Ikea Used Prisoners

Story first appeared on NYTimes.com.

Ikea has long been famous for its inexpensive, some-assembly-required furniture. On Friday the company admitted that political prisoners in the former East Germany provided some of the labor that helped it keep its prices so low.

A report by auditors at Ernst & Young concluded that Ikea, a Swedish company, knowingly benefited from forced labor in the former East Germany to manufacture some of its products in the 1980s. Ikea had commissioned the report in May as a result of accusations that both political and criminal prisoners were involved in making components of Ikea furniture and that some Ikea employees knew about it.

Even though Ikea Group took steps to secure that prisoners were not used in production, it is now clear that these measures were not effective enough.

The use of political prisoners as forced labor, even decades ago, is a publicity disaster for a company that with its familiar blue and yellow logo seems at times like a cultural ambassador for Sweden. Inexpensive Ikea furnishings have filled countless student apartments and the homes of millions of young families around the world.

Accusations against Ikea started to appear about a year ago in news media reports in Germany and Sweden. Ikea’s admission has given new impetus to efforts by victims’ groups to receive compensation for work they were forced to perform under the Communist government in East Germany, an issue that has long been overshadowed here by the large and deadly slave-labor program under the Nazis.

“There’s little recognition,” said the chairman of the Association of Victims of Stalinism, himself a former forced laborer, after a news conference here a short walk from the former Checkpoint Charlie border crossing, in a building that stands along the path of the Berlin Wall.

Ikea is not the only company that has been linked to forced labor in the former East Germany by purchasing goods from suppliers there, though the actual number may never be known.

The prisoner said that after an attempt to escape from East Germany, he was forced to make steel pipes for the firms Klöckner & Company and Mannesmann.

At least two well-known mail-order companies in the former West Germany, Neckermann and Quelle, which have since run into financial trouble, have also been accused of using forced labor.

Christian Sachse, a Berlin historian, said forced labor permeated institutions across East Germany, and that it would take years of research to properly understand the field.

The prisoner said that more needs to be done for the victims, many of whom today live under worse circumstances than their former tormentors.

Ikea’s announcement received a mixed response. There was praise that the company had made an effort to uncover unpleasant facts about its past, but also criticism that it had not been transparent enough with the results. Rather than releasing the entire report, the company made only a four-page summary available, citing privacy concerns.

Investigators examined 20,000 pages of internal Ikea records, as well as 80,000 pages of documents from federal and state archives. They interviewed about 90 people, including current and former Ikea workers and witnesses from East Germany.

A political prisoner in Naumburg, about an hour’s drive from Leipzig, told investigators that he was sent to VEB Metallwaren Naumburg, one of East Germany’s state-owned enterprises. He was put to work placing metal pegs in chair legs and furniture rollers, and remembered seeing boxes with the Ikea logo.

A purchaser for the company said that the use of prison labor was not an official Ikea strategy, but that there was an awareness within the company about the issue.

The G.D.R. did not differentiate between political and criminal prisoners, andduring this time period, many innocent individuals were sent to prison. Ikea repeatedly raised concerns about the possible use of forced labor at the time but no action was taken, the report said.

It was well known at the time that East Germany was using prisoners to work in factories but that West Germany encouraged the production of goods in the East because it allowed the East to reduce its debt. At the same time, companies liked to move production to East Germany because costs were lower.

Companies like Ikea would still have paid for the work in East Germany but that the pay never reached the workers. It was pocketed by the G.D.R.

Ikea employees did visit the production sites in East Germany, but rules governing such visits were strict, that way reducing the effectiveness of site inspections. Any visit had to be registered and approved in advance and could take place only in selected parts of the plants, and a representative of the East German government had to be there.

Ikea said Friday it was sorry about the episodes and pledged to donate money to research on forced labor in the former East Germany.

IKEA Uses Computer Renderings in New Catelog

Original article appeared in the Wall Street Journal

Browsing through the new IKEA catelog, it's difficult to tell that the couch you've been admiring isn't really a couch, but a pixelated representation of a couch developed by IKEA's 3-D Design Team. Other Affordable Furniture Companies may follow.

It is likely the entire Living Room Furniture Set was created by a graphic artist. In fact, much of the furniture and settings in the 324-page catalog are simply a collection of pixels and polygons arranged on a computer.

The Swedish furniture giant has for decades spent more than two-thirds of its marketing budget building and furnishing living quarters, including Bedroom Sets, which are typically portrayed with a sparse, fastidious fashion sensibility and lighted with impeccable precision.

But the privately-held company's quest to curb costs and boost productivity has it mothballing some of this real-world production. It is instead turning to 3-D graphics to fill its pages. Find a new Dining Room Set that suits your taste and budget.

This year 12% of IKEA's content for the Web, catalog and brochures were rendered virtually; that number will increase to 25% next year.

In all, IKEA plans to publish 208 million catalogs this year, more than double the amount of Bibles expected to be produced. And it will create 62 different versions in 43 countries. Sleep better on a Discount Mattress.

"It's a clever way to save money," said the head of photography at IKEA during a recent interview at the company's sprawling photo studio in this sleepy southern town. "We don't have to throw away kitchens in the Dumpster after the photo shoot."

Instead, sets for entire rooms—spanning kitchens to bathrooms to porches—can be mocked up and created on a computer screen without the help of a single camera.

The practice is allowing IKEA to easily manipulate imagery to use a set created for one country—where dark wood might be popular—to another where lighter hues are all the rage.

IKEA doesn't break out just how much money this will save, but the company has an aggressive strategy to keep its prices down. The company cut prices an average of 2% to 3% every year during the last decade while expanding aggressively, and still manages to squeeze more profits from the operation on a yearly basis.

In 2011, for instance, the company booked €22,641 ($28,240) in revenue per employee, or 10% more than it did in 2009.

Although known for its growing collection of inexpensive flat-pack ready-to assemble furniture, the company has long been a publishing giant. In 1951, the IKEA founder branched out beyond the basic business of mail-order Christmas tree decorations, ballpoint pens and bird seeds and added a catalog-only furniture business.

Putting together a catalog is a massive task, taking about 10 months from concept to finished product. Until late in the last decade IKEA relied entirely on its sprawling photo studio here. The studio is one of the largest in Europe, covering 94,000 square feet—about a third the size of an IKEA store—and employs 285 photographers, carpenters, interior designers and other people working full time on photo shoots.

IKEA's 3-D team is housed in the same building. Faced with a shortage of people capable of doing this work, the company is collaborating with photo schools to teach computer design skills. It is also retraining photographers to better create a scene without a camera. The company said it is retaining all photographers, carpenters and set designers and reapplying their skills to the 3-D environment.

"With real photography you're constrained by the four walls," said the head of photography, noting the company is running out of room in its studio. "A kitchen has to be built in a week or two and then torn down the following week to make room for a bedroom shoot…everything has to run like clockwork," she said.

A kitchen shot for potential U.S. buyers might have darker colors. "Now let's say we want to sell that kitchen in Japan," she added. "Japanese people, like Scandinavians, like lighter hues of wood than Americans."

Instead of rebuilding the kitchen, IKEA can easily change the color and the background. "And we can still use the same basil plant on the counter. In 3-D, the basil plant never wilts," she said.

The process isn't entirely free of kinks.

When artists make a person in 3-D, the figures tend to look like ghosts. Food and textiles are difficult to depict.

Also, items tend to look too perfect when done on computers, so the traditional studio's crew, such as carpenters, sit with the artist to add wear to a piece of furniture or fingerprints to a surface.

"Let's say we have a door that is supposed to look like an old door that has been repainted," said IKEA's head of photography. Carpenters "know where surfaces fade and wear and have a fine eye for detail and they can help the 3-D artist get the right look."

IKEA started dabbling in 3-D design in 2005, when three interns specializing in computer graphics spent a year working on a graduate-school thesis. Before their arrival, IKEA had used computers only to retouch photographs.

These interns were charged with creating an image of an IKEA product without using a camera. They went to work on a small wooden chair and, after a year, solved it.

"There was a lot of excitement here at IKEA about that little chair," said the head of photography. The company placed the image in the 2006 to see if any customers noticed a difference between real and fake.

Not a single customer noticed the change.

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