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FLEXSTEEL INDUSTRIES, INC.

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Label. Photo courtesy: Bob Reding

FLEXSTEEL INDUSTRIES, INC. In 2016 Flexsteel was a designer, manufacturer, importer, an marketer of upholstered and wood furniture for the residential, recreational vehicle, office, hospitality and health care markets. Plant locations in 1991 included Dubuque, Iowa; Dublin, Georgia; Lancaster, Pennsylvania; Riverside, California; New Paris, Indiana; Evansville, Indiana; Harrison, Arkansas; Sweetwater, Tennessee; Starkville, Mississippi; and Vancouver, Washington. Executive offices of the corporation were maintained in Dubuque. The Dubuque plant employed 433 workers including manufacturing and corporate workers.

Flexsteel's industrial history began in 1893 as the Rolph & Ball Furniture Company based in Minneapolis, Minnesota. The company was purchased by Frank BERTSCH, John Grau, R. F. Curtis, and T. J. Gorman and renamed the Grau-Curtis Company. Bertsch bought out his partners in 1917 and brought his son, Herbert T. BERTSCH into the company in 1919. (1) The firm, renamed NORTHOME FURNITURE in 1929, was renamed Flexsteel Spring Corporation in 1934. (2)

In 1936 the company, under the leadership of Herbert T. Bertsch, moved to Dubuque into the former buildings used by the BRUNSWICK-BALKE-COLLENDER COMPANY. Flexsteel was one of the first companies to produce on a conveyor production line. Realizing that low priced furniture was produced by many businesses in the industry, the company chose to use the Flexsteel spring in a more expensive but better product.

H. T. Bertsch brought his son, Frank H. BERTSCH into the company in 1947 as a plant engineer. He rose to plant manager in two years and became the company president in 1958. He held this position until 1985 seeing the company renamed Flexsteel Industries and the construction of plants in Pennsylvania and Texas. (3) During his tenure, the company hired K. Bruce Lauritsen as a sales trainee. He rose to the position of company president in 1989 and CEO in 1993. (4)

In the 1960s Flexsteel began its vehicle seating division after securing a contract to manufacture seating for Winnebago Industries. Stock in Flexsteel was first publicly traded in 1969. In the early 1970s, a profitable contract was signed with the General Motors recreational vehicle unit. The company added more plants and hired additional employees to meet the growing demand for its products.

Flexsteel announced in 1972 that it would expand its Dubuque Plant by 120,000 square feet, to 720,000 square feet. The expansion doubled the size of the metal division which manufactured the Flexsteel spring and recliner, convertible bedding fixtures, and motor home bucket seats. (5) By this time, the company had further expanded with the construction of a plant in Arkansas and two in Indiana. (6)

A strike lasting nearly nine weeks affected 450 workers in 1982. (7) When work was resumed, the company entered the contract seating market and began manufacturing furniture for the health care and hospitality industries and government. (8)

In July 1990, Flexsteel announced that Jack B. CRAHAN, former vice chairman of the board and chief operating officer, would be the new chairman of the board and chief executive officer. Crahan replaced Frank H. BERTSCH who had been chairman of the board from 1958 to 1985. K. Bruce Lauritsen, former executive vice-president of sales and president of the company since 1985, was named the chief operating officer, and James R. Richardson, vice-president of marketing, was named to a new position on the board. In 1997 Flexsteel was the city's third largest employer with 820 employees. It trailed the JOHN DEERE DUBUQUE WORKS and FARMLAND FOODS INC. (9)

The 21st century with a declining national economy had a great effect on the company. With less customer demand, Flexsteel had to reduce its local workforce bringing an end to the assembly line production of upholstered furniture at the Dubuque plant. In 2008 layoffs reduced the workforce to less than 150 hourly employees. (10)

In September 2012 a $12 million project in the Port of Dubuque was completed establishing Flexsteel's headquarters. (11)

In 2016 the company reported net sales of $500 million, a 7.1% increase over the previous year and the highest total ever recorded by the company. Net income increased 8.7 percent to a record $24 million. (12) Fiscal year 2016 was the third consecutive year of record net sales and the seventh consecutive year of growth for the company.

Flexsteel Industries on September 21, 2016 plans to close its Jackson Street manufacturing facility next year. Officials said it has become inefficient for manufacturing and costly to maintain. They planned to be out by December of 2017. Flexsteel employed a total of 250 associates at the manufacturing facility, with 185 of those associates represented by the United Steelworkers (Local 1861), Teamsters (Local 120) and Operating Engineers (Local 234). (13)

In a press release, Karel Czanderna, President and CEO, said the company had identified several viable locations for manufacturing. Directly linked with this decision, the company recently announced plans to invest up to $25 million in North American manufacturing infrastructure during the next two fiscal years to address aging facilities and improve efficiency. (14)

On May 13, 2017 the announcement was made that Flexsteel would remain in Dubuque. In the announcement, the company reported that it planned to spent $28 million on a new manufacturing facility in the Dubuque Industrial Center South and would keep at least 200 related jobs in the city. Production would shift from Jackson Street to the new site in late summer or fall 2018. The announcement was related to multiple agreements involving the city of Dubuque, Dubuque County, DUBUQUE INITIATIVES and the Iowa Economic Development Authority. The current site on Jackson would be demolished and redeveloped. (15) State incentives were tied to Flexsteel maintaining at least 200 full-time permanent employees through May 31, 2022. At that time there were 146 employees working in the corporate headquarters in Dubuque. (16)

The facility located on 22 acres of land in Dubuque Industrial Center South would donate nearly $2.7 million and about 40 acres of land to Dubuque Initiatives. (17) On November 28, 2017 the Long Range Advisory Commission voted 4-0 to provide tax incentives to encourage redevelopment and help prevent the abandoned site from becoming a blight on the North End of Dubuque. (18)

On June 20, 2019 seven weeks after announcing a large third-quarter loss, the company laid off some staff and began selling some assets in what it called 'right-sizing' its 'manufacturing footprint.' In late April when the loss of $15.6 million was acknowledged, the company closed a California facility and cut production. There were also 130 layoffs although officials said Dubuque jobs were not affected. (19) On April 21, 2019 the company announced the closing of its plant in Arkansas. (20)

In a move that created lots of questions, in October 2019 Flexsteel canceled several agreements it had made to retain and redevelop the property at 3200 Jackson. This meant it would assume the responsibility for cleaning up and marketing its former plant site after the company terminated redevelopment agreements made previously. Flexsteel had agreed to give the 43-acre site on Jackson to Dubuque Initiatives and an estimated $6.3 million was deposited into two escrow accounts for demolition and environmental cleanup. An estimated $1 million had come from the Iowa Economic Development Authority and $2.6 from Flexsteel. The city was to contribute $660,000 and Dubuque County was to pay up to $2 million over seven years. By terminating the agreement, the city, county and state were released from their pledged financial assistance and the $660,000 deposited by the city and $600,000 deposited by the county in escrow would be returned. (21)

In March, 2020 the company announced its plans to lay off 40 employees, then an additional 58 more for up to three months. In April a filing with the U. S. Security and Exchange Commission outlined plans to cut pay, close a distribution facility and temporarily suspend manufacturing in the United States and Mexico. The company reported a $5.3 million net loss in the quarter ending March 31st which followed a loss of $5.4 million loss in the previous quarter. Net sales for the quarter ending March 31st was 11% below the same quarter in the previous year. Among the factors cited by the company were tariffs and the PANDEMIC. On March 29, 2020 after 84 years in Dubuque, company officials announced the closing of the local manufacturing facility. The closing resulted in the loss of 213 jobs including 150 manufacturing positions. Flexsteel's workforce in Dubuque was reduced from an estimated 350 workers to less than 140. (22)

The former site of Flexsteel in Dubuque yielded an unexpected treasure trove of 'old growth' southern yellow pine used in the construction of the facility. Built in the 1800s as the BRUNSWICK-BALKE-COLLENDER COMPANY, the buildings were moved into by Flexsteel in 1936. Timbers used in the building exhibit a tight grain and great strength. In contrast, new-growth southern yellow pine which is abundant was grown in different soil and weather conditions and harvested sooner than the 'old growth.' Timbers found in the old buildings were extremely-rare in twenty-feet lengths--almost impossible to find in the 21st century. FitzGerad Deconstruction & Reuse salvaged the wood which saved hundreds of tons of the valuable material which was destined for the landfill. Some was immediately purchased by STRAKA JOHNSON ARCHITECTS for a project in Galena. (23)

In November, 2021 Flexsteel officials headquartered in Dubuque announced strong first-quarter earnings and plans to increase production. The company's increase capacity was focused internationally with a growing manufacturing presence in Mexico. (24)


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Source:

1. "Flexsteel Company Timeline," Telegraph Herald, May 13, 2017, p. 6A

2. Montgomery, Jeff. "Flexsteel Will Close Dubuque Facility," Telegraph Herald, September 22, 2016, p. 2A

3. "A Look at Flexsteel Through the Years," Telegraph Herald, April 30, 2020, p. 5A

4. Ibid.

5. "Flexsteel Company Timeline"

6. "A Look at Flexsteel..."

7. Ibid.

8. "A Look at Flexsteel..."

9. Ibid.

10. Ibid.

11. Ibid.

12. Montgomery, Jeff. "On Heels of Record Year, Flexsteel Eyes New Challenges," Telegraph Herald, August 18, 2016, p. 1A

13. Ibid.

14. Hanson, Brad. "Dubuque Based Flexsteel to Close Jackson St. Facility Next Year," KWWL.com. Online: http://www.kwwl.com/story/33152086/2016/09/21/dubuque-based-flexsteel-to-close-jackson-st-facility-next-year

15. Montgomery, Jeff and Jacobson, Ben. "Flexsteel to Stay," Telegraph Herald, May 13, 2017, p. 1A

16. Montgomery, Jeff, "Flexsteel Lays Off Some Staff, Plans to Sell Assets," Telegraph Herald, June 20, 2019, p. 1

17. Hanson, Brad, "Flexsteel to Break Ground on New Facility Monday," KWWL. online: http://www.kwwl.com/story/36483954/2017/9/29/flexsteel-to-break-ground-on-new-dubuque-facility-monday, Sept. 29, 2017

18. Barton, Thomas. "City Eyes Urban Renewal Area at Flexsteel's North End Facility," Telegraph Herald, November 29, 2017, p. 1A

19. Montgomery, Jeff, "Flexsteel..."

20. "News in Brief," Telegraph Herald, June 21, 2019, p. 3A

21. Barton, Thomas J. "Flexsteel Opting to Redevelop Property on Its Own," Telegraph Herald, October 6, 2019, p. 1

22. Montgomery, Jeff, "Flexsteel Closing Dubuque Plant," Telegraph Herald, April 30, 2020, p. 1A

23. Montgomery, Jeff, "Rare Timber Reclaimed for Reuse," Telegraph Herald, May 7, 2020, p. 1

24. Montgomery, Jeff, "Flexsteel Aims for Increased Production," Telegraph Herald, October 27, 2021, p. 2A