MarineNews: What did you do before coming to Senesco Marine, and how did you get into the shipbuilding industry? How does your former field compare/contrast with the marine business?
Gary Schuler: I served as CEO of Bostitch
, a $500 million producer of pneumatic tools
and fasteners, from 1980-1990. After leaving there, I was involved in some turnaround situations before joining an investment partnership. The majority investor at Senesco Marine, whom I've know for about 20 years, gave me an opportunity to invest in the company and become CEO. So that's how I got into the shipbuilding business. I had no prior experience in shipbuilding, but I have been in manufacturing all my life, specifically in the design, production, and delivery of pre-engineered metal buildings
. We basically built a building kit, then delivered it to the customer and erected it on-site. We were producing factories for major companies, Intel (INTC)
, Motorola, Ford, which could be as large as 400,000 sq. ft. and take seven or eight months to build. These are steel buildings with all the interior/exterior features that are necessary. So I was familiar with engineering and design being major factors, just as they are in shipbuilding. Getting all the steps in the manufacturing process under
control is another similarity. Customers expect a product to be built on time and delivered on time to their specifications. I see a lot of similarities between what I used to do in pre-engineered metal buildings and what I do now with barge building … except our buildings didn't float.
MN: Describe your management style and how it fits in at Senesco Marine.
GS: Aggressive and patient at the same time. The thing I like most about Senesco Marine is that there is a lot of passion for the business here. Our people really care about and love this work … they wouldn't do anything else. They work very hard to make us successful. You just don't get that in very many businesses, where this large a percentage of your employees feels that way. Virtually everyone here is dedicated. That's the personal attraction to me, because that's how I try to approach any job…by being a problem-solver and being effective. It's not enough to be smart. Smart people do stupid things every day. You need to be effective, and to do that, you have to communicate and you have to listen. When you have enough information, then you move on it. Don't fiddle with it. It means something to solve these problems. People's livelihoods and families are at stake.
MN: From where you sit, what are the top three opportunities, by market, for Senesco Marine in the coming year?
GS: We're dedicating ourselves, first of all, to the double-hulled tank barge business. We're concentrating on 50,000-100,000 barrel barges, but we're making further investments in the company to go up to larger vessels, up to 125,000 barrels. Larger vessels will become a priority later in the year. And we're continuing to build deck barges and dry docks and other marine products (MPX)
. But we're putting a greater emphasis right now on the barge business because we need to get everyone OPA-90-compliant in time. Plus, the establishment of our repair business is a great opportunity for us. We put a lot of effort into building that business, and we're very happy with the results. A lot of customers in the Northeast have a better understanding now of what we can do for them. In 2002, we took in less than a million dollars in repair work. This year, we're looking at 5 or 6 million, and by 2004, we expect to be in the10-12 million dollar range in our repair business alone. We've just certified our dry dock, the Leslie G, to get Coast Guard work and research vessel work. We're working up to more complicated repair jobs, and more demanding customers.
MN: What are the top three challenges to Senesco Marine's profitability in the coming year?
GS: Well, our greatest challenges to profitability ironically come from our greatest source of profitability…our growth. We think we'll grow from 150 to around 400 employees soon. We're currently at around 250. That means the assimilation of a lot of new people, especially in their first few months here…so productivity will be an issue for a while. That's a concern, but a necessary by-product of our growth. Also, the cost of insurance, especially worker's comp, is going straight up. It's a big problem for all businesses, especially in Northeast. But we'd still rather be here than elsewhere because the workforce is very productive and able to handle the type of work we do. There's a great talent base from which to draw upon here in the Northeast.
MN: What sets Senesco Marine apart
from its competitors?
GS: We don't want to be a big company… not much bigger than I mentioned, but what we do well now is build a top-notch product. Our customers understand that. And our new relationship with Guarino & Cox completes that because now we have what we feel is one of the best design houses in the country, which helps make us one of the most quality-oriented shipyards in the country.
MN: Any investments being made in the company that will expand/improve your products and capabilities in the coming year?
GS: We have an application in to MarAd for about $15 million to expand our business in order to handle larger barges and to work out glitches in our manufacturing process. We've spent a lot of time lately bringing in professional manufacturing engineering and production planning people to team up with our shipbuilding veterans. There's been a large investment in people at Senesco Marine, and now we plan to invest more in infrastructure at our repair pier and our shipyard. Over the next year, as that MarAd request gets approved and other investments are made, we'll be significantly stronger, just as we're stronger today than we were a year ago. We're not trying to be the biggest dog, just a good, solid, profitable, high-quality business of moderate size.
MN: What new products or services are being offered by Senesco Marine? What are people in the industry talking about, or what would you like them to be talking about?
GS: As I mentioned, our repair business continues to grow, and we'll be looking to construct larger new barges (125,000 barrels) in the near future. That's what we want people to be talking about: Senesco Marine's growth, our versatility, our quality, and our people. That's what matters most to me.