Jun 21, 2012

Case Study — Exxel Outdoors Inc.

Bringing American manufacturing jobs back by betting big … and winning … on shuttered Alabama sleeping bag factory

Haleyville, Ala. – Exxel Outdoors CEO Harry Kazazian made a calculated gamble in buying a soon-to-be-closed sleeping bag factory in rural Alabama at a time when most of the industry had moved to China. By modernizing, retooling and reinventing factory processes, Kazazian believed he could manufacture sleeping bags at lower cost and higher quality than those he was getting from his Chinese manufacturers.

It was a good bet. Not only did he save desperately needed jobs in a town with significantly high unemployment, his company continues to bring previously outsourced jobs back to America, while also driving job growth among the new American suppliers with which Exxel has partnered. In January 2012, Kazazian was one of a few business leaders asked to participate in President Obama’s “Insourcing American Jobs Forum” in Washington, D.C.

“Colleagues said I was crazy to buy a plant slated for closure that was losing hundreds of thousands of dollars monthly,” Kazazian said. “Today, we’ve increased American production of our sleeping bags from 40 to nearly 90 percent.”

Exxel Outdoors now produces more than two million bags annually at what remains the only major sleeping bag factory in America. The company specializes in family camping bags under brands such as Suisse Sport, American Trails and Master Sportsman, as well as a licensing agreement with brands like Disney, Marvel and Hello Kitty.

Since rescuing the plant and expanding production, Exxel has increased its U.S. workforce by more than 20 percent with approximately 100 employees in Haleyville and plans to add about 25 percent more jobs over the next two years. This expansion has had a ripple effect throughout the area. As Haleyville Mayor Ken Sunseri explained, “Exxel has been a stable manufacturer in our community, providing not only critical jobs for our citizens, but also for their suppliers in North Carolina, South Carolina, Mississippi and Tennessee. Their payroll has built homes, bought groceries and provided economic development to our city.”

Kazazian grew up poor in an immigrant family in Los Angeles, and literally began his business in his garage in the late 1980s. So giving back to the community is elemental to his company’s corporate culture. It routinely comes to the aid of communities struck by natural disasters, providing sleeping bags and supplies to victims of Hurricane Katrina, the Haiti Earthquake, and the recent mid-west tornados that hit the Alabama area particularly hard.

Being a good corporate steward of the earth is also important to its operations. The company’s products are made from 80 percent recycled polyester fill, which has saved more than 32 million pounds of the material from ending up in landfills. Exxel recycles 98 percent of its industrial waste, including shipping all its cloth waste to India-based companies, who repurpose the material for other uses. It has reduced package materials by 50 percent. And the company is exploring ways to run the plant completely on renewable energy.

Kazazian believes his company’s successful gamble will be contagious in spurring other outdoor companies to bring manufacturing jobs back to America. “Patriotism isn’t enough to make a factory run; it has to make good business sense. We’ve proven that by making strategic efficiency improvement investments, American manufacturing can compete and thrive. Companies tend to emulate success.”

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