Loyal Employees Bring Bankrupt Firm Back -- A Handful Worked Without Pay, Convincing Investors

CHATTANOOGA, Tenn. - The Japanese may not think much of American workers, but John Rogers and Terry Rutherford have a dozen or so they're crazy about.

Choo Choo Customs Inc., a van-conversion company they founded 17 years ago, is on its way back from bankruptcy, in part because a handful of employees worked three months without pay.

"Terry and I weren't convinced it was over, and they (employees) weren't convinced it was over, either," said Rogers, the company's 45-year-old president.

The workers' dedication helped convince two Knoxville investors, Kurt and Ross Faires, to buy Choo Choo Customs for $5 million and rescue it from Chapter 7 bankruptcy.

The company has rehired about 100 of the 170 employees it had a year ago and is working to reclaim its former position as the nation's top converter of Chevrolet vans.

"We've done as many as 5,000 units a year in the past, and we hope to exceed that over time," said Kurt Faires, 33, Choo Choo Customs' chairman.

Choo Choo Customs transforms stripped-down Chevy vans into deluxe $30,000 family cruisers, complete with leather seats, televisions, VCRs, stereos with separate headphones, even wireless Nintendos. The company sells only to dealers under its deal with Chevrolet.

Rogers and Rutherford, a pair of car enthusiasts who began customizing hot rods when they were teenagers, started Choo Choo Customs in a tiny Chattanooga garage in 1975.

The company moved into its present 125,000-square-foot plant in 1986. Two years later, Choo Choo Customs was Chevy's busiest van converter, turning out 24 to 30 finished vehicles a day.

In an effort to strengthen its position, the company spent heavily on research and development and a national marketing program. Then the recession hit, followed by the Gulf War.

The customized van market collapsed. The number of van-conversion companies nationally shrank from about 240 to 110; one of those in trouble was Choo Choo Customs.

Its heavy expenses and declining sales forced the company into Chapter 11 reorganization in March 1991. When a proposed sale fell through in September, U.S. Bankruptcy Judge Ralph Kelley moved Choo Choo Customs into a straight Chapter 7 liquidation bankruptcy, and the company halted production.

But even though their paychecks stopped, a few managers and other employees continued to come to work while Rogers and Rutherford looked for another buyer.

"There were probably 12 to 15 people who came in virtually every day," said Faires. "If they weren't here, they were in garages around town doing product development work, planning for the startup again."

They did big things like studying how the company would be restructured, making projections and cost analyses, and keeping in contact with dealers. And they did little things like answering phones and making copies. Some even paid mailing and shipping expenses out of their own pockets.

"It was like if we didn't come in, we were giving up in a way . . . We wouldn't let something die that we cared about," said sales-representative Theresa Christopher, 42.

Encouraged by the employees' determination, as well as the company's solid reputation, Kurt Faires and his father, Ross, bought controlling interest in Choo Choo Customs on Dec. 23. It was open for business the next day.

The company already has a sales backlog, said Kurt Faires, and many of the 500 dealer customers Choo Choo Customs had a couple of years ago are flocking back.

"We hope to be humming here about midyear," Faires said.

Choo Choo Customs employees like Mike Sabin just smile when you mention Japanese Prime Minister Kiichi Miyazawa's claim that Americans lack a work ethic.

"I think they're tending to stereotype us a lot like we do them," said Sabin, 41, the company's research and development assistant. "How can (Miyazawa) say that people here are lazy? I invite him to come out here and work alongside us."