Background
Bill Healey ends just about every work day at his Viking Yacht Co. headquarters in New Gretna, N.J., by extending a farewell greeting to plant employees as they leave for the day.
“I’ve been doing it since we started,” Healey said. “My dad used to do it in his business.”
It harkens back to a philosophy of business that Healey learned from his father. Treat people the way you wanted be treated, and they’ll usually respond in kind.
When they don’t, however, Healey isn’t shy about making a point.
“I tell this story,” Healey said. “We had a fellow by the name of Head and Shoulders. He had these big shoulders on him.”
As Healey tells it Head and Shoulders, “was a nice guy, but a tough guy. He was a former iron worker. An ex-con. He stuck up a bank one time.”
At some point, Shoulders apparently tried to sell a piece of company equipment - a 12-meter timing light, to be exact - to a local gas station. The station owner called Viking and asked if they were missing the timing light.
“We said, ‘Yes, we are.’” Healey said. “The guy said, ‘Head And Shoulders was in here trying to sell it.”
Upsetting news to a man who believes that the cornerstone of any relationship is trust. So, one day as Shoulders was leaving work, Healey called him into a meeting where he confronted Shoulders about the incident. His way of handling the culprit, basically, was to scare him a bit until Shoulders admitted to the deed. It also was a way to send a message out to those who might want to pull the same stunt, according to Healey: Viking won’t tolerate thievery.
“That (message) goes through your subculture, to the people who could put you out of business,” he explained. “There are many ways to run things, but that happened to be our way. You discourage the bums…and you make it right for those wonderful, decent people.”
The story certainly helps explain how Healey and his brother Bob have prospered for 40 years in the pleasure boat business through good times and bad.
The company celebrates its 40th birthday on April 1, and Healey is quick to hand much of the praise for Viking’s longevity to a core group of hard working, dedicated managers and employees who’ve been with the company through much of its history.
Building a good culture, whether it be in the plant or the front office, requires hiring good people, treating them with respect and setting an example for them of how you want things to be done, according to Healey. “One thing we like to think is a good person can’t be treated too well,” he said.
Welcome to Viking Yacht Co., arguably one of the recreational marine industry’s best known and well-regarded brands, especially in the higher end of the market. With annual unit production of about 110 units a year, privately-held Viking’s annual sales approach $200 million, according to Healey.
The company’s yachts, sport cruisers and - its premier product - sport fishing boats, retail for between $1 million and $4 million each. So Viking’s end-user customers, who extend from the US to Europe and the Far East, tend to be among the wealthy elite.
As with any business that has survived and prospered for so long, Viking’s success hinges on its reputation in the marketplace; a fact that is not lost on Healey. To him, indeed, to everyone at Viking, everything the company does is for the customer, pure and simple. “Without them, we’re nowhere,” Healey said matter-of-factly.
It’s an obvious point, perhaps, but one that sometimes is forgotten in the rush to build product and ship it to dealers. It also explains why Viking today chooses to build rather than outsource major components, such as the towers that are installed on sportfishing boats.
Probably 75 percent of the boats Viking builds are sportfish models. And, they all get towers. Not so long ago, a sportfish customer would have to buy towers, even electronics, separately and have them installed. If a problem arose, the buyer would then have to haggle with that supplier. Customers complained. “They wanted a one-stop shop, where the responsibility is Viking’s” Healey said.
So three years ago, the company purchased a decaying facility in Riviera Beach, Fla., and fixed it up. They based not only the tower manufacturing subsidiary, Palm Beach Towers, there, but also established an electronics installation subsidiary, Atlantic Marine Electronics, at the facility, as well as a service yard. All totaled, Healey said Viking has invested close to $9 million in the facility, which operates with about 50 employees.
Viking chose the location because it was the perfect midpoint for buyers who would take delivery on a yacht in New Gretna and th¼en motor south.
“Between 60 to 65 percent of all the (delivered) boats travel through Florida,” Healey said. “Even boats going to California or down into the Caribbean will go through Florida.”
Customers will stop at the Riviera Beach facility for repairs or modifications, then head on out.
“You always have a shake-down cruise,” Healey explained. “(The Riviera facility) allows the customer to go in and have the repair done so (the boat) doesn’t go into some yard.”
Such dedication to customer service isn’t new at Viking, according to Healey. Since day one, he and his brother Bob have understood that their buyers have plenty of competitors to choose from. Building a high quality product and backing it with good service simply keeps them coming back.
The Healey’s learned that “trick of the trade” as youngsters watching their father manage a steel construction business. Born and raised in Atlantic City, N.J., the two went to Camden Catholic High School. Bill joined the marines and served in World War II. After the war, he attended St. Joseph’s College and graduated in 1951 with a B.S. in Political Science.
Meanwhile, Bob went to the University of Pennsylvania Law School and upon graduation began practicing law. He also started a real estate business, which Bill joined in the ‘50s.
Along the way, the Healeys entered the recreational marine business after buying Bass River Marina in New Gretna. At about the same time, Petersen Viking Builders, a manufacturer of small wooden boats, was in financial straits.
In 1964, the Healey’s bought the business, relocated it to New Gretna and changed the company’s name to Viking Yachts. The business grew and the Healey’s sold the marina (and only recently repurchased the property) to focus on the boatbuilding operation full time.
Bill became the president and focused on everything from design and engineering to manufacturing. Bob was the CEO, chairman and its lawyer.
The business evolved and grew and, by the late 1980s, Viking had nearly 1,600 employees building boats in two locations - New Gretna and at a subsidiary in Florida.
Those were the heady, “Miami Vice” days for the recreational marine industry, when it appeared the only direction for sales to go was up. But along came an economic slowdown, the first war in Iraq and, finally, the 10-percent luxury tax on boats valued at more than $100,000.
Enacted into law as part of a budget bill signed by the first President Bush in 1991, the tax was a death knell to many boat builders and dealers, especially those serving the high end of the market. Viking’s business all but stopped. Sales fell in just a few years from over $100 million to around $10 million, and the company was forced to layoff more than 1,500 employees.
Bill readily admits Viking almost collapsed. It survived those difficult times, thanks to a $2 million cash infusion from the Healeys.
“Bob and I both had 401Ks,” Bill recalled. “We cashed them in, which was almost $2 million, and we threw that in here to build new product.”
At the same time, the Healeys almost single-handedly fought the tax, overseeing a massive grassroots lobbying effort that led to its repeal in 1993. This kind of industry involvement is part of the Healey legacy.
Meanwhile, the investment in new models paid off, Healey said. “We had been doing our homework, so when the tax was lifted, we were on our way.”
Bill has been active in the National Marine Manufacturers Association for years. Under his engineering and design leadership, Viking helped found the American Boat & Yacht Council’s Standards and Yacht Practices, and the NMMA’s recommendations.
Bill and Bob also founded the New Jersey Boat Builders Association, which was instrumental in winning state aid to help restart New Jersey’s battered boat building industry after the luxury tax was repealed.
As noted earlier, sportfishing is core to the Viking brand. So it’s not surprising that the Healeys have been instrumental in advancing and protecting the recreational fishery. In the late 1990s, they founded the Recreational Fishing Alliance, a nonprofit organization with 75,000 members that promotes sustainable fisheries and a healthy marine environment.
Bill and Bob also have worked with local high schools and technical colleges to launch on-the-job training and school-to-work programs, which have trained hundreds of young people for careers in boat building.
In recognition of their dedication to the industry, both in defending it from harmful government regulation and helping to attract new talent, Bill and Bob in 2001 were awarded the 23rd Annual Chapman award by NMMA at the Miami International Boat Show. Their support of the industry and willingness to “get involved” in major issues helps explain why Viking has consistently increased sales and expanded its market reach since the luxury tax was repealed.
Pat Healey, Bill’s son who is now president of Viking, said Viking’s business hasn’t slowed down from the industry’s late 1990s peak, thanks largely to a huge order backlog that kept the plant humming even when
new orders all but disappeared.
“Our backlog shrank, but it always stayed out far enough
to allow us to not even contemplate slowing down,” Pat said. “And now (the backlog) has gone back up.”
With 20 percent of sales coming from foreign markets, Pat credits much of today’s strong growth to a favorable foreign currency exchange climate where the weakening dollar and strengthening euro have given Viking and other US boat builders selling into a Europe a huge price advantage.
“Since the Fort Lauderdale Boat Show (late October, 2003) the dollar has depreciated, or the Euro has appreciated, by close to 25 percent,” Pat said. “We believe we have another six months before it corrects and starts going the other way.”
The weak dollar exchange against the British pound also has negatively impacted Viking’s partnership with British-based Princess Yachts International plc. - Viking Sport Cruisers. Princess builds the line under a partnership agreement with Viking that began in 1996. “We’re experiencing some toughness with the dollar and the euro,” said Bill Healey.
Pat agreed.
“The pound is as strong as the Euro right now,” he said. “But, we’re involved in a lot of futures contracts to insure any of the upward risk from the (pound), so we’re doing okay.”
Viking still imports 40-45 Viking Sports Cruisers annually, according to Pat. And, with the US recreational marine market expected to rebound this year, he believes sport cruiser sales here will continue to grow despite foreign exchange pressure.
Right now, the company’s biggest challenge is servicing the business it has. December sales were uncharacteristically strong, further strengthening the argument that 2004 will be another good year for Viking.
And, in February, Viking hosted a Friday/Saturday VIP event at its Riviera Beach facility, which was attended by over 550 current and prospective Viking customers. An impressive draw, especially considering the poor weather conditions, which included torrential downpours on Saturday.
“It was a tremendous event,” Pat said in summary. “We sold five Viking Yachts and two Viking Sport Cruisers…We did over 80 demo rides.”
As the company moves into its fifth decade of operation, Pat’s focus will remain on day-to-day operations, while father Bill plows more of his energies into engineering, design and long-range planning. Given that Bill and Bob are now in their 70s, one might wonder whether the brothers have considered selling the business.
“We’ve had offers,” Bill admits. “But we have no plans to sell.”
Obviously, the second generation of Healeys is well ensconced at Viking; even some Healey grandchildren are now working there. But Bill Healey says there is another reason why he and Bob choose not to sell. They fear many of Viking’s employees and senior managers, many of whom have worked at Viking for 20 years or more, would not fare
so well.
“I was speaking to (a fellow business owner) last year,” Healey said. “He said the same thing. He has managers and
wonderful people, and he said he would not want to let those people down.”
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