OVC Prepares For Changing Military Needs
OVC Chairman and President J.C. Egnew discusses his company's position as a military shelter supplier and the potential impact of planned military spending cuts.
Stephen M. Warner, Contributing Editor
J.C. Egnew, chairman and president, Outdoor Venture Corp.
Textile World: Why did you choose to locate your company in Stearns, Ky.?
Egnew: We were looking for a good environment for the start of our new business, including three key elements: an affordable building ready for occupancy; a community with a sustainable supply and an appreciation for the kinds of jobs we had to offer; and the availability of venture capital financing for our new business.
Looking back on our decision, picking a community with a sustainable supply of job applicants has proven to be invaluable. Conversely, I was recently advised by the banker that made us the initial loan 40 years ago that today's banking laws would preclude him from making that same loan today.
TW: Can you tell us about your management team?
Egnew: Our management team is diverse, committed, resilient and accustomed to change as they realize that change is essential to survival and profitable growth. We have reinvented ourselves a number of times in the pursuit of opportunity and of necessity due to decline in our core business.
The key management team members are:
- Lori Miller, vice president, finance;
- Joe Fields, vice president, business development;
- Patty Kid, vice president, engineering;
- Amanda Lester, quality assurance manager;
- Roger Branscum, manufacturing manager;
- Diana Bybee, human resources manager; and
- Brian Maxwell, plant manager, Stearns Manufacturing Plant.
TW: What types of products do you manufacture for the military?
Egnew: Since the mid-1980s, we have manufactured primarily military tents and accessories. There has, however, been a major shift in both the products and the market. The products have transitioned from finished cotton material designed primarily to keep the occupants dry to smart technical synthetic fabrics that are more durable, lighter and provide a more comfortable and safe environment. Additionally, their quick-erect and modular designs provide great flexibility in meeting multiple mission requirements.
TW: The Berry Amendment has provided protection for the U.S. industrial base since 1941, requiring domestic sourcing for certain articles used by the military, including textile products such as uniforms, shelters and personal gear used by the soldier. Critics believe the amendment contradicts free trade policies, limits the availability of better products, and prevents best value purchase by the DoD. Do you have concerns the amendment will be weakened or eliminated in the near future?
Egnew: We have a continuing concern as the economic competition continues to grow. The upcoming squeeze on the defense budget will also add pressure to reduce or eliminate the Berry Amendment. The real question is, "Do we want to become dependent on sources of supply beyond our borders for the timely support of essential food and gear to our warfighters who have volunteered to combat threats to our nation?"
TW: The Pentagon has planned $487 billion in cuts over the next decade. The Army plans to reduce personnel from 560,000 to 490,000, and the Marines, from 197,000 to 182,000. What type of impact does the contraction have on a military supplier like OVC? Do you see a consolidation of contractors?
Egnew: The planned cuts will definitely impact the entire supply base. Those suppliers who have not planned for this cut and do not have other resources to sustain them will go out of business. The survivors will be required to lower their overall costs due to increased competition and/or find new opportunities.
TW: Are the expected additional $40 billion in cuts as a result of the current sequestering situation a different issue? Will they have a long-lasting impact?
Egnew: I believe sequestration will have a long-term impact that will require the DoD executives to plan for significantly lower costs over a long period of time while maintaining capabilities they deem most essential. In other words, they will be making decisions based on life cycle and sustainability costs as opposed to initial procurement costs of equipment.
J.C. Egnew (right) conducts a tour of OVC’s plant for U.S. Rep. Hal Rogers, R-Ky., Chairman of the House Appropriations Committee (left).
TW: In the last 10 years, we have seen a tremendous number of new products for the military, particularly in the development of "smart" textile products. Which drives the innovation process — the military or the industry itself?
Egnew: I believe innovation comes from all directions. For example, current and increasing energy costs are driving a lot of innovation in both the commercial and military markets.
TW: Are you diversifying your markets, given the planned military reductions? If so, what types of products are involved?
Egnew: Presently, we are diversifying our company into a specialty shelter company with the addition of two product categories.
The first area is safety shelters for use in underground mines. This business resulted from the need to provide a better means for ensuring longer-term survivability for miners trapped by a cave-in and/or explosion while waiting to be rescued.
Additionally, we recently acquired the assets, including intellectual property, to manufacture steel insulated panels (SIPs) that are load-bearing and easy to assemble. The SIPs are designed in a manner that can be utilized to construct modular panel buildings having high thermal efficiency (25R) as well as a freestanding structure that can be quickly assembled on-site, thus reducing expensive on-site construction. Likely applications are schoolroom additions, utility buildings, man camps and other shelter appplications, especially in extreme and/or remote environments. The modular design also enables the building to be disassembled and moved to a new site and reassembled using approximately 30 percent of the labor required for standard stick frame construction.
TW: Are you seeking collaborative relationships with other end-product fabricators? If so, are they only in the technical textiles industry?
Egnew: We have always sought and continue to seek collaborative relationships that make good business sense. As a small business, one cannot afford all the assets required for success; thus, collaborative relationships are an excellent way to leverage your resources. We have the facilities, skilled employees and management team that know textiles and end-product fabrication for military, consumer and commercial applications. It's all in place, and we welcome working with other companies in the industry.
TW: How do you feel about OVC's next five years?
Egnew: I feel optimistic as we are focused on laying groundwork to position Outdoor Venture Corp. for future opportunities. The driving forces will remain the fear of failure and the desire to succeed.
TW: Besides the military's reduced demands, what "big picture" changes do you see that will influence OVC?
Egnew: I believe rising energy costs, new regulations and new technologies will be the main drivers for our business in the foreseeable future.
Editor's note: Stephen M. Warner, Arden Hills, Minn., is publisher of BeaverLake6 Report, beaverlake6.com, a Web-based newsletter reporting on trends, data and issues that he feels influence the technical textiles industry. He also is former president and CEO of Industrial Fabrics Association International.