CALHOUN, GA. - Mohawk Industries may be the world's biggest floorcovering company with operations in more than 15 countries, but company CEO Jeff Lorberbaum wants Americans to know that the $10 billion-a-year global manufacturer is still American made.
So last week just five days after Flag Day and 15 days before the Fourth of July, Mohawk hoisted the biggest American flag ever flown in Georgia at one of the company's most visible plants along Interstate 75 just south of Mohawk's headquarters in Northwest Georgia. The giant 45-foot-by-75-foot flag - bigger than the size of two typical American homes - was raised atop a 128-foot pole at the company's Union Grove distribution center.
"Our flag represents our pride in being an American company and honors the thousands of men and women who have helped us grow and prosper," Lorberbaum said during a flag raising ceremony on Wednesday. "Our competitive edge comes from more than 20,000 U.S. employees who make, sell and deliver our products, with about half of those working in Georgia."
Mohawk Industries has expanded worldwide and more than half of its more than 42,000 employees now work outside the United States. But the Calhoun, Georgia-based business has invested more heavily in U.S. production than most of its competitors to serve the American market.
The domestic additions have come even as Chinese flooring producers have grabbed 25 percent of the global flooring business, according to the industry publication Floor Focus.
Company at a glance
Name: Mohawk Industries Inc.Headquarters: Calhoun, GeorgiaChairman and CEO: Jeff LorberbaumOwnership: Publicly traded since 1992 and now listed on the New York Stock Exchange under the symbol MHKFounded: 1878 in Amsterdam, New YorkStaff: More than 42,000 employees worldwide, including over 20,000 in the United StatesMarket value: $10.7 billion2018 sales: $10 billion2018 net income: $861.7 millionBrands: Bigelow, Columbia Wood Flooring, Daltile, Durkan, Eliane, Feltex, Godfrey Hirst, IVC, Karastan, Kerama Marazzi, Lees, Marazzi, Moduleo, Mohawk, Mohawk Home, Pergo, Quick-Step and Ragno. and Unilin.Acquisitions: Almost 45 acquisitions of other leading flooring companies in the U.S., Europe, Russia, South America and Australia/New Zealand, including Horizon Industries in 1992; American Rug Craftsman and Karastan-Bigelow in 1993; Aladdin Mills in 1994; Galaxy Carpet Mills in 1995; certain assets from Diamond Carpet Mills in 1997; Newmark Rug Company, American Weavers & World Carpets/WundaWeve in 1998; Durkan Patterned Carpets and Image Industries in 1999; Alliance Pad in 2000; Dal-Tile in 2002, Unilin in 2005, Pergo and Marazzi in 2013, IVC Group in 2015, and Godfrey Hirst and Eliane in 2018.
Mohawk petitioned the U.S. Trade Representative last year to impose tariffs on Chinese floorcovering imports, arguing that China sells some of its products below cost and uses its government-controlled economy and currency to unfairly subsidize Chinese suppliers.
Mohawk has urged President Trump to impose import duties on what it claims is unfair competition from government-backed industries in China.
"They've done things to protect their industries and limit competition, while also giving their own businesses advantages for their exports," Lorberbaum said about the Chinese producers. "The things that the present administration are doing with trade are long overdue. There needs to be the right balance, which hopefully we will get to. But that is not easy because the other countries don't want to give up the advantages that they have had for the past 25 years."
The raising of the giant American flag at the Mohawk distribution complex along one of the most heavily traveled interstate highways in America came during the same week that the Trump administration began imposing a higher 25% tariff on imported flooring products from China. The tariff rate on about $200 billion of Chinese goods was originally set at 10% but was raised last month to 25% as trade talks continued between the world's two biggest economic powers.
Trump plans an extended meeting to discuss the tariffs with Chinese President Xi Jinping at the G-20 meeting in Osaka, Japan, scheduled for Friday and Saturday.
Mohawk officials said the timing of the giant flag installation last week was not directly tied to the imposition of the tariffs or the upcoming trade talks.
"We've been working on this for the past 18 months to get all of the FAA (Federal Aviation Administration) approvals for the flag pole and to get the flag made and shipped here," said Karen Mendelsohn, Mohawk's senior vice president of marketing.
The new flag, which weights nearly 150 pounds, required a permit and lighting atop the flag pole because of its proximity to the Calhoun airport.
"The timing on this (at the same time as tariffs go into effect) is really coincidental," said Tom Lape, the president of residential flooring at Mohawk. "We're a global company, but over the past 20 years we have done a disproportionate amount of our investment here in North America and the United States. We try to make and service the products were they are sold. The flag shows our pride in being an American company."
Lorberbaum said investing in America makes sense for Mohawk to respond quicker and provide better service to its U.S. customers.
"We think being a local company allows us to provide better products and service to the marketplace," Lorberbaum said. "We think we can adapt to changes faster to give customers and suppliers what they want. Being an American company is a wonderful thing that we are really proud of and we continue to invest in the United States where we think we have the best employees in the world."
Through its 141-year history, Mohawk has made more than 45 acquisitions to grow into the biggest company in its industry.
Mohawk acquired the IVC Group in 2015, positioning the company at the forefront of the growing global vinyl flooring market. The acquisition added manufacturing capabilities for Mohawk in both in Europe and North America, including the world's largest, most efficient LVT production lines in Dalton.
In 2016, Mohawk built a $100 million luxury vinyl tile production plant in Dalton, and the company says it employs nearly 1,800 workers at seven U.S. ceramic tile plants, including a $180 million plant in Dickson, Tennessee that has more than 500 employees.
Nearly half of the hard surface floor materials produced in the world are now made outside of the United States, but Mohawk's domestic share of such business is much higher than its rivals.
Tariffs split flooring industry
Other floorcovering giants, including Shaw Industries and Dixie Group, have sourced most of the growing demand for luxury vinyl tile and other types of hardwood floors from Chinese suppliers. Those companies have not asked for import duties on China.
Tim Baucom, executive vice president of Shaw's residential business, said "such tariffs could harm consumers with higher prices and fewer choices."
Shaw, which acquired US Floors at the end of 2016, is the biggest resilient flooring maker in the U.S., according to Floor Focus magazine.
The Chinese tariffs are also opposed by the International Wood Products Association (IWPA), which represents 200 companies that import hardwoods and softwoods for flooring and a variety of other products.
"Tariffs are taxes," said Cindy L. Squires, executive director of the IWPA. "They are paid by American families, farmers, businesses, workers and communities. They are not paid by the exporting country. They are paid here at home."
Lorberbaum said it's still too early to tell the impact of the higher 25% tariff, which became effective on most flooring goods received from China as of a week ago. Imports from China swelled ahead of the higher tariffs as floorcovering retailers sought to build up inventory before tariffs boosted the price of the imported goods.
Mohawk exhibits American dream
Mohawk itself began in 1878 when four brothers from the Shuttleworth family imported 14 second hand looms from England to Amsterdam, New York. By 1908, the fledgling firm introduced a new carpet, Karnak, and the company has grown ever since, primarily though a series of acquisitions of other carpet, tile, ceramic and hardwood manufacturers over the past couple of decades from its current headquarters in Calhoun, Georgia.
"Only in America could a venture that began 141 years ago in a small building the owners could barely afford to heat grow into the world's biggest flooring company," Lorberbaum said. "America is truly the land of opportunity."
Rickey Bishop, who will mark his 40th year of employment with Mohawk in August, said his job at the Union Grove distribution facility is only a few miles from where he grew up in Chatsworth, Georgia "and it's been good steady work with decent pay.
"I'm glad Mohawk has stayed in America and I wish more companies would stay here and keep their money at home," Bishop said during last week's celebration of the new American flag at the Mohawk facility where he works.
Top U.S. flooring manufacturers
The biggest flooring companies for carpet, ceramic, hardwood, laminate, resilent and rubber flooring sales in 2018 in the United States were:1. Mohawk, $5.2 billion2. Shaw, $5.1 billion3. Engineered Floors, $1.1 billion4. Armstrong, $873 million5. Tarkett, $724 million6. Mannington, $824 million7. Interface, $601 million8. Dixie Group, $405 million9. Maples, $215 million10. Phenix/Looptex, $210 millionSource: Floor Focus magazine, May 2019. The magazine estimates flooring imports total nearly $8.5 billion, or 36% of the total $23.7 billion U.S. market for flooring.
Lorberbaum said more than one in every eight employees at Mohawk, like Bishop, have been with the company for over 25 years.
"We're all getting old, including me," the 64-year Mohawk chairman told employees last week.
Lorberbaum, who began working in his parent's business - Aladdin Mills - when he was 14 years old, joined Mohawk when it merged with Aladdin in 1994. He rose to Mohawk president in 1995 and CEO in 2001.
Over the past 25 years under Lorberbaum, Mohawk grew into the biggest floorcovering firm by buying many family-owned companies in the carpet and tile business started in and around Dalton, Georgia.
Local officials praised Mohawk for its important role in the economy of Northwest Georgia and for its support of the United States.
"We certainly appreciate all of the jobs and investment they have made in this area, and it was really moving and tearful to see this giant American flag and to see this patriotism that most companies need to show," said Jeff Mullis, a Georgia state senator and executive director of the Northwest Georgia Joint Development Authority.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.