A Tale of Survival

Cha

rlie Bishop is keen on touting the virtues of wool. Besides being all natural and biodegradable, wool, he will tell you, is flame, water, wrinkle and stain resistant — plus it keeps you warm in winter and cool in summer. But first and foremost, he wants to spread the word that wool isn't scratchy. "That's the presumption we've got to change," he says with a grin. Today's wool, like the kind being produced by his family's business, Pendleton Woolen Mills in Portland, Ore., is soft, supple, lightweight and not at all irritating.

The Bishops are among the world's best wool craftspeople, outfitting legions of Americans since 1863 with signature products like plaid lumberjack shirts and brightly colored blankets. And that isn't likely to change, despite stiff competition from China, where textile quotas are about to be lifted. Although Levi's 501s, Fruit of the Loom briefs and Pillowtex pillows are no longer "Made in America," this Pacific Northwest apparel maker has found a way to continue weaving woolens here at home. Knowing it can't compete against overseas firms on low cost or mass scale, the private company has kept a foothold in the U.S. by producing limited runs of high-end, upscale fabrics for niche markets. "The work we're doing now is much more specialized," Bishop explains during a tour of his company's 300,000-sq.-ft. factory in Washougal, Wash. Built in 1910, it's one of the country's last functional woolen mills. Custom products made here include vintage baseball uniforms, woolen sleeves for high school and college letter jackets, and commemorative Jacquard blankets and dance shawls for Native American tribes. To create environmentally friendly upholstery for office furniture, Pendleton spent months testing nontoxic dyes and other biodegradable materials to meet strict safety criteria. "I don't think you could certify that or control all those variables if you were sourcing those products in China," Bishop notes.

Pendleton, however, has not been immune to the pressures of outsourcing. After holding off for years, the company produces half its apparel in the U.S. and half in Mexico, Central America and even China. There have been plant shutdowns and layoffs; with 800 employees, Pendleton is half the size it was a decade ago. "We're realists," Bishop says. "If you can't be competitive, you have to change. We've had to make some difficult decisions."

But Pendleton also spent $50 million to upgrade its two mills in Washington and Oregon, adding equipment that allows state-of-the-art vertical production. Overall, the strategy is working. Its annual sales top $100 million, and profits remain strong. "There are a lot of challenges in the world today," says Bishop, "but there have always been a lot of challenges." Despite the competitive hurdles, Pendleton is living up to its tag line: "Good for life."