Flex-N-Gate: Who's Behind This American Dream Story?

By Markets Fool.com

If you want an absolute and undeniable American Dream tale, look no further than Shahid "Shad" Khan. If the name sounds familiar, it could be because he owns the Jacksonville Jaguars. Or perhaps because he owns the English Football League Championship team Fulham F.C. Or maybe it's because he owns one of the largest North American automobile parts suppliers, Flex-N-Gate, which was the cornerstone of his success story.

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But all of that is perhaps the culmination of his story; let's rewind. Khan was born in Pakistan and moved to the U.S. in 1967 at age 16 to attend the University of Illinois at Urbana-Champaign. True to the American Dream theme, Khan's started from humble beginnings: His first job waswashing dishes for $1.20 an hour so he could afford to sleep in a room at the campus YMCA until the dormitories opened.

Later during his schooling, Khan started a job at a small automotive manufacturing company called Flex-N-Gate. Then, in 1978, Khan left Flex-N-Gate with a Small Business Administrationloan to start a small business called Bumper Works, where he developed a car bumper that would eventually become an industry standard. A mere two years later,he returned to Flex-N-Gate to purchase the company from his former employer; he then combined it with Bumper Works.

Now, Flex-N-Gate manufactures metal and plastic automotive components, including bumpers, grilles, parking brakes, latches, interior panels, and pillars, along with many other automobile products, and has a customer list spanning 45 automotive brands across more than 10 automotive manufacturers. You can find Flex-N-Gate products on vehicles ranging from a Chevrolet Impala to a Lamborghini Gallardo Spyder.

While the sheer number of manufacturers you can find on Flex-N-Gate's customer list speaks volumes in itself, a company isn't a supplier for brands such as Lamborghini, Jaguar, BMW, and Bentley if it doesn't produce a high-quality product. Flex-N-Gate's quality is evidenced by its long list of awards: 74 awards from auto manufacturers since 1996. Recent examples includeGeneral Motors' Supplier of the Year Award for the past three consecutive years, as well as Ford Motor Company's World Excellence Gold Award for 2012 and 2013, and Toyota Motors' Gold Quality Alliance Award for 2014.

Flex-N-Gate ranked No. 92 on Forbes' America's Largest Private Companies list last year with its roughly 13,000 employees. Khan has grown Flex-N-Gate from a company generating less than $20 million in sales in the late 1980s to one generating roughly $4.5 billion in sales in 2014.

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Chart by author. Data source: Forbes.

Flex-N-Gate ranked 46thin total global OEM automotive parts revenue in 2013, and that's with the vast majority of its sales having been generated here in North America.

Chart by author. Data source: Automotive News.

Because of the company's focus on business with major automakers in the United States, Flex-N-Gate has become the 12th-largest OEM automotive parts supplier to North America. And it is integral to the success of the automakers it supplies:

Considering the impact suppliers have on our business, with 70 percent of the value of the vehicle being purchased from our supplier partners, our suppliers are critical to our ability to offer attractive solutions to our customers.
-- Hau Thai-Tang, group vice president for Ford global purchasing, according to Automotive News

Flex-N-Gate has produced components for the heart and soul of Ford's lineup, the 2015 F-150, and will only see its importance to automakers increase as the companies continue to consolidate vehicle platforms and use more common parts among multiple vehicle models. In fact, Ford has long-term plans to decrease its number of suppliers from around 1,150 to 750, and General Motors plans to consolidate its number of vehicle platforms from 26 this year down to only four by 2025.

It's pretty clear that with 91% of Flex-N-Gate's sales generated in North America -- leaving much room for growth overseas, and with larger suppliers becoming of higher importance to major automakers -- Flex-N-Gate and Khan's success still have much potential on the journey ahead. From washing dishes and sleeping at a YMCA to owning a major company, English Football team, and the Jacksonville Jaguars -- it's just another American Dream in the books.

The article Flex-N-Gate: Who's Behind This American Dream Story? originally appeared on Fool.com.

Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.