Boat Builder's Paradise
Thu, Feb 21, 2008

Through down times and up, Skagit’s maritime industry continues to thrive

Boat building has been synonymous with Skagit County for more than 50 years. In fact, Skagit Boats, founded by the Dunlap family of La Conner, began one of the nation’s first lines of fiberglass pleasure boats in 1954, according to HistoryLink.org.

“I believe it has something to do with what we do here in northwestern Washington,” notes Jim Cress, CEO of Nordic Tugs and president of Skipper Cress Yacht Sales of Anacortes. “It’s a jumping-off place for pleasure boating — to the San Juans, Gulf Islands, to Alaska. A smart businessman will say this is a good place to build boats.”

Nordic Tugs, located at the Port of Skagit County west of Burlington, is a major success story in the recreational-boat-building business. Started in Woodinville in the mid-’80s, the company took advantage of the many Skagit County incentives extolled by EDASC and moved here in 1990. Since then, it has built in excess of 800 of its highly popular, seagoing, tug-like pleasure boats sold through Skipper Cress.

For the high-end yachters, two other boat manufacturers came on board a short time later. Pacific Mariner of La Conner developed a fully equipped, 65-foot motoryacht that it’s sold over the past 11 years, and now it’s slowly converting over to an 85-footer because of demand.

“We launched our 12th 85-foot motoryacht in January,” says the company’s chief of sales, Scott Flick. “We grew from the 65- to 85-foot vessel with a three-year overlap. We’re going to be a single-model boat builder for the latter part of 2008 and into 2009. The new boat is quiet, rides beautifully, is fast and fully equipped, and it has three feet more beam.”

A builder that has survived through the serious economic ups and downs of the past several years is Northern Marine, which has doubled its workforce to 170 since Ashton Capital Corp. of Renton took over in fall 2006. President Ken Kurtenbach hopes by the end of 2008, “we’ll level off at between 180 and 200” skilled employees.

Northern Marine targets a moneyed clientele worldwide to offer a super motoryacht of 151 feet plus and smaller luxury trawlers. It was founded in 1995 by Bud LeMieux, who is no longer with the Anacortes company.

“Our products are being built for the North American and even overseas marketplaces,” Kurtenbach states, adding that the larger model, thanks in part to the struggling economy, is getting more attention outside this country. “We’re seeing growth there, principally because of more interest in Europe and the fall of the dollar.”

The trawlers come in 57-, 64- and 80-foot lengths, the latter in both raised pilothouse and tri-deck versions.

“That has been traditionally more of a domestic market for us,” Kurtenbach continues. “We’ve had interest from international buyers and lots of trawler activity over the last six months. Three or four are sold, one is in production now, and another hull is on the shop floor. That marketplace has been good for us.”

Repairing Super Class Ferries

Boat building here doesn’t end with family-owned pleasure craft, midsized luxury yachts or the super motoryacht. One shipyard that seems always to be alive with scurrying workers is Dakota Creek Industries in Anacortes. If not building boats for the U.S. Navy or oil industry, it is repairing — and in the past constructing — ferry boats. Right now, according to Mike Nelson, Dakota Creek’s vice president, repair work is being done on the 40-year-old Super Class ferry Hyak, which along with several others among the state’s aging fleet has had to undergo major hull renovations. Another ferry in dry dock is the smaller Hiyu.

“We’re pretty stable,” Nelson observes. “We’re really busy, but we’re not making huge amounts of money. We’re doing as well as last year, but our contracts are pretty tight. Even so, employment is up to 215 and we’ll continue to grow.”

Among those contracts are construction of IMR (inspection, maintenance and repair) vessels for the oil industry, as offshore wells are erected farther out in rougher seas and more restrictions are enacted to regulate them.

“We’ve got one big IMR to deliver next fall to help develop well heads for offshore oil platforms. Another one is just getting started. Both are around 300 feet long,” Nelson continues. “We’re also on track to build three 16,000-horsepower tugboats in the future — one each for 2010, 2011 and 2012 — for Crowley Marine Services (of Seattle).”

Cap Sante of Anacortes is another “boat builder” that has diversified greatly over the past several years.

“We’ve been historically involved in the repair industry for 30 years,” says John Sanford of Cap Sante International. “The last few years, we’ve repackaged ourselves in an interesting way.”

To beat the ebb-and-flow nature of the maritime industry, Cap Sante Marine branched off to form an international unit to troubleshoot and solve safety and accessibility issues for physically challenged people on cruise ships.

“Call it fate or happenstance, the original opportunity to get involved in this business was given to us by Holland America Line,” declares Cap Sante CEO Graeme Wilson. “We had a reputation for being problem solvers, which they wanted.”

Today, Cap Sante builds, installs and services cruise ships with American Disability Act (ADA)-approved lifeboat systems and equipment.

“We began from a standing start with zero revenue five years ago and can say we’re now a multimillion-dollar company,” Wilson says of the international division, with offices in Hamburg, Germany, Perth and Brisbane, Australia, and Anacortes, where a new facility soon will be added at the foot of 32nd Street.

"In 2006, we paid out $2.4 million in family-wage salaries directly to employees and another $1.1 million to hired contractors, for a total of $3.5 million,” Sanford puts in. “That supported more than 50 craftsmen and their families. In 2007, the trend continued.”

Outstanding Skilled Labor Pool

Skagit County has always enjoyed a surfeit of skilled and hard-working employees in the maritime industry, whether the repair-and-maintenance side or the construction of boats and boating equipment. But as anywhere else, the labor pool can only be stretched so far.

Several years ago, Skagit Valley College in both Oak Harbor and Mount Vernon, along with EDASC, job-service organizations and members of the maritime industry, began looking at a means of increasing the workforce through training and apprenticeship programs. This winter, the Marine Skills Training Center, a part of SVC’s Skills Training Center, has taken major steps toward fruition.

“From the beginning, Skagit Valley College has believed the Skills Center was important for delivering training to the workforce here,” explains Gary Tollefson, president of the college. “The closer we get to making the Marine Skills Center a reality, the more I believe that we were correct in the beginning and that this will be an important recourse for businesses in Skagit County.”

According to Tim Bruce, the superintendent of the La Conner School District who is coordinating efforts to establish the Marine Skills Training Center, a proposal has been tendered to the Port of Anacortes for property near the old Seafarers’ Park between R Avenue and the round-towered structure used now by NWESD 189. Construction could begin as soon as any legal issues that might arise are settled.

“We’ll be looking toward the industry for actual teachers,” Bruce states. “They’ll be people coming right out of the marine industry.”

“The center is a fabulous idea,” Sanford remarks. “We’re behind it all the way.”

“We definitely support the program,” adds Flick of Pacific Mariner, who recalls the numerous tours his company has given over the years to SVC students interested in the maritime trades.

“EDASC is a part of it, and we’ll be a part of it, too,” echoes Cress, who has offered internships during summers and spearheaded a marine-centered program at nearby Anacortes High School.

Need for More Trained Workers

“Our biggest challenge is in skilled boat-building ability,” Cress says. “The same batch of people have worked for the same companies, including us. Historically, we’ve been able to retain more than we’ve let go. But all that being said, there’s still an extreme shortage of a developed, skilled, boat-building labor pool.”

Another challenge locally has been the ability of some manufacturers to keep the workforce fully employed through difficult times.

“It’s no secret that our industry nationally has been in a downturn the last few years,” Cress explains. “We live by a seven-year cycle, where we have five good years and a couple poor ones. We’re just coming out of the bad times.”

Nordic Tugs anticipated the rough patch more than two years ago and sought new markets in Europe and elsewhere, with great success. Super Cress, which sells the Nordic Tug, had its best year ever in 2007, according to Cress, and that helped the two separate entities he heads “break even” over the two down years.

“National trends say the downside is over and sales are starting back up,” he continues. “During the downside, we opened our first European market because we had time. We built a new, 35,000-square-foot, world-class, state-of-the-art plant to build our new 49-foot Nordic Tug. Let’s say it was an investment-intensive time. The point is, we entered the downtime productively so that as good times are rolling again, we are hitting the ground running.”

Nordic Tugs plans to build 60 boats this year at a price starting around $700,000 each, Cress notes.

Pacific Mariner, too, is looking ahead to good times. It has 2008 booked up and will produce five of its new 85-foot motoryachts, which come fully equipped including sophisticated electronics gear such as GPS and chart plotters, all the way down to the sheets and towels in the cupboards and crystal glassware on the table — a unique feature among luxury boat builders. The finished product sells for $5.2 million, which Flick calls “a tremendous value” because of what it involves. “You can add 40 to 50 percent to the cost elsewhere and not have any more of a boat,” he says of competitors.

Even Northern Marine, which only a few years ago was cutting back on labor to meet its expenses, is on the upswing. Following Ashton Capital’s takeover in a “down” year, the company improved bookings, hired more skilled labor and completely rebuilt its 30,000-square-foot, high-bay building on T Avenue in Anacortes to accommodate several projects at a time up to 54 feet high.

“Our goal is to have three large yachts in production at any given time,” Kurtenbach says.

For thousands of years, Native Americans and more-recent entrepreneurs have built boats in and around the Skagit River. Ideally suited to the growth of an enthusiastic boating community, with the San Juans, Gulf Islands, maritime cities of Seattle, Vancouver and Victoria within a short cruise and the Inland Passage providing a virtual highway to Alaska, La Conner, Fidalgo Island and other boat-building centers continue to enjoy success and prosperity.

Although the first fiberglass builder Skagit Boats, the Dunlap enterprise, ceased to exist in 1961 after producing more than a thousand pleasure craft over seven years, many others like it have sprung up and carried on the Skagit tradition. This is, indeed, a boat-builders’ paradise. Just ask anyone associated with it.

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