Bob Spilman Oral Interview.
Oral Interview
Date: April 4 & 7, 2005
Place: Bassett, Virginia, USA

E. L. BRIGGS - Interviewer: When were you born?

Spilman: I was born in 1927.

Interviewer: Where?

Spilman: Knoxville, TN.

Interviewer: Was your family in furniture?

Spilman: No, they were in textiles.

Interviewer: But your in-laws were?

Spilman: Right, my in-laws were in furniture.

Interviewer: Tell us about the furniture people.

Spilman: Well, my wife's grandfather, Mr. J.D. Bassett, Sr., was one of the three founders of Bassett Furniture Industries. He eventually became the sole operator. He had two sons that ended up in the furniture business, at Bassett Furniture. One of them was J.D. Bassett, Jr. He was my father-in-law.

Interviewer:And of course, there were a lot of Bassett companies as I remember, way back.

Spilman: Well, yes, but there was still only one company. They just had
different marketing names, and different factories. Bassett Furniture Industries was still the umbrella or holding company.

Interviewer: Now what was Bassett Superior Lines?

Spilman: It was just one of the operating companies.

Interviewer:And Hooker-Bassett was one?

Spilman: Well, that was not connected. Hooker-Clyde Hooker, Sr.-used
to work for Bassett, and he married a Bassett, and that's where
the name came from. Then there was Vaughan-Bassett. Same thing.

Interviewer:Yes, I did an interview with John Vaughan, and I did one with Clyde Hooker, who had a Bassett grandfather.

Spilman: That's right. His grandfather was Mr. C.C. Bassett, who was a first cousin of Mr. J.D. Bassett.

Interviewer: I had thought they were brothers.

Spilman: No, he was a first cousin.

Interviewer: He was involved in Hooker-Bassett, but not in any active management way. The Hookers always ran it and eventually gave it to Clyde Hooker.

Spilman: Well, the Bassett name came because his wife was Mr. C.C. Bassett's daughter.

Interviewer: Do you still have family in furniture?

Spilman: Yes, my oldest son is CEO of Bassett Industries.

Interviewer: Anyone else?

Spilman: No.

Interviewer:Describe your growing up years in Knoxville.

Spilman: Well, I lived in a place called Sequoia Hills that was west of
Knoxville, and went to public school, elementary school and junior high. Then I moved to Statesville, NC in about 1942, and I went to Augusta Military Academy, in Ft. Defiance, VA, and graduated in 1945.

I then went to Davidson for a semester because I knew I was going to have to go into the Air Force. So I went into the Air Force and stayed about a year, and I wanted to go to textile school at North Carolina State, but there were so many returning veterans that I couldn't get in, though I could go back to Davidson. So I went back to Davidson for another semester, then I transferred to NC State textile school, where I graduated in 1950.

In 1950,1 went to work for Cannon Mills in New York as a salesman in their decorative fabric division. We sold converters all over the country. Then Korea broke out in late June, early July, and by September lst, I was back in the Army, and I'd gotten a commission to go OTC. I was sent to Ft. Devens, MA to join an East Tennessee National Guard Outfit. I stayed with them as platoon leader and company commander for two years, serving time at West Point in the infantry section. Then when I was discharged, I went back to New York to work for Cannon, where I stayed until 1957, when I came to work for Bassett.

Interviewer:Were there any significant happenings while you were in school?

Spilman: No, I would say the horror back in 1946, 1947, right after WWII- everybody had lost at least a year, some three and four years. The discipline and the competitiveness was a lot stronger than it is in today's educational environment. But I can't think of any one significant event.

Well, there was one. It happened in school when I decided I wanted to go into sales because I was going to represent Cannon Mills after I got some experience in New York, but they sold it while I was getting this experience! I interviewed at 19 organizations and I got 17 offers. I was very proud of that.

Interviewer:And that was at NC State?

Spilman: That was while I was a senior at NC State.

Interviewer: Is there anything else about the military that was significant?

Spilman: No, I was very fortunate being an infantry officer, I never had any combat, and the only overseas time I spent was in Alaska.

Interviewer:What was your first furniture job?

Spilman: The Bassetts built a new table plant in the 1956-57 time frame. I
came down to be a sales manager. At that time, they were making tables at Bassett Chair Company. The new plant wasn't ready yet. So I worked under a gentleman named Booker Dalton, to learn the rudiments of sales in the furniture industry.

Interviewer: Tell us more about your work at that time.

Spilman: Well, I learned our customer base. I learned the plusses and
minuses of our sales force. I also learned how to convert our sales into cutting orders. I just learned the basics of sales responsibilities.

Interviewer: You did the transactions from the salesmen?

Spilman: I did after I'd been down there several months, but Booker Dalton
did them when I first got there. But that was before the days of computers. Everything was done on spread sheets; there was a lot of manual work.

Interviewer: Who else did you work with in the industry?

Spilman: Well, I was also responsible initially for design - the marketing part
of design. Leo Jiranek was our designer. I worked very closely with Leo, and with the plant manager, Bob Coleman. I worked very closely with Bob in developing new processes to get the look that we were trying to get.

Interviewer: What was the first market you attended?

Spilman: Well, when I was with Cannon Mills, I sold decorative fabrics, so I went to the market with Cannon Mills in 1950.

Interviewer:Which market?

Spilman: Chicago. High Point had just barely started then.

Interviewer: What can you tell us about the Chicago market?

Spilman: It was hot as hell. There was no air conditioning. It was long, a
two week market. Then from there we would either go to New York or Los Angeles for another week. So it was six weeks a year, not counting the High Point market, with those three markets.

Interviewer:I remember Chicago as either the hottest place on
earth or the coldest place on earth!

Spilman: I don't remember many winters when there weren't great big
chunks of ices up Lakeshore Drive that would blow in from the lake and crystallize.

Interviewer: The building was managed by two brothers. One was Frank Whiting, and I don't remember his brother's name.

Spilman: Yeah, Frank Whiting, sure. But Norris bought it from Frank Whiting. They were partners together.

Interviewer: I understand the building at 666 Lake Shore Drive is a residential condo now.

Spilman: I have no idea. I thought they were supposed to give it to Northwestern University. Because you know, their downtown campus is right next to it.

Interviewer: Yes. We sometimes used to stay in the dormitory for the summer market. Northwestern's dormitory is right across the street.

Spilman: Well, I used to go to the Lakeshore Club, which was right next door to that.

Interviewer: I had friend who was a member of the Lakeshore Club, and he got me in there my last several years.

Spilman: Well, I remember the first market after we put air conditioning in. Everybody was so relieved.

Interviewer: Well, what has changed about market since then?

Spilman: Well, geographically, of course, the demise of the Los Angeles Market, the New York Market, and Chicago, and now the concentration in High Point, with a marginal market in Tupelo. That's the major change. Of course, there is a new one opening this summer in Las Vegas. It looks to me like that these are a lot of fringe exhibitors around the outside of the real heart of the industry.

The market is also much shorter now. You have pre-market now that a lot of the major buyers make their decisions based on what they see at pre¬market, and so it enables them to have a much shorter market. The concentration of resources in the High Point area makes it a lot easier for buyers to see the vast magnitude of the industry, with everything located here. Everything is right within a short distance from each other, and that's a big change.

As far as the display of the product, I think it is a thousand-fold improved from the way I remember when we originally displayed our products. We didn't have the room setting vignettes, we didn't have the accessories-it was cold turkey. You walked in and what you saw was what you got.

Interviewer: And is that speaking in terms of Chicago or High Point?

Spilman: I'm speaking in terms of Chicago. Well, though, it was the same in High Point until the last 15 or 20 years.

Interviewer: In High Point, we had the next space to Bassett up on the
twelfth floor. They had the biggest space in the building which was 6,000 feet!

Spilman: Who was that?

Interviewer: It was my family, Briggs Manufacturing Company

Spilman: Where was Briggs?

Interviewer: In High Point.

Spilman: What did you manufacture?

Interviewer: Upholstery.

Spilman: You did? I was not familiar with that. I know a Briggs that made reproductions in Richmond, VA.

Interviewer: That was Biggs.

Spilman: Biggs? Oh okay. They made a wonderful product like Mary Henkel
did at Henkel-Harris. Her husband was a cousin of mine. My middle name is Henkel.

Interviewer: They were the most wonderful people, and they became close friends of mine. One of my lines showed in one of the outside buildings, big spaces, and Henkel-Harris was right next door. I got to know them well right up until the time that Carroll Henkel died.

But your mentioning of the room vignettes was also quite true in High Point. The partitions, you know, were built up almost three feet up from the ceiling

Spilman: Was it Bassett Furniture Company, or J.D. Bassett, or W.M. Bassett?

Interviewer: Well, it was just Bassett to me! We were here, Bassett was next to us, and they had the whole end of the building.

Well, now, tell us about the beginning of your company, or companies. Except for what Clyde Hooker told me, which isn't the same, there's never been anybody to recap the whole Bassett story. John Vaughn did to some degree.

Spilman: Well, there's a local publisher, (or was, he's dead now,) at the Bassett Printing Company who did a little history of our company. I don't know where the hell my copy is. If I can find one I'll send it to you.

But anyway, Mr. J.D. Bassett was a farmer, and he grew tobacco, and he pin-hooked tobacco. That's where you go into an auction, and if you think the grade that the sellers have put on it isn't right, then you buy it, and try and sell it later at a higher grade. They're called pin hookers. He was also in the lumber business. He got into the lumber business cutting railroad ties for the Punkin' Vine Railroad, it goes from Roanoke to Winston-Salem. When they finished the railroad, he had the sawmill, and the wood, and he decided he ought to go to Grand Rapids and try and sell it. So he ended up in Grand Rapids selling it to furniture companies up there. Lumber, that is. Evidently, his value must have been pretty great, because he was doing a good job.

And I don't know the time frame from Grand Rapids to when he started the plant down here, but he thought that if they could do it up there, he could do it down here, and he had the proximity of all the raw material. So he built a plant and went into production in 1902. The remnants of plants on that location still exist today.

He went into partnership with his cousin, C.C. Bassett, and with his brother¬in-law, Stone. I don't know Stone's first name. Eventually, though, they continued to make furniture, and were very successful, especially from a small viewpoint. I think they made $28,000 the first year they were in business. But the plant burnt down several times, and it was rebuilt and rebuilt and rebuilt.

Mr. J.D. Bassett decided he wanted to build a mirror plant, so he built a mirror plant to furnish glass for his case pieces. Mr. C.C. Bassett ran the mirror plant, he left the industry. Mr. Stone went into the mercantile business, next to the J.D. Bassett plant which is in north Bassett. He had the company store and the companies to pay employees in script, spendable only at the store. He handled that end of the business, and they left the furniture business.

Spilman: Then Mr. Bassett built more plants, the chair plant, and also acquired the W. M. Bassett plant in Martinsville, VA. Then he acquired what is now Bassett Superior Lines, which was Ramsey Furniture Company. This was during the 30's. They continued to grow in case goods, with all of the facilities here in Henry County. Then it was in the early 30's that the Securities and Exchange Commission decided that if you had so many stockholders, that you had to register with them and become a public company. So he consolidated all the companies into Bassett Furniture Industries, even though they operated under their individual names - Bassett Furniture Company, Bassett Superior Lines, W.M. Bassett, J.D. Bassett, and Bassett Chair.

They continued to grow until WWII. During WWII (I don't know how many of the plants) but, they made truck bodies for the Army and other military services. Then in 1946, they went back to furniture, and continued to make progress. Then the Korean War broke out, and Mr. W.M. Bassett was CEO at that time. Like a lot of other industries, remembering the shortage of goods that happened in WWII, they ran the plants at full capacity, and built up tremendous inventory. That happened in the textile business as well as the furniture business, and a lot of other industries. Well, there was no shortage in goods, and by 1952, there were more closeouts on the market than you could possibly imagine. On fabrics, in furniture, on anything.

They continued to grow, and in 1956 we started a new table plant. The table line was handmade in our chair plant, and it was very low end-highly promotional - and without much style. It was more commercial. The plant opened in 1958, and by that time we started to grade-up our table line, and make it a higher-end expression.

We stayed basically in the wood business until 1967 or 1968, when I asked my father-in-law why we didn't go into the upholstery business. He told me to go find somebody to put us in the upholstery business! Well, I looked around, and everybody I thought was a capable person was already in their own business. So we ended up having to buy an upholstery plant, which we did, called Prestige, in Newton, NC. Rome Jones was the manager and one of the principles. Their customer base paralleled our customer base.

I skipped one important thing from a marketing view. In about 1959 or 1960, we had gone into national advertising. We were in LIFE - one of the first major manufacturing companies to really take that on. We found out that because of national advertising, we were having trouble having three different sales organizations. So at the prodding of Mr. Ed Bassett to Mr. Bill Bassett, who was CEO at that time, they decided to consolidate all of our sales forces into one. We had a committee meeting of the sales managers of the various marketing divisions. We sat down and decided who would get each territory out of the three salesmen we had. Then we would present it to one of the Bassetts, and they would make the decision whether we were right or wrong. If it was his man, we were usually right. If it was one of the other Bassett's men, we were usually wrong and had to go back! So we called it the "Nuremburg Trials!" But our distribution method has completely changed now. We couldn't have continued to grow and do national advertising the way we were marketing before.

Anyway, we went into the upholstery business in the mid-1960s. Mr. Bill Bassett died in 1966 I believe. My father-in-law became Chairman and CEO. Now, the original Mr. Bassett, J.D., was still living. He was Chairman Emeritus and he had a hard time, physically, getting around. Still very astute, mentally. In the latter part of his life, he had a suite in the hospital in Martinsville, with his nurse, and he would go out for a ride every day. So then Ed Bassett became president, and I became Merchandising Manager over the whole Bassett Line - tables and case goods. I moved out of the table division and into the corporate headquarters, which was this building here, it had just been built. I had the responsibility of the design and marketing of all the products in the line. That was before we bought Prestige, and went into the upholstery business. I had been planning that for several years, before I asked my father-in-law about upholstery.

Anyway, we bought Prestige. Prestige was doing about 6-7 million dollars at that time. They'll do 150 this year in that division. Of course, we have more facilities. Bassett Upholstery will do 150.

Then, we bought a series of plants. My father-in-law died in 1966, and then Ed Bassett became Chairman, and I became President and COO. Ed was CEO. We worked very closely together. At that time, we decided to level out the peaks and valleys of our distribution. We would buy some higher end plants that didn't have the same cycle that we had. So we bought three plants in Mt. Airy. We bought National of Mt. Airy, Mt. Airy Mantle and Table, and there was a third company we bought whose name I can't remember. I don't think we bought Mt. Airy Furniture in North Carolina. We tried to at one time. Anyway, we bought a few plants in North Carolina. We consolidated them and called it National Mt. Airy, and merchandised the high-end line. We also needed some more people capacity, and I bought a table company down in Macon, GA. They were building a new plant at that time. We also bought a case goods plant in Dublin, GA. Beautiful plant and wonderful workforce, the plant manager did a great job. Then we bought the Weiman Company in Christiansburg, Virginia and Ramseur, North Carolina. We had a pretty complete line with the upholstery and the case goods. We thought if we had bedding, we could put together a whole package. There was a company called E.B. Malone Bedding in Lake Wales, Florida, and they had about 21 plants across the country. They were doing a tremendous job with Levitz, and so were we at that time. So we bought E.B. Malone and got in the bedding business. Their plants were not large, they were 25,000-30,000 square feet. But counting their plants, in 1989, we had 44 plants in 17 states, and we had a little under 9000 people working for us.

Then a new type of case goods came on the market-that was "veneered" with printed paper. You could do all sorts of commercial looks with it. The gaudier and the uglier, the more it sold! We were getting a lot of pressure from a company called Ashley who made this stuff. So we decided to go into that business, and we bought Impact Furniture Company. We did not market this through our regular sales force-we had a separate sales for Impact. So at that time, we had a case goods sales force, an upholstery sales force, a National Mt. Airy sales force, a Weiman sales force, and an Impact sales force. So we had five different sales organizations to try and tap all of the market that we could.

Then it got kind of tough in the first part of the 1990's, and this paper stuff just did not do well. The buyers weren't buying. So we decided to close that plant down.

I retired in 1997, and one of my directors, a friend of mine, Paul Fulton, became chairman and CEO and my son Rob became President. The Board of Directors hired Hydric Struggles to do a search to see who would be chairman and who would be president. They came back with the recommendation of these two guys after they interviewed everybody that was available. So the board made the decision to let these people run the company. Rob, my son, decided at that time that we ought to follow the path of Ethan Allen, and to a certain extent, Drexel, in trying to get control of our distribution here. So he started doing these gallery stores. We didn't have a gallery program while I was still active, though we'd had one free¬standing store, which was not successful. It was a Bassett complete store. But he decided to get into retail. In my opinion, he made a brilliant decision, because if you can't control your distribution today, you're a dead duck.

Now, the mentality is entirely different from being a retailer to being a manufacturer. You have to have people that have the retail skills. He filled the staff and the team to address that challenge, and they are going to open twenty-some additional stores today, which will put them at about 130 stores around the country. They are very successful. They've had some turkeys, but only a few of them! If a store doesn't work out, they close it down, they don't nurse it along. Most of them are franchisees, but some are company stores. So that is pretty much my memory of the industry.

Interviewer: This store in Greensboro is sort of a prototype isn't it? I've been in that store, but that's the only Bassett store I've been in.

Spilman: It does very well, too.

Interviewer: Yes. Well, that's some growth story! How has this growth been affected by labor?

Spilman: It's been hurt by labor. If you'll remember the recession in the early 1970's... we were working our plants 21 hours a week. That allowed our employees to get unemployment under VA law. In the first quarter of 1972, I believe we made a penny a share, which was something. We had been making 10% on the sales after taxes, and then to go down to a penny a share! Our people were accustomed to overtime. But being on 21 hours a week, when we came back, we had a hard time getting people to work overtime. That was the beginning-we picked up in the 70's, we had more orders than we could ship, but couldn't get the labor! Furniture traditionally, whether it's in VA, NC, GA, or AK, it pays at the lower end of the pay scale as you well know. We just couldn't get people. We had 28% minority workers, and we ran out of them, we just couldn't find any more. We would put women in jobs that had traditionally been for males.

About the middle of the 1990's, the godsend happened, with Mexicans. They're great workers and great people to work with. Now, the majority, or at least half of the products that Bassett sells, is out-sourced offshore. So the case goods plants have been reduced to just 2 plants-National Mt. Airy and Bassett Superior Line. We still have the Weiman Upholstery, but we don't have the NC wood plant, and the table plant has been closed. That is all offshore. So a great percentage is coming from elsewhere. And not all from China. From Bosnia, for instance.

Oh, I forgot to say. At the end of the 1960's, we bought a baby crib plant in Statesville, NC. Bought so damn many plants it takes a long time to remember them all! Those cribs are made in Bosnia now, though.

Anyway, our Mexican employment was up, but it is way down now. Mexicans are having a hard time finding a job now, because there are so many of them. We live on a little farm in the country down in Richmond, next to my daughter, who is very much into hunting. She's master of the Deep Run Hunt. She has Mexican grooms for the stable, and her main groom told me he had three guys staying with him, and he said they were looking for jobs and just can't find anything, that they are running out. But if you look at that category in labor, that's all you see. They've taken up most of the jobs.

(end of Tape 1, Side 1)

Spilman: Back in the 30's, the Bassetts decided there was a need for something for the women to be employed. They built a textile mill up here in North Bassett, and it was called Bassett Knitting Company. Well, unfortunately, they didn't know anything about the textile business. They got someone named Sam Walker to run it for them. In the 60's, they merged Walker Knitting Company with Bassett, and that gave the women a place to work. Of course, Sara Lee bought that and it's now closed.

Two years after I left, the management decided to build a new furniture plant in the industrial complex in Martinsville. It was supposed to be the state-of-the-art plant to put super finishes on dining room and occasional tables. That finish is impervious to cleaning fluid, cigarettes, anything like that. Scratch resistant, too. So they built this new plant while we had vacant plants over here, they wanted it to be state-of-the-art. That plant has done very well, in fact, they are in the process of expanding it right now. It is simply a finishing plant, no machine work.

Interviewer: Where do they get parts ?

Spilman: The majority from overseas.

Interviewer: Alright, now, your growth, and this is where your strong suit is, how has it been affected by style and design?

Spilman: Well, we - and I don't think we're unique in this, I think all companies do this with the exception of a few who have stayed low-end (and even they've upgraded their lines tremendously), but we were known as lower end originally. We would go out and see what Broyhill's starting point was early in the market, and they'd see what ours was, and we'd be competitive like that. But we gradually got away from that, and the last ten years before I retired, with the exception of the Impact division, we were not in the promotional business. But since I retired, there has been a terrific evolution into a much higher level of style than we had.

Interviewer: High level of price also?

Spilman: Oh definitely. Definitely. And I say it's not unique to us. Everybody has done it. Because style is very very important today. Everybody has used style, quality, and price or value now for decades and decades. But I think that's a sense of priority. I think style is number one, you have to catch the consumer's eye. Quality is just about as important, but not quite. And price-if you've got the look and you've got the quality, price is really not that important. Unless you're a credit house or promotional brand.

Interviewer: Do you remember Ed Spence? He was the first designer I ever heard anything about.

Spilman: Yeah, I remember him. Leo Jiranek was our designer. He stayed
until I became president, about a year after I became president. He opened a design school in New York. We went to staff design then instead of freelance. Great guy, though. He had the greatest ability of talking to you and making it appear on paper. If anybody had an idea, he could interpret that idea.

Interviewer: I'm sure that's what made him successful. What about advertising? You said you were among the first?

Spilman: Well, we did the national advertising, and then when we consolidated our sales force, we continued to advertise. We've used all media. We did mass-circulation magazines for awhile, then we did the shelter magazines for awhile (House & Garden, Good Housekeeping), then we did some television. We had a syndicated program on Frank Lloyd Wright's house. We had 10 films that we syndicated. The FCC required local television stations to have so much local programming. And this was considered local programming. So they were running this pro bono. And we would get a dealer in that area to tie in with it. We did Frank Lloyd Wright's things, we did Monticello. We did outstanding homes all over the country. We did Teddy Roosevelt's home, and these things were a home run. Then we got on the Today Show. We've purchased time on the Super Bowl before. I don't know what all they're doing now, but they're still very active in it. Of course, they do a lot of circulars for these Bassett direct stores, and they do a lot of ad mats, so they don't have to pay their own ads. So they're very much into advertising but it's on a market basis, then a national basis. John Elway, is a quarterback for Denver. He signed up to do a grouping of entertainment centers for men-the recliners-things people would look at a football game with, or a basketball game. That promotion has been highly successful.

Interviewer: Alright, now we go to furniture industry involvement.

Spilman: Well, I started out industry-wise by going to the SFMA sales and marketing division meetings. I became a director of that division, then I became president of it, and was very active in it in my starting days. Then I was made a director of SFMA, and became president and chairman of that. Then, Hamp Powell of The Lane Company was a very dear friend of mine and we did a lot of things together. Hamp and I got very much involved in the upholstery flammability issue. Then I sort of turned it over to people who were younger and hadn't had the opportunity to participate like I had.

I was on the board of the Dallas Market, chairman of the Board. I forgot the date, but this fellow from Greensboro wanted to take over the building in High Point. And I had just been put on the building board. We had a lot of people on there that didn't quite understand what was going on, what was happening. It was turning into a real estate deal. So I got very active in that. We had a fellow named Bob Gruenburg who was running our building there. He tried to sell the building out from underneath us to the Kennedy's in Chicago who owned the Merchandise Mart. He had them flying down, meeting them in the airport, all this stuff. Well, I got wind of it and so I put together something called Tenants Incorporated. Bassett, Jefferson Pilot, Roger Soles was the chairman then, and Randall Terry and I were the three big ones. I put quite a bit of Bassett's money in it, and I was beginning to choke a little bit. So I asked my brother-in-law if he'd like to take a hunk. Well, B.B. was on his way out then. Stewart Wall was taking over, so he turned to Stewart. We had lunch over in Lynchburg, and he just turned to Stewart and said, "Stewart, do you want to do it?" Stewart said sure. So I put them in, which I can kick my ass for, I wish I had taken it all. But Burlington Mills was very heavy then, and Bill Klopman is a very close friend of mine, and I bought his interest in Bassett. He had gotten it from Henry Foscue, who had Globe Parlor Furniture then. Henry didn't own it personally, Globe Parlor owned it. So then Burlington bought out Globe Parlor, and Klopman ended up with it.

Interviewer: Oh, that's interesting. Henry pretty much made the market on SFEB stock for many, many years.

Spilman: Yeah, he ran it with an iron fist. He got in a little trouble though.
Through all these mergers and all this other stuff, I had the opportunity to learn a little something about trying to sell a building out from underneath someone. So, we ended up with the building. Had 95 percent of it. I believe you held on to yours didn't you?

Interviewer: Tried to.

Spilman: Well, you got second settlement. I remember that. So the next year I decided to retire. The last active thing I did in the association was out in San Diego when I got the James Ryan Award. That was the last time they gave it. Plus they merged with the National Association the next year.

Interviewer: The whole time I was growing up, my dad was very active in the Association. Back then, when they were worried about the NRA and OPS and all that stuff.

What about changes in production? That's not particularly your forte, but you were head of the company.

Spilman: Well, when I became CEO it was because there was such a modernization with the introduction of CAD/CAM, where so many of the machines are computer controlled, we could do the processing with so much more accuracy. But they were a great deal more expensive than the conventional machines. So, since I handled the money, I got involved, and we tried to stay on the cutting edge. We were some of the first to have computerized machines in all of our plants. Of course, we had computer¬controlled routers from the get-go. The molders all were computer controlled. It was a tremendous change. We've got electrostatic finishing in our chair plant, we were one of the first into that. Smith Young-great guy- he put some in, and you would have thought he reinvented the wheel! We didn't say much about ours (laughing). But there was a tremendous change in the manufacturing process. It reduced labor costs. Glenn Hunsucker, who ran our upholstery operation, and later became president of Bassett when Ed Bassett died and I became chairman, put in computer-controlled processing machinery that substantially reduced the cost of their upholstery frames. He was really very progressive in that area. He was using hardwood plywood instead of lumber. You can use stacks of it-cut 10 at a time, and substantially reduced our frame costs.

Interviewer: What about purchasing?

Spilman: Purchasing has had an evolution since I left. Course, the bottom
line is that Bassett doesn't buy as much as they did when we were there. But we always tried to keep up a good relationship with suppliers.

Interviewer: Now who was the chairman of S&H?

Spilman: I can't think of it. Was it Beineke?

Interviewer: Yeah Beineke. We visited-one time they had a UFAC
meeting in New York. Bob Cortelyou and Charlie Carey were the co-chairmen of UFAC and we met at the staff office on Madison Avenue.

Spilman: Nice fellow. Well, we tried to keep a good relationship with our suppliers, and we tried to concentrate on not running around chasing everybody. If we found out there was any discrepancy, we'd bring it to their attention, and if they didn't correct it, they were out.

We had one major carton supplier, and that account was about $11 million a year. We had three finishing companies, and we assigned one of the plants to each company, so they weren't competing with each other. But they changed that now, and they just have a different philosophy.

Interviewer: What about sales and merchandising?

Spilman: Well, I've covered most of that I think. Course, we're now going to the franchised stores. You don't need to slap them on the back, give them a big smile. You have to be a professional, working with the floor salesman, working with the advertising department. The factory sales force as I understand it has been restructured where they have a regional sales manager out in the field. Then, he has a staff-mostly women-who then go into the stores and do the presentation, display, and other things.

Interviewer: What about finance?

Spilman: Well, I do not like debt, even though that's the modem way to manage. I always liked to keep a good cash position, for mergers and acquisitions, or for plant improvement-any type of expenditure. I wanted to be able to make a quick decision, and not have to go in to see investment bankers or people like that. Of course, it's taken a tremendous amount of money to open all these retail stores, or Bassett's share of them. And the chairman who replaced me thought the ratios would look better if we had a little debt, so he borrowed some. But it's all been paid off now, and they're back up to just about where I left it. I left $100 million in cash when I retired.

Interviewer: I know a stock broker who told me, "You know, Bassett is Always totally paid up. 2% cash discount on all purchases!! (laughs)

What about management?

Spilman: Well, you know, it's gotten to where you have to be right on target with any decisions you're making today. Back in my day, you could make a lot of bad mistakes and live with them. But today, the marketplace doesn't give you that ability. Publicly-owned companies are really under the microscope on everything they do-they miss projected earnings by a couple of pennies, the stock can go down tremendously. That didn't happen back in our days. In fact, we never gave projected earnings.

I think management has to be a lot more socially inclined. By that I mean involved in the community, in the environment-items that we weren't so cognizant of back in our day. It's a lot more disciplined; there are a lot more things you have to do today, the new Sarbanes Oxley bill for example. Management is different-they have to spend a lot more time on things that really don't go to the bottom line. We were always more bottom-line focused.

Interviewer: Describe the support you've personally received from people in our industry.

Spilman: Well, we were very fortunate, I think the Bassett's were greatly respected in the industry, and I came in on their shoestrings. I was still a son-¬in-law, which has a certain stigma to it. I was still able to make friends, like Hamp Powell, who was 10 years older than I was. We became very close friends. Smith Young and I became great friends. And Bob Philpott. Course, I grew up with Paul Broyhill. I grew up with him in the mountains of North Carolina in Blowing Rock.

We would cross-pollinate sometimes; whenever we would have lawsuits-when we were being sued. In one case we were being sued by a salesman of ours in PA. We fired him and he sued us. Smith Young appeared as a witness for us, and he made the case. I appeared as a witness for other people. We really had a lot of support. The SFMA has always been supportive. Back in my association with them, they weren't as professionally organized as they have been in the last several years. They didn't have a staff back then. They made an attempt to use Jim Ryan-he was basically a traffic manager. He'd go after the freight rates, that's what he did. When Bob Spelman came in, he was more of a generalist. But there really wasn't any bad feeling among our competitors unless we would copy something. Like the Lane Company when they sued us. They finally dropped the suit, but that was big news. They said I copied a table from them.

Interviewer: What about the support your company has received?

Spilman: Well, I guess when I referred to the support for myself, I was representing the company, so one is applicable to the other.

Interviewer: Carrol Henkel was very big at asking. I know he talked to you many times about things.

Spilman: Oh yeah, he'd call me.

Interviewer: He and Mary (Henkel). I bet you they did more for the association than anyone else ever did.

Spilman: I would say they did. And I got a nice box of apples every year!

Interviewer: They used to come to High Point in the fall sometimes, and they always brought us a case of apples!

I went to work for SFMA just about the very time that you finished your presidency, and I spent twenty years there until I retired.

Spilman: Spelman had a son who worked at Stanley and he was up here all the time seeing his son.

Interviewer: Now, what have you done for other people?

Spilman: Well, I did what they did for me, I've appeared in trials and so forth-copyrights, etc. When Stanley had a strike, a guy named Van Gleck was running the company, Stanley had sold it then. When they had a strike down there, they had the union sympathizers on picket, and they still had people in the plant, but they didn't have enough people to run it. So I got them to give me bills of process of what they needed, and I cut lumber for them up here, and furnished it to them. So we'd do things like that back and forth.

Interviewer: Describe your business strategy.

Spilman: Well, personally, before the days of missions, where you have the missions spelled out, annual reports, all the employees signing off on things, and so on and so forth. Basically, my strategy was focused on making a profit, and I didn't care what it took as long as it was legal and ethical. I had a reputation of maybe being a little tough, but I wanted to be tough to get that last squeeze out of a dollar. Because the shareholders take a risk when they buy you, and you've got to earn their support. That's what we tried to do. At the same time, we tried to look after our employees with medical benefits, with life insurance, things that. At that time, that hadn't been done before. We put in a retirement fund that hadn't been put in before. We finally ended up with a 401K plan.

Spilman: But I think most CEOs even today think their focus should be profit. Because that is what they are in business for. I think what so many CEOs have done, with their salaries and their perks, I think it's criminal. And I blame the compensation consultants. They have made an industry of jacking up CEOs, COOs, CFOs salaries beyond all reason.

Interviewer: Well, and another way of compensating is stock options and that sort of thing.

Spilman: Well, now that you have to post that against earnings, that is out of favor. But phantom stock is coming back in. But still, even with stock options, I think that's been greatly abused.

Well look at of McColl at Bank of America, I was on that Board for 20 years. Of course it was NationsBank then. But you could never value him at $37 million dollars, that he could cash in all he wanted.

Interviewer: There's no justification for the wage difference.

Spilman: Well, I don't think so either. I just hope it doesn't backfire long-term with the unions-bringing the unions back in.

Interviewer: It could.

Spilman: You're darn right it could.

Interviewer: I read somewhere, and I think it was in Europe, that by law, the company presidents cannot make more than 37 times what the lowest employee gets.

Spilman: Oh yeah, they put a lid on it.

Interviewer: What about management techniques?

Spilman: Well, I think I covered that. I've served on a lot of Boards, and I noticed in my twilight years on these Boards that there is a lot more management by committee. A lot of meetings. The techniques of this has changed, and you've got so many things you can do and can't do legally-age restrictions, sexual remarks. Techniques are entirely different than they were in my really active years.

Interviewer: What has been your central, personal goal in business?

Spilman: Well, to run a successful company. With a real focus on profits. And then the other areas-happy employees and a morally correct company.

Interviewer: How well would you say that you have achieved that?

Spilman: Well, on a 1 to 10 scale, maybe a 7.

(end of Tape 1, side 2)

Spilman: So, I said 7 on a 1 to 10 scale, but you have to be judged by yourpeers, you can't judge yourself. There are a lot of goals, and maybe you were 2 on some of them, and maybe you were 10 on some of them. So that's a difficult question to address.

Interviewer: Did you have a central, primary goal- one that you could group them all under?

Spilman: Profit.

Interviewer: I was impressed by your statement that you had one year, only one cent a share profit. But, what did everybody else make that year? (laughs)

Spilman: Yeah, well, that was just the 1st quarter-we ended up with $1.80 something.

Interviewer: What has been your goal for the company-your company goal?

Spilman: To be on the cutting edge for the manufacturing process. To have a royal style line. And give the value and quality that is necessary for success.

Interviewer: That's the same style, quality, and price that you hear about elsewhere.

Spilman: That's exactly right.

Interviewer: Is that anything that is used as an acronym? Style, quality and price?

Spilman: No, in the old days, I used to put it on all the catalog prints. Then my competitors started putting it on theirs, and I cut it out!

Interviewer: Alright, how well was that achieved as a company goal?

Spilman: Again-well, we're still in business, and a lot of people have closed down, so it must've been, to some degree, successful.

Interviewer: This is very difficult, I've found, talking with a lot of fellows, can you express the overriding business philosophy of your company?

Spilman: Well, any company takes on the personality of its CEO. And I think you can look at the personal philosophy of the CEO and transpose that to the philosophy of the business. Because it's not going to change as long as he's running the company.

Interviewer: I was really amazed at one Hall of Famer that 1 interviewed, and he had really done quite well. He said, "And all I ever wanted to do was just make a little money!" And I was surprised. What I knew of his success was that he made $45 million! So he did all right. I was just expecting something broader than that. But everybody is different! (break in tape)

Let me say real quick that we're now in Bob's home, near Richmond, VA, and we'll continue where we left off. Today is the 7th of April, 2005.

Bob, the next question is. "describe your relationship with your suppliers". As I told you, there is a lot of opportunity for overlap in your answers, but anything you can add to what we've already said would be great.

Spilman: Well, I think our relationship with our suppliers was excellent.
We concentrated on focusing our purchasing with very few sources. So we would mean more to them to other customers that they had. And that philosophy worked very well. If we found some discrepancy in service or price or something, we would warn the supplier, and if he didn't adjust the situation, we would change suppliers.

Interviewer: What about your relationship with your customers? And you had a whole lot more customers than you did suppliers!

Spilman: We certainly did! I think our relationship with our customers was good. We tended to put more emphasis on the larger customers than we did the smaller customers, which was an omission on our part. We should have been really working on a smaller customer base. But our appetite was so huge, that if we didn't have the order from the major retailers, we wouldn't be able to run all of our plants.

Interviewer: What was your Virginia salesman whose name was Booker?

Spilman: Booker Carter. From Martinsville, VA. Interviewer: Yeah-he was in command!

Spilman: He was! He really was. Nice guy. Interviewer: Oh, yes. But he was in command!

Spilman: He was a good salesman. He was with Bassett Furniture Company before we consolidated into one sales force.

Interviewer: I was in Norfolk with Lennie Strelitz's store. Do you remember him?

Spilman: Oh, do I!!

Interviewer: And it was lunchtime and Lennie was out. Salesmen kept coming in to wait in line. Booker was first in line. And about 2:00, Lennie came in and said something about "sitting around, wearing out my furniture..." And Booker got up and said, "Here's my address, ship me the chair and send me a bill!!" And he walked out! And Lennie was right behind him, apologizing.

Spilman: Boy, Leonard Strelitz! That's the only way you could handle him. He was tough!

Interviewer: Now: what were your greatest problems when you were dealing, in both categories, with customers and suppliers?

Spilman: Well, our biggest problem with suppliers, particularly lumber suppliers-you would get an order to support your production schedule-and the prices would go up, and these lumber dealers wouldn't ship! An order with them was like a puff of smoke. And if prices went down, they'd ship at the higher prices. And that's not just the small lumber mills, this is some of the major lumber mills also. As far as others-veneer suppliers, hardware suppliers, and finish suppliers-we didn't have any real problems with them.

Problems with customers? Unfortunately, in this industry, the word cancellation is prevalent, unlike some other more professional industries where you can't cancel. If you try to cancel you have to pay a premium, or go to arbitration. But in the furniture industry, the customer can call up and cancel the day before you ship their order. That was the biggest problem we had, and that wasn't limited just to Bassett, that was the whole industry.

Credit was a problem with a certain type of customer. We had very generous terms, "2% 30 days, net 70." Those are generous terms, but we had credit problems through my whole tenure. And not just with the smaller dealers, some of the major dealers had problems.

Interviewer: Oh, yes. Heilig-Meyers went out, Levitz went out.

Spilman: Montgomery-Ward. Montgomery-Ward was like Sears, it was a pillar of retailing.

Interviewer: Sears, Wards, and Penneys-they all go together. Penneys went pretty much out of furniture, though, didn't they?

Spilman: No, they're still in furniture, but they are importing from China.

Interviewer: Of course importing was never a problem when you and I were in the business, but it is a different ballgame today.

Spilman: Well, you hear this time after time, after time- "it's a global economy." And it is a global economy, whatever it is-automotive, electronics, furniture.

Interviewer: Textiles, too.

Spilman: Textiles, oh yes. But the quota's are off now-China is just really popping it in here. And the advantage they get in their currency has really allowed them to just explode.

Interviewer: Well, and of course, they're doing that artificially by buying our money and bonds and everything. But in them doing that, we owe China over a trillion dollars!!

Spilman: Oh yes. Well, they're smart.

Interviewer: I got into a discussion with one of my groups in High Point, talking about the fact that of all the printed US currency, 76% of it is not in the United States. It's out all over the world. If we ever had to pay that all back, we'd be down the drain!

Well, now we have to go a little bit more industry-wide. Describe your involvement with industry trade associations. Of course, you and I both know quite much about that because we were heavily involved together.

Spilman: Well, my first association was SFMA, the Southern Furniture Manufacturers Association, and specifically with the sales & marketing division. I was elected to the Board of that division and then I became president of it. I was involved with some of the peripheral activities like the flammability effort which you spearheaded. I got involved with that along with Hamp Powell, and we went to California and saw Governor Brown. Were you on that trip?

Interviewer: Oh yes! While Hamp was out there-he called me Thursday afternoon, and it was maybe 6:00 in Raleigh where we lived. He says, "Roy, there is a flight to San Francisco at 8:30 from Raleigh-Durham. I want you on it!" I was cooking chicken in the backyard, but I just packed up and left!

He called you, an he found you in Miami scraping your boat. He had you out there Sunday morning, I think it was. Amazing!

Spilman: Also, we had something called the Furniture Factories Marketing Association of the South, FFMAS. And the Bassetts were some of the original founders of that group. The purpose for it was to strengthen the High Point Market and have a united front to present to the retailer to try to lure them to High Point away from the other markets. I got involved in that early on, and was very active in that and later became president of it.

I was in the National Manufacturers Association, for a great many years, but that was overall industry, not just furniture.

Interviewer: What has been the greatest benefit from that activity?

Spilman: Well, the greatest benefit that I have received from any association is the opportunity to meet my peers, and to have a dialog with them on whatever subject might be important at that time. And you impart business knowledge, too-techniques, systems, things you might not have thought of.

Interviewer: We spoke the other day about Carroll Henkel, who was really big at talking to people. He was a wonderful guy.

Spilman: He made furniture in his garage-when he started out, his shop was in his garage.

Interviewer: That was in Pittsburgh.

Spilman: No, it was in Winchester.

Interviewer: Ok, and they rented an old shed back behind their house. Belonged to someone else, and is still there as far as I know.

Spilman: What's happened to his son?

Interviewer: Bill is now president of the company.

Spilman: Bill was adopted, wasn't he?

Interviewer: Yes, and he wasn't a baby at that time. He was 5 or 6 years old. As I told you, we were in a showroom, next door neighbors, over in that little Merchandise Mart that Stanley Taylor owned.

Spilman: Well, the first time I ever met him was in Blowing Rock. He had stopped by to see an uncle of mine, C.B. Henkel, who was in the textile business, and he was Lieutenant Governor of North Carolina. At that time, I was still with Cannon Mills in New York. That was the first time I'd met Carrol and Mary. Then, when I went in the furniture business, we saw a fair amount of each other.

Interviewer: So, you meet your peers as a result of being in associations. Of course, we used to go to the annual SFMA meetings. They were always in Blowing Rock, or Grove Park Inn. It was like a family reunion!

What has been your biggest benefit as a result of being in those organizations?

Spilman: Well, as you alluded to earlier, it was originally more social than it was educational. As we got into new directors, new blood, younger people, it became more educational. It was departmentalized: traffic, sales, manufacturing, etc. So it became more beneficial to the members from that perspective. But it lost the "good of boy" syndrome!

And there was the furniture production curriculum at NC State University, which SFMA sponsored, it contributed a lot to bringing technology into our industry.

Interviewer: Hamp Powell was very largely responsible for that, over a good many years. He had a picture, and I don't think you were in it- I don't know who it was, but somebody was representing Bassett, and it was taken on the steps of the hall where the furniture program office was. Hamp Powell was right in the middle of it. As you know, he gained a lot of weight at one time in his life, and he was almost fat in that picture.

Spilman: Well, that must have been before 1957, because he was thin as hell when I first met him.

Interviewer: Yes, it was. He just deliberately got rid of it! He was thin as a snake after that.

What other business enterprises or joint ventures have you been part of.

Spilman: Well, I really didn't stray too far from the center line of Bassett. I was instrumental in starting a plastics company. Plastic was prevalent to put on the front of cases of dressers and chests. Several of us formed a plant facility, High Impact Styrene in Bassett, VA. And when I saw the handwriting on the wall, I sold the company to Libby Owens' Ford Glass Company. It was a good thing I did, because that fad sort of hit the brick wall. However, they went from furniture into automotive. And in reducing the weight of cars, they went to various types of plastics, to use in all sorts of ways-bumpers, grills, dashboards. I was instrumental in that.

I've also been on a lot of boards-those are joint enterprises and so forth. But I was on five Fortune 500 boards: Bank of America, Jefferson Pilot Life Insurance, TriNova (which owned Vickers and Air Equip, and was in the hydraulic industry), Fiston (the coal company, now called Brinks), and Dominion Resources (the major power company in Virginia and Eastern NC-they're also very heavy in natural gas). So I've had some exposure to other businesses by being on all these boards. I can't think of any other enterprises that I've been associated with.

Interviewer: Do you remember a guy from High Point named Jack Burris? He was a car dealer. He bought, way back in the 1930's, $20,000 worth of Jefferson Pilot stock, before it was Jefferson Pilot, could have been Pilot or could have been Jefferson. I met him on the street one day in High Point. He said, "Roy, if you have any money to invest, put it into (what was then) NCNB. I just came from the Pilot Life stockholder's meeting. Every nickel that Pilot Life has, loose money, is somewhere at NCNB!

Spilman: Oh, they were a major shareholder. In fact, if you'll recall, we put him on the Board of Jefferson Pilot, and he got eaten up, because of conflict of interest. NCNB was later NationsBank, and they bought a lot of JP stock, too. So it was both ways. There was sort of a feeling back in the early 90's, late 80's, that banks ought to go into the insurance business.

Interviewer: This would have been about 1970 probably, because my son was a baby. My mother died within a year of his birth, so he got into a trust that she had-he had a little income! So I talked to Jack, and I went over to the bank, borrowed some money, and went and bought NCNB! Benjamin is 37 years old, still has that stock. He is still happy with it!

Spilman: I'm very happy with mine. I bought a bunch when I went on the Board. Of course, it had splits, and reinvested dividends. Still do, as a matter of fact.

Interviewer: And the Texas Commerce Bank acquisition..

Spilman: Oh, lord, that was a real home run. Financial people really engineered that, then when they got the FDIC to have a good bank/bad bank, and everything that wasn't good, they had to put in the bad bank. And the FDIC had to eat it!

Interviewer: Well, by and large, these joint ventures-how did they work out?

Spilman: Very well. We took stock and LOF did, and when we got the company started, we spread the stock around to employees of Bassett, because they were going to use the product, and we let them invest in the company. Originally there were about 4 or 5 of us, then when we spread it around, we ended up with about 12 or 15 different shareholders. And they all came out very well.

Interviewer: There was a particleboard facility, II guess it's still there in Martinsville. Was that Bassett or was that a joint venture?

Spilman: That was a joint venture, I forgot about that, called Triloid. I put that together. We got Hooker and Pulaski to go into it. It was a “sandwich board” product, fiber board. It had fines on the outside and coarse in the core. Burlington wanted to join us later on, so we let Burlington get into it. The equipment was German. We bought it in Germany and brought it all the way here and set it up. We ran it for about 10-15 years, then we closed it down. I don't know what happened to the equipment after I left. But that wasn't too successful.

Interviewer: They sure did buy the wood waste everywhere.

Spilman: Oh yeah, we had a marshaling plant in High Point, and we used to go around to all the little plants out there. We had a bunch of trailers we'd haul it back and forth in. But the reason we went into it was because we thought there was going to be a shortage of particle board, and that shortage never occurred. A new product, a medium-density fiberboard came on the market, and that took the place of the type of board that the furniture industry had used. Also the oriented strand board came on the market. While the furniture people didn't use it, it took away from the type of board the furniture industry did use, and consequently, there was a surplus of the type board we used.

Interviewer: There was a plant in High Point that I think had the same machinery. It didn't survive either. Elliott Wood bought that factory when he went back in furniture with Woodmark.

Spilman: Well, timing is so important. A fellow named Wilbur Doyle who was in the lumber business in Henry County, VA, got associated with these people to make these laminated trusses, using OSB and fiberboard, and laminating them together. That construction is very prevalent in the industry, everybody is using the trusses. But when he went into it (and we put $1 million this), he didn't have the building permits. He'd go to all these different cities, and the building inspectors wouldn't let the builders use this stuff because it hadn't been approved. Of course, now it has been permitted, and it's like Apple Pie and Motherhood!

Interviewer: Describe how the manufacturing industry has changed over the years that you've been active.

Spilman: Well, as we mentioned earlier, the techniques and the machinery that make these constructions possible, has changed substantially. We've gone to computer-controlled machines. It is less labor-intensive because of these advanced, good-working machines. And a lot of these machines came from the metal industry, too. The wood machinery manufacturers didn't have the R&D budgets to do a lot of developing, so they pirated techniques from the metal industry.

Electrostatic finishing is another one-that way you don't need an operator. There's just too many things that have changed to define each one, but basically, there has been a tremendous upgrading of manufacturing techniques over when I first joined the industry in 1960 or 70.

Interviewer: What about changes in the marketplace?

Spilman: Well, the marketplace is entirely different. The number of customers and furniture dealers is probably down to about 20% of when I first got into the industry. And not only your smaller dealers, but a lot of your larger dealers, too, have disappeared from the marketplace. It used to be a lot of regional furniture markets: New York, Atlanta, Dallas, Los Angeles, San Francisco, Seattle, Chicago. And now, there are only two markets currently that are considered national in scope. Of course, one is High Point, which is the market of the world. The other is Tupelo, Mississippi, which is more low-end type merchandise. It's changed the buying habits of the retailers. A lot of the small dealers can't afford to go to these markets. Number one, the cost and expense, and number two, being away from their businesses during that time.

But marketing has changed considerably, and there is a trend that seems to be spreading like the plague of manufacturing having their own retail outlets. Of course, this was started by Ethan Allen years ago, and was very successful. But Drexel and Thomasville took it up, and Bassett had a gallery program, but now we have the Bassett direct stores that have been very successful. So that aspect has changed in the marketing area.

The sales representative's responsibilities have changed considerably as well. In a lot of cases, the person representing manufacturing are display people or advertising people, or a combination-they're not really there to present merchandise and write an order. They are there to help move the merchandise that the dealer has received.

Interviewer: By and large now, any changes of the display is taken up at the market, and the successful salesmen just go around and educate the retail salesmen. The salespeople are mostly female today. Did you ever meet Plato Wilson? You know, we got him in the Hall of Fame last year. Only on the grounds that he was a typical salesman-highly successful. In a sales-oriented industry like ours, we have only one salesman in the Hall of Fame. So we went to work, and Plato himself went to work!

Do you want to add anything on changes in your own business?

Spilman: Well, as CEO, at the annual stockholders' meeting, Bassett has gone from a manufacturer to a retailer. And I think that, in a nutshell, sums it up. Different mentalities, different philosophies, and basically, Bassett is a retailer now.

Interviewer: Well, is there anything wrong with that?

Spilman: No. Unless there is something that happens that disrupts the global sourcing, and you need manufacturing facilities to have product to support your stores. God forbid that would ever happen.

Interviewer: In our church, we have a group that discusses stuff like that, and they are saying we are going to be at war with China. And I say, "Listen-how many people have you ever heard of that go around shooting their customers?" (laughs)

Spilman: Well, I'm getting to be more and more of an isolationist. To have to fight these wars on our enemy's battleground instead of our own battleground, logistically, is just miserable.

Interviewer: Most expensive mistake in the history of the world.

Next question: What do you see as the most serious problem facing our industry today, both short-term and long-term?
Spilman: Well, I think the major problem short-term is exciting the consumer. There are so many products out there that disposable income can be used for that are so gratifying: electronics, recreation, vacation, transportation. This is an ongoing problem that we've had forever-how do we excite the consumer to put their dollars in home furnishings rather than some of the other, sexier products?

Interviewer: Which, 40 years ago, were not even products! Computers, all that stuff.

Spilman: Yes-like these new televisions. I've got one of those new, plasma deals. But long-term, I think our industry will lose a tremendous amount of capacity to the global market. Long-term, I think that's a problem. Sources from outside the US for product for our stores, for the retailer-I think that is going to be a major problem. Because, I think these off-shore people, as they get more sophisticated, and as transportation becomes cheaper or easier to get, they'll just move in and open their own stores here in the US and bypass the manufacturers using them now.

Interviewer: Except for the ones like Bassett who are smart enough to become the middle-man themselves.

Spilman: Well, they could conceivably bypass Bassett. They could open their own Chinese direct furniture store. I think that is going to be a problem.

Interviewer: Well, let me impose on you, to an extent: can the Chinese people successfully merchandise furniture? It is a lot more than just manufacturing. You've got to sell it.

Spilman: Well, if they can't, they'll hire the people that can do it for them.

Interviewer: But they'll be Americans.

Spilman: Well, they will be, but it won't be an American operation, it will be a Chinese operation. They are cunning, they are patient, they have obviously unlimited resources behind them, and they are going to do what they have to do to be successful. If they see a chance to increase their margins by going directly to the American consumer and bypass us, they'll do it in the flip of a thumb. They'll have warehouses here so they can distribute in a timely manner, and as you allude to the advertising and merchandising-if they can't do it, they'll get the people who can. And they can do it. I know you're familiar with C.S. Wo. He also was one of the principals in Universal Furniture. So long-term, I think it's going to be a problem.

Interviewer: I read the NY Times on the Internet. Over the last 3 or 4 weeks, they've had a whole lot of stuff in there about the showing of garments. And do you know where all the innovative garment design takes place? In Paris. New York people don't do a thing! They buy the designs and make them in New York. There's a whole lot more clothing made in New York. But the center of the women's clothing design business remains in Paris. I think it's going to work like that. If they can make it cheaper, fine. But there is no reason in the world why Bassett shouldn't have a store in Berlin and Paris like those here, and make money on them!

What has been your greatest contribution to our industry?

Spilman: I don't think I can evaluate what I've done for the industry. I think someone outside Bassett would have to do that. One of the things I take the greatest amount of pride in is keeping the High Point market in the South, keeping it in High Point, and keeping it from being exploited by other people.

Interviewer: The Greensboro paper had an editorial yesterday, that Las Vegas is going to 11 million square feet, which would make it the same size as High Point. And Las Vegas is spending $1 million per month I think it is to advertise Las Vegas. The market in High Point puts $1 billion per year into the overall NC economy.

Spilman: Well, they're going to end up with some business, and I think eventually end up with the High Point business. I think it'll be a long time.

Interviewer: You know, we have a big banquet, we call it a `Market Gala', every fall, at which we install two or three people into the Hall of Fame. The AFHF president closes his commentary, every time, exactly the same way. He says, "Well, folks, we promised to have you out of here by 9:00, and it's 8:50! (laughs)

Well, I tell you, you go through a day of market, you're ready to go home and go to bed at 9:00!

Spilman: You know, we had a private dining room down at the Bassett showroom. It was like an English men's club. And we entertained there every single night. I had all my people over there before 7:00 in the morning. We'd get down there about 6:30 p.m., and we'd stay there until about 11:00 or 12:00 a.m. You do that about 6 nights straight, and you're ready to go home early as possible.

Interviewer: But if you were in Las Vegas, what would you do? Go home, go back to the hotel, and go to bed! So I just don't think that having all that entertainment there is that big of an attraction.

Spilman: Couldn't agree with you more.

Interviewer: How about other important contributions?

Spilman: I really can't answer that. Everything is relative. You get involved with associations, and you do the best you think you can do in something, and how much of a contribution that is, I really can't say.

Interviewer: But you have things that interest you, like your boat, you take time for that. Some of the industry stuff is a whole lot less interesting, you just don't do it!

Spilman: Well, a lot of things like boating and stuff, you get a lot of transfer of energies. You have your focus on your business, and you need something to let a little steam off, whatever it might be.

Interviewer: You know Hamp raised Sheltie dogs.

Spilman: Yeah, he lived out in the country, in a country house. When I went to his funeral, I went to his home, and I was amazed.

Interviewer: He raised these Shelties. If he particularly liked somebody, and knew they'd take care of it, he'd give them a puppy.
b He was quite a guy.

Interviewer: It had nothing to do with furniture, but that's one thing that he did with his spare time.

Spilman: You know, what's happened to the Lane Company is just ludicrous.

Interviewer: Yes, it is, and Hamp and BB Lane were fortunate not to be around to see it.

How much of your contribution was built on already existing techniques and methods? How much came from innovations which you originated or put into use before most other companies did?

Spilman: Well, that question isn't really applicable to what I said I had the most pride in.

Interviewer: Yes. you've covered it to a very high degree. I would say that Bassett got into retail-not the first, Ethan Allen was probably first-but very soon after! You were ahead of most!

Spilman: Well, we got into the gallery program first, which is a quasi approach to retailing. But as far as the dedicated store, total Bassett environment, we got into it about 8-10 years ago. A lot of people are going into it now.

Interviewer: Out between High Point and Greensboro, on the interstate, Furniture South is on the north side, and Boyles is on the south side, and they've extended that street that Boyles is on. They are just now opening a Drexel Heritage there, and a Thomasville store, and one other one.

Spilman: Yeah. Well, Broyhill just opened one in Blowing Rock. At the Intersection of US 360.

Interviewer: Anything else on changes? Spilman: No, that's about it.

Interviewer: All right, new topic: "Influence of outside factors on the furniture industry." How was your company affected by the depression?

Spilman: Well, I'm not knowledgeable in that area. Obviously, they made it through the depression. A lot of manufacturers didn't! And the wages were just unbelievably low. Like 10 cents an hour, just unbelievable.

Interviewer: I think I took home $13.65 a week when I first started out o f high school - I think it was $14.00 less Social Security.

Spilman: I remember during the war, we had people that would work on the farm for $1.00 a day. $5.00 a week.

Interviewer: Well, they're lucky to have that during the depression!

Spilman: This wasn't the depression, this was WWII.

Interviewer: Well, that's the next question, it's somewhat analogous. You were talking the other day of WWII and Bassett making truck bodies. We made bunk beds. John Christian (Bernhardt) told me about that wooden airplane that they were involved in.

Spilman: The Howard Hughes airplane or the B-24 that was made of laminated plywood?

Interviewer: The B-24 was probably it, but it was farmed out by components. And what Bernhardt did in order to have a justification for buying lumber, they made the tail assembly.

Spilman: I know the main fuselage was made in Bristol, TN. We had a woolen mill over there, and it was fairly close to our woolen mill. I remember going to the plant and seeing line after line of fuselages of these plywood bombers.

Interviewer: The aircraft that John Christian was working on never did get into production. Mengel in Louisville was to make made part of it, maybe the wings, I don't remember. But there were about five companies making components. One of the five never did finish its prototype. Bernhardt got theirs all done.

Alright, what about racial attitude?

Spilman: That's been a big change, of course. It's been an education for employees in the factory who changed from working with all whites to integration-same water fountains, same johns, everything else. It's just been a big change. But you have to go with the flow.

Interviewer: We had a terrible time at the Futorian factory in Rocky Mount, because they wouldn't let us hire any blacks. In the fall with the tobacco market working, you couldn't get enough people to run a factory if they had to be all white! They finally let us try it. We found a very distinguished black man, and he guided us, and we got the right people in there. Worked so well, they started hiring them in Mississippi.

Spilman: Well, you know, discrimination is not limited just to white-black. We had several plants in Los Angeles, and all the workers were Mexicans. We had two upholstery plants, and we bought Fame Furniture Company. Then I bought another plant, a cut-sew plant, next door to them. We had a lot of trouble when we hired black people, because our workforce was basically Mexican in all of our plants out there.

Interviewer: They always have worked together in NC. And then as you said-I thought you covered that very well-how Mexican workers have made a big difference here.

Spilman: Well, I think in Los Angeles, they've been out there so long, I think they're a much more cohesive group there than they are in NC and.

Interviewer: I talked to an upholstery manufacturer in L.A. The U.S. started restricting the immigration of Mexicans - illegal ones. He said they had one supervisor who worked in his factory. He said that anybody he needed, he'd call this guy in, and tell him he needed someone to do that job, and he'd have someone there the next morning! A good one! They won't let the boss do that anymore, and he isn't happy about that.

Spilman: Well that's what we did. Basically by families. Every family had a patriarch. And if you needed someone in the sewing room, you'd tell this patriarch and hire who he brought in the next day. We didn't know if they were legal or illegal. But now, you better have them legal.

Interviewer: Women's issues is next, what about that?

Spilman: Well, as I mentioned earlier, in the late 50's, we had all men in our factories. We started bringing women in after WWII. We haven't had any issues as far as women are concerned-on pay, or in the sexual area. But it's certainly something you have to be conscious of, and be careful.

Interviewer: Morrie Futorian started hiring women in upholstery way back, and the only limitation they had was that they couldn't lift over so much weight. So we would have 9 people on a line, and they would even work sofas. If it wasn't on a conveyor, the next operator would step over, and together they lifted them off and on. And we always had two people lifting. Morrie's furniture was not heavy-ever. And they had it all worked out. Part of the job description was to help the next lady lift.

Spilman: I listened to something on C-SPAN this past weekend, and they were talking about the subject of compulsory military conscription. Two of the participants were for it, then there was a moderator that was the devil's advocate. It was very interesting. But the one thing that they think is that there is a great need for more people in our armed forces. Well, what are you going to do to get more people in our armed forces? Should it be all volunteer? And they went back and forth with the pros and cons of the whole thing. But one thing they said was to get more combat troops, they ought to erase the limitation of women not being active combatants. They are doing everything else-they're space people, military police (which is probably just as dangerous as being in combat. If they'd only remove the restriction, we could get a great reservoir of people by letting them get a shot at it.

Interviewer: I think I'd have reservations about that.

Spilman: I think I would too.

Interviewer: Anything else on that? Spilman: No sir.

Interviewer: How has shipment of your product affected your company-both rail and truck?

Spilman: Well, when I joined Bassett 40-some-odd years ago, I would say 80% of our shipments were by rail.

Interviewer: Carloads and LCL.

Spilman: Yes, LCL. Railroads eventually cut out LCL, though, and there were very few carload customers left by rail. Truckers made it so convenient for the dealer-not only competitive in price, but less damage in the shipping in a truck. Also, when a truck arrives at a destination, the driver would help the warehouse people unload the truck, whereas with rail, you had to get some local delivery service to take it out of the boxcar and take it to the warehouse.

Interviewer: In New York, this was later when the railroads quit, we ran trucks to New York, and the union up there would not touch a piece of furniture except after it was off of the tailgate of the truck. So our drivers mostly had to hire someone to help them.

Spilman: And another thing-when these refrigerated trucks bring produce back from the west coast, and they're usually deadheading back from the west. That's become a tremendous source of transportation for the furniture industries, the back hauls. And they make interim stops in between the east and west coasts-Chicago or Denver, wherever it might be. That's hurt the rail considerably So it's been a tremendous change in favor of trucklines.

Interviewer: But would you think that there is a possibility of rail coming back?

Spilman: I don't think so. I think with rail-they don't want the LTL. Less than truck loads.

Interviewer: Containerization coming across the ocean-do you know who invented the container?

Spilman: Malcolm McLean. A container is 20 feet. It ships based on 20 foot containers, not 40 foot. You see mostly 40 foot. But by using 20 foot containers, that will enable a lot of smaller retailers to get a container full of furniture rather than a 40 foot. And of course they are piggy-backing, stacking one on the other, and the trains are from Long Beach, CA, and they're coming across the country with these piggy-backs of 20 foot containers. But they still have to be distributed by trucks.

Interviewer: We have a container train that comes through High Point between 1:00 and 2:00 every afternoon, and it highballs past everybody. Even the passenger trains stop for that. It doesn't slow down.

Spilman: Well, Norfolk-Southern is reconfiguring a lot of these tunnels over here in the Appalachian Mountains to be able to carry these piggy-backs. I was chairman of Virginia Port Authority for 5 years, and we have a container terminal near Winchester, VA that we can consolidate-trucks bring them in there, then we can put them on a train, and haul them down to the tidewater area, to Norfolk, Newport News, etc.

Interviewer: Well, see, that's rail coming back. That's what I mean.

Spilman: Well, it is rail coming back, but not to the actual customer. Interviewer: What's been the effect of environmental regulations?

Spilman: Well, it's added a tremendous amount of cost to our product. Some of it is needed, and some of it isn't. The typical governmental approach is overkill. It's put a burden on our cost-and this gets back to the world economy issue. It's a cost that our global competitors don't have.

Interviewer: Jerry Epperson went to China, he said they just do whatever! You remember Jerry wrote about when he was in the office of one of the big Chinese companies, and he went to the restroom. He said, "You flush the toilet, and you can see light!" (laughing)

Spilman: Rob, the first time he was over there, went in this finishing room. This was 10 years ago I guess. No fans, no masks, nothing. The plant manager was an American, and Rob said, "What the hell? How do you keep these people?" The plant manager said, "Well, they're usually good for about 2 years, and then they die. Then we just get another one in."

Interviewer: Alex Bernhardt, when I was at NC State, I'll never forget. I was in talking with him about environmental protection. He looked across the street (they had one of these Carter-Day collectors on top of the factory). He said, "That damn thing cost us $70,000, and it doesn't add a nickel to the product!"

Spilman: Were you in the furniture program down there at State?

Interviewer: I worked with them, I was not directly involved. I was in the Industrial Extension Service. A very substantial part of our business was furniture-related. Ed Clark was one of those directly involved, and Rudy Willard.

Spilman: I graduated from State, you know, and I was on the board of the furniture program. This gal named "Peaches" from Nashville. They had a big going away party for her. She lobbied to be chairman of the board. We'd picked this guy Ed-he was in contention for CEO of General Electric, he ran the aircraft engine division. He has a home up in the mountains near us. Anyway, she blew it out by politicking. I've been on university boards for 35 years, and I've never seen anybody politick to be chairman of the board. Anyway, she really pissed me off, and we had to put Anco Prak, or whatever his name is, in as chairman. That knocked Ed out of the position. So I resigned.

Interviewer: What's been the involvement of your factory business on your community?

Spilman: Well, we were, in essence, a 100% company town. We owned the power company, we generated power from wood waste before we got into fiberboard. Then we bought wholesale power from American Electric Power Company, and sold it to the employees who lived in Bassett. The police force worked for us, we did the road maintenance for the state.

Interviewer: I remember, once when you said the county sheriff would drive you to High Point. He set the world record? (laughs)

Spilman: Yeah. We were very influential. The town was unincorporated. It was very paternalistic, and it worked. We had company houses, and when I became CEO, I tore them all down because they were sub-standard. Some of them were sub-standard. We had 100+, and I just tore them all down. Or else gave the employees the opportunity to buy them, which some of them did. So we had great influence on our community.

Interviewer: Now, on to civic and social involvement. Describe your involvement in social, civic, and business activities outside the furniture industry.

Spilman: Well, I've been on the board of Old Dominion University for several terms. I was on the board of Appalachian State University for 7 years. I was supposed to be chairman, but the governor put me on VMI's board, and I was on VMI's board for 8 years, and then I was on the Darden School Board (University of Virginia's business school) for 2 terms. I was on the Board of NC State. Then I went on the Council of Higher Education for the state of VA, and served there. So I've had a fair amount of exposure to higher institutions of education.

Interviewer: You sure have! Anything else?

Spilman: Well, I've been chairman of Virginia Port Authority. I was on the Port Authority, and then became chairman. I've been on a lot of study commissions for various governors. One on the highways of Virginia and how to finance them, one on the judicial system -going to arbitration rather than courts. I was one of two non-lawyers on that commission. Just a hell of a lot of other things-hard to remember them all right now! I was on the Airport Authority for 25-30 years in Henry County. I was active in the United Fund in my younger days.

Interviewer: Which one of the Vaughan brothers was it that was very big on the highway thing? Was it John's father?

Spilman: No, it was his brother George. He was a highway commissioner for awhile.

Interviewer: George, that's right! He had a Cadillac Fleetwood. He and Sandy Bienenstock were good buddies. Anything else?

Spilman: Well, I've been very active in the VA Foundation for Independent
Colleges. We have 17 independent colleges in Virginia, and we raised right at $4 million a year while I was chairman of it. I was very active in the solicitation of money for the VFIC.

Interviewer: Oh? That's very good. Sort of unusual. What is your favorite charity?

Spilman: I really don't have a favorite charity. We are obligated to a lot of things, Jane and I are. We like to really spread it around. She is very active, and every time she takes a new one, she ends up as chairman of the board or president or something. So all of a sudden, that is my favorite charity overnight! She's very active.

Interviewer: What was the arts group you were telling me about the other day?

Spilman: Yeah, she was president of the Board here in Richmond, at the Museum of Fine Arts. She and the group together raised about $144 million. They were building a new addition, and they need more money now.

She was chairman of the Board of Hollins University. She was chairman of the Board of Trustees of Gallandet University. She's got lots of stripes.

Interviewer: What is your principal leisure time activity?

Spilman: Well, I do an awful lot of fishing. I used to do deep sea fishing, and now I do fly fishing. There are four of us-we probably spend more time together than we do with our wives. We fish in Chile, we fish in Iceland, in a couple of weeks we're going down to the Bahamas to fly fish.

I also like to shoot. I shoot with these same guys, and some others. We shoot in Spain, Scotland, England, Georgia, and South Carolina.

Interviewer: Bill Henkel always has been very much into guns. He goes out West and uses them, but they cost 16 times more than they are worth!

Spilman: Well, I've never shot a four legged animal, except for rabbit. I'm not interested in deer shooting or any of the big game. I have no desire to go to Africa!

Interviewer: Yes, that's ridiculous in my opinion. Spilman: But I love to bird shoot.

Interviewer: Where do you find any birds anymore?

Spilman: Well, in Texas there are loads of wild quail. And some in Georgia, too. My next door neighbor in Linville has a beautiful plantation down there, and he has wild birds. He has a game keeper, and it's very disciplined.

Interviewer: He's way out away from any settlement, isn't he?

Spilman: No, he's not too far from Albany-the airport there. But he's very disciplined, you can only take two birds out.

(end of side 4)

Interviewer: What is your best experience in this activity?

Spilman: Well, I mentioned shooting and fishing. I also love to work in wood-I have shops at all three of our homes.

I think one of the greatest experiences I had was off the Great Barrier Reef in Australia when we hooked a 1300 lb Black Marlin. It was really thrilling.

Interviewer: You'd be surprised how many people say "a hole in one." To answer that question.

Spilman: Well, I've had two, and one of them, the ball hit the cart path right in front of the tee, went down the cart path, bounced off and hit a tree on the side, and went on the green and went in the hole!

Interviewer: Now, you retired in 1997?

Spilman: August 1, 1997.

Interviewer: What have you done since then, in the industry?

Spilman: In the industry, absolutely nothing! I've resigned from the Board of Directors of Bassett Industries. I've been in two major corporate situations where the ex-CEO's stayed on the Board after retirement and caused a lot of problems. So I believe once the CEO is out, he ought to get out altogether, and leave it to the new people in charge.

Interviewer: Just be careful who you pick! What about other businesses?

Spilman: Well, some of the Boards I remained on-I just got off my last Board at the first of this year. Dominion Resources-at 77 years old, and you look at a proxy and see a director 77 years old, with the corporate governments and the pressure from the institutional investors, it could be an embarrassment to the management. I just figured it was time to hang it up and move on.

Interviewer: What about your leisure time?

Spilman: Well, I covered that with hunting and fishing. I'm taking full advantage of any opportunity I get for leisure time!

Interviewer: Well, that was the last question! Anything else you want to say about anything? The whole purpose of this is to get your opinions.

Spilman: No, I don't think so. We covered this earlier in some of your questions. Business is a lot tougher to manage today than it was in my generation. We had a little margin for error-we weren't under the microscope like business is today. I admire the men and women who assume the responsibility of public companies today, because it's a lot different. At the same time, I really hate some of the abuses some of the management has taken of the public companies that they were entrusted with. I think that's horrible. But I've enjoyed our visit, Roy, you've been very patient.

Interviewer: Thank you! It's been a great pleasure for me, too.

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