Foreign Sales Avert a Hard Landing for Chute Maker : Defense: The U.S. market was shrinking after the Cold War, so FXC in Santa Ana looked overseas for growth.
Well after the Cold War thawed and the shrunken Pentagon budget sent defense contractors scurrying to commercial customers, the maker of Guardian parachutes and automatic rip cords still relied on the U.S. armed forces for much of its revenue.
But during the last 12 months, FXC Corp. began to feel the pressure too, and it sought new customers in a way that expanded the meaning of defense conversion. Just because the Defense Department cut back on orders, FXC founder Frank X. Chevrier figured, it didn’t mean militaries abroad were tightening their purse strings.
So the Santa Ana company began peddling its chutes and cords to countries involved in regional conflicts or simply upgrading military operations. It deployed 40 sales agents, many of them former military officers, to 40 countries worldwide.
The effort paid off. Foreign sales grew 29% last year as the privately held FXC generated $4.5 million--about 60% of its revenue--from exports. Its overseas effort garnered it a nomination by the World Trade Center Assn. of Orange County for export excellence among small companies, though the honor was awarded last week to another company.
“Business is picking up more and more,” Chevrier said. “We’re starting to groom South America, and Germany’s starting to buy some of our stuff.”
Talk to Chevrier, a 65-year-old French Canadian who immigrated to the United States three decades ago, and the latest news on military buildups in any given country rolls right off his tongue, as though he were some foreign affairs officer rather than the designer of high-technology parachutes and escape gear. He knows where the sales are hot.
“Mexico is the biggest one,” he says. “They’re buying like mad right now. They’re buying our special force equipment for the elite--and they’re buying them complete. Chile is buying the same system every three months and Peru is buying every four months.”
Special force equipment is highly advanced, high-altitude parachute gear that comes with goggles, oxygen masks and the automatic rip cord device that Chevrier invented two decades ago.
“Europeans are getting very strong,” Chevrier said. But the European Union is trying increasingly to buy more products from within its common market of 15 countries.
Chevrier has his sights set on Argentina, Paraguay and Uruguay. Some of his gear is so advanced that he needs U.S. clearance before he can sell overseas, and some countries--Libya, North Korea, Iran and Iraq--are excluded.
FXC’s latest invention is a computer-aided, cargo-dropping parachute that, with satellite guidance, is capable of winding around mountains and many other obstacles, constructed or natural, to reach a pre-programmed site.
“That will probably be used for food drops,” Chevrier said. “But that’s also the one the drug traffickers are after.” Drug traffickers could use the advanced system to drop cocaine loads, say, in the United States while flying in Mexico or over international waters.
The special force equipment is popular in Colombia, Peru and other South American countries where military pilots fly sometimes dangerous missions in their fight against the drug cartels.
When Ecuador and Peru got into an armed skirmish in January over the exact location of their border, a U.S. embargo forced FXC to halt shipments. Chevrier, whose products are valuable to militaries at war, is hoping for peace soon in Ecuador and Peru.
“We’re waiting any day to ship our stuff out there,” Chevrier said. “It looks like they’re going to be nice guys again and stop fighting over that river.”
FXC is plying in a tough market. Major foreign companies are able to undercut the company’s prices, and FXC can’t compete against them on price, he said. Instead, he said, the company prides itself as being the only one to offer a complete package of gear, including the automatic rip cord.
His export experiences are giving him an education that he never received when he was a youth in Montreal. A seventh-grade drop-out, he enlisted in the Canadian Air Force when he was 20 by using his older brother’s high school diploma. He spent seven years repairing planes and then, as a civilian again, helped design defense radar systems for his country for two years.
A 1953 mid-air collision that killed two Canadian Air Force friends spurred Chevrier to start thinking about some device that could have helped to save their lives.
“When you have friends who bail out of a plane and you can’t find them for two days, and when you finally do, they’re dead, you start thinking, ‘There must be a way to save them,’ ” he said.
By 1973, he had created his patented parachute rip cord, which opens up parachutes automatically for those unconscious or unable to do it themselves. He figures the device, which now sells for $1,200, has saved about 1,500 lives so far.
“If it weren’t for this, I probably wouldn’t be where I am today,” says Chevrier, holding the piece of metal in his hand and briefly contemplating the weight of its significance. The invention of the automatic rip cord led him to start making parachutes and related products.
After patenting the rip cord, Chevrier sold thousands to the U.S. Navy, but defense cutbacks have slowed domestic sales in the last year or so. Much of his domestic work--about 30%--is spent repairing and refurbishing equipment the Defense Department sends back.
Para-sailing buffs account for about 10% of all sales, but FXC isn’t interested much in that market, he said, because of the potential liability costs in defending lawsuits. Chevrier and his 65 employees at FXC would much rather stick to foreign orders.
“If we didn’t have foreign sales,” he said, “we’d be in deep trouble.”
