Wanted: Naval Architects
An “under-the-radar” profession is doing just fine, thank you.
By Art Garcia
“What recession?” responded John Waterhouse, Chief Concept Engineer, Board Chairman and a founder of Elliott Bay Design Group, when asked how the Seattle-based naval architecture and marine engineering firm fared during the global economic slump. “The marine industry did not suffer the same downturn as other sectors of the economy.”
Echoing Waterhouse’s optimism is Robert Allan, Executive Chairman of 82-year-old naval architecture and marine engineering consultancy Robert Allan Ltd. in Vancouver, B.C. His outlook is likewise positive, calling the firm’s prospects “very bright.” It didn’t suffer much from the recession mainly because of a diverse and international client base. The firm entered the recessionary period “on a wave of huge growth and overactivity,” he said. “What the recession brought was a bit of normalcy to our business in that we weren’t all having to put in 35 to 40 percent overtime.”
A Bullish Refrain
Joining the bullish refrain is Johan Sperling, Vice President at Jensen Maritime Consultants, a Crowley Maritime naval architecture and marine engineering company in Seattle. “We’ve been very fortunate over the past few years,” he said. “When we joined hips with Crowley in 2008 we were able to go out and knock on shipyard doors that we didn’t get into before. Our outlook changed quite a bit. In the past few years we’ve grown and grown and don’t see that stopping. It’s been tremendous for us, and we keep staying busy. We’ve just been fortunate, I suppose, but we feel the outlook for firms like ours is tremendous.”
At Boksa Marine Design in Tampa, FL, operations turned a corner early last year. The recession hit the naval architecture firm specializing in custom yacht and commercial marine design late because some of its projects had started before the economic downturn. The slowdown caught up with the company briefly, but by the end of 2010 phone calls and contracts started coming in and last year hiring calls went out. “The end of last year was gangbusters,” said Nick Boksa, President and a naval architect. “There was a slight slowdown after the holidays, but it picked right back up from where it left off.” He senses economic optimism across every industry, especially the offshore business: “I hear the Gulf shipyards talking, a lot of chatter. They’re getting busy.”
Business has been good at A.K. Suda Inc. in Metairie, LA, and President A.K. Suda expects more of the same for the naval architecture and marine engineering firm. He credits results to a pick-up in international activity: “Our business is mostly oil exploration-related, and there’s been a lot of downturn in this region because of the British Petroleum oil spill and the consequent fallout from that.” Effects of the spill still hang over the Gulf market as seen by the small amount of offshore work going on there. Many of the company’s clients sent their vessels overseas, probably never to come back. “We followed some of our clients overseas, and now a lot of our business is from the Far East, West Africa and other foreign markets,” Suda explained. He expects more than 90 percent of the company’s business in 2012 to come from abroad, compared with 80 percent last year.
Engineers Are Thriving Too
Marine consulting engineers The Glosten Associates, based in Seattle, also managed to prosper during the recession, thanks mainly to the diversity of its projects. “Our strength is we do a wide variety of naval architecture work,” stated Dirk Kristensen, one of the firm’s Principals. “Typically, one of our sectors will always be busy at any given time. We like to say we work on anything that touches the water.” That includes ferries and research vessels along with support for civil engineering firms that work the waterfront. Glosten recently entered the wind-energy market with a specialized platform that supports wind turbines in deeper waters. “We have a whole gamut of commercial and marine construction clients as well,” he added.
“We always have a very positive viewpoint,” noted John Witte, Executive Vice President at Donjon Marine and Director of subsidiary Donjon Shipbuilding and Repair, a marine salvage and services company out of Erie, PA, on the shores of Lake Erie. “We have to because in the absence of being positive you can get depressed pretty quickly. “We’re in a good position because of location. As far as the economy is concerned, all indicators on the Great Lakes in the past year have been positive.” He said the subsidiary is lucky to be one of just two facilities on the Lakes to have a more-than-1,000-foot grading dock. “We’re able to handle the largest bulkers that transit the lakes. So in our view we have a positive prognosis.”
When Eugene Caldwell started at Bay Shipbuilding Company, a Fincantieri company in Sturgeon Bay, WI, in August of 2010, there were no marine engineers and just one naval architect, who also served as production manager. Since then several engineers have been hired as designers along with a dedicated naval architect. The hires were in support of new construction and conversion projects. The company doesn’t sell its architecture and engineering services separately; rather they’re part of the package for newbuildings. “They were nothing and now they’re a significant portion. For the first time in years we look at them as a profit center for our newbuildings,” Caldwell explained. “We haven’t turned a profit on them yet because we’re still building.” Profits likely will come on the third or fourth vessel, he added.
Uncertainty in the Gulf
Mike Jannise, Engineering Manager at Leevac Design Services of Jennings, LA, has his own engineering department at the company that’s part of the Leevac shipyards. Business has been slow: “There’s a lot of quoting going on, a lot of potential projects we’re close to, but we have to work awfully hard right now to secure a contract. It’s pretty competitive, and there just aren’t that many operators in the oil and gas industry building that many boats right now, not like it’s been in the past.”
The slowdown, he explained, is a carryover of both the recession and the BP spill. “We haven’t fully recovered from the recession, and the more than year-long drilling moratorium in the Gulf didn’t help. It really put the brakes on everything.” What’s happening now, Jannise added, is a lot of potential customers have money but don’t want to spend it. “In the past, no one had money but they wanted to build boats even during the recession. Now there’s plenty of money but people are just nervous, either about the Obama Administration because it’s an election year or just uncertainty.”
Leevac Design currently has a full staff of one naval architect and nine marine engineers, and Jannise isn’t looking for additions. But when he does need to hire, it’s hard to find qualified people, a problem common in the industry.
Meanwhile, Elliott Bay Design is hiring. “We bought ourselves back last year from our former parent company, American Commercial Lines,” said Chairman Waterhouse. Of a full staff of about 45, some 30 are technical employees in naval architecture and marine engineering: “It’s about the same as a year ago, but now we’re in a position to expand with the various projects we have both in hand and coming down the road this year.” Ferries are big business on Seattle’s Puget Sound, where the company is located, and it has been active in ferry-boat design and on a number of state transportation initiatives. “Over the past two to three years, those are parts of our business that have done well,” Waterhouse said.
The challenge in finding new people is that there aren’t too many of them. “You can look at it demographically, given the struggles of the industry in the 1980s,” Waterhouse explained. “There’s a whole generation of architects and engineers who didn’t get into the business, and we’ve got a lot of people who will be retiring over the next 10 years. So one of our concerns as a firm, and of other firms I’ve talked to, is where are we going to find the skilled people?”
The company is working with a number of universities to help fill the gap, including Webb Institute on Long Island, the University of New Orleans and Virginia Tech. “We’re going to have to work with these new graduates and help them see a successful career path here at Elliott Bay Design by providing structured opportunities to succeed,” Waterhouse said. Asked whether the schools his company is partnering with are turning out enough naval architect and marine engineer graduates, he said that’s a difficult question to answer because many of them don’t go into the marine field.
The most telling indicator of Jensen Maritime’s performance is that at this time last year it had a payroll of 26 naval architects and marine engineers. Today it has 51. “We’re going to keep expanding,” said Vice President Sperling. “We don’t think there’s a ceiling to where we’re going, but we don’t have a specific goal of what size we need to be. We’re very much a carpe diem kind of organization where we seize the opportunity when we see it and go after it. So far there’s nothing stopping us.”
But it’s not easy finding qualified people. “The pool is very small, for instance, for naval architects. Between 100 and 200 graduate a year, and that’s not a big group to choose from.” Sperling said his company was lucky last year when it kept growing while many competitors slowed. “That meant we got to pick and choose,” he said. “But as the market picks up, it’s harder and harder to find good folks. You really want quality because being profitable today building vessels you need high-quality workers. It’s hard, but you can find them if you know what you’re looking for.”
One of Waterhouse’s concerns at Elliott Bay Design is that, compared with other industries, the maritime community undervalues architects and engineers. In general, maritime industry salaries are lower than those in comparable industries. There is one advantage to the marine side of the business, though, he contended: “We get paid to mess around with boats every day, and that’s pretty cool.” – MarEx
Art Garcia writes from the West Coast.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.