If you want to know what it takes to manufacture a product in the United States these days, just ask Fred Carl.
The founder, president and CEO of Viking Range, Carl virtually invented the market for half-ton, restaurant-sized stoves in the home, launching his company in the late 1980s, just as a cooking craze swept American kitchens. The company rode a second wave of demand in the early 2000s, when the easy-money housing boom sent homebuyers, builders and remodelers on a shopping spree for $10,000 trophy stoves.
Now, with lower-cost appliance makers invading Viking’s turf, new-home construction down some 70 percent from five years ago, and recession-weary homeowners hunkered down, Viking is fighting to maintain its foothold as an American manufacturer.
“We're at war right now with the economy, and I'm not in the foxhole,” Carl said in a recent interview. “I’m out there charging across the economic terrain trying to win this war. And we will.”
Orders are running about half their levels from the company's 2007 peak, according to company executives. The privately held company does not disclose financial information.
For Carl, the battle is personal. As a native of Greenwood, Miss., (Greenwood High School Class of 1966), Carl watched helplessly as the once-booming cotton industry declined in the 1970s when American textile manufacturing became one of the first and biggest casualties of globalization.
Located halfway between Memphis, Tenn., and Jackson, Miss., on the storied “City of New Orleans” rail line, Greenwood was the world's “cotton capital” for a century. Today, once-imposing, now abandoned antebellum bank buildings attest to the money that flowed through this city of 18,000 — and then retreated.
“Cotton and agriculture was the base of the economy in the Delta,” said Bill Litton, a John Deere tractor dealer in Greenwood. “It still is a large part of the base; you’ll never take that out of it. But Viking has brought stability into our local economy."
Company lore has it that, in the early 1980s, Carl’s wife wanted a stove like the one her grandmother cooked with. A fourth-generation building contractor, Carl searched appliance manufacturers and suppliers around the country for such a stove. When he couldn’t find one, he decided to make one.
That turned out to be harder than it looked. Commercial stoves were too big for the typical residential kitchen; without bulky firewalls, venting and insulation, the high temperatures they generate could burn down a house.
Carl spent six years developing prototypes, trying to convince appliance manufacturers there was a market for 48-inch, eight-burner stoves. He tried working with contract manufacturers and wasn’t happy with the results.
So he set up shop in Greenwood — in part to try to help reverse the economic slide he saw hitting his hometown.
“It was sad, and I think to some people it was scary,” he said. “The entire Mississippi Delta was struggling. Everyone realized we're in transition here, but what are we transitioning to? Cotton was gone, and cotton had been king for generations. So now what do we do?”
His timing proved impeccable. The launch of the company coincided with the rise of “cocooning” in the 1990s, as Americans spent more time at home and the center of gravity for many families moved to the kitchen. By the middle of the next decade, the housing boom created another wave of demand from aspirational home owners who had easy access to cheap mortgages and saw top-end Viking ranges as a “must-have” piece of home décor — even if they ordered take-out every night. Real estate agents and builders of upscale homes began touting the Viking name in their listings.
“You had home buyers with $1,000 bills hanging out of their pockets and they didn’t know where to put it,” said Michael Smith, vice president of purchasing at upscale home builder Toll Bros. “So they’d customize their kitchen. And they had to have top-end appliances.”
Those boom years were good to Viking. Today, the company occupies a dozen restored buildings on the banks of the Yazoo River, in the historic "cotton row" district downtown near the Cotton Row Club, where the city's remaining cotton brokers still gather.
But keeping the home fires burning is a lot tougher with the U.S. housing market mired in its deepest downturn since the Great Depression and consumers worried about their next paycheck.
Moving production offshore might boost profits, Carl said. But he’s as committed to staying in Greenwood as he was to his eight-year odyssey bringing 18,000 Btu burners to American kitchens.
“Allegiance is a big part of that, and by golly we are going to build in America no matter what,” he said. “We are going to work our brains out to make sure that we are able to do that and stay competitive. It's just extremely important to us. This is our product. It’s made by us right here in the Mississippi Delta and we plan on keeping it that way. That's just how we feel about that.”
Devotion to domestic manufacturing and allegiance to community only go so far. To maintain an edge in an increasingly crowded market niche, Viking is relying on the manufacturing philosophy pioneered by Japanese manufacturers like Toyota. A combination of worker involvement and a relentless drive to improve manufacturing efficiency are keeping Viking competitive, said Carl.
Viking's headquarters complex includes a 13,000-square-foot "training center" that looks like the set for Food Network show, complete with a kitchen showroom full of gleaming Viking appliances. The original range that Carl’s wife so admired, a Chambers, six-burner, two-oven, white enamel gas stove (the 90-C Special Deluxe model) occupies an honored space by the main entrance.
On the outskirts of town, the company operates a 230,000-square-foot factory for making stoves, along with another 153,000-square-foot facility refrigerator plant next door, a 95,000-square-foot plant for range hoods and vents and an 80,000-square-foot distribution center.
On a recent visit, forklifts zipped and honked their way through through the plant as if it were a Home Depot on a busy Saturday morning. Workers continually restocked the production line with parts and subassemblies — a handful of which are made in Mexico, China and Germany. When the process breaks down — a part is missing or a stove isn’t ready to move to the next station — workers stop the line and music begins blaring, alerting supervisors of a problem. Each line has its own tune; on this day, Wagner’s "Flight of the Valkyries" was in heavy rotation as that line worked out the kinks on a new model.
The relentless drive to improve efficiency — by getting those kinks out of the production process — is central to Viking’s plan to avoid moving manufacturing offshore. Dennis Cheshier, a manufacturing engineer, said the trick is to imagine the production line as a river and mentally “lower the water level.”
“When you do that, you see more rocks,” he said. “Those rocks impede the flow, so you want to get rid of them.”
Carl and other Viking executives also credit the company’s ability to stay in Greenwood to a stable work force with devoted employees like Bridgette Matthews, a quality control inspector who also waitresses nights at Giardina’s, a Viking-owned restaurant in town.
“We know what we have to do in order to survive,” she said during a break on the production line. “We work hard. This is our livelihood, and we’re just not going to stand back and let it fail. We need it. And we're going to do whatever it takes to keep it right here.”
It also helps that Viking draws from a poll of workers accustomed to lower wages than in many other parts of the country. And it faces relatively little competition from other employers in the area. The median family income in Greenwood is $26,393 – a little more than half the national average, according to the latest Census data. The county's jobless rate was 12.2 percent in March, 2.5 points higher than the national average.
Still, Viking has had to lay off about a quarter of its work force since April, 2008 to a current level of about 1,000. The company looked for other places to cut: recycling paper, shrinking investment in new experimental designs and squeezing more out of every sheet of increasingly pricey stainless steel.
The recession also brought a reworked product line designed to cut production costs, along with scaled-back models at lower prices.
“(Consumers) are looking for more value for their dollar,” said Dan Lyvers, Viking’s vice president of engineering. “The idea is that we’ll provide a product that gets them started, and then as they learn and get more experienced with cooking they can grow into something more.”
Viking has also branched into the tourism business, with a multimillion-dollar renovation of The Alluvian, a 50-room luxury hotel and spa across the street from the flagship location of the company’s cooking school chain, which has 16 locations including franchises.
Mayor Carolyn MacAdams, one of Carl’s high school classmates, credits the Viking tourist attractions with helping to blunt the recession’s impact on the local economy; sales tax receipts in Greenwood didn’t fall nearly as far as in other nearby cities, she said.
“We never had to lay off (city workers),” she said. “When people did decide to quit and leave, we did not rehire and tried to do as much as we could with less people.”
By tapping into a passion for cuisine that has a long history in the Mississippi Delta region, Viking is hoping to light a fire under the widening segment of the U.S. population glued to the Food Network, snapping up shelves-full of cookbooks and cruising the Web for new recipes. Home cooking has also gathered steam as more households entertain at home and steer toward healthier family menus, according to Beth Purifoy, a chef instructor and manager at the cooking school.
“We all know if we cook at home we have more control over what goes into our food and how it’s prepared,” she said. “I think that been a great movement."
One recent cooking class featured a cocktail party menu that included chocolate-coated strawberries stuffed with amaretto-infused cream cheese. The class, which felt more like a cocktail party, consisted of couples invited by Litton, the John Deere dealer, who periodically hosts events to thank his best customers. A few years ago, someone suggested asking the wives come along.
“Even the men who were reluctant — they said, ‘I really wanted to go quail hunting’ — when it was all said and done, everyone had a tremendous time,” he said. “And the wives do play a big part with these farmers in what they do.”
Viking is also looking for growth outside Greenwood. To diversify its product line, Viking in 2001 acquired St. Charles Cabinets, which makes steel cabinets that match its shiny appliances. The company also launched its own line of smaller appliances, including toasters, blenders and food processors. Viking has also begun expanding overseas, establishing distribution channels in Europe, Mexico, South America and Asia.
“There a lot of new wealth being generated (in Asia), and U.S. products are highly valued there," said Lyvers.
But for now, the vast bulk of sales are coming from American homeowners and builders. Carl said that while he sees signs that things are picking up, it will be “a long time coming” before Viking returns to the boom years.
“So we're hunkered down and we're prepared to sustain this lower level of sales for the next two years or who knows, maybe even more,” said Carl. “I think people have been in a foxhole for 18 months now and they're not jumping out of their foxholes. They're just kind of peeping out and seeing what’s going on here, and coming out of a state of shock, to tell you the truth.”
Analysts who follow the appliance industry say that even though the market for trophy kitchen stoves has cooled, it’s not going away.
“Americans are Americans and God bless us, right or wrong, we tend to be aspirational when it comes to what we have in our house,” said Mark Delaney, who follows the appliance industry at The NPD Group, a market research firm. “This is where we’re going to live; this is where we’re going to bring up our kids or whatever the case may be. So if I’m going to spend a little bit more, I might spend a little bit more on my home first before I go back to the expensive coffee or the expensive sports car.”