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The New York Times
Before Embracing America-First Agenda, David Perdue Was an Outsourcing Expert
The biographical video from Sen. David Perdue’s first campaign, in 2014, celebrated a narrative arc that many fellow Georgians either related to or have aspired to: the story of a humble boy from rural America whose hard work catapulted him into a global business career, navigating free markets and faraway lands, all the while gathering stores of wisdom and wealth.The embrace of global commerce has been a hallmark of modern Georgia, showcased in the 1996 Atlanta Olympics and promoted by, among others, Perdue’s NAFTA-loving cousin, Sonny Perdue, governor from 2003 to 2011. Three years later, in his maiden run for office, David Perdue would boast of his international experience as a consultant and CEO while speaking to a gathering of Republicans in Bibb County, close to his middle Georgia hometown.”There’s only one candidate in this race that’s ever lived outside the United States,” Perdue said. “How can you bring value to a debate about the economy unless you have any understanding about the free-enterprise system and what it takes to compete in the global economy?”Sign up for The Morning newsletter from the New York TimesNow, facing one of a pair of Jan. 5 runoff elections in Georgia that will determine control of the Senate, Perdue has continued to make his global business experience the essence of his brand. But that has highlighted the contradictions that emerge — in his career and in his character but also in his party and his region — as he embraces the populist, America-first strains of Trumpism.The man who has lately voiced support for some of President Donald Trump’s signature tariffs built his career as an unapologetic, free-trading practitioner of the outsourcing arts. As a top executive at companies including Reebok, Sara Lee and Dollar General, he was often deeply involved in the shift of manufacturing and jobs to low-wage factories in China and other Asian countries.A review of that business record shows a man who achieved significant successes, making millions, managing complex periods of corporate growth and change, and creating domestic jobs — particularly at Dollar General. But there were also disappointments, like his fruitless effort to rescue a company called Pillowtex that brought heartbreak to a North Carolina mill town.The man who spent much of his life broadening his horizons took to the stage at a Trump rally in Macon, Georgia, before Election Day and mocked Sen. Kamala Harris’ first name, mispronouncing it with an exaggerated stumble that to critics amounted to crude racism. His campaign has called it an innocent mispronunciation.The man who dons a faded denim jacket to reinforce his connection to everyday Georgians has a record of aloofness, with an aversion to holding town hall meetings and a thin skin for tough questions. Now he has chosen a further withdrawal, declining to participate in additional debates after one in which his Democratic opponent, Jon Ossoff, called him a “crook” for his prolific stock trading while in the Senate.Perdue did not respond to requests to be interviewed for this article. In response to written questions, his campaign issued a statement that said, in part, “Throughout his four decades working in the real world before being elected to the Senate, David Perdue led American companies that saved and created tens of thousands of American jobs.”As when he first ran for office six years ago, Perdue, who is 71, regularly invokes those decades in business to style himself the ultimate Washington “outsider,” though it was his cousin the former governor who gave him his entree to politics and helped nurture his ascent.Taking aim at his 33-year-old opponent, who runs a London-based documentary film company and has never held public office, Perdue’s campaign has fixed on a $1,000 payment from a Hong Kong media company to charge that Ossoff had a two-year working relationship with the Chinese Communist Party.A Global Man of the New SouthIncreasingly and inexorably, the region’s apparel and textile industry was turning to foreign contractors to manufacture its products. The disruption, which meant thousands of layoffs for low-skilled workers in Southern mill towns, was Perdue’s ticket to the world. He became an expert in outsourcing.His apprenticeship in outsourcing began in 1972, when he joined Kurt Salmon Associates, a consulting company that had earned its reputation sending bright young engineers into Southern clothing factories to solve technical problems and boost efficiency.William Sand, an engineer who worked in the Atlanta office with Perdue, recalled that in the 1970s, as Southern factories were beginning to close, new ones were opening in Mexico and Asia. Kurt Salmon, he said, “became experts at helping companies source product from overseas.”Perdue left in 1984 and worked at a few other places before ending up at Sara Lee, which was best known for its baked goods but was also an apparel manufacturer. He was hired in 1992 to open a headquarters in Hong Kong, where he lived for two years, establishing operations throughout Asia “from the ground up,” he would later say.The ripple effects reached home. In 1994, the company eliminated thousands of jobs, including 230 at its Spring City Knitting plant in Cartersville, Georgia.By that time, Perdue was globe-trotting with yet another company, Haggar Clothing, which had chosen him to lead its international operation with one aim: increasing foreign sourcing. As company plants were closed in the United States, workers in Mexico performed the job for $1.50 an hour.By 1998, Perdue was headed to Reebok, which ultimately promoted him to lead its main division. The manufacturing of most of the company’s products was outsourced, primarily to China and elsewhere in Asia.But Reebok’s chair, Paul Fireman, passed over Perdue for promotion to the company’s No. 2 job of chief operating officer.Within months, Perdue was in discussions with a headhunter seeking an executive with the know-how and experience to turn around Pillowtex, a troubled sheet and towel manufacturer with well-known brands in its portfolio, including Cannon, Fieldcrest and Royal Velvet. Perdue agreed in spring 2002 to take the job as CEO of Pillowtex.The company was just emerging from bankruptcy, and thousands of workers at its home base in Kannapolis, North Carolina, viewed Perdue as a potential savior, according to Scott Shimizu, a former executive vice president. Looking back, though, Shimizu said he believed Perdue’s inaction led to the company’s demise.The company needed to sell off assets quickly and outsource production to survive — with the possibility of retaining part of its U.S. workforce — but Shimizu said Perdue took few steps to do either.The company imploded, and about 7,650 people lost their jobs, most of them in North Carolina. The hard feelings toward Perdue were rife in Kannapolis, and in 2014, his Democratic Senate opponent, Michelle Nunn, would release an ad set there highlighting the bitterness.Perdue, who had been at Pillowtex less than a year, soon found a new opportunity at Dollar General. As CEO, Perdue oversaw the opening of a Hong Kong office in 2004.Dollar General flourished under Perdue’s leadership, adding more than 2,000 stores. Former colleagues who visited Perdue at the company’s Tennessee headquarters said it was apparent he was preparing Dollar General for acquisition. In 2007, Kohlberg Kravis Roberts & Co. announced it would purchase Dollar General for about $7 billion. It was later reported that Perdue walked away with a $42 million payout.The Perdue family had lived in Nashville, Tennessee, but it was time to head back to Georgia.’The Outsider’In 2010, as Sonny Perdue was finishing his second term as governor, he named his cousin David Perdue to the board of the Georgia Ports Authority.In 2013, Georgia’s senior senator, Saxby Chambliss, announced he would not stand for reelection the next year. In David Perdue’s telling, he drove to see his cousin and tried to convince him to run. “Well, he told me he didn’t feel led to do so, but then he said I should consider running,” Perdue later recalled in an interview.When Perdue decided to run, he recruited top aides from his cousin’s campaign staff. “David’s team was Sonny’s team,” said Jack Kingston, a longtime Republican congressman who also sought the vacant seat.For all that, David Perdue branded himself “the outsider”– the man with the real-world business savvy needed to effect change. The Republican primary was crowded with well-known and seasoned politicians, and Perdue attacked them for their seasoning.After defeating Kingston in a primary runoff, Perdue went on to face and defeat Nunn.The record Perdue built was reliably conservative. He submitted a far-fetched — and, critics said, regressive — proposal to replace income taxes with sales taxes on goods and services. He proposed limits on the ability of immigrants to sponsor family members, instead giving priority to college-educated young people with high-paying jobs.In the beginning, he also spoke and voted as one would expect a free-trader to do. In 2015, he voted to give President Barack Obama enhanced powers to negotiate big trade agreements, including the Trans-Pacific Partnership, the most substantial trade accord since the North American Free Trade Agreement of the 1990s.But Perdue was also early to see the potential in Trump, who offered a kind of mirror reflection of Perdue’s own political persona as chief executive change agent. The two men reportedly met at Trump Tower during Perdue’s 2014 run.Perdue and his fellow Republicans quickly had to grapple with the president’s determination to break the party’s mold on global trade. Three days into his tenure, Trump tore up the Trans-Pacific Partnership, calling it “a rape of our country.”Although Perdue’s campaign has said that he consistently supported the president’s America-first trade policies, the senator spoke out in 2017 against a Trump-backed plan to impose a “border adjustment tax” that would have raised taxes on companies that import goods into the United States. A year later, he criticized the president’s plan to impose steep tariffs on foreign steel and aluminum, calling for a “more targeted” strategy.But by late 2019, as Perdue’s reelection bid on a ticket with Trump loomed, he seemed more amenable to the president’s approach.And the senator helped spark a civil war among Georgia Republicans in 2020 when he and his Georgia runoff-mate, Sen. Kelly Loeffler, demanded the resignation of the state’s top elections official, a Republican.More recently, the senators supported a failed Texas lawsuit that would have blocked the election result in Georgia, where President-elect Joe Biden beat Trump by about 12,000 votes, and in three other states Trump lost.The battle over Perdue’s Senate seat has been no less fierce. Ossoff’s “crook” attack, in a televised debate in October, was based on disclosures that Perdue, the Senate’s most prolific stock trader, made a number of well-timed trades, including in companies that could be affected by his committee’s votes. An investigation of some of Perdue’s stock dealings by the Justice Department and the Securities and Exchange Commission ended without prosecution, and Perdue has used those facts to argue the has done nothing wrong.Ossoff has revived criticism of Perdue’s outsourcing record. The senator has also had to fend off charges of bigotry, for both his mockery of Harris’ name and a campaign ad that showed a photo of Ossoff, who is Jewish, with a lengthened nose. Perdue’s campaign called the image an accident caused by a “filter” applied by an outside vendor handling the graphic design.For his part, Perdue’s closing attack is in keeping with Republicans’ emerging argument that Democrats like Ossoff are too weak, and in some cases too compromised, to stand up to the threat of Chinese global dominance.Ossoff, Perdue contends, is a radical left-winger with a grave “China problem.” He cites as proof a $1,000 agreement that allowed a large media company in Hong Kong, PCCW, to rebroadcast a documentary Ossoff’s company produced about the Islamic State group.Perdue has said little about his own China ties.In 1991, the year before he headed to Hong Kong to build Sara Lee’s Asian outsourcing operation “from the ground up,” the company proudly announced a new foothold in Asia: a deal in Fuzhou, China.The joint venture, Fujian Sara Lee Consumer Products, manufactured toothpaste, shampoo and other personal care products. It was partially owned by the Chinese government, according to a report in The Chicago Tribune.No U.S. firm could have established such an operation in China at that time without dealing extensively with the government or the Communist Party, industry experts said.This week, the Times asked Perdue’s campaign if he had any other business involving the Chinese government.The campaign declined to answer.This article originally appeared in The New York Times.(C) 2021 The New York Times Company
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