'As Long As There's Human Life On Earth, A Strong Ikea Has Its Worth' : Planet Money A billionaire founder who takes salt packets from restaurants. The history of flat-packed furniture. A factory in the U.S. Everything you always wanted to know about IKEA.

'As Long As There's Human Life On Earth, A Strong Ikea Has Its Worth'

"We satisfy the many needs" Mark Lennihan/AP hide caption

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Mark Lennihan/AP

I have a box full of random allen wrenches and a long, intimate relationship with the bald guy in the IKEA instruction pamphlets.

So I pretty much had to read the very long article about IKEA (subscription req'd) in this week's New Yorker. It's basically everything there is to say about the company, which has stores in 38 countries and sales of more than $20 billion a year.

A few interesting facts from the article:

Flat-packed furniture:

IKEA invented flat-packed furniture in 1951, when an employee took the legs off of a table to fit it into the back of his Volvo.

Today, the company aims to "design products that can be packed as tightly as possible, minimizing damage and maximizing profit as they are transported over the oceans. Its motto: 'We hate air!'"

The do-it-yourself assembly has a side benefit for the company: People like stuff better when they build it themselves. This has been dubbed The Ikea Effect. (Bonus: Here's a study published earlier this year that demonstrated the Ikea Effect in action, and here's a summary of the findings.)

Store Design:

The "Main Aisle" through the store curves every 50 feet, to keep customers interested in what's around the bend. "A path that is straight for longer than that is called an Autobahn — a big, boring mistake."

A professor at University College London "conducted a study of the IKEA labyrinth and deemed it sadomasochistic."

IKEA "uses a technique called 'bulla bulla,' in which a bunch of items are purposely jumbled in bins to create the impression of volume and, therefore, inexpensiveness."

Wherever you stand, you can always see a bin full of yellow shopping bags.

Ingvar Kamprad, the company's founder:

* drives a beat-up Volvo and "is known to pocket the salt and pepper packets at restaurants."

* created a complex corporate structure that includes a $12 billion foundation based in Liechtenstein and controlled by the Kamprad family. (Here's more on the company's finances.)

* was "active in the Swedish Nazi movement" in the late 1940s. He later apologized.

* did his first business deal at age 5, when he got his aunt to buy a hundred boxes of matches, then re-sold the boxes one by one at a higher price. "I still remember the lovely feeling," he told a biographer.

IKEA's U.S. manufacturing plant:

The company opened a plant in Danville, Virginia in 2008. The New Yorker cites coverage from the LA Times, which wrote earlier this year:

...three years after the massive facility opened here, excitement has waned. Ikea is the target of racial discrimination complaints, a heated union-organizing battle and turnover from disgruntled employees.

Workers complain of eliminated raises, a frenzied pace and mandatory overtime. Several said it's common to find out on Friday evening that they'll have to pull a weekend shift, with disciplinary action for those who can't or don't show up.

The head of IKEA USA told the New Yorker that mandatory overtime had been a problem, but that the situation was improving.

In July, the workers at the plant voted to join the International Association of Machinists and Aerospace workers.

"As long as there's human life on earth"

The company has an egalitarian, penny-pinching corporate culture. Everybody flies coach, there's no executive dining room, etc. And there's a deep belief in what the company does.

The article quotes the company's first annual report, issued last year:

Sustained profitability gives us resources to grow further and offer a better everyday life for more of the many people.

And then there's this song, set to the tune of "I Did It My Way":

As long as there's human life on earth

A strong IKEA has its worth

We satisfy the many needs

A strong IKEA that succeeds

Our culture leads us on our way

That's the IKEA way