since 2006.

Few probably know that better than Sandberg, who has seen a 58.2% decline in furniture manufacturing employment from 2000 through the end of the decade in Southern California, a change to about 13,900 jobs from 33,200. That was the manufacturing sector's second-worst workforce contraction, after the computer industry, which declined by 65.6%. Employment at Sandberg Furniture has fallen to about 150 employees from about 450 several years ago.

The main threat to the recovery of the U.S. furniture manufacturing industry is foreign competition, particularly from China, according to many U.S. furniture businesses.

In October, Sandberg and other furniture makers went to Washington to argue against eliminating so-called anti-dumping fees levied against importers of Chinese-manufactured goods sold in the U.S. for less than fair market value.

"Imports from China jumped 148% from 2001 to 2003," said Joseph W. Dorn, a lawyer testifying on behalf of the furniture manufacturers. "The imports undersold domestic producers' prices in each and every quarterly price comparison. The U.S. producers' prices declined. So did their production and employment. The industry's operating income fell by 57%. Sixty-five plants closed."

U.S. importers have paid more than $500 million in retroactive anti-dumping duties since the system was implemented in 2005. Sandberg said that his share of the fees helped him stay in business.

"We made over $1.4 million in capital expenditures from fiscal 2004 to fiscal 2006, which is a considerable sum for a small company like us. Without the order, there is no question in my mind that Sandberg Furniture would already have been forced to close," he said.

But Sandberg Furniture's resilience has a long history.

The business was established in 1890 in Minnesota as Acme Furniture Manufacturing Co. by Sandberg's great-grandfather Martin. In 1900, the family moved to California, and its main products were wooden crates and woven baskets to haul groceries and supplies at a time when there were no checkout lines or baggers.

The business boomed. "Then some guy invented the paper bag — oh, and the automobile too," Sandberg quipped.

In 1918, the family decided to focus on bedroom furniture on the simple logic that there was usually more of it than anything else in a typical family home.

"One dining room. One living room, but there's often more than one bedroom," Sandberg said, explaining the family's reasoning.

Martin Sandberg passed the business to his son, Arthur, who passed the business to his son, Albert. Next, John's older brother Bill ran things until his death in 1999 at age 46. Now, a fifth generation is waiting in the wings, including John's 28-year-old nephew, Scott, who is earning an MBA at USC.

Sandberg is well acquainted with the challenges of following so many skilled woodworkers in his family, as he learned in his very first shop class, where he thought things would come to him a lot more easily than they did.

"My first assignment was squaring and chamfering a block of wood. I failed it and had to do it over again," Sandberg recalled with a grin. "My family used to say that sawdust runs in our blood, but at that point I wasn't so sure."

Before long, however, Sandberg was so good that he was chosen as a teacher's assistant for the class.

It's a determination that still serves Sandberg well; his company has faced an almost endless number of challenges since 1985. That was a period in which the Southern California furniture industry was a giant, $1.3-billion-a-year business employing more than 60,000 workers. But things were changing rapidly.

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