Workers at Riverside Mattress Co. own their future

Jan 12, 2013 (The Fayetteville Observer - McClatchy-Tribune Information Services via COMTEX) -- Kim Brown cuts mattress tops and loads orders at Riverside Mattress Co. on Dunn Road.

"I like my job," said Brown, who's been working at the mattress factory for 23 years. "The people are good." Brown, who's 57, said she wants to keep working at Riverside another five years, which is when she hopes to retire.

But that's no sure thing for the soft-spoken, quick-to-smile grandmother -- or the other 19 or so people who work at the company.

"It's been bad," Brown said. "We used to have quite a few more who worked here." The economic downturn has been hard on the 80-year-old company, which makes standard and custom mattresses of all sizes and quality levels and sells them to independent retailers, lodging businesses, institutions and government agencies.

Sales have dropped. Jobs have been cut. Hours have been trimmed. And take-home pay is down.

"They're struggling," said William Allen, the Fayetteville mattress company's accountant since the mid-1980s.

But, he said, Riverside's owners are committed to the company's survival. And Allen said he's sure they'll make it work. They'll have to if they want to keep their jobs -- because the company has been owned by its employees since the early 1990s, through an employee stock ownership plan.

As Riverside's accountant, Allen knows plenty about the company's business. He knows even more because he's also the company president. That was a condition set by former owner Odus Cain when Allen suggested that he sell Riverside to its employees.

Allen said the deal would provide the employees with their first-ever retirement plan -- which could be applied retroactively. Cain, meanwhile, would get a sweet tax shelter for his proceeds from the $3.4 million sale.

"It was a win-win," said Allen, who knew all about stock ownership plans from an early 1980s stint as head of the Internal Revenue Service division responsible for approving U.S. pension plans.

Three years ago, Riverside's ownership plan finished paying off the bank loan it got to buy the business, and it is debt-free.

That's one of the things that has helped the business keep going despite the steep drop in home purchases and consumer spending on products such as mattresses during the recession and the sluggish recovery.

"We owe the bank nothing, and we're not about to go get in debt," Allen said. "Everything's paid for. If we can just keep a positive cash flow, we can weather this storm and make it." But it hasn't been easy. Years ago, Riverside had 55 employees or more. Even two to three years ago, it had "40-some," Allen said. Now, about 20 people work there.

The company has cut its workweek to 30 hours, and its employee owners approved two 10 percent pay cuts to keep the business afloat.

"With labor and product, you do what you have to do to survive," Allen said. "The employees understand, and we're pulling together. We're making all the adjustments that we can." He said the difference between costs and sales has leveled out, and Riverside is back to making a profit.

Last summer, the company took a potentially tricky new step and started offering mattresses for sale to the public at its plant. Customers pay the same rate that business clients do -- a move that could alienate competing retail clients. But Allen said most of the retailers that buy Riverside mattresses are outside Fayetteville, so the company likely won't take away any of their sales.

Earlier this week, Eastover resident Steve Culbreth stopped at the factory to look at mattresses. Culbreth said he had to get rid of his old mattress and now needs one that's not just new but comfy. Because of kidney disease, he now must sleep on his back -- something to which he's not accustomed.

But, he said, he knew where to come for his new mattress -- Riverside. In his 32 years of managing furniture rental companies, Culbreth said, he bought countless mattresses from Riverside.

"Every rental company I worked for, we always switched to you because it's a good product," he told plant manager Wayne Gillis.

Culbreth lay down on a memory-foam mattress to test its feel.

"Oh, I could go to sleep right here," he said, closing his eyes. "You just don't know." Jo Lucas, Riverside's general manager, said sales to individuals account for a tiny fraction of the company's business. But every bit helps, said Lucas, who has been with the company 28 years. At 70, Lucas could start drawing the company pension but only if she stopped working. She said she's not ready to do that -- but she's glad to have the option.

If the company failed, she'd be OK. Others, though, would suffer.

"It's hard when you have to cut days and hours," Lucas said.

Before Christmas, a couple of workweeks had to be shaved to 24 hours. Now, workers are back to 30 hours, and things should get busier.

"Hopefully, we can stick with 30 hours," she said, "or even more if the economy gets better." Through it all, one Riverside salary has not been cut. Naturally, it goes to the man in the top job -- Allen. Unexpectedly, though, his pay has gone unscathed because he pulls down only minimum wage for his work. He said that's been the deal since he took over as company president. In part, he said, it's because he was already financially comfortable from his main business as an accountant. He also leaves the day-to-day management to the employees.

"If I had to mother-hen this thing, I wouldn't have got it," he said.

But there was another reason he took the job and remains satisfied with its limited pay.

"I want to see these people get a pension," he said. "They're really dedicated people who do a really great job." Allen gets a lot of satisfaction from Riverside's work. He said the company is well-known in mattress circles for the bedding it makes, particularly the medium- and lower-priced models that it used to produce exclusively. He thinks it deserves as much credit for its high-end mattresses, which the company started building after Allen bought a name-brand model and Riverside workers dissected it to see how it was made so they could copy it.

Now, Allen said, he believes Riverside's high-end mattresses are as comfortable and well-built as national brands. But they cost 20 percent or more less.

Riverside's employee-owners get a lot of satisfaction from their work, too -- and pride. Allen said the workers are probably even more careful about the mattresses they make because of their stake in the company's survival and well-being.

"We're realists," he said. "We're not going to close. You've got to deal with what you've got to deal with. It's just a tough economy." Staff writer Catherine Pritchard can be reached at pritchardc@fayobserver.com or 486-3517.

___ (c)2013 The Fayetteville Observer (Fayetteville, N.C.) Visit The Fayetteville Observer (Fayetteville, N.C.) at www.fayobserver.com Distributed by MCT Information Services

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