To Salvage Faribault Mills, CEO Michael Harris Gets Corny
January 27, 2004
FARIBAULT, Minn. — Until two years ago, getting dressed was the closest Michael Harris had ever gotten to textiles. But in 2001, when Harris, 51, became chairman, president, CEO and shareholder of Faribault Mills in Faribault, Minn., his life was profoundly altered. The 140-year-old mill and major producer of woolen blankets to U.S. retail and industrial markets had plunged $12 million into debt and was on the brink of bankruptcy when it entreated Harris, a former senior vice president of several top investment companies, to save it from ruin.
Harris took on the daunting challenge of reviving Faribault amidst a collapsing U.S. textile market that experts call the weakest since the Great Depression. Since 1998, 300 U.S. mills have closed and one third of U.S. textile workers have lost their jobs owing to cheap imports from Asia and the Middle East. Wool, the mainstay of Faribault Mills, has been the hardest hit of all market sectors, plunging to an estimated 24 million square yards in sales in 2003 from a high of 191 million square yards in 1988, said Cass Johnson, acting president of American Textile Manufacturers Institute.
But the crisis doesn't intimidate Harris. Before taking the helm at Faribault Mills, Harris co-founded a same-day delivery service called Velocity Express, Inc. that won him large profits within three years. He believes he can turn around Fairbault Mills just as swiftly with unorthodox strategies that include keeping no finished goods in inventory, acquiring a cotton mill in South Carolina and producting the world's first blankets made from corn, or Ingeo™. Faribault's debt has already shrunk to $2 million, Harris said.
"I relish everyday and see exactly where I want to go and take this company," Harris said. "I get a chance to live history because of our status and make history because of things like Ingeo."
Corn and other annually renewable plants offer a way to produce textiles and other environmentally friendly plastic products that are "made in America." The first Faribault Ingeo corn blankets – and the first corn textile products to hit the market – were launched in November at Marshal Field's stores in the U.S. and on Faribault's website. Available in 100 percent Ingeo or in blends of Ingeo and Merlino wool, the soft-colored blankets cost about $90 for a twin to $160 for a king-size blend.
Minneapolis-based Cargill Dow LLC created Ingeo by investing $750 million in developing an economically feasible method to extract carbon from corn kernels to create the plastic from which Ingeo fibers are spun. The company describes Ingeo as the first commercially viable synthetic fiber derived entirely from annually renewable agricultural resources, and whose cost and performance compete with synthetic fibers made from petrochemicals. Ingeo requires 20 to 50 percent fewer fossil fuels to produce, decreasing greenhouse gas emissions by 15 to 60 percent.
Cargill Dow is now researching how to create synthetic fibers from the stalks and leaves of the harvested corn, as well as from wheat and switch grasses. To lessen its dependence on fossil fuels, Cargill Dow is also investigating other sources of energy, such as wind, to use in production.
"When we found Ingeo, we had made a decision to be made in America and be as environmentally favorable as possible," Harris said. He said Ingeo blankets are biodegradable, very durable and washable, and inherently fire retardant. Although the fabric doesn't flame, it melts under high temperatures and therefore can't be ironed.
To compete with Asian textile manufacturers, Harris instituted a made-to-order policy for the production of finished goods, thereby eliminating the need to keep expensive inventories of finished goods.
Faribault has also stepped up production of cotton blankets. In early 2003, Harris bought Beacon Blankets, a leading maker of cotton blankets, in Westminster, South Carolina from bankrupt Pillowtex. Harris plans to make high-end cotton blankets and crank out low-end blankets for mass-market distribution worldwide.
In addition to shifting his focus from wool to Ingeo and cotton, Harris is deviating from Faribault tradition by selling cloth to clothing and industrial manufacturers. He will also continue to develop overseas markets; Faribault currently ships blankets throughout North America and the Middle East.
Harris took on the daunting challenge of reviving Faribault amidst a collapsing U.S. textile market that experts call the weakest since the Great Depression. Since 1998, 300 U.S. mills have closed and one third of U.S. textile workers have lost their jobs owing to cheap imports from Asia and the Middle East. Wool, the mainstay of Faribault Mills, has been the hardest hit of all market sectors, plunging to an estimated 24 million square yards in sales in 2003 from a high of 191 million square yards in 1988, said Cass Johnson, acting president of American Textile Manufacturers Institute.
But the crisis doesn't intimidate Harris. Before taking the helm at Faribault Mills, Harris co-founded a same-day delivery service called Velocity Express, Inc. that won him large profits within three years. He believes he can turn around Fairbault Mills just as swiftly with unorthodox strategies that include keeping no finished goods in inventory, acquiring a cotton mill in South Carolina and producting the world's first blankets made from corn, or Ingeo™. Faribault's debt has already shrunk to $2 million, Harris said.
"I relish everyday and see exactly where I want to go and take this company," Harris said. "I get a chance to live history because of our status and make history because of things like Ingeo."
Corn and other annually renewable plants offer a way to produce textiles and other environmentally friendly plastic products that are "made in America." The first Faribault Ingeo corn blankets – and the first corn textile products to hit the market – were launched in November at Marshal Field's stores in the U.S. and on Faribault's website. Available in 100 percent Ingeo or in blends of Ingeo and Merlino wool, the soft-colored blankets cost about $90 for a twin to $160 for a king-size blend.
Minneapolis-based Cargill Dow LLC created Ingeo by investing $750 million in developing an economically feasible method to extract carbon from corn kernels to create the plastic from which Ingeo fibers are spun. The company describes Ingeo as the first commercially viable synthetic fiber derived entirely from annually renewable agricultural resources, and whose cost and performance compete with synthetic fibers made from petrochemicals. Ingeo requires 20 to 50 percent fewer fossil fuels to produce, decreasing greenhouse gas emissions by 15 to 60 percent.
Cargill Dow is now researching how to create synthetic fibers from the stalks and leaves of the harvested corn, as well as from wheat and switch grasses. To lessen its dependence on fossil fuels, Cargill Dow is also investigating other sources of energy, such as wind, to use in production.
"When we found Ingeo, we had made a decision to be made in America and be as environmentally favorable as possible," Harris said. He said Ingeo blankets are biodegradable, very durable and washable, and inherently fire retardant. Although the fabric doesn't flame, it melts under high temperatures and therefore can't be ironed.
To compete with Asian textile manufacturers, Harris instituted a made-to-order policy for the production of finished goods, thereby eliminating the need to keep expensive inventories of finished goods.
Faribault has also stepped up production of cotton blankets. In early 2003, Harris bought Beacon Blankets, a leading maker of cotton blankets, in Westminster, South Carolina from bankrupt Pillowtex. Harris plans to make high-end cotton blankets and crank out low-end blankets for mass-market distribution worldwide.
In addition to shifting his focus from wool to Ingeo and cotton, Harris is deviating from Faribault tradition by selling cloth to clothing and industrial manufacturers. He will also continue to develop overseas markets; Faribault currently ships blankets throughout North America and the Middle East.