Return to Transcripts main page

CNN Pinnacle

Encore Presentation: Tami Longaberger Makes Billions From Baskets

Aired July 21, 2001 - 14:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BEVERLY SCHUCH, HOST (voice-over): The human hand. Visionaries from Aristotle to Leonardo da Vinci have celebrated the hand as the meeting place of the mind, body, and spirit.

For Tami Longaberger, the hand is the quintessence of love, and a living which has woven her family together for generations. It's also made her a billionaire, outranking Martha Stewart, Oprah Winfrey, and Donna Karan on lists of the world's wealthiest women.

The Longaberger Company lives by the hand. The world's foremost maker of handmade baskets, its headquarters building, about 70 miles east of Columbus, Ohio, is a replica of their best-selling market basket, seven stories tall.

TAMI LONGABERGER, CEO, THE LONGABERGER COMPANY: Oh, it's a great building. It's a great building. And it was my father's idea to build that.

SCHUCH (on camera): Did I hear you were against it?

LONGABERGER: Well, I would reveal to you now that I was not a strong advocate at the time. And I actually, you know, privately fought him on the idea. And he of course won.

SCHUCH: Do you remember when he said, Oh, you know what? I want, I want a headquarters shaped like a basket. I mean, what did he say to you?

LONGABERGER: That's exactly what he said. "I think we can -- we're going to build a building that looks like a basket."

SCHUCH: And you said...

LONGABERGER: And I said, "We're going to do what?" And I said, or someone in the room said, "You know, I don't know if we can do that." And he said, "Look, if they can put a man on the moon, we can build a building that looks like a basket."

SCHUCH (voice-over): From all over the world, basket fanciers descend on Dresden, Ohio, the Longaberger family seat and the epicenter of the world's basket-weaving empire. It's a Midwest tradition to make marriage proposals in the shade of the world's largest basket as certified by Guinness and proposing comfortably in a Dresden park.

From its factory, 2,200 pairs of hands expertly twist strips of fine maple into 200,000 baskets a week. Those are turned over to 68,000 more pairs of hands belonging to sales associates, mostly women, who sell them at home sales parties. Once a year they gather in the Columbus Convention Center at the world's basket extravaganza, the Longaberger Bee. There, members of the family are treated like movie stars.

Tami's father, Dave Longaberger, started the company with his father's hands and a few strips of maple in 1973. Dave died of cancer last year, but his legacy is no less than a rebirth for Appalachia and a huge challenge for Tami, his oldest daughter.

(on camera): You took over as CEO in '94, correct? And then you learned in, what, '98 that he was diagnosed with cancer. What did you -- I mean, obviously there's the shock of having your father ill. But did you also think, Oh, my God, I could be alone here?

LONGABERGER: You know, he asked me to go to work when I was 14, and he knew that to teach someone how to be independent, they need to be able to take care of themselves. And, you know, it reminds me of a story when I was in college, he -- I called him, probably had a bad day, maybe a bad grade on a test or something. And I said, "Dad, I'd like you to come over, and I'd like to have dinner with you tonight."

And he said to me, "You want me to do what?" Because he was very busy trying to grow this business and do other things. I said, "I'd like you to come over. I need you tonight." And he said, "Tami, I'm not coming over tonight." He said, "You're going to have to learn how to pick your own self up. Because there's going to be a time that I'm not going to be there, and that's when you're going to need me the most. And you need to learn how to reach behind and lift your own self up."

SCHUCH (voice-over): The complex interweaving of father and daughter, the handmade family saga of the Longabergers, next on Pinnacle.

(COMMERCIAL BREAK)

SCHUCH (voice-over): Appalachia, the underbelly of the American dream. In the late 1800s, Appalachia prospered through coal and canals. But then the railroad turned canal towns into backwaters. Appalachian poverty arose like a mist on the river. But as coal mines prospered, so did small crafts. You need pottery for home and work, and you needed baskets to carry the pottery.

In southeastern Ohio, near the borders of Pennsylvania and West Virginia, basket making became a way of life. John Wendell Longaberger, Tami's grandfather, moved to Dresden, Ohio, in 1896 and made baskets for a living, until the Great Depression broke the basket business and choked the coal mines.

He and his wife had 12 children. Child number five, Dave Longaberger, Tami's father, also known as Popeye, was for many years considered the dumbest man in Dresden. He stuttered, had epilepsy, and didn't finish high school until he was 21 years old. And yet, of all the 1,500 residents of depressed Dresden, Popeye was the one who became one of the richest, most successful men in America.

For all his handicaps, he had an overwhelming vision.

(on camera): Your father had said that -- well, he was recalling, actually, what a, you know, kind of crazy 25 years it had been. This was a few years ago. And he said, you know, there were a string of near-bankruptcies during his tenure, IRS threats to shut the place down, periodic labor unrest he had, and frequent huge layoffs. I mean, this was not one of these steady climbs to success. It was a fight, tooth and nail, it seemed, all the way.

Did you feel it was your job to bring some stability to that?

LONGABERGER: I think it's the challenge of growing a business. I mean, to start a business from nothing, literally. You know, he was the only salesperson.

SCHUCH (voice-over): But what a salesman he was, even with a stutter. He started out selling bread to grocery stores and soon had enough money and satisfied customers to open his own grocery. Then he made what his brothers and sisters thought was a completely insane move. He asked his father to make a few baskets to see if he could sell them. He offered his dad $5 apiece, and Dad said, "Popeye, no one would ever pay me more than $1.50."

Everyone in Dresden knew that the basket business had died long ago. But Popeye had a vision that people would pay for genuine American handicrafts. And when he sold them for $10 apiece, they saw he was not so dumb after all.

(on camera): Was it a dying art when your father kind of revitalized it?

LONGABERGER: My grandfather had made baskets for years and years, and it was part of our family heritage. But there weren't too many basket makers around at the time, and my dad had asked my grandfather to make a few baskets up. And we found that many, many people wanted baskets.

SCHUCH (voice-over): Dave hired workers to make baskets, but they had to wait months before he could pay them. They stuck by him, the advantage of living and working in a small Ohio town. And the business grew around them. It's now one of the largest businesses in Ohio, employing more than 8,000 people. They branched out from baskets to pottery, ironwork, even a kind of basket-weaving theme park and a championship golf course.

And the people keep coming, spending their money and loving every minute of it.

(on camera): Well, how did you find a way to bring more stability, then? What was it? LONGABERGER: I think we all grew in this business together. We get incredible ideas on how to make the business better from our employees.

UNIDENTIFIED FEMALE: You got to act like you really love this thing.

LONGABERGER: If you're trying to improve the process and smooth it out and make it better, the best people to ask are the people who are working there every day. And so we put together teams of employees throughout the organization that are working to help make the business better.

UNIDENTIFIED FEMALE: You need to love your basket.

SCHUCH: I love my basket.

(voice-over): Because of his stuttering, Dave Longaberger made a great business discovery, the home sales associate. Dave was considered such a bad business risk that no bank would loan him money to market his baskets. So instead, Popeye hit on the idea of selling them directly in his home, friend to friend.

UNIDENTIFIED FEMALE: You'll also notice this particular basket has swinging handles. The handles are all attached with copper rivets. That's important, because copper doesn't rust.

SCHUCH: It proved to be a billion-dollar technique. Marketed this way, every order is paid in advance. There's no need for bank loans or costly market research. Longaberger makes just as many baskets as it has orders for, and the customers trust their own friends to hold the money.

Once a year, all 68,000 of those friends, the sales associates, are invited to converge on Columbus, Ohio, for their annual convention, known as the Longaberger Bee.

Overcoming all obstacles, Dave Longaberger became a classic American success story, even though he didn't have a grand idea until he was nearly 40 years old. He died at age 63 and left in charge the girl he used to play practical jokes on. Under Tami's hand, the business has grown more than 100 percent.

When we return, we learn why a red-faced Tami once escaped through the bathroom window, and we meet Grandma Bonnie.

(COMMERCIAL BREAK)

LONGABERGER: You need to love your basket.

UNIDENTIFIED FEMALE: I love my basket.

LONGABERGER: You a big collector?

UNIDENTIFIED FEMALE: Yes, yes.

LONGABERGER: How many baskets do you think you have?

UNIDENTIFIED FEMALE: Probably maybe about 40.

SCHUCH (voice-over): In the worlds of baskets and business, Tami Longaberger is a superstar. A signed basket that originally sold for $32 can now fetch more than $3,000 in the collector's market. They regard the baskets as individual pieces of art, and that art has made Tami Longaberger one of the richest women in America.

(on camera): So this is the old homestead.

LONGABERGER: This is it.

SCHUCH (voice-over): Tami's worked for the company since she was 14 and officially joined after graduating from Ohio State with a degree in business.

LONGABERGER: And I'd sit on that porch and daydream about where I was going to go to school and what I was going to do when I grew up.

SCHUCH: Now, how many people -- what do you think your role is, then, if your father's was maybe a visionary? What's Tami's role?

LONGABERGER: I want to ensure that we continue to help people to help themselves, as helping people reach their potential, helping people grow in the business.

SCHUCH: But how do you do that? I mean, you've got a company that is -- you know, it's successful, it's growing almost 20 percent every year. But how do you -- where do you take it from here? What's the next step?

LONGABERGER: The next step is to continue to grow the business. It's (UNINTELLIGIBLE) more people who become a part of the organization and can live up to their own potential, the energy moves the business forward.

SCHUCH: Do you think there are no glass ceilings for women in general?

LONGABERGER: There are no glass ceilings at the Longaberger Company.

SCHUCH: All right. Your father's name was Popeye, nickname?

LONGABERGER: His friends called him Popeye.

SCHUCH: Why?

LONGABERGER: He did. Well, it was a long time -- when he was born, my grandmother -- he was my grandmother's fifth child, and you heard my grandmother talk this morning, talking about her husband's eyes and his dark eyes. Well, my father inherited those eyes.

SCHUCH: What do you miss most about him?

LONGABERGER: He -- we had so much fun together. He had an incredible sense of humor.

SCHUCH: What's an example of that?

LONGABERGER: He -- we were working in a grocery store one night. There -- he was at a cash register and I was at the other (UNINTELLIGIBLE). I don't know why he was there at the time, but he was running the cash register. And some kids came through, younger kids, and they were being smart. And, you know, he would always, you know, (UNINTELLIGIBLE) to teach, always wanting to teach someone a lesson.

And they came through, and they said, yes, they'd paid for their pop, their soda. And Dad handed them the soda back, and the kids said, "Well, Popeye, I want that, I want that in a sack." And Dad said, "You want that in a sack?" He said, "Yes, I want it in a sack." Dad said, "OK." So he popped open the tab and poured the soda right into the bag.

SCHUCH (voice-over): A story Tami didn't want to tell is one that appears in Dave's autobiography. Once when she was a teenager, the whole family was at a restaurant. Tami went to the ladies' room, and when she returned, Dave began to applaud, and the entire restaurant followed suit. She turned red as a maple leaf in autumn, ran back to the ladies' room, and climbed out the window.

It took her a while before she could even laugh about it.

LONGABERGER: He loved playing tricks, and loved to (UNINTELLIGIBLE).

SCHUCH (on camera): Did you get even?

LONGABERGER: I tried, but I never succeeded. He was so far ahead of me.

SCHUCH: You have two young children. Is it their destiny to go into the company?

LONGABERGER: I would like to put my -- help put my children in a position that they have the skills if they want to be in the business. But that's their choice. And, you know, I'll tell you a story, though. A few months ago, I was in my office, and my kids come in my office occasionally. And my daughter had been there. And she had gotten one of my business cards out of my business card holder. And I saw that she had put a line through my name and wrote her name in.

SCHUCH: Watch out.

LONGABERGER: So I kept that business card, so maybe that's an indication of what she wants to do.

SCHUCH: Watch out, Mom, because you could be vacated.

You know, Barbara Walters said, a wise woman, Barbara Walters said that you -- women can't have everything. They can have two out of three things. They can have a great career and great children or they can have a great career and a great husband, but they can't have all three.

Do you think she's right?

LONGABERGER: I -- there are three things that are important to me, and that's my children, certainly this company, and my own personal development and growth. And I'm very -- I work very deliberately at all three of those things.

SCHUCH: You were a product of divorce. Your parents were divorced.

LONGABERGER: My parents were divorced.

SCHUCH: How old were you?

LONGABERGER: I was 12.

SCHUCH: That's the age for your daughter now. They have been through your divorce as well. How is it different?

LONGABERGER: Again, I think in both situations, both my parents as well as myself and my children's father, none of us look to the past, we just move forward.

SCHUCH: But did you take things from what you -- the experience that you had been through and say, OK...

LONGABERGER: Oh, I've learned...

SCHUCH: ... I'm going to do this differently?

LONGABERGER: ... learned from all of the mistakes. Now, what I did is, I took from how well my parents handled that situation, and actually modeled my situation from the experience I had as a child. I was very fortunate, I was very lucky, and I had two parents who loved me very much, and my children have two parents who love them very much.

SCHUCH: You're lucky you have that worked out.

Will you get married again?

LONGABERGER: Oh, I am so busy with work and so busy with my children that I really don't even have time to think about that.

SCHUCH: You didn't say yes automatically.

(voice-over): When PINNACLE returns, the great Michigan-Ohio State rivalry, Grandma Bonnie, and the Carolina wren.

(COMMERCIAL BREAK)

SCHUCH (voice-over): One of Tami Longaberger's biggest honors is being on the board of trustees of her alma mater, Ohio State University. She's become one of the highest-profile women in the state, even mentioned as a possible candidate for governor one day. UNIDENTIFIED MALE: This is the dream trustee. No, I mean that. She sort of just in a -- so many ways epitomizes the feeling for this university, and it was so evident the day I walked on the campus.

SCHUCH: At the legendary Ohio State-Michigan game, on her way to root for what turned out to be the seriously outplayed Ohio State team, Tami took time to meet with some of the recipients of scholarships co-funded by the Longaberger Company.

CAROL BOWMAN, SCHOLARSHIP RECIPIENT: A few years ago, oh, about five or six years ago, I was a junior at Ohio State, and I -- when I decided to come back to school, I had been a custodian for about 10 years. And one of my bosses said, Look at it this way, Carol, what else could a woman with six kids do, than be a custodian?

LONGABERGER: Oh, you're kidding.

BOWMAN: And I thought, Well, wait a minute. A woman with six kids has a lot of skills. And I found some financial aid sources. But by the time I got to my senior year, I had pretty well tapped out a lot of things. And I was beginning to wonder, Am I going to be able to complete the senior year? And that's when I received the Critical Difference for Women Scholarship.

And I want you to know that it made all the difference in my life.

SCHUCH (on camera): So what do you remember about going to Grandma's house?

LONGABERGER: Oh, I can remember big family reunions. There's so many children. My grandmother had 12 children, six girls and six boys.

SCHUCH: So what do you think of your granddaughter now running this big company?

BONNIE LONGABERGER: It's a big job. You know, I pray for you every once in a while.

LONGABERGER: Thank you, Grandma.

SCHUCH: How was it when you first remember your husband making baskets? It's grown so much.

LONGABERGER: He enjoyed making baskets, didn't he?

BONNIE LONGABERGER: Oh, heavens, yes.

LONGABERGER: Tell about when he'd bring the splints. He would bring the splints home.

BONNIE LONGABERGER: Oh, when he'd get it -- had them made in Marietta, and I could tell whether they were good splints, bad splints. I used to look at him, because he had brown eyes, and they would be black if they were not good splints. LONGABERGER: He took a lot of pride in the baskets he made, didn't he?

BONNIE LONGABERGER: Oh, yes. He'd bring them in -- if they were good, he'd bring them in and show them to me. If they weren't, well...

SCHUCH (voice-over): Still living in the house on Eighth Street where Dave and his 11 siblings grew up, Grandma Bonnie is the biggest star of all in the Longaberger constellation. She's 92 years old and still going strong, working out every day at the senior citizens' center named after her.

(on camera): When you drive back now, having grown up here, you know, everywhere you look, you see your name. Is that odd?

LONGABERGER: Oh, it's not about me, it's about the company. And it's a great sense of pride to know that you're able to bring opportunity and career development and growth for people that -- in southeastern Ohio, we did not have a lot of those options.

UNIDENTIFIED MALE: Carolina Rigg (ph).

SCHUCH (voice-over): When Tami's not making or marketing baskets, she's bird watching.

LONGABERGER: I can remember when I first started birdwatching, I saw these little yellow birds that I'd never seen before. And I thought, Well, that's interesting, where are they? Oh, they're very common. And I realized I was missing this whole world that flies around me every day.

SCHUCH (on camera): You're fourth generation in the basket business.

LONGABERGER: Yes.

SCHUCH: Was it something you were instructed on very early, that you and your sister will make -- learn the technique, and the skill and the talent of making a basket?

LONGABERGER: You know what? We would go round to my grandmother's and grandfather's for family reunions, and my grandfather at the time had a basket shop in the back area of his house. And in there were all kinds of -- as a child, all kinds of wonderful splints and wonderful tools and things in which to play with. But that was my grandfather's space, and he liked to keep his studio to himself. But we snuck in there.

SCHUCH: Do you remember when you made your first basket?

LONGABERGER: Oh, sure. It was wonderful for me. It was actually -- probably I was in college at the time. And Dad had started the basket business, you know, as we would all it, you know, I went to college in 1979, and he had his shop and maybe three or four weavers at the time. And I came into the shop and helped make a basket.

But I've got my children making baskets already now.

SCHUCH: They have.

LONGABERGER: Yes, I have a 10-year-old and an 8-year-old, and they've both made baskets already.

SCHUCH: And do they...

LONGABERGER: They love it.

SCHUCH: And love it.

LONGABERGER: And love it.

SCHUCH: Because you have to love your basket.

LONGABERGER: Absolutely

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com