By combining an ability to adapt to changing markets with manufacturing and export assistance from Wisconsin, TLX Technologies has grown from a kitchen table to a 17,000-square-foot facility and has become a key supplier to GM and Harley-Davidson.
In 1996 there was a need for high-speed digital valves that could control the inflation of a vehicle air bag, as there had been multiple fatalities of children due to the excessive force from airbag inflation. Recognizing that need, Neil Karolek formed TLX Technologies. By 1998, TLX had patented the valve technology and moved into its first facility in Waukesha, Wis.
But TLX's niche soon encountered a serious problem. "Things changed overnight for our company in 1998 when a U.S. regulation went into effect with regard to air bags and our product was no longer necessary," Karolek recalled. "Within a year we adapted our technology for the fire protection market, where we remain strong today."
That experience taught Karolek a lesson, and TLX began to diversify. By 2002 the company was awarded five new patents, and the next year it added GM to its customer list. TLX provides a residual latching solenoid for use in GM's Sierra Hybrid truck. However, to service GM the small manufacturer had to measure up to rigid industry standards. The state of Wisconsin stepped in through the Wisconsin Manufacturing Extension Partnership (WMEP), providing lean techniques training as well as helping TLX secure ISO certification.
The next big customer win occurred in 2006 when TLX became a Tier 1 supplier to Harley-Davidson.
"Our specialty is our ability to customize products and to produce in smaller quantities," Neil said. "This was attractive to Harley-Davidson, which was able to slowly test the product and eventually move to larger quantities. Harley-Davidson also appreciated the cache of U.S. production, which also provides cost reduction due to our automation."
The company kept growing. Due to strong sales in a variety of markets including off-highway, industrial, medical and consumer applications, TLX doubled its floor space and production capabilities in 2007.
Karolek began to set his sights beyond the U.S. "We started to hit some walls, and we knew we couldn't branch out unless we got smarter from a global perspective," he said. "But the thing is you just can't call FedEx and tell them you want to start exporting. You have to market yourself on a worldwide basis."
The company again sought help from the state and became one of the first companies in Wisconsin to enroll in the ExporTech program. A joint venture between WMEP and the Wisconsin's Bureau of Export Development, ExporTech helps small and midsize manufacturers rapidly develop and execute a successful export strategy.
The export program led TLX to the Gold Key Program, a part of the U.S. Commercial Service that pre-screens potential distributors and customers. This connection helped TLX find a representative in Europe and boosted the company's sales by about $500,000, according to Karolek.
With global sales growing, the company moved to its current facility in Pewaukee in 2012. "We ran out of space to expand production and for salaried people, engineering personnel and labs," Karolek said.
Various state programs accessed through WMEP led TLX to secure grants for marketing in Brazil, Europe and China. Foreign sales now account for 10% of the company's revenue.
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Karolek points to his partnership with WMEP as an integral part of his success. "We turned to WMEP because we needed help," he said. "It's better to learn from somebody who knows what is happening rather than doing it yourself."