Ernie Petit, president of the four hobby divisions of J. Lloyd International holds up a newly released metal coated model of a Boeing B-17G at the companies headquarters in Cedar Rapids on Wednesday, July 29, 2009. The plastic model is sold unassembled and utilitzes a special process to coat the plastic parts in aluminum. (Cliff Jette/The Gazette)

A toy company based in Cedar Rapids has done its part to lessen the trade imbalance, bringing back most of its work from China.

J. Lloyd International had contracted about 90 percent of its production to manufacturers in China as recently as two years ago. Now about 85 percent of its production comes from the United States, owner Jody Keener said, and the company plans to move an undetermined amount of its production to Cedar Rapids.

Product lines owned and marketed by J. Lloyd International include some of the oldest toy and model kit manufacturers in the country — 133-year-old Tootsietoy and Hawk, America’s oldest model kit company.

Many of the products feed on the nostalgia of the Baby Boom generation for the toys of their childhood. They also include Big Wheel trikes, Crocodile Mile lawn slides and Lindberg models.
U.S. manufacturing gives J. Lloyd better control over its inventory management and shipping costs, said Keener.

“The secret of our success in the future will be taking product back from China and manufacturing it in the U.S.,” he explained.

Manufacturing costs are not much greater here than in China for relatively automated high-volume production, Kenner said, and lower shipping costs help make up the difference. Most of the company’s in-house manufacturing of model kits takes place at its plant in Kalkaska, Mich.

When Chinese contract manufacturers were being used, orders of 10,000 to 100,000 units and lead times of three to six months were required.

Hawk/Lindberg Models President Ernie Petit says the company plans to introduce 57 new model kits this year, at a time when the model kit industry is contracting. He said manufacturing in this country allows J. Lloyd to keep hot models in stock.

“If I run out of something, I can call the plant and get them in a week or two, at most,” Petit said.

Manufacturing domestically will allow J. Lloyd to reduce its warehouse space from about 700,000 square feet to 20,000 square feet, Keener said. It will cut the company’s inventory costs from more than $7 million to less than $2 million.

“We cut our warehouse space in half this year, and will cut it in half again next year,” Keener said.

Petit was retiring from Testor, a company that makes model paints, about three years ago when he was recruited by Keener to head J. Lloyd’s model operations.

“In less than three years, we’ve grown to the second-largest model company in the U.S., and the only company manufacturing in the U.S.,” Petit said.

Petit, with more than 45 years experience in the model business, has a free hand to research and select iconic aircraft and vehicles to be reproduced as model kits. The company then enters licensing agreements with makers of the original product to use their name and designs.

J. Lloyd bought drawings of the World War II German aircraft carrier Graf Zeppelin from the German national archives for a model kit launch planned later this year. The model, with more than 400 parts and some lighted compartments, will retail for about $250.

The human element of the models he develops are never lost on Petit. Every so often, the company hears from military veterans who served aboard the ships or flew the planes its models are based on. Petit recently was contacted by the wife of an ace Air Force pilot in the Korean conflict, who had seen the model J. Lloyd marketed of the airplane he had flown.

“She wanted her grandson to have his airplane, and I sent her kits at no charge,” Petit said.

The average model builder is a man at least 36 who started building models as a child. Many of them drifted away from the hobby when they got married or went to college, and got back into it when their lifestyle gave them some free time again, Petit said.

Sales of models have been hurt by the economic downturn, but not as much as some other products, Keener said. That’s because model-building, hour-for-hour, is an inexpensive leisure activity that helps relieve stress.

J. Lloyd still has the tooling for its model-making factory built in China, because it is more economical. It also contracts to manufacture some of its toy lines in China.

About 20 people work at J. Lloyd International’s headquarters at 517 Third Ave. SW, Suite C. The building, which formerly housed a telemarketing call center, took on about eight feet of water in the June 2008 flood. Keener, the owner, had it restored last winter and moved J. Lloyd International into it in March from its former location on 20th Avenue SW.

Keener said he moved the business because interest among businesses in the flooded area was lagging, and he wanted to show that it remains an excellent business location. The building also houses a foot massage business operated by a former employee of Keener, a pawnshop and, soon, a deep-discount retail clearance business.

Keener has had a colorful career in marketing and toy design. He calls J. Lloyd International “the best kept secret in Cedar Rapids” and has so many vintage toys that he acquired as prototypes for products that he may someday open a toy museum.

Keener spent nearly one-fourth of his 42-year toy industry career with his ex-wife, Connie Hung, at Alpha International.
Alpha closed essentially because of a protracted divorce battle between the owners, and was acquired by Keener, who became a secured creditor in the legal dispute.

“It was the biggest divorce in Iowa history, and I would have rather watched it on TV,” Keener said, calling it a humbling experience.

As a result of the rift, Keener channeled his energies into J. Lloyd International. He did little with the former Alpha products, which include Big Wheels and Crocodile Mile, for about a year, but has paid off the company’s creditors and is now managing the brands.

Keener said he also bought out a business partner in his J. Lloyd business last winter.

J. Lloyd incurred losses for most of the past three years, but turned a profit in the second quarter of this fiscal year.