Cheap (22 page)

I thanked Dahlvig for his time and that afternoon drove to Almhult in the charming company of IKEA spokeswoman Charlotte Lindgren. On the two-hour drive through the stark Swedish countryside we passed acre after acre of spruce trees, most of them uprooted and mangled, trunks splintered, branches twisted—a pitiful sight. Two years earlier, Lindgren told me, a nightmare of a storm flattened 75 million cubic meters of timber. It was a tragic loss and costly. To prevent forest fires the logs must be watered down regularly, at great fiscal and environmental expense. I asked Lindberg whether IKEA was making use of the fallen trees. She said she didn’t think so. But shouldn’t the company capture and capitalize on this tragic bonanza scattered across its own backyard? She smiled patiently. The furniture factories were too far away to make that idea practical.

Many of us think of IKEA as the world’s largest furniture maker, but that’s wrong. It’s the world’s largest furniture
retailer
. IKEA’s vaunted “made in Sweden” quality is hammered out by tens of thousands of workers mostly in the employ of other companies—1,300 vendors in fifty-two countries. China is the company’s largest supplier, but that’s just for now. If Chinese workers demand better wages, protections, and benefits, as they have in the past, IKEA is likely to move on to India or Vietnam, where the company already has a strong foothold. Or it might expand in Africa or even the United States where to great fanfare it recently installed a factory in Danville, Virginia.

Lindgren and I reached Almhult in time for a lunch of Swedish meat-balls with lingonberries at Hotel IKEA, where we were booked for two nights. The food was plentiful, but the rooms were Spartan; thin mattresses and Lilliputian bathrooms equipped with industrial-size vials of soap and the tan woody toilet paper found in Boy Scout latrines. If Hotel IKEA was not the most elegant hostelry in town, name recognition seemed to have made it the most popular one: The place was packed.

Almhult boasts of being home to “two of the world’s best ideas.” The first was botanist Carl Linnaeus’s systemization of the animal and plant kingdoms into the coherent taxonomy that made modern ecology possible. The second was Ingvar Kamprad’s application of “shrewd logistics to offer home furnishings products at such low prices that the masses could afford to buy them.” These feats get roughly equal billing in the town’s tourist brochures, although IKEA is by far the more prominent icon in town, and no wonder. With over 2,500 of its 15,000 citizens on the IKEA payroll, Almhult is the largest stable agglomeration of IKEA employees on the planet.

“Making the impossible possible is what we do” was a refrain I heard again and again in Almhult while touring the IKEA facilities—the IKEA museum, the original IKEA showroom, and the IKEA cafeteria, sauna room, and recreation area. Asked to elaborate, an IKEA product manager in charge of kitchen supplies offered this cryptic example: “When you meet a supplier who has not worked for IKEA, that is a challenge. Every supplier is unique, and each one has the opportunity to find more cost-efficient solutions.” Loosely interpreted, this seemed to mean make the cheap cheaper. The manager had been to China, to a factory that specialized in the production of pine products. “We told them they could help us if they made the right choices,” she said. “We briefed them on the challenge.” The challenge was to meet IKEA’s price demands. The manager escorted us on a tour of a model kitchen and pointed proudly to what she called a dining table. It was unpainted wood and very small, barely containing the two chairs tucked beneath it. It looked just the right size to host a child’s tea party. The manager said it had been designed to fit precisely on a pallet for easy transport in shipping containers from China.

For IKEA, designing a table to fit snugly into a shipping container—as opposed to, say, fitting snugly under a Thanksgiving dinner for twelve—makes good business sense. In the IKEA catalog, the table looks sturdy and inviting, and since more than 200 million copies of this catalog get circulated each year—more copies than the Bible!—it is perhaps beside the point that up close in the showroom the table looks like firewood. It is made of pine and pocked with what I was told were “healthy knots.” Pine is not the optimal choice for furniture, especially chairs, because like all softwood it tends to compress under pressure. And knots, healthy or not, weaken wood and tend to splinter when stressed. The good news is that when the table starts to wobble or buckle or splinter, it can be recycled. Everything IKEA sells is built with the endgame in mind.

IKEA environmental manager Jens Lindell is an endgame specialist. A twenty-plus-year veteran of the company, he dreams of recycled tables and especially of flat pack sofas, sofas being the one category that has so far resisted the two-dimensional condition. Several of his coworkers had earlier mentioned the same fantasy. Lindell likes flat packing because it uses less packing material, and he’s borderline obsessed with saving packing material. “If I could, I would ship things with no packing material,” he said. Packing material costs money, and Lindell, like all IKEA coworkers, are charged with minimizing costs. I ask him if he had given any thought to the environmental benefits of longevity, of building products that last for decades or even a lifetime. He told me he hadn’t but added that he’d been environmental manager for just a year and a half. Most of his two decades at IKEA had been spent selling children’s goods.

Lindell offered to show me around the IKEA compound. We strolled past the IKEA function room, which is sometimes leased out for weddings. “We love it so much, we even get married here!” From there we walked to the product testing facility, which he described as “the world’s largest furniture testing laboratory.” It seemed about the size of a tennis court. A lonely technician manned a number of punishing contraptions—machines repeatedly rotating swivel chairs, pummeling sofas, or opening and slamming disembodied file drawers. I asked the technician why he was testing older designs that had been on the market for years. “Because sometimes greedy people cheat by using less material or changing products in other ways,” he said brightly. By “greedy people” he meant the company’s suppliers. Lindell glared. The technician winced and, in a weak attempt to recover, muttered strangely: “Thanks to our great suppliers, all our materials are flame retardant.” Lindell stiffened, clearly perturbed that the specter of toxic chemical flame retardants had been raised. The technician literally hung his head. “It’s within us to use less material, more recyclables, and no hazardous substances,” Lindell intoned, leading me briskly out the door.

From his manner it occurred to me that Lindell had committed to memory Kamprad’s
The Testament of a Furniture Dealer.
Kamprad refers to the testament as his “sacred concept” but credits its authorship to no higher power than his own. In it he promises to lead employees to a “glorious future,” writing: “Those who cannot or will not join us are to be pitied.”

Kamprad may not be much of a philosopher, but he is a folkloric figure—an intrepid farm lad who sold matches at age five and peddled goods from a milk truck at age twelve. He is a CEO who calls staff members by their first names and gives them mountain bikes for Christmas. He is also a billionaire who flies coach and barters for day-old vegetables at farm stands.

That the seventh richest man on earth haggles with a dirt farmer over the price of lettuce is a cruel irony that should give us pause, and for some it does. But IKEA soothes its few fitful critics by acknowledging flaws and forming alliances with not-for-profits. In response to complaints from environmental groups over its wood policy, the company partnered with the World Wildlife Fund and Greenpeace. When human rights activists accused IKEA of child labor violations in India, Pakistan, Vietnam, and the Philippines, it partnered with Save the Children and UNICEF. What these partnerships have produced in terms of societal betterment is unclear since IKEA offers no guarantees and few specifics. Yet in the minds of consumers these alliances apparently offset any nagging negatives. At this writing a Google search of “I Love IKEA” revealed 36,380 distinct Web entries, and that’s not counting the 1,850 “I Heart IKEA” sites. More important, 1.1 million customers visit an IKEA store every single day.

Wal-Mart’s relentless march toward world retail domination provokes scathing exposés in books, articles, and documentaries. But most media responses to IKEA verge on the hagiographic, swallowing whole the well-polished rags-to-riches story the company wrote for itself. Wal-Mart’s mascot is a bouncing price tag, while IKEA goes straight for the heart. Consider a recent advertising campaign, “Home is the Most Important Place in the World.” An IKEA home is not about bricks and mortar. It’s about beauty, joy, and security. “We don’t just sell a chair or a table,” an IKEA employee once publicly declared. “We sell a philosophy and a mission.”

The much vaunted “Miracle of Almhult” was not designing chairs composed of recycled plastic bottles mixed with sawdust. The Miracle of Almhult was convincing millions of people around the world that mass-manufactured furniture that looks, feels, and smells like extruded Lego blocks is not only affordable and stylish but
soulful.

IKEA’s designers work directly with suppliers to ensure that whatever object they dream up can be built for less money than customers have any right to expect. The company works with scores of freelance designers but relies for the basics on a small in-house team. Chief designer Anna Efverlund is a legend and looks the part. Large and billowy, she frames her impish eyes in black shadow and tints her hair something beyond blond. The day we met she wore a black caftan and trailed a whiff of mystery—mentioning in passing a youthful stint designing bicycles in Brazil and a grown son but never a husband. At IKEA, her employer since 1980, she is best known for her whimsical children’s accessories—a heart-shaped pillow sprouting arms and a ladybug lamp. These are hits, but not her biggest. “The first product I designed for IKEA was the Bagis,” a plastic children’s clothes hanger in neon colors, $2.95 for a flatpack of eight. “If I got royalties, this would be the only product I would do. It is such a good seller. But I don’t get royalties. No one here does. Only Ingmar gets rich.”

The potshot was affectionate: Efverlund is a dear friend of Kamprad’s and a staunch IKEA loyalist. She represents the company frequently at educational events and conferences, and has traveled to India to spotlight IKEA’s much-touted campaign to market embroidered pillow covers sewn by the rural poor. In these and other efforts Efverlund is sometimes accompanied by Maria Vinka. Vinka is by blood an ethnic Sami, the reindeer-herding indigenous dwellers of northern Europe sometimes referred to (tactlessly, I was told) as Laplanders. A spiky tattoo in the style of her ancestors circles her elbow. Vinka designs fabrics for IKEA, and also cutlery, clocks, china, and furniture. Her proudest creation is a stackable “rocking chair” composed primarily of tightly woven banana leaf fibers. Vinka’s chair, shaped like a cross between a spoon and a ruffed grouse, is named after the tiny Swedish fishing village of Gullholmen. It is made in Vietnam in a vast open factory. Women weave the banana fibers, and men weld the frames. Each chair takes half a day to build, and in the United States it costs $59.99. The design is intriguing, but the chair is not for everyone: Access requires lowering oneself nearly to ground level.

Vinka attributes the success of her Gullholmen chair to its “good story.” “It is biodegradable, made out of stuff that was once thrown away,” she told me. Apparently, furniture made of waste products is pure seduction for IKEA’s target demographic. But the backstory IKEA tells is not the whole story. In Vietnam, banana leaves are used to thatch huts and to wrap food for cooking, and at last check they were selling for about $6 apiece on the Internet. It is not environmental concerns that brought IKEA to Vietnam.

In April 2008, Ingmar Kamprad met with Vietnam’s prime minister, Nguyen Tan Dung, to make a deal: He wanted lower tariffs, lower docking fees for container ships, and “ensured access to wood” in exchange for employing more Vietnamese. Vietnam, itself in constant threat of deforestation, is a major Southeast Asian hub for processing illegally logged timber. While IKEA suppliers are instructed to follow the IKEA way, Vietnamese enforcement of environmental and human rights regulations is notoriously haphazard. Vietnamese factories pay workers as little as $50 a month for a forty-eight-hour, six-day workweek. As one American commentator said about doing business in Vietnam, “The effect of bringing into the global labor pool hundreds of millions of low-wage workers—people whose wages are held in check by both capital mobility and communist repression—is to hold down wages in democratic nations with advanced economies . . .” The banana leaf story may keep IKEA customers coming, but cheap labor and wood is what keeps IKEA in Vietnam and other low-wage nations.

The IKEA story is told best through its catalog, a product on which the company does not skimp. The weighty document is produced in the largest photography studio in Europe, a ten-thousand-square-meter hangar echoing with photographers, interior designers, copywriters, and product managers. Digital cameras said to “cost as much as a new Volvo” snap and snap and snap at ersatz kitchens, baths, and rumpus rooms, each meticulously arranged to exude a carefree and intimate homeyness. Plants, flowers, and watercolor brushes clumped in white mugs set off the living areas; bowls of fresh fruit, piles of leafy greens, jars of whole grains, and flasks of olive oil spice up the kitchens. Books, bought by the yard, are everywhere. IKEA carries the same merchandise in stores from China to Saudi Arabia, so the goal here is to tempt customers from every culture to bend their wants to meet IKEA’s products.

I watch a photographer shoot a model living room. The space was designed to simulate a modest flat in Eastern Europe where, the designer tells, me “Mum, Dad, Gran, and children all live together in three small rooms.” It’s a lovely thought and a lovely room, but too small to accommodate the wide-screen TV, the opposing couch, and much of anything else. Where do the parents sleep? It turns out that the fluffy white couch is a sofa bed; after Gram and the kids turn in, the parents settle down to a “good, long snuggle.” Ah, romance, but with all that gear squeezed into three small rooms, where will the kids play? Where will the family eat? And how will they open the sofa bed without busting the big-screen TV? The photographer laughed. This Swedish fairy tale may not in reality translate into a better life for a struggling Russian family, but what’s my point? He’s creating a fantasy.