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The Great Recession
2008: A Global Financial Downturn
Amidst an international crisis, Marvin remained determined to weather the storm in lockstep with its people.
When the housing crisis gave way to the Great Recession in 2008, layoffs cascaded across industries as many companies made the decision to reduce their workforces to stay afloat. Millions of Americans lost their jobs, homes, and sense of security.
For Marvin, uncertainty loomed. But the company’s third generation of family leadership had a playbook to turn to, because Frank, Jake, George, and Susan had grown up understanding firsthand the importance of putting people first.
Their father and grandfather, William S. “Bill” Marvin and George G. Marvin, had modeled values-driven leadership since childhood with lessons that stayed with them as they worked their way through the ranks at Marvin. Though in their youth at the time of a devastating 1961 fire that resulted in opportunities to move elsewhere, the siblings remembered the commitment to community that drove Bill and George to rebuild Marvin’s operations in Warroad, employing Marvin workers to do so until their original jobs could be reinstated. It was this example that would guide the siblings’ response to the country’s most challenging financial period since The Great Depression.
Marvin made a commitment to preserve the jobs of its workforce. Work hours were reduced, some benefits were rolled back, and the company took no profits for three years. But the Marvins were adamant: no one would be laid off or lose their medical benefits. They knew that dealing such a blow to their colleagues would serve no benefit to the company in the long term, because customers would feel the impact of a reduced workforce when the market recovered – something the company refused to compromise on. It would also bring severe hardship to the community of Warroad, which had remained the company’s beating heart since its founding.
“You can’t cut your way to prosperity. You can’t grow if you are cutting your lifeblood – and that’s the skills and experience your workforce delivers,” Susan Marvin, who served as president of the company during the financial crisis, told The New York Times in 2011.
“These are the people we went to school with. We go to church with them. We see them in the same restaurants. Indeed, a lot of us have married local [residents]. We could be anywhere. But we are in Warroad,” said CEO Jake Marvin when asked by The New York Times about the family’s commitment to its rural headquarters. He, along with his siblings, believed that Marvin and Warroad could weather the storm together.
The country took notice of this unique, steadfast commitment to people. Even President Barack Obama found inspiration in Marvin’s approach. “The family business in Warroad, Minnesota that didn't lay off a single one of their four thousand employees during this recession, even when their competitors shut down dozens of plants, even when it meant the owners gave up some perks and pay -- because they understood their biggest asset was the community and the workers who helped build that business -- they give me hope,” he said in his 2012 Democratic presidential nomination acceptance speech, in a surprise to Marvin family members at the time.
The nod came as Marvin celebrated the 100th anniversary of its founding, a fitting recognition of the values that both brought the company to life and continue to sustain its success four generations later.
As the financial crisis waned, full-time work hours were reinstated and all benefits were restored. Profits returned and were once again shared with employees. In the years that followed, it became evident that retaining its workforce wasn’t just good for people — it was good for business. Because Marvin had continued to employ its talented workforce during the downturn, the company was uniquely poised for success as the housing market recovered. Where others needed time to ramp up production and personnel, Marvin could meet growing demand for products as homebuilding and remodeling resumed. Today, the company has more than doubled in size since the recession, expanding its production footprint, product innovations, and, crucially, growing its workforce of exceptional manufacturing talent.
By looking to the example of their predecessors, the third generation of Marvin family leadership not only successfully navigated an unprecedented recession but set a powerful example for future generations that continues to drive company leaders today.