There’s a lot of talk these days about bringing manufacturing back home to the United States, and the conversation is particularly active in the home furnishings industry, where big companies and startups alike are contemplating resurrecting domestic production. But for one segment of the home business, there’s no chatter about re-shoring the business—and not because it’s not going to happen, but because production never really left in the first place.
While there are certainly a fair number of area and bath rugs produced overseas in China, India, Pakistan, Turkey and other pockets around the world, most of the carpeting and a large percentage of the rugs sold in the U.S. are, and have always been, made in the U.S. It’s one of the more curious anomalies of the home business, one that owes its existence to both a very unique product development story and the realities of global transportation.
The origin of the domestic tufted rug and carpet industry is a fascinating tale that depends on good old American ingenuity, geographical happenstance and a simple twist of fate. It starts back in the 1890s, near Dalton, Georgia, a small town in the northwestern corner of the state. There, a woman named Catherine Evans (later Catherine Evans Whitener) revived an old-time handicraft technique called tufting, which essentially took thick pieces of piled yarn and inserted them into a grid pattern that could be washed and then dyed or finished with a pattern. (As with many serendipitous events in history, there was nothing special about this part of the country in terms of natural resources or geography; it just happened to be where she lived.)
At first, home workers who created these products focused on bedspreads. They called them “chenilles,” after the French word caterpillar. (It’s a little difficult to understand how simple home sewers in rural Georgia came to use a French term for their product, but that’s not a mystery we’ll solve here.) Chenille bedspreads were all the rage for the first part of the 20th century. Then, somewhere along the line, somebody got the idea that this tufting process could be used for more than just bedspreads, and small tufted rugs began to come out of those same Georgia workrooms. By the time America began its great postwar suburban push, rug production started outnumbering bedspread production; soon, the tufting process was automated and moved out of households and into large manufacturing facilities nearby. The American tufted rug industry was created.
Pretty soon, these companies realized they could also tuft much larger products—namely wall-to-wall carpeting. As the housing boom created demand for carpeting across the newly formed suburbs, the towns of Dalton, Calhoun and others in this corner of Georgia became the de facto center of the business. But unlike other regional manufacturing areas—Michigan or upstate New York (and later the Carolinas) for furniture, New England (and later the Southeast) for home textiles, or even towns like Corning or Oneida in New York for tabletop—the tufted rug business has remained in Georgia. That’s where the second factor that has kept so much of this business domestic kicks in: Soft floor coverings in general, and especially carpeting, are large, relatively bulky—and they aren’t terribly expensive.
In an age where fitting as much product into a 40-foot shipping container and then spreading the cost of that container out over its individual contents was the norm for global sourcing, carpet and rugs were a terrible value proposition when you started to do the math. You couldn’t fit that many giant rolls of carpet into a container, and at a couple of bucks a square foot at retail, it was hard to tack on the shipping costs and stay competitive. Taken together with the manufacturing efficiencies the American producers had developed, the cost of cheap Asian labor was not enough to overcome the shipping costs. It was, however, a closer balance in smaller rugs, which is why the overseas suppliers for these products have had success in gaining market share over the years.
People in the home industry always used to say there were three specific product categories that would never lend themselves to an overseas sourcing model. One was carpeting; the other two were major appliances and mattresses, each for many of the same reasons—they’re all big, bulky products that are expensive per unit to transport and often make more sense to be manufactured closer to where they were sold. But interestingly, the walls are falling for both majors and mattresses. The big Chinese supplier Haier bought General Electric’s fabled major appliance business in 2016, and while the company continues to operate GE’s main facility—the so-called Appliance Park in Louisville, Kentucky—expectations are that more and more production will come out of China in the years ahead. For mattresses, the tipping point is coming with the onslaught of memory-foam bedding and the direct-to-consumer companies like Casper and Tuft & Needle that sell it. No longer limited to big, bulky box-spring and coil-type products, sellers can now get a whole lot of foam-type mattresses, often rolled up like burritos, into those shipping containers. The math is now very different—and very favorable.
So far, the wall-to-wall business—still called broadloom by old-timers—has held off the foreign market. This is partially due to the fact that two monster players, Mohawk and Shaw (the latter owned by Warren Buffet’s Berkshire Hathaway), dominate the marketplace. And while carpeting is on the downswing in consumer preferences these days, it has been replaced by hard floor coverings, both natural and synthetic—which, ironically, are often covered by rugs. (And further boosting the other sector of the soft floor covering business.)
It’s worth noting that none of the factors that have caused the domestic carpet and rug business to repel foreign manufacturers have anything to do with the current political climate. Modern manufacturing efficiencies, a skilled labor pool and the need for speed-to-market are much more relevant to the current conditions than any Made in America movement. Given global manufacturing trends, it stands to reason that perhaps the tide may swing to imported goods at some point down the road. But for the time being, carpets and rugs remain the outlier in the home furnishings business when it comes to domestic manufacturing. So the next time you’re in Atlanta, head an hour northwest to see one of the greatest historical sites in American business history. Who knows, you might still be able to pick up a pretty nice chenille bedspread too.