The Achilles Heel of the Great Southern Lumber Company

Frank Goodyear created what was on paper an unstoppable force in the South. Its size, technology, rail line system, backing by the business elite etc all helped the company do one thing well---be the lowest cost producer of lumber in the Nation. This production cost advantage was key to the operation. Having the lowest cost of production ensured profits and survivability across economic conditions. Without it the Company was vulnerable to being taken over during an economic downturn. Frank well understood how his Jekyll Island "friends" used constriction of the monetary supply to force economic downturns during which they "took over" other less capitalized business entities such as oil, coal, railroads, etc companies. Being the lowest cost producer of lumber in the Nation gave the Goodyear family economic power and status in the business elite of our Nation. The fact bogalusa timber was also the best in the world was icing on the cake Frank created.

But what you might ask was the Achilles heel of such a brilliant operation? Labor. Labor. Oh did I mention labor. Or should I say the concentration of labor in one "factory" which controlled the production of the entire volume of the business output. Frank had all his economic eggs in one basket. In Penn and New York Frank had as many as 15 saw mills going at one time. Labor problems at one site did not disrupt the other sites. He could play workers in one location against those of another location and avert problems in this manner. His Great Southern Lumber Company did not have this luxury. These workers were by the nature of the plant more specialized and highly trained or skilled. The very fact that a relatively few workers could shut down the entire production of the Great Southern Lumber Company, and due to their skill set not be so easily replaced, created a risk which blew up in 1919. Unions.

To put it in terms any Walmart customer can understand. Why does the meat at Walmart taste so bad? It would seem Walmart could have some mighty fine meat given their technology in supply chain, labor cost and procurement skills. The reason their meat is so awful has to do with Unions. Unions? Yes. A few, maybe 4 or 5 butchers, can shut down the grocery business of any one Walmart location if they go on strike. Multiply this on a National level and you have a very small percentage of workers being able to destroy the company. Meat cutting is a highly skilled labor function which requires a skilled person to engage in it. Not just any teenager off the street can do it. The positions in the store require no such skill set and thus are harder to Unionize.

This is why Walmart doesn't have butchers in their stores and the meat sucks because of this. Same problem with the Great Southern Lumber Company. A few well placed Union members could shut down the plant overnight and keep it shut down for a long time. This is also why the Company went to such extremes to control the community and workers. They feared Unions because their very structure of production made them more vulnerable to Unions. Unions would assure the Company would no longer have the lowest cost of production and make the entire enterprise vulnerable to predatory business men like JP Morgan, etc. During economic hard times the JP Morgans of the world bought companies on the cheap, destroyed family/investor equity, and consolidate the industry to ensure HIS ability to profit off the industry. Frank knew the game well and his Great Southern Lumber Company could survive any economic climate IF it didn't become Unionized.