Jeffrey Lorberbaum, left, CEO of Mohawk Industries, speaks to Rock City's Bill Chapin at the Chattanooga Rotary Club Thursday.Mohawk Industries chief Jeff Lorberbaum said Thursday he sees an upturn in the economy, and the world's largest flooring company is investing a half-billion dollars in the business so it's ready to gain.
"The economy is doing better," he said in Chattanooga. "It just hadn't rebounded as fast or as much as what we all had thought. Next year, we're hoping it will be better than this year."
U.S. home building grew in September on the strength of apartment construction, but that's a segment which offers less of an economic boost than single-family homes. Housing starts rose 6.3 percent in September from a month earlier to a seasonally adjusted annual rate of 1.017 million units, the Commerce Department. But, that's a gain from a sluggish August.
Lorberbaum told the Chattanooga Rotary Club that Calhoun, Ga.-based Mohawk is investing $500 million in its existing business, including a new plant in the Nashville area. It's also building a luxury vinyl tile plant in Belgium, and it has an eye on another in the U.S., though a site hasn't been picked yet, he said.
The Chattanoogan, whose net worth was put at $1.6 billion recently by Forbes magazine, noted that Mohawk also had three key acquisitions in 2013 covering seven countries over just three months.
"It was quite something to swallow," he said, calling last year a transition from capital conservation following the recession to an aggressive growth strategy.
Lorberbaum, Mohawk's CEO since 2001, said the $8 billion a year business has gone from a carpet business to one selling a variety of flooring products. In addition, the company went from a U.S. business to a worldwide operation, he said.
Mohawk's product mix is now just 40 percent carpet and rugs. Stone and ceramics make up 40 percent, with the remainder in laminate and wood products, Lorberbaum said.
Additionally, nearly a third of its business is international, he said.
Lorberbaum recalled the sharp economic downturn in 2007, saying the industry fell 35 percent from 2006 to 2010.
"It was a horrible experience to go through," he said, adding that it made officials take a hard look at the business, close plants and cut its workforce by 30 percent, or 10,000 people.
But, the CEO said, officials learned to change.
"The companies that didn't adjust to change aren't here anymore," he said.
Lorberbaum said business people need to "take actions faster than you think," and probably more than they believe.
"It's easier to add back than suffer when you can't afford it," he said.
Bill Kilbride, the Chattanooga Area Chamber of Commerce's new president who left Mohawk after serving as a top executive for many years, called Lorberbaum "a genius about business and business operations."
He cited Lorberbaum grasp of business fundamentals and his execution sound logic is "unlike anyone I've ever been around."
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.