Voices: Todd Roberts, President, Marine Group Boat Works

Todd Roberts (Photo: Marine Group Boat Works)

By Greg Trauthwein

From growing up on San Diego Bay then graduating from
the California Maritime Academy to leading a fast-growing,
technologically advanced, family-owned group of shipyards, Todd
Roberts, for as many of his 43 years that he can remember, has
always been 'maritime.'

"As a kid, I worked for our sister company, Flagship Cruises
(formerly San Diego Harbor Excursion)," said Roberts. "I wanted
to be a deckhand on the ferry but I was told that I was too
young, so I started out sweeping the floors in the boathouse, and
doing just about anything, from loading the boats to hauling
line. Going to work for me was like other kids going to the
Little League field. This is where I wanted to be; this is what I
wanted to do."

And so starts the story of Todd Roberts' maritime career some
three decades ago. Roberts graduated Cal Maritime, and after
nearly two years of sailing various commercial vessels, he knew
that his maritime future lie ashore. "I graduated in 1995 with a
degree in business administration and marine transportation,
which was a new program at the time. As usual Cal Maritime was 15
years ahead of the curve, realizing that it didn't need to
graduate only mariners, but mariners with a business sense," said
Roberts. "I always had an entrepreneurial spirit and a head for
business, and going to sea you can only do so much in controlling
the operations of a ship."

But after coming to shore and working as a port captain and
broker for bulk cargo ships coming out of San Diego, he was bored
at work. His career trajectory changed for good when he ran into
the president of the company he used to sweep floors for less
than 20 years earlier-also the co-owner of Marine Group.
Eventually he was offered the position of Director of Operations
for the company's San Diego Harbor Excursion operations, running
10 boats carrying more than a million passengers per year.

During his tour as the Director of Operations, his duties
included the usual - supervising vessel construction, acquisition
and operations - as well as the cutting edge: Emissions trading
and the sale of NOX credits to local power companies, not a
common practice in the year 2000.

"We created a system of taking surplus emissions from vessels,
reducing vessel emissions and selling those (NOX credits) on the
open market to power companies - a very exciting project," said
Roberts. But even with this workload, Roberts had time to invest
in other projects, so he went to the owner and said "if there's
something else you have cooking, let me know."

Closing a Shipyard

One of the company's holding was a shipyard in Chula Vista that
wasn't doing great, so Roberts - now still in his late 20's - was
sent in to shut it down in 2001 to make way for a proposed hotel
construction project. In his words the owners were 'done with
it', and the mandate was to lay off 60 workers to start, and
finish any work that was still open. But Roberts, who had never
before managed a shipyard, noticed a 'megayacht vibe'
proliferating in Southern California. That, combined with the
fact that the proposed hotel project was ensnared in a quagmire
of regulatory red tape, prompted him to approach ownership with
the notion of providing a "Quickie Lube" for yachts, following
the land-based automotive trend.

"The proposal was that we would haul your boat on Monday, we
would limit our work to shafts, propellers and bottoms, and your
boat leaves on Thursday," said Roberts. "With a fixed price and
three trades, we became efficient very quickly and we started to
expand, picking up some Navy business."

With success in hand, Roberts went back to ownership for
additional financing to turn the Chula Vista yard into a
full-fledged superyacht facility. Ownership essentially said
'here's a fixed amount, good luck, not a nickel more; and if it
doesn't work, send everyone home.'

Nearly a decade later, the business where he saw value continues
to grow in earnest, with three facilities (Chula Vista, Calif.;
National City, Calif. and Los Cabos, Mexico) and a growing
portfolio of repair, refit and new construction for commercial
and government/military clients.

Of the $7 million invested at the time, Roberts counts the
660-ton Travelift as the key investment, remembering "the day we
put that machine into service there was no looking back. We
booked our first year in the first three months … it was the
epitome of 'if you build it, they will come'; the central player
was the lift capacity," said Roberts.

MGBW: The Modern Shipyard

By virtue of Roberts' diverse background in the marine business,
he never pigeonholed himself or his company as a 'yacht yard' or
as a 'tugboat yard.' You have workboat yards that want nothing to
do with the white hulled 'foo foo' boats, and vice versa, you
have yacht yards that don't want 'smelly workboats' in their
yard, he said "They're all the same to me. I don't care, I love
them all."

Love is one thing, performance another, and Roberts and his team
take 'keeping to schedule' to a new level.

"The megayacht market is so discerning you have to have an
insatiable level of detail work; you can't screw up, there is no
'sorry.' Roberts said that he learned the value of 'on time'
early on, when a famous yacht owner in late 80's told him 'Young
man, I have more money than time. Don't be late.'

"I'll never forget that comment. That's the mantra we live by:
Honor your commitments, stay on your schedule."

By word of mouth commercial tug and barge owners saw the yard's
lift capacity and started inquiring, and according to Roberts he
and his team are always up for a good challenge. "We love when
people doubt our capability to do something. (I tell them) "if it
doesn't work and I'm wrong, I'll give you your money back, we'll
shake hands and we'll part friends. We haven't failed yet," said
Roberts, who today runs the operation and owns a minority share.

Looking back from when it started to today, he can see the
obvious changes, but also the similarities.

"It's most different by the size and complexity of the jobs that
we do. The biggest change, arguably, came with the addition of
new construction capability. It's most the same by the passion
and integrity of the people who work here. We still have that
craftsmanship mentality. That spirit penetrates the yard, and I
must admit that's both good and bad. It's good because it mixes
some love into the recipe; when you're making the cake, you can
follow the directions all that you want, but there's a little
love in mom's cooking. The downside is we're working on more
complex vessels, we're working on specifications that are very
tight, and sometimes craftsman want to do it their way. You have
to take that craftsmanship and love and blend it with technology.
When you have a catamaran that's carrying 350 people at 30 knots,
when they meant a 1 x 6 angle they didn't mean a 1 x 6.25 angle."

To that end MGBW has a progressive view toward investment. Our
investment strategy is an investment in technology capacity
Roberts said. "We buy the tools we need to do the job and grow
the business. There is no hard and fast "Capital Improvement
Budget;" whatever we need, if we can make a good sense of it,
we'll buy it. This philosophy was fast-tracked during the
(economic) downturn, when sub-suppliers slowed down and caused
some delays."

Recent investments include a 10-ton gantry crane (bought with
help from MarAd's small shipyard assistance grant program) for
use in fabrication shop to make newbuilding more efficient. The
company also upgraded its waterjet cutting table to handle a 10 x
40 sheets of material, meaning bigger pieces and less welding.

"We struggled with outsourcing and vendors dropping the ball on
us, so we decided to control our own destiny and cut our own
parts." The yard also invested in a same-size plasma cutting
table to cut its own steel in an efficient manner, as well as
sandblasting capability; and in its National City yard a new
70-ton hydraulic trailer for moving modules in and out of the
fabrication building as well as two new docks. All of these tools
are critical to maximizing efficiencies and keep schedule.

But arguably the purchase which Roberts is most proud … the
"Crowning achievement which is the least fun to buy but the most
fun to have," is its $3m, 500 kW solar system at its National
City building, allowing it to produce about 2/3 of its own power
and driving the company toward a "Zero Emission Facility." (See
related story next page).

With 217 people across three yards, an armada of cutting edge
technology, and a growing market in Southern California, Roberts
is happy to discuss what he views as a good contract:

"What's a good job for us? It's profitable and a win-win
situation. If it's not good business for either side, you don't
want to be here and frankly, we don't want you here. There is no
magic in boat repair."

Todd Roberts on:

The Market Today:

I think the market is very healthy. I think it is healthy for
yards that are willing to accept technology and innovate.

Running a shipyard in California:

In shipbuilding there is a leveling of the competition
(globally). The only thing that knocks the level away is the
state of California (and the extra expenses that come with
environmental regulatory compliance). But there are benefits to a
shipyard operating in California: our environmental requirements
are unprecedented in the world, and they exceed any yard in the
U.S. It creates a cleaner, more productive environment … we can
overcome environmental regulations and the result, in my opinion,
is a better product. You can't tell me that welding aluminum in a
dirt lot that you're not going to have contamination.

The Adoption of Technology:

A lot of the environmental regulatory requirements transition
into quality, and we are forced to innovate. We have to lean on
technology, we have to look at everything and think 'How can we
cut these pieces more efficiently' … 'Where can we bend and break
instead of weld'

His Greatest Challenge:

Finding and keeping a qualified workforce. The biggest struggle
we have is finding qualified labor, and you wouldn't think that
in a big navy town like San Diego. Roberts said a successful MGBW
employee is one that is flexible and cross trained, able to work
projects on the repair or new construction sides, yacht,
commercial or navy. "Some folks can do it, some cannot. The ones
that can are very successful, and the ones that cannot are not. I
refuse to put folks in pews and limit their work scope. Our
reluctance to do that has been a key to our success."

Solar-Powered Boatbuilding: Marine Group Boat Works Moves
Toward a Zero-Emission Shipyard

Marine Group Boat Works, LLC, completed a 500 kW rooftop solar
panel system for its shipyard in National City, Calif., making it
reportedly first boatbuilder to use solar energy to construct
boats. "Our initial decision to go solar was driven primarily by
our desire to be a zero-emission, low impact boatbuilder," said
Todd Roberts, president of MGBW. "There's no question that solar
is an economic benefit, but there are many other advantages -
everything from self-reliance and sustainability to doing the
right thing." The new solar panel system will decrease MGBW's
footprint and is expected to reduce annual energy consumption by
81% based on past and projected consumption. While MGBW has
wanted to go solar for the past several years, energy consumption
from boat repair was simply not great enough to warrant the
investment. However, since MGBW opened its new construction
division, increases in manufacturing and Solar panel installation
helps San Diego boatbuilders Marine Group Boat Works, LLC power
the construction of boats for the Navy. Baker Electric Solar, San
Diego, was selected to design and install the 500 kW rooftop
solar panel system for MGBW. The total cost was $1.2m, and the
new system reportedly will provide more than $3m in net savings
over 25 years, with return on the initial investment in about
five years.

Feb 24, 2017

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