Reardon Voice Of Industry

October 1, 2007
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CASCADE TOWNSHIP — In an homage to one of the commercial furnishing industry’s trademark scenes, the lobby of the Business Institutional Furniture Manufacturers Association International headquarters is decorated with a convoy of miniature semi-tractors from Steelcase, Herman Miller, Haworth, Trendway and a host of others. Each year, a life-size version lines the bank of the Chicago River outside of the annual NeoCon trade show, the industry’s signature event and host site for BIFMA’s annual meeting.

There is also a slightly worn map marked with hundreds of pins on the office wall of Executive Director Tom Reardon. There are thick concentrations of pins in California, North Carolina, Wisconsin, southern Indiana, and of course, West Michigan.

“I put this together a few years ago when I was visiting our members,” explained Reardon. “We went to the areas with a concentration of members to do some outreach and networking. I wanted to make sure we knew each other.”

Symbolic of the office furniture industry during Reardon’s tenure at the helm of BIFMA, some pins have fallen out, and there are spots of glue where manufacturers once were represented. The public face of the office furniture industry since late 1997, Reardon is most recognizable to those outside the industry as the bearer of bad news — arguably West Michigan’s worst economic news ever — when he was the unofficial spokesman for the sector’s 40 percent contraction at the tail-end of the dot-com bust.

“The industry was having a good run when I took over,” Reardon recalled. “From ’91 to 2000 we averaged 8.5 percent annual growth. It was kind of the heyday. There was a ton of venture capital in the market, tons of startups, and they all had to have the best Aeron chairs and everything else.

“But then the bottom fell out.”

It was Reardon’s task to explain the tapering at the beginning of 2001 when the association halved its growth projections for the year from 5.6 percent to 2.7 percent. With the sector coming off a record $13 billion year in 2000, a settling could be anticipated. Two months later, Reardon was in the spotlight again as the forecast turned to a 4.4 percent decline. By August, it was apparent the sector was in the midst of its worst slide ever. Layoffs were under way throughout West Michigan, and the market was in, as Reardon said at the time, “uncharted waters.” From 2001 to 2003, the industry contracted annually by 17.4 percent, 19 percent and 4.3 percent, finally rightsizing itself with moderate 5.1 percent growth in 2004.

“It was a tough story to tell,” said Reardon. “At first it was big news: the drop in business, the consolidation and layoffs. But then it quickly got old. Nobody wanted more bad news, and all anyone wanted to know was when our companies were going to start hiring people back again.”

Manufacturers had learned some hard lessons during the downturn. Business models were adapted with less overhead and a larger reliance on domestic and offshore outsourcing. Companies began to look at how to avoid any sort of similar pitfall in the future, looking at new markets and more efficient production. When the companies began to grow again, they did so with significantly less labor.

The association also learned some valuable lessons, particularly concerning its own forecast model. Although it did adjust after the first year, the group was all but powerless to predict the downturn.

“When you’re forecasting with historical data, it’s like driving with the rearview mirror,” Reardon said. “You can only see what’s behind you and hope that what’s ahead is pretty much the same. Historic data is notorious for not being able to predict sharp turns, and this was an unprecedented downturn.”

To make matters worse, Reardon explained, BIFMA had completely reconfigured its forecast model the year before, dropping a “black box” program administered by Grand Valley State University in favor of a more transparent system managed by Massachusetts market research firm Global Insight: “We were trying to roll the model out and impress people, and the timing couldn’t have been worse.”

Reardon came to BIFMA in 1989 to lead the statistical information program. A Detroit native, he worked in the automotive industry for seven years before being recruited to West Michigan in 1984 by a former co-worker who had jumped to Holland furniture maker Haworth Inc. As a product analyst at Haworth, Reardon found it much more appealing than the auto industry.

“It was a culture shock at first. The automotive industry is tough and hard-nosed, while the furniture industry has more of a fashion sense to it. It is every bit as competitive, but the customers are different and there is a different sales process that I found much more enjoyable.”

He left Haworth for a position at Muskegon-based furniture maker Shaw-Walker Co. in 1989. Three months later the company was acquired by Westinghouse Electric Corp. as part of its furniture division, today known as Knoll, and Reardon was subsequently laid off. During his employment search, he approached the executive director of BIFMA, Stephen Channer. The industry was on a downward slope at the time, and Channer knew of no opportunities in the market, but he did have an opening in his office. Channer stepped down after 15 years in 1992. He was replaced by Steelcase veteran Russell Coyner. Reardon was named acting executive director following Coyner’s sudden death from a heart attack in 1997.

Reardon is only the association’s fourth leader. It was founded in 1973 by former Herman Miller executive Eugene Eppinger as a vehicle for the maturing industry to cooperate and collaborate. Core services are government relations, the development of industry standards and the aggregation of market data. By pooling industry data, member firms no longer need to conduct their own lengthy investigations of the market.

“Instead of everyone spending money looking at how big the chair segment is, we just pool our resources,” Reardon said.

The group also has been the platform for the development of industry standards for safety and performance, alleviating burdensome government oversight. In recent years, it has concentrated heavily on ergonomics, toxicity and, most of all, sustainability. “We’re the voice of the industry,” Reardon said. “I believe this organization has a responsibility to lead the industry. Right now, we’re seeing that in sustainability.”

The office furniture industry was one of the first sectors to wholeheartedly adopt sustainable business standards. BIFMA has offered assistance along the way, including a set of manufacturing guidelines two years ago, and is now facilitating the development of an exhaustive set of product guidelines through a broad group of industry stakeholders.

“We’re seeing a potential fragmentation and proliferation of different standards, much like we did with performance and safety in the ’70s,” Reardon said. “The industry could be pulled in a lot of different directions, and we thought it was our responsibility to bring some standardization and harmonization to the field.”      

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