Business - Business News

POSTED: Sunday, Mar. 22, 2009

Whatcom Co. marine companies stay afloat in rough economic waters

A lousy economy is not preventing Gary and Steve Nordvedt from bringing back a classic.

Gary owns Norstar Boats, Inc., and gets help from his brother, Steve. For almost 15 years the company has been building custom power boats, but it has recently begun construction of 40-foot sailing yachts, using the original molds from the Nordic line they built in the 1970s and 1980s when Gary and Steve operated Nordic Yachts Inc.

"We're excited about getting back into the sail boat business," said Steve Nordvedt, who noted their first sailing yacht should be completed in August. "As a business, it's another arrow in our quiver in terms of what we can offer to boaters. Our challenge with this economy is getting the customers back, and we think this is an appealing way to do that."

While this region has suffered in the boating industry with the closure of Olympic Boat Centers and the Bayliner manufacturing facility in Arlington last year, there have been some bright spots, particularly in Whatcom County. Along with Norstar Boats adding a new product line, other companies and agencies have been busy, including:

? Fairhaven Shipyard has been going through a major expansion project, taking over the former Arrowac facility in Fairhaven and adding its semi-submersible barge, which could add about 80 more employees to its 111-person workforce by the end of the year;

? Aluminum Chambered Boats also continues to look for welders as it continues its projects;

? The Port of Bellingham is moving forward with its remodel of the former Georgia-Pacific tissue warehouse that will include marine-related research and development workspace. Currently part of the space is being used for a joint project between Western Washington University students and Bellingham-based All American Marine, which is developing a lightweight hydrofoil for its passenger ferries.

"It seems there are some building blocks falling into place that will be helpful as the economy turns around," said Matt Mullett, CEO of All American Marine. "I'm certainly optimistic about the future."

While the future is looking good to Mullett, the present is creating some concern. At All American Marine, the company is finishing up construction of an 83-foot ferry that will be going to Alaska and hopes to finalize a contract for a 77-foot low-wake passenger ferry that will be used in this region. However, while the company has been busy pursuing government contracts, customers in the private sector have been holding back. That means fewer projects on the books, so they've had to take steps to reduce costs. The company enrolled in the state's shared-work program, which could allow some employees to work part-time while also collecting unemployment benefits. The company hasn't had to use it yet, though.

"In the short-term we're staying lean and mean, trying to anticipate any slowdown we might have as we finish up our current projects," Mullett said.

Staying conservative is also in Norstar Boats' plans. Both Steve and Gary have spent much of their lives in the boat-building industry; their father, Arthur Nordvedt, was the founder of Uniflite, which operated locally from 1957 into the mid-1980s. They plan on bringing the sailing yacht line along slowly.

"Gary hasn't attempted to grow (Norstar) big; he's seen what's happened to other companies who grew too fast," said Steve Nordvedt, noting the company has eight employees and usually builds three custom boats a year.

Gary Nordvedt originally began looking at the sail yacht line last summer because of what was happening to the economy. The cost of fuel was approaching $5 a gallon, and he wanted a product that would not be as dependent on the changing supply and price of diesel. He looked at his original sailboat molds and found them in good condition to try again. Norstar stopped building them in the early 1990s because of a federal luxury tax on yachts that hurt the industry. That tax was later rescinded.

"Now is a great opportunity," Steve Nordvedt said. "Our customers tend to be people who have owned boats in the past and know what works. It is still a big-ticket item and people aren't parting with their money, so we know we have to take a conservative approach."