The Shelby Rhinehart bridge in South Pittsburg opened in 1982, replacing a longtime ferry service across this stretch of the Tennessee River. The towns of South Pittsburg and New Hope are hoping their jointly optioned land at the river port in New Hope brings additional industrial investment to the area.

   A plant tour by new employee Tim Farmer, fresh out of the Air Force, showed how the facility will take a 10-mm.-thick length of flooring, sand it down to 9.7 mm, and then build it back up to 10.1 mm., UV-cured with a finish to complement a range of hardwood veneers that includes red oak, cherry, walnut, hickory and maple. As contractors installed a racking system and others tended to the air conditioning, employees checked monitors, graded flooring and conferred on quality.
   Quality of work force was as much a consideration as low operating costs for Shaw in deciding to re-open the facility. The new jobs will be technical in nature, with wages reflecting the skill levels required.
   Reuse of machinery can be just as important to such a project's viability as the site and the people.
   "We work with several people in Jeff's group to develop equipment specs," says Butch Hicks, Shaw's engineering manager. "Then we go out and see equipment in operation in various locations. Based on who has the engineering solution, that's what we buy, and it's not necessarily low bid. Most of this equipment in our experience is produced in Europe – Germany, Belgium, some in Italy. Everything here is from Germany except for one piece of U.S. equipment."
   One of the pieces in South Pittsburg, says Jeff Williams, was "purchased at a very reasonable rate, then modified, and saved us quite a bit of capital for the amount of capacity we have. The modification was expensive, but still a lot cheaper than new. Fortunately we had the technical expertise to convert it."
   There is no shortage of expertise and experience on the real estate team either, typified by Vonda Davis, project administrator with the company for more than 22 years, and Karen Carter, lease administrator and 20-year Shaw veteran. Asked about if changing FASB rules related to dormant assets may be influencing Shaw's re-use, Dobbins says not at all, precisely because Shaw has always been focused on managing for the long term. He points to the leasing in South Carolina as an example of the flexibility driven by a focus on free cash flow and return on invested capital, not a quarterly balance sheet. As for the FASB rules, Dobbins says, the company's annual testing by external auditors Deloitte and Touche continues to show that "the way we have our physical assets on the books is fairly reflective of what they should be."
   Instead, the pressure to repurpose comes from the corporate expectation to manage efficiently and effectively, says Dobbins. After all, that was the reason the asset group was established in 1999, after Dobbins had served five years as the company's director of real estate, ramping up a team in concert with Shaw's ill-fated attempt at retailing. Wilkinson came on in 1996. After the stores did not work out, Dobbins says, "the CFO, president and myself talked about how we could do a better job at looking holistically at assets. What is now the corporate asset group was fragmented across the organization. We had the corporate real estate department, so everybody understood where you went for real estate, but property taxes were handled by the tax department, capital budgets were handled by the manufacturing organization, capital projects administration was handled by manufacturing, office space planning and management was handled by industrial engineering and maintenance was handled by whoever has a facility."
   Before you could say "silo," the team had put together a portfolio management organization with three primary departments: real estate, corporate facilities (internally focused office and services) and asset management, the last of which handles such matters as property taxes, licenses, capital budget and expenditure administration and fixed asset accounting. The entire team stands at 25 people.
   "Given the order of magnitude of the company, I think we're pretty efficient, which means we do have some outsourced activity," says Dobbins,

Pictured at the South Pittsburg plant with Chuck Dobbins and John Wilkinson are (l. to r.) Jeff Williams, director of manufacturing, Hard Surfaces; Karen Carter, lease administrator; and Vonda Davis, project administrator.

primarily in the corporate facilities group. "We have three mechanics across that group, which manages approximately 900,000 sq. ft. (83,610 sq. m.) of office space across 20 buildings," he says. They depend heavily on preventive maintenance contracts and an external vendor network. Facility planning is 100-percent outsourced within that group, and the vast majority of construction and project management is too.
   Nearly everything is handled internally in real estate, says Wilkinson. Two law firms in Atlanta handle property transaction documents. Construction management is handled by Shaw's John Milhollin, construction manager, who with Davis's assistance manages anywhere from six to 12 projects at any one time across the U.S. Carter handles lease administration, with accounts payable for around 200 locations a month and accounts receivable for around 32 leases and subleases right now, many of them retail holdovers. Sandra Hewitt, real estate representative, is another key player on the team. But relationships with the major brokers are certainly cultivated.
   "One of the key things in the last several years has been to educate those brokers so that they know our requirements and the standard specs for our type of facilities," says Wilkinson, "so when we have an assignment, there's no question as to what is needed. They can begin the site search process. We can go in and narrow down a list that's already been predetermined to work for our needs. That helps considerably."
   Dobbins adds that Shaw's internal quality and leadership programs have also contributed to the effectiveness of the asset team, from Six Sigma to the Shaw Academy for Leadership Training.
   "Continuing skill development is a key part of what we believe as an organization continues to make us a leader in the industry," he says. "Mr. Shaw has said, 'I can go get buildings and assets, but what I really need is high quality people. They are our greatest asset.' "
   People skills helped with a final deal-making detail too. "One of the key components as we made this site selection decision was the ability to expand the plant," says Wilkinson. "The land with the plant was not conducive to future expansion. The decision involved 13 acres [5.3 hectares] of farmland next door, so if this product we are manufacturing here grows to the point that we need to keep everything under one roof, we could do so. We clearly felt we had to get that property tied up under contract before we made any serious final decisions on location."
   Using the services of CB Richard Ellis, Shaw worked out a purchase agreement with the Marion and Bertha Gonce, a couple in their 90s who moved to town from Alabama in 1934, and who sold the land for the original plant built by Salem. Wilkinson says Shaw's 189,000-sq.-ft. (17,558-sq.-m.) operation now can easily be expanded to 300,000 sq. ft. (27,870-sq.-m.). But the house will stay.
   "We carved that out so the owners could keep the house," says Wilkinson. "They told me they didn't want to sell that home because their son lived in it. And it turned out their son was 76 years old."
   South Pittsburg Mayor Mike Killian says he's known the Gonces all his life, in part because his grandfather lived two blocks away. In coming back to town, Shaw can aim to live up to the simple praise Killian bestows on the Gonces and their children.
   "They're great people," he says of the family that's outlasted its share of companies. "They're quite an asset to our community."