Despite last week’s layoffs, Nichols Brothers Boat Builders of Freeland is confident that more work is on the way.
“The marine industry is still pretty hot,” Matt Nichols, managing director for business development, said Sunday. “There’s a real demand for marine products of all kinds. People are still buying.”
“We’re always chasing,” Nichols added. “Even when we’re laying people off, we’re busy chasing. Ups and downs are the nature of the business, and I’ve been in it for 45 years.”
On Friday, Nichols Brothers laid off 30 workers. The layoff is expected to last three months.
The company said the reductions were due to a California buyer’s plan to acquire and rebuild existing vessels rather than purchase a new vessel from the Freeland firm.
The laid-off employees were given one week’s severance pay and health insurance coverage through the month, and those eligible received additional pay for the Thanksgiving holiday, the company said.
The remaining 150 employees were promised Friday that there would be no further cutbacks, officials said.
Besides several ongoing projects, Nichols said negotiations for at least five more jobs are in the works, and that bids are expected to go out on two of them next week. He declined to list the projects.
“We don’t want to alert the competition about what we’re bidding on,” he said.
But the biggest job on the horizon would be replacement ferries for Washington State Ferries.
Nichols Brothers, in conjunction with Todd Pacific Shipyards in Seattle, has submitted a bid to construct a portion of two new 64-car high-speed ferries for the Keystone-Port Townsend run.
That bid, the only one submitted, was opened by ferry system officials on Nov. 13. A decision is expected this week, Ron Wohlfrom, project engineer with the ferry system, said Friday.
Steve Welch, Todd chief executive, said the joint bid was $65.5 million for one ferry and $124.4 million for two.
The state originally projected $84.5 million for two boats.
If the contract is awarded, the first vessel would go into service in April 2010, and the second later that fall, state officials said.
The state Department of Transportation ordered the two new ferries for the Keystone-Port Townsend run after four 80-year-old Steel Electric vessels were pulled from service a year ago because of safety concerns.
The new vessels would be modified versions of the Island Home, a 255-foot ferry operated by the Nantucket Steamship Co. that has run the seven-mile, 40-minute route between Woods Hole and Martha’s Vineyard in Massachusetts since March 2007.
The Island Home was designed by the Elliott Bay Design Group of Seattle and built by VT Halter Marine Inc., of Moss Point, Mass. It can carry 76 vehicles and 1,200 passengers.
Nichols said that if Todd and the Freeland firm get the contract, Nichols Brothers would build the top sections of the boats, including the entire passenger deck and galley, and the pilot houses and machinery compartments for the heating and air-conditioning systems.
Nichols Brothers officials said Friday that if the company gets the ferry job, there would be three or four months of engineering work before additional workers could be added to the project.
“Time starts running on the other end of delivery, so I expect them to make up their minds pretty quick,” Nichols said of state officials.
If the contract is awarded, “that will make a lot of people happy,” he added, “especially those people who want to go to Port Townsend.”
Meanwhile, Nichols Brothers is continuing work on its other contracts.
The first of four twin-hulled passenger ferries destined for the San Francisco Bay area is undergoing sea trials at the Langley marina.
The $8.8 million catamaran, built in partnership with Kivchak Marine Industries of Everett, is scheduled to be delivered to the Bay Area’s Water Emergency Transit Authority in December.
Construction of a second WETA catamaran is underway at the Freeland boat yard, and two more have been ordered, Nichols said.
The next catamaran is scheduled for delivery in March, and the other two for late next year. Two additional vessels are being discussed.
Meanwhile, the company also is midway through contracts to build five large tugboats. The $10-million tractor vessels are 100 feet long and weigh 85 tons.
The third and latest tug was delivered recently to the Minette Bay Co., of Prince Rupert, B.C. The remaining two tugs will be built for BayDelta Marine in the Bay Area.
Friday’s layoffs came on the heels of approval by a California transportation district to buy two used ferries from Washington state.
Nichols Brothers had maintained its employment level to allow for training in anticipation of winning that ferry contract.
The Golden Gate Bridge, Highway and Transportation District has been looking to buy new high-speed passenger ferries since June 2006. In July, Nichols Brothers submitted a bid of $18.6 million to build one of the ferries.
However, the district decided to buy two used ferries, the M/V Snohomish and M/V Chinook, from Washington state for $4 million.
The M/V Snohomish was used temporarily on the Keystone-Port Townsend route in November 2007, when the Steel Electrics were pulled from service.
The Golden Gate district also plans to spend approximately
$19.1 million to refurbish the Washington ferries.
The district hopes to complete the purchase this year, and award a refurbishing contract in May.
The first rebuilt ferry is expected to be delivered in late 2009, with the second arriving in mid-2010.
Nichols said his company intends to bid on the refurbishing job, when the bid announcement is made.
Nichols Brothers officials stressed that Friday’s layoffs aren’t an echo of what happened a year ago.
In November 2007, the company laid off its entire workforce after 43 years on Whidbey Island and filed for Chapter 11 bankruptcy.
Nichols Brothers was later sold to a limited liability company, Ice Floe, based in Dallas, Texas, and was restructured.
Since then, the company, one of Whidbey Island’s largest private employers, has maintained a steady 175 to 250 employee workforce, injecting about $12 million into the local economy.
News of layoffs so close to the holidays brought mixed reactions from South End civic officials.
“It’s my understanding this really isn’t a dire layoff, although it’s dire for the people being laid off,” said Chet Ross, president of the Freeland Chamber of Commerce.
“Anytime there’s a loss of wages, there’s always an impact,” he said, but added: “Freeland’s not doing too badly. We’re probably surviving better than some of the other communities. I think we’re in reasonable shape.”
As for the general shape of the economy, Ross said much will hinge on the recovery plan that will be put together nationally.
“It really is a comfort and trust issue right now,” he said.
Helen Price Johnson, the newly-elected county commissioner representing South Whidbey, said the layoffs may not be a good sign for the island’s economy.
“It isn’t unusual for there to be temporary fluctuations in Nichols’ labor force, but during this economic downturn, when our community support systems are already strained, this news has a more profound effect,” she said.
“My heart goes out to these families,” she added. “I would ask all of us to be as generous as we can with donations to Good Cheer Food Bank, Holiday House and other charities to help them meet the increased demand for their services.”
“Layoffs are imminent in our community, and the ripple effects, due to our smaller population, are felt so much harder than in larger urban areas,” said Sherry Mays, executive director of the Langley Chamber of Commerce. “I’m sure Nichols is doing the best it can.”
Mays said there are many companies holding their collective breath as 2009 approaches.
“As a community, we have to support our neighbors, whether they are business neighbors or individuals,” Mays said. “We have support networks in place, and we’ll do what we can to stay afloat together.”
“We’ll get through this and look back on it with lessons learned under our belts,” she said.
