published Thursday, December 5th, 2013

Carpet comeback rolls on in Georgia as U.S. economy recovers

AT A GLANCE

Dalton facility

Location: 2100 S. Hamilton St.

Employees: 260 at one time, but mothballed during recession

Growth: 420 workers

Rome facility

Location: 420 Lavender Drive

Employees: 230

Growth: Existing workers retrained

Total Mohawk investment: $85 million

Total taxpayer investment: $700,000

Current Mohawk Employment: 36,500

Source: Mohawk Industries, Georgia Department of Economic Development

Riding a wave of recovery in the U.S. housing market, Mohawk Industries is preparing to bolster its Georgia workforce and reinvigorate two aging carpet plants in the Peach State in early 2014.

The world's largest floor-covering manufacturer doubled its net income in the third quarter to a record high $149 million on sales of $2 billion. It will invest $85 million into a modernization program that it says could create an additional 420 jobs at a mothballed Dalton, Ga., plant, and retrain 230 workers in Rome, Ga.

Brian Anderson, president and CEO of the Greater Dalton Chamber of Commerce, said Mohawk's announcement is good news for all manufacturers, especially those tied to the housing market.

"This latest expansion by Mohawk is strong evidence that the economy, especially the housing market, continues to improve," Anderson said.

The Rome carpet plant in question is the last of Mohawk's facilities that is still producing spun yarn, a method that allows carpet to "shed" and gives it a less lustrous look. The two-year renovation will convert both plants into the newer continuous filament process, which consumers prefer.

The Calhoun, Ga.-based company will work with Georgia officials to train workers at the refurbished plants, which will begin hiring in 2014, according to a news release. Mohawk's expansion qualifies it for a $700,000 state grant made through the Development Authority of Whitfield County, according to a public notice.

In a news release, officials said Mohawk's expansions were driven by increased housing demand as well as cooperation from local, regional and state officials.

"As the U.S. economic recovery gains traction, Mohawk is increasing manufacturing capacity to meet rising demand for the company's premium soft carpets," said Joe Yarbrough, senior vice president of advanced manufacturing engineering.

It's Mohawk's second big Georgia expansion announcement in as many years. The company revealed in 2012 that it would expand its Summerville, Ga., recycling facility and add 500 jobs on a project that converts old bottles into carpet fiber. That's one of a number of ways that Mohawk and its competitors are moving to capitalize on increasing demand, said Kemp Harr, publisher of Floor Focus magazine.

  • photo
    Melissa Kernea prepares to pick up a load of yarn off of a conveyor belt at Mohawk Industries, Inc. in Dalton, Ga., in this file photo.
    Photo by Staff File Photo /Chattanooga Times Free Press.

"We're seeing a lot more smiles on faces in the carpet channel, smiles that we haven't seen since 2007," Harr said.

Harr estimates that demand for all floor coverings is up 9 percent for 2013 and the wholesale value of all floor coverings sold is back up to $20 billion, from a low of around $15 billion during the recession. Though sales still are down substantially from the $26 billion peak in 2007 before the housing crash, most economists aren't predicting a return to that level anytime soon, Harr said.

Mohawk was on a roll even before the carpet comeback, having slashed expenses, raised prices and purchased several flooring manufacturers, such as Marazzi, Pergo and ARAUCO in 2012, Sanfi in 2010 and Columbia in 2007.

Other flooring manufacturers experienced similar gains this year. Chattanooga-based Dixie Group became one of the top 10 fastest-growing stocks in the U.S. after it announced in late October that it had returned to prerecession prosperity with a 37 percent jump in sales.

The surge really kicked off in the second quarter of 2013, when Werner Braun, president of the Carpet and Rug Institute, said the industry grew at a rate of 8 percent. That was shortly after Bob Shaw's brainchild of Engineered Floors announced it would spend $500 million and create as many as 2,400 jobs in North Georgia at two brand new carpet facilities.

Dalton, Ga.-based Beaulieu of America soon joined the party, with an announcement that it would hire 200 workers for its facilities. And Shaw Industries, which hired 450 new workers toward the end of 2012, picked up 60 more positions in the middle of 2012.

"The fact is that right now, it's coming back," Harr said.

Contact staff writer Ellis Smith at esmith@timesfreepress.com or 423-757-6315.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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