Vigor Industrial Acquires Kvichak Marine Industries

Vigor Industrial A Bigger Vigor Vigor Industrial acquires Kvichak Marine Industries.

Vigor Industrial continues to spread its influence in the maritime industry.

By Bruce Buls, n early March, Vigor Industrial and Kvichak (OIW) in Clackamas, Ore., to its family of facili- Technical Editor Marine Industries announced a blockbuster ties. With Kvichak and OIW, Vigor now has a lot deal: Vigor, the biggest shipyard group in the more newbuild capacity to balance the repair work I Vigor Industrial Pacific Northwest and Alaska, would join forces that has been a fundamental business line for all of with Kvichak, the region’s top aluminum boat- Vigor’s yards. The yards are located in Portland, builder. The result is a maritime industry pow- Seattle, Tacoma, Everett, and Port Angeles, Wash., erhouse that will aggressively compete for work and Ketchikan and Seward in Alaska. When Foti regionally, nationally and internationally. made his initial foray into the shipyard business in For the principals involved, the new combina- 1995 with the purchase of Cascade General on tion of facilities, skills and markets is intoxicating. Swan Island in Portland, ship repair was the main “It’s hard to describe just how happy we are business. Now that yard is also building barges as we’re putting this together,” said Frank Foti, and towboats. The Seattle yard, which Vigor principal owner and CEO at Portland, Ore.-based purchased from Todd Pacific in 2011, is build- Vigor. “The synergies are just crackling between ing ferries and a fireboat. At the Ketchikan yard, the leaders of Vigor and Kvichak. The energy which had been Alaska Ship & Drydock, two makes everyone feel like they’re 20 again.” new ferries for the state of Alaska are underway, At Seattle’s Kvichak, the feeling is mutual. as well as completing a multimillion-dollar repair “My partners and I are totally excited,” said Keith and refurbishment job on the LeConte, an Alaska Whittemore, Kvichak president and one of its Marine Highway System ferry. three founding owners. “We couldn’t be happier, “Vigor has done a really good job of taking we couldn’t be more pleased with Frank. I can’t what was a repair-oriented company and moving imagine any other person we would transition this it to fabrication,” said Foti. “There’s no particular company to. The companies are a lot alike. I love goal for the split between repair and fabrication. his style with people, I love his heart, and we feel Right now we are more than half newbuilding, really good about it. I know he’s going to treat our but that’s a function of this particular year. I think people right.” we’ll be roughly half and half for quite some Just last year Vigor added Oregon Iron Works time.”

50 www.workboat.com • APRIL 2015 • WorkBoat OIW does substantial non-marine fabrication in areas as diverse as nuclear containment, hydroelectric, aerospace and transit. It also has an active marine component, primarily Vigor CEO Frank Foti (pink hardhat) continues to expand his Portland-based company. building high-speed aluminum military Bruce Buls boats, including the new Combatant ing with Vigor, the cross-pollination any shift of workers from non-union Craft Medium (CCM) for the U.S. amongst the yards has been fantastic,” to union or vice versa. “There’s not a Navy. OIW was awarded the CCM he said. “Having new expertise coming huge movement either way. But if you contract last year, beating out United up from the Lower 48 yards and teach- want to make that change, you can States Marine. The contract could be ing our folks new ways, and with our probably do it by joining a different worth as much as $400 million through folks going down there, it’s been a rich company inside Vigor.” 2021. learning experience for everybody.” “Oregon Iron Works also has a really The Vigor bond also landed the TARGET MARKETS substantial non-marine component, LeConte ferry repair job in Ketchikan. The Kvichak connection will help which gives us a volume hedge against Originally the contract was awarded to Vigor compete in three specific areas. needing marine fab,” said Foti. “The Vigor’s yard in Portland, but the com- One is the Alaska fishing industry. repair business also gives us a hedge pany got the job transferred to Alaska “That’s going to be a huge focus for the against needing too much fab and the to facilitate overall workflow. “Work- business, it already has been, they’ve fab business gives us a hedge against flow is defined as keeping your people been working on it,” said Whittemore. needing too much repair, and all of continuously employed and effectively “That’s one. Two is oil on the North them allow us to invest in leadership, using your facilities,” said Foti. Slope. Shell is still moving forward, technical skills, training, treating In addition to moving the LeConte and that’s going to create huge opportu- people right and innovation.” job to Alaska, Vigor has been bring- nities. And then there’s foreign military ing Alaskans down to Washington and sales.” CROSS-POLLINATION Oregon to train them and keep them At Kvichak, export sales, both mili- With the addition of OIW’s skills working. “We moved a bunch of people tary and commercial, have gained more in highly technical fabrication and from Ketchikan into Tacoma and importance over the past several years. systems integration, and now Kvichak’s Portland for a long period last summer The company just signed a contract for skills in both production and one-off to supplement the workers in those a pair of 62' Camarc-designed pilot vessel design and construction, the new locations. We also took advantage of boats for the Port of Duqm, Sultan- combination will “cross-pollinate and cross-training opportunities,” said Foti. ate of Oman. Whittemore has traveled improve our genetics,” said Foti. Lower 48 workers have also spent time frequently to the Middle East and will Cross-pollination is also a term used in the Alaska yards. This mobility be- certainly continue doing so after the by Doug Ward, director of shipyard tween facilities not only promotes cross- merger. “We don’t know exactly how development at Vigor Alaska, when pollination, but Foti said it provides everything is going to be integrated, but describing the corporate culture at “much stronger financial security for the you can count on them being integrated Vigor. For years, Ward was part of the shipyard worker, wherever home is.” overseas with us,” he said. “Just adding management team that built up Alaska Not only does Vigor mix it up with the CCM to our foreign military sales Ship & Drydock before it was pur- employees from its various facilities, it channel is going to be fantastic.” chased by Vigor. also mixes and matches union and non- As with the other acquisitions, there “The way things have been work- union workers. Seattle and Portland are will be no layoffs at Kvichak once it union shops, Ketchikan and Seward becomes a Vigor subsidiary. All three aren’t. Kvichak is non-union while Kvichak partners will stay with Vigor, OIW is. and all employees will continue their “We don’t worry about that barrier,” work. Eventually, the Kvichak and said Foti. “We have lots of doors at OIW brands will be positioned under Vigor and if you want to work through the Vigor flag. a union arrangement, you can. If you Meanwhile, the brainstorming con- want to work in a non-union arrange- tinues in Seattle and Portland. ment, you can. You can also work “Just take a look at all the facilities to- With the merger, Kvichak cooperatively with someone who’s in gether and all the talent and what we’re President Keith Whittemore the opposite situation, it happens every capable of doing together,” said Whitte- (left) has a lot to talk about. day here.” more. “It’s all pretty darn amazing.”

Bruce Buls Foti also said that he doesn’t see