Thousands of jobs returning to Dalton as Bob Shaw expands carpetmaker

Thousands of jobs returning to Dalton as Bob Shaw expands carpetmaker

May 3rd, 2013 by Ellis Smith in Business Around the Region

An array of twister machines are seen at the Engineered Floors carpet manufacturing plant near Calhoun, Ga.

Photo by John Rawlston/Times Free Press.

Engineered Floors by the numbers

* Size of new plants in Whitfield and Murray counties: More than 1 million square feet.

* Dalton plant size: 800,000 square feet

* Calhoun plant size: 650,000 square feet

* Chatsworth plant size: 185,000 square feet

* Current staff: Almost 1,400 workers

* Planned hires: Between 2,000 and 2,400 over five years

Source: Engineered Floors

A quick look at Engineered Floors

* Headquarters: The historic city hall building in downtown Dalton, Ga.

* Chairman and CEO: Bob Shaw, former head of Shaw Industries

* Key to growth: The company combines two steps in its carpet manufacturing process, dying the yarn as it is made rather than as a separate step. The move saves water, energy and labor, allowing Engineered Floors to sell better carpet for less than its competitors.

* Latest move: The company will build two new plants in Whitfield County and Murray County for $450 million, creating as many as 2,400 jobs over five years. It received $70 million in tax breaks, not including exemptions on sales tax for construction and energy use.

Source: Engineered Floors

If you go:

Is Engineered Floors hiring workers right now? Yes

Where? 112 Enterprise Drive, Dalton, Ga.

Source: Engineered Floors

The coming jobs explosion in the Chattanooga region is no surprise to Bob Shaw, chairman and CEO of carpetmaker Engineered Floors.

"What we are doing is continuing with our expansion, really the same thing we've been doing since we started," Shaw said Thursday.

Engineered Floors, which announced on Wednesday that it will spend $450 million to build two manufacturing complexes over the next five years that could employ up to 2,400 workers, has been on an upward trajectory since its founding in 2009.

"This is simply an ongoing effort," he said, resisting efforts by politicians and media outlets to label his latest expansion as an isolated event.

Shaw came out of retirement to found Engineered Floors at the height of a recession, at a time when competitors were closing plants and laying off workers. His plan was simple. Instead of refurbishing the dusty old carpet mills that dotted the Dalton, Ga. countryside, he'd start from scratch with private money, new plants and cutting-edge technology.

It paid off. He began by targeting high-volume customers who supply carpet to apartment complexes. He built a plant in Calhoun, Ga., then another one in Dalton, Ga. He bought residential carpetmaker Dream Weaver Carpet in 2011 which allowed him to sell carpet to retailers. He expanded his manufacturing floor space to more than 1.5 million with nearly 1,400 workers. Today, Engineered Floors has gained the Holy Grail: a big chunk of space at big box stores like Lowe's and Home Depot. For flooring manufacturers, these are the big leagues.

Dealmaker

The rise of Engineered Floors is a highly unusual development in an industry that for years has been dominated by just a few big names. One of those names belongs to Shaw Industries, which Shaw sold to billionaire Warren Buffett in 2000 before stepping down as CEO in 2005.

Buffett paid about $2.35 billion in cash and stock for the company -- money that is now being used against him, as well as fellow large competitors Mohawk Industries and Beaulieu of America. Shaw's noncompete agreement with Buffett appears to have run its course.

Just a few years after he walked off of the golf course and back into the boardroom, Bob Shaw's Engineered Floors has grown big enough that state governers issue news releases on his behalf. Engineered Floors even secured $70 million in tax breaks for the project and an end to sales taxes on energy use and construction at the new sites.

"But this isn't new," Shaw said. "We've been creating jobs in Georgia for three years."

Some of his success is thanks to the special technology he uses that eliminates the step of dying the yarn before it is turned into carpet. Instead, the yarn is dyed at the same time it is made, saving millions of gallons of water used to dye the yarn, millions of dollars in heat energy used to dry it, not to mention the money saved on labor. He runs the whole operation in-house.

New locations

Engineered Floors' current growth spurt will include two new plant complexes: one in Murray County and one in Whitfield County.

While the company has not announced the specific locations, local officials say privately that the one site will be located in Whitfield County's Carbondale business park next to I-75. The Murray County location is still under wraps, but won't be linked to the Chatsworth, Ga., plant that the company acquired when it purchased Dream Weaver Carpet.

There's no doubt that some of Engineered Floors' growth will come at the expense of competitors. But that's not necessarily a bad thing for Northwest Georgia, said Robert Culp, assistant professor of economics at Dalton State College.

"Obviously it's a very large investment so there will be a benefit from that, but also it'll be updating the area with better technology to make sure we remain competitive," Culp said.

The additional carpet jobs in Dalton help stabilize a flooring industry that has been shaken to its core by the housing recession, he said.

From its peak in 2006, metropolitan Dalton has shed more than 20 percent of its employment, losing 16,700 jobs over the past seven years, according to the U.S. Bureau of Labor Statistics.

"One of the things I'd say about our job market is that we need to preserve the current market, preserve what you're good at," Culp said. "You don't want to, on top of everything else, lose the carpet business here."

Training

Though new technology always means fewer jobs in the long run, that opens the region up to new industries that require a similar labor pool, such as chemical manufacturers, Culp said.

The immediate need, however, is gearing up more than 2,000 workers to handle next-gen carpet production. It could be a challenge, but not an insurmountable one, said Jim Catanzaro, president of Chattanooga State Community College.

"In some wonderful ways the world has changed and jobs in manufacturing are very enriched positions," he said. "They're challenging, they're exciting, they're positions typically where one works on a team. But on the other side, that takes an entirely new set of skills."

On projects this large that could require a large amount of training, Catanzaro said that multiple institutions will often work together to fill a company's need for skilled labor.

"It's always a stretch, and it's always a challenge, but it's one of those challenges that as a community, in a coordinated way, we can definitely meet the challenge," he said. "Our community's work to support business and industry and build our economy, that's what makes us a desirable place for people to locate."

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