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As dust of the storm settles, vacuum firm still cleaning up
JTA / June 5, 2006

By Larry Luxner

NEW ORLEANS— Anybody who watches TV for very long will inevitably see 82-year-old David Oreck pitching his "amazing Oreck XL 8-pound upright vacuum cleaner."

What most viewers don't know is that David Oreck, his brother Marshall and David's son, Tom Oreck — chairman and CEO of Oreck Corp. — head one of the most prominent Jewish families in Louisiana.

"The Orecks are major contributors, not only to the Jewish community but to the entire city," said Roselle Ungar, interim executive director of the Jewish Federation of Greater New Orleans. "They not only write checks, but roll up their sleeves and get involved."

Last year, Oreck Corp. gained even more respect for promptly and generously helping hundreds of its desperate employees in Louisiana and Mississippi following the devastation of Hurricane Katrina.

"It's well-known that we're Jewish. It's not a secret," Tom Oreck told JTA in a recent interview. "We're one of the top four or five locally owned companies in New Orleans."

Oreck, 54, is on the board of Touro Synagogue. He's been to Israel five times and is very much involved in fundraising campaigns for Jewish causes.

"My great-grandfather was named Oreckovsky, but he thought that didn't sound American enough, so he shortened it to Oreck," said the 54-year-old executive. "My dad founded the company in 1963 in his Connecticut warehouse, which was an empty rail car in the back of a building."

Forty-three years after that humble beginning, Oreck — headquartered in the New Orleans suburb of Harahan — is today one of the largest U.S. manufacturers of upright vacuum cleaners. It makes 20 different models priced from $300 to $7,000, and airs more TV commercials than any other vacuum-cleaner maker in the world.

"In our first year of business, all our competitors — GE, Whirlpool, Westinghouse — were in the vacuum-cleaner business," Marshall Oreck recalled. "We were told that if we made it through the first six months, we'd be lucky. Today, all those companies that spoke of our demise are no longer in business. None of them make vacuum cleaners."

At last count, Oreck had 1,200 employees, 500 retail outlets — including two in Israel — and annual sales of around $300 million, though the exact number is a secret.

"We're very tight-lipped about that sort of thing. This information has no value except to our competition," said Tom Oreck, who has been CEO since 1999.

Oreck is vice-chairman of the Business Council of New Orleans, which comprises the city's top 50 corporate CEOs. He's also a graduate of Lawrence University in Appleton, Wis., a board member of Jewish Children's Regional Services, a sponsor of the New Orleans JCC Maccabi team and a father of four.

"As individuals and as a company, we've given to every synagogue and every sisterhood," he said. "We've supplied the JCC with vacuum cleaners for the last 15 years. There isn't a Jewish organization in New Orleans that doesn't come to me for vacuum cleaners."

Oreck Corp. also had a well-rehearsed disaster emergency plan — yet nothing could prepare the company for Hurricane Katrina, which struck last August with unprecedented fury, leveling buildings along the entire Mississippi Gulf Coast and triggering levee breaches in New Orleans that flooded the city for months.

Oreck said the emergency plan called for powering down the company's computer system and sending tapes to a backup site in Boulder, Colo. In addition, Oreck's call center was relocated from New Orleans to third-party call centers in Phoenix and Denver. Its 375,000-square-foot factory in Long Beach, Miss., was shut down in stages, and employees and their families evacuated to Dallas and elsewhere.

Oreck said he personally fled New Orleans "with three pairs of underwear, three shirts and three pairs of socks," because he expected to be back in a matter of days.

"I evacuated my family to Houston," he told JTA. "I'm a pilot, and brought them all out to the Lakefront Airport and flew to Houston in a Swiss-made Pilatus aircraft. That airport later ended up under eight feet of water."

Many of his employees weren't so lucky. Of Oreck's 750 workers in Louisiana and Mississippi, about 250 were "completely wiped out," he said, losing their homes and possessions.

"Once we realized the storm was far worse than anyone had anticipated, affecting both New Orleans and Long Beach, we knew we had to do something," he said. "If you try and solve everything, you solve nothing — you get immobilized because it's too much. So we had to ask what the single most important was, and for us, it was our people. And that meant finding them. They had scattered, and naturally the cellphone system had gone down.

"Fortunately, text messaging was working, so we started out with that, and got the would out through the media. We brought our website back up for people to call us and check in. Every morning at 8 a.m., we had a company-wide conference call. Every employee called in to get an update."

Once the skies had cleared, the scene in Mississippi was one of utter devastation.

The factory in Long Beach sustained "tens of millions of dollars in damage," said Oreck, including $4 million in inventory damage caused by a single spinoff tornado.

Yet within 10 days, the vacuum-cleaner plant was up and running again — making Oreck the first major employer on Mississippi's Gulf Coast to reopen following the storm.

"We purchased generators to run the factory, and mobile homes from all across the country. We set up a city nicknamed Oreckville on the parking lot to house our people, and we trucked in food and water. We brought in trauma doctors, and insurance specialists to help our people make claims," he said.

The company also set up an Oreck Relief Fund to help employees who had suffered significant losses. Oreck funded the 501(c)(3) charity with $500,000 in seed money, and later raised another $500,000.

"That money was distributed to our employees to help them rebuild," Oreck explained. "Within five days of the storm, we'd set up offices in Dallas. We never missed a payroll. We never paid attention to how much all this was costing, we just said 'do it.' We kept records and made claims as best as we could."

Four months after Katrina, Oreck distributed 188 grants totaling $887,900 from its employee assistance fund. The fund is administered by the Baton Rouge Area Foundation (BRAF).

"Oreck has been great," said Flor Guandique, a staff accountant at the company's New Orleans headquarters, in an article posted on the BRAF website. "In a time of great despair and uncertainty, I was reassured that I'd still have a job, that somehow my family could recover."

Another employee, 17-year veteran Geralyn Mouille, said: "There just isn't a substitute for the loyalty and compassion this company has shown me. From helping my family get out of harm's way, to providing shelter while my roof was repaired, Oreck has kept me going, looking forward and thinking positive."

Interestingly, sales jumped after the storm, and Oreck said last January was his best month ever. The factory has long since returned to 100% of pre-Katrina production of about 3,000 vacuum cleaners a day.

But that doesn't mean Oreck is satisfied with the government's response to Katrina.

"There's plenty of blame to go around," he said. "I was supporter of [New Orleans Mayor] Ray Nagin pre-Katrina, but I don't feel he displayed leadership characteristics after the hurricane. Neither did [Louisiana Gov.] Kathleen Blanco. I think Haley Barbour, the governor of Mississippi, was very strong. More importantly, his staff did an outstanding job."

Oreck added that "President Bush also did a good job, but the organizations that work for him have not. I don't personally blame FEMA. Their biggest problem is that it should not be a government agency, which by definition is slow-moving and bureaucratic. FEMA should be part of the military, in my opinion, because that's what the military is trained to do: respond decisively."

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