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Changing Gears: The ‘New” Company Town - Norwalk

Thursday, July 28, 2011 at 8:31 AM

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Our Changing Gears team is looking at company towns in the Midwest. Dan Bobkoff takes us to Norwalk, Ohio, a company town that almost lost its company.... until the townspeople themselves saved it.

When a company bears the name of its hometown, it can be hard to separate the two. Such is the case with Norwalk Furniture and the town of Norwalk in Northern Ohio. Sue Lesch is the town’s mayor.

“It really is our flagship company,” said Sue Lesch, Norwalk’s mayor. “It’s the company we’re proud of. We’re known for furniture all over the country.”

For more than a hundred years, Norwalk Furniture made custom-order sofas and chairs in its Ohio factory. For a long time, it was the biggest business in town, employing about 700 in this town of 17,000.

Jump ahead to 2008. The housing crisis depressed demand for furniture. The company’s bank pulled its credit line. Meanwhile, the town’s unemployment rate was heading toward 18 percent. Norwalk Furniture closed its doors.

“The closing of Norwalk Furniture was just such a symbol of not only the devastation we were seeing in many companies, but just a shock to the very system of this city just because of the importance of that company,” Mayor Lesch said.

So, the story could have ended here. A company dies, leaving hundreds without jobs.

And, yet they’re still making furniture in Norwalk. How this factory reopened is a remarkable story.

LOCAL INVESTORS

Tom Bleile is a Norwalk local. He worked in the family business much of his life: highway construction. But, like many in this small town, he didn’t like its most famous company closing up shop. Over just four days, Bleile and a group of local families came together to buy the company.

On the surface, it might not seem like this group had any hope of succeeding. There wasn’t much time to do their homework, and they weren’t exactly experts on this market.

“Quite frankly, most of the investors couldn’t tell you the difference between a sofa and a love-seat,” Bleile said.

There was something unusual in this deal to save Norwalk, though. Investors like Dan White saw this as almost civic duty.

“The people who live here are truly devoted to this town and their friends and neighbors in this community,” White said. “So, it really wasn’t that difficult to get those 12 families to come together to look at doing something to help Norwalk Furniture.”

Dan White had made his money starting a firm that helps predict flood zones. He too knew very little about furniture, but with financing secured, and the company sold to the group of families, White became president. He streamlined the business. Maybe his inexperience in furniture was an asset: he says the company is now profitable. It has no bank debt. And, about 150 workers like Jim Spears are back on the job.

“I got hired in here when I was 20 years old. I’m 45 now,” Spears said from the shop floor. “I have a wife and three daughters. And, it was scary. Definitely a little bit of depression going on there.”

Of course, Norwalk Furniture isn’t the only company in town, but others were watching closely. The New Horizons Baking Company churns out thousands of hamburger buns for companies like McDonald’s. It’s just down the street and is growing. Trina Bediako is New Horizons’ executive vice president and she says what happened with Norwalk Furniture influenced their decision to expand here.

“It kind of helped to reaffirm what kind of community this was. There is growth. The people do care. The businesses do want to thrive,” Bediako said.

It’s not a totally happy ending yet. Not all the workers from the old Norwalk Furniture were hired back. The economy still needs help. Mayor Sue Lesch worries about the remaining unemployed and underemployed in her town.

“I think we have a lot of folks that have not been able to find that job that they want, but they’re working to provide for their families. They’re working two jobs. I worry about those folks,” Lesch said.

Perhaps the biggest contribution of these 12 investors is showing what’s possible.

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