Frank Foti aims to build a kinder, gentler industrial workplace.
Frank Foti, CEO of Vigor Industrial, is sitting on a couch in his Swan Island office hugging a large, Dumbo-style stuffed elephant. “We’ve got to get a picture of my buddy,” says Foti, a tall, jovial 58-year-old with an easy, self-deprecating laugh. Is the elephant a private joke? “Well, it is to some, but that’s OK. One of our values is to seek the truth and speak the truth, so a lot of our offices have big or small elephants to remind people to name the elephant in the room.”
Vigor’s values don’t stop at veritas. Walk into a company office, conference room or on any shipyard site and you’ll most likely see a poster inscribed with the words “Truth. Responsibility. Evolution. Love.” Otherwise known as TREL, Vigor’s culture code and the prominence it is accorded can be a bit surprising to the unsuspecting shipyard visitor.
"Not everyone adopts TREL because they are a little leery of the love thing."
The largest shipbuilding operation in the Pacific Northwest, Vigor grossed $600 million in 2014, up from $500 million in 2013. The company employs 2,600 people in 13 locations and three states (Oregon, Washington and Alaska).
In the past year, the company has gone on a buying spree — merging with Oregon Iron Works in 2014, acquiring a shipyard in Seward that same year and Seattle-based Kvichak Marine Industries last spring. But for Foti, a former Comcast executive who has a penchant for mythologist Joseph Campbell — Oriah Mountain Dreamer’s spiritual invocation “The Invitation” is a favorite read — expansion is only part of a larger story about the rebranding of Vigor and the industrial workplace.
Like many manufacturing companies, shipyards have been in decline for many years. Reversing that decline is not about looking back, Foti says. “We live in an evolving world. Our role is to find a way to responsibly perform industrial work in the world we live in today in a way that is sustainable for the world of tomorrow.”
Investing in new technologies and environmental efficiencies is part of that vision. But nothing embodies Foti’s attitude toward industrial rebirth more than TREL, a set of principles that rolled out in mid-2013 with the help of more than 100 employees representing all levels of the company.
“It’s about living by principles that are not exactly unique,” he says. “It’s about modeling love, community and respect.”
TREL reflects a slow-growing movement on the part of manufacturers to manage their companies as brands.
The code of conduct also points to broader business trends focusing on relationships as much as skills. This past June, for example, ad agency Wieden+Kennedy co-hosted a “Love Summit” featuring 150 top executives weighing in on compassion as the basis for corporate decision making.
Not that these principles don’t trigger some pushback — and eye rolling. “Not everyone adopts TREL, because they are a little leery of the love thing,” admits Vigor’s recruiting manager, Jennifer Green. During an employee meeting about respect in Seattle, one supervisor reportedly shouted: “If you’ve got such thin skin, you shouldn’t come through the gates of a shipyard!” A union appeal with the National Labor Relations Board is pending following Vigor’s blanket ban on smoking in the workplace last year.
Naysayers don’t always understand what Foti means by TREL, says Green, whose office features a poster of Foti, broad grin on his face, bullhorn to his ear and a call to arms: 'Be Frank. Be heard. Be part of our off-site survey.' Green continues: “What Frank means is: We care about the people who are around us. We’re going to make sure we have safe and good-paying jobs and good people to work for.”
If love is the new green — or black — the vanguard of the movement may be one of Oregon’s largest privately held companies, a sprawling tri-state ship repair and shipbuilding concern.
On a Thursday morning in late summer, Vigor’s 60-acre Portland shipyard is bustling; welders and carpenters are dwarfed by two enormous barges under construction; others put the finishing touches on a gleaming new $7 million tugboat destined to ply the waters of the Columbia. A U.S. Navy ship, the Charles Drew, is undergoing maintenance in the mammoth dry dock, a $40 million investment Vigor undertook last year.
Half a century ago, the United States was the world’s dominant shipbuilder. The epicenter has since shifted to Asia, where countries like South Korea, Japan and China have invested heavily in their shipyards. There are an estimated 200,000 people working in U.S. shipyards, down from a peak of 1.7 million in the 1950s.
There are bright spots on the horizon. After shrinking for several decades, the industry is experiencing a bit of an uptick, fueled by energy exploration and development, along with a recovering economy. A U.S. maritime law passed in the 1920s also shores up the sector. Under the terms of the Jones Act, all vessels operating between United States ports must be built and repaired in the United States.
“The domestic shipyard industrial base is seeing the most robust activity in decades, building tankers and container ships for the Jones Act market,” says Kirsten Allen, a spokesperson for the U.S. Maritime Administration.
Frank Foti in his office. The photos of Vigor Industrial workers were taken by photographer Brian McDonald.
At Vigor, diversification has helped boost corporate revenues. Through its acquisition of Oregon Iron Works and Kvichak, Vigor is now a significant player in the steel-fabrication business. The company builds aluminum boats for fishermen and the Coast Guard, as well as parts for bridges and the nuclear power, aerospace and renewable-energy industries.
Still, in 2015, most of Vigor’s fabrication and repair work involves building and repairing government, conventional and commercial vessels, among them the Fennica, the Finnish icebreaker that was on charter to Shell Oil and the target of a dramatic protest by Greenpeace activists last summer.
Foti, who stepped down as head of the Shipbuilders Council of America this year, says the high-profile event did not harm business — in the short term. “But the long run is dependent on how community engages in the reality of how our energy comes to us,” he says. Foti notes that all of Portland’s fuel and energy is pipelined or barged in here, "or came from somewhere else.” He cites lax environmental regulations in “other parts of the world" and says he would “love to see the day where Greenpeace is hanging people off bridges in places where it’s so polluted you can hardly see.”
Ask Foti about global trends driving the shipyard industry and he will direct the conversation toward the risks of an “imbalanced” economy, in Oregon and around the country. “We can’t subject ourselves to a tourist and service [marketplace],” he says. “We need balance.” Many Vigor positions pay $60,000 to $120,000 annually, he says. Oregon’s industrial jobs “are critical and need to be cherished and protected, and need to grow.”
One of Oregon’s "few registered Democrat CEOs, Foti says he is not interested in complaining about “the diminution of our importance.” Instead, his wheelhouse is tweaking workplace culture, and one of his key insights is to layer a consumer marketing patois over a blue-collar work environment: to rebrand the docks as a 21st-century hub where art, craftsmanship and industry intersect.
“There is a movement in Portland called the maker movement,” says Foti, whose office features photographs of Vigor welders, carpenters and other workers, a series the company commissioned by photographer Brian McDonald. “We are part of that movement, whether we call ourselves that or not. Rather than identifying with the industrial worker of yesteryear, we’re the artisans and makers of today.”
Barge under construction at Vigor Industrial’s shipyard on Swan Island.
A self-described tech geek, Foti was working at Comcast in Philadelphia when his father, who owned a small construction business in Cleveland, was diagnosed with brain cancer. Foti moved back home to help wrap up his father’s business dealings. “That was when I got a real education on what an artisan is and how much more truth is spoken in an industrial setting than an office setting. It changed my world view.”
|"It's a shipyard but that doesn't mean it has to be a throwback to: pick the time in history."
— Dave Whitcomb
Now Foti wants others to change the world views of others. TREL is part of the tool kit. Asked how Vigor’s values play out in the workplace, Foti says, without irony, “We are constantly trying to define what love means in an industrial setting.” He ticks off a few examples, from Vigor’s Bring Your Child to Work Day — “it’s like an industrial Disneyland” — to matching donations for victims of El Faro, a cargo vessel lost in Hurricane Joaquin in October that was on its way to the Vigor shipyard.
And in late September, Foti says, Vigor put 60 subcontractors on the payroll after their company was about to go under — then issued paychecks within 48 hours. “The speed and the way it was done and how committed people were to executing it makes us who we are. It was evolution, responsibility and love at its best, three of our values pinging off the charts.”
Vigor is one of a small number of industrial companies that are beginning to focus on human relations, says Chris Scherer, president of the Oregon Manufacturing Extension Partnership, a nonprofit consulting organization. “We are seeing the beginnings of this trend,” Scherer says, and much of it is workforce driven. “Companies are beginning to understand that attracting a young, talented workforce takes more than competitive wages and benefits. New-generation workers want to be appreciated as individuals and treated with respect.”
TREL can sound a bit squishy, a new age sheen on industrial capitalism. But there are also glimmers of “walk softly and carry a big stick,” a nod, perhaps, to the omnipresent hazards of working in a shipyard — Foti says not a day goes by without a major concern about safety — and an industry struggling to compete globally and stay relevant locally.
“Speaking the hard truth is not comfortable for a lot of people,” Foti says. “But sometimes the truth needs to be raw.” He pauses. “Love is about caring about the people we work with and the world we live in. Love can also mean helping someone go on their way if they don’t fit.”
If Foti is the TREL evangelist, Dave Whitcomb is the enforcer. A tall, laconic 46-year-old who has worked as a firefighter and a barge pilot in the Yukon, Whitcomb has an equally varied background with Vigor and now provides the lead on both technical operations and culture and values. (Whitcomb’s business card reads, simply, “Executive”). Foti credits Whitcomb with leading the culture shift in Seattle, and on a tour of the Portland shipyard, Whitcomb describes some of the aggressive tactics behind the company’s compassionate culture.
Seven years ago, offensive bathroom graffiti was such a problem in the Portland yard — “you name it, against Jews, women, blacks” — that Whitcomb shut down all the facilities for a week and a half. (Porta Potties were brought in for the duration.) “We made a big deal about it,” he says. “We communicated how it was not conducive to a proper workplace or considerate of co-workers, employees, customers or regulators.” Whitcomb did the same thing in Seattle a couple of years ago, then painted bathrooms “gloss black so that typical sharpies wouldn’t show up.” Workers pushed back but Whitcomb persevered. “We’re not going to let people call nonunion people rats,” he says.
One week after reopening the bathrooms in Seattle, one of the facilities was tagged again. So Vigor launched an investigation; the company brought in handwriting experts and pulled time records and HR files, finally zeroing in on one person who had written derogatory comments about co-workers in a work group. “We had a lot of written work from that individual, so we got a clear match there,” Whitcomb says.
That kind of police procedural approach sounds over the top, he admits. “But at the end of the day, you got people who were thankful that they had a much better workplace.” Not that there aren’t chinks in the TREL armor. Says Whitcomb: “Just last week, we had a customer saying: ‘Well, you know, it’s a shipyard.’ It’s a shipyard, but that doesn’t mean it has to be a throwback to — pick the time in history. It’s 2015 and that’s an inappropriate way to act.”
Love and war: The shipyard cafeteria; a cafeteria bulletin board memorializes former employees. A smoking ban imposed in 2014 has triggered worker protests.
After Vigor implemented a company-wide tobacco ban in 2014, workers filed a complaint with the National Labor Relations Board, and an appeal is now pending. The ban “is a big change from what the members were used to,” says Gary Moore, a business agent for Laborers Local 296 and a representative for the Portland Metal Trades Council. (Eleven unions are represented on Vigor shipyards). As Vigor continues to grow, the union is looking forward to “more jobs and better conditions,” Moore says. He declined to comment on specific conditions or TREL, which involves a two-day training for all new workers.
Chad Niemeyer, Vigor’s craft development manager, seems to embody one common attitude toward TREL: quick to poke fun but a true believer. When I contacted him about a phone interview, Niemeyer suggested a Skype meeting “so at least we can share facial expressions … such as rolling our eyes in disgust when talking about our values.” Later, speaking from Vigor’s Seattle shipyard — a small stuffed elephant visible on his desk — Niemeyer laughed, saying he was being sarcastic. “The code and values are pride and joy for me,” he says. “‘Speaking the truth’ — holy cow. I use that phrase all the time.”
Just that morning, Niemeyer, who started his career as a boilermaker 21 years ago, met with a new director of another division to discuss one of several minor fires that had occurred over the past few months. “One of these days it might be something big,” Niemeyer says. “I was active on what I knew was right — responsibility, [spoke] the truth — helped the new director evolve and, above all, loved the people around me.” TREL, Niemeyer says, allows managers and employees to address stressful issues — like fires — without personalizing them.
Echoing OMEP’s Scherer, Niemeyer says Vigor’s corporate values also help recruit young people to an industry in desperate need of qualified workers. “We’ve sucked Puget Sound dry,” Niemeyer says. “The quantity of people on the planet who have industrial skills — they don’t exist. We’re looking more and more for people who have our values, and we’ll teach you the skills.”
| "The quantity of people on the planet who have industrial skills — they don't exist."
— Chad Niemeyer
In 2002, Vigor, facing a financial crisis, sold its massive Portland dry dock, the largest in the Western Hemisphere. Today, the shipyard has come full circle. The 960-foot Chinese-built vessel Vigor acquired last year is the largest floating dry dock in North America and opens the shipyard to new customers, such as cruise ships and post-Panamax vessels.
Other changes are coming down the pike: namely, robotic lasers, 3-D printing and other technologies to help automation work in a custom-building environment. “You’ll continue to see technologies that combine the skills of the individual learner with programming and additional tools to make jobs more productive,” Foti says.
Attitudes toward safety have also evolved. “Human beings have a lot more respect for the lives of other human beings, and it shows in an industrial workplace,” Foti says. He makes a subtle dig at offshore competitors. “When you see companies, wherever they are, being held to standards of living of the people that produce their products — I hope I’m alive to see that in the world.”
In the meantime, Foti presses forward with in house initiatives intended to bridge gaps between art, craftsmanship and industry. This past August, members of the Tlingit tribe raised a totem pole at Vigor’s Ketchikan shipyard, which the company acquired in 2012. The pole raising was a tribute to workers and the surrounding community, especially women, who are still a minority “on the deck plates” but are counted among the company’s best welders. (One of the totem pole’s four figures is “Aunty,” representing elder Tlingit women).
Vigor’s value system and native culture overlap, says Foti, who has an abalone inlaid hummingbird bath in his office, gifted to him by the mayor of the Metlakatla Indian community in Alaska. “We hold truth circles and other things that don’t really fit industrial businesses. We walk a line where spirituality and principles meet.”
Will love save the American shipyard? It’s becoming a corporate buzzword, at least in the consumer product and service sectors. “I want to kick off with some love,” Duke Stump, vice president of struggling athletic apparel company Lululemon told his workers during a recent staff meeting, as reported in an October New York Times article. (The article was titled “Lululemon’s Kumbaya Capitalism.”) But even Foti, who staff say tears up during Christmas parties, knows love is not enough.
Ten years ago, Oregon policymakers heralded Oregon Iron Works as the rebirth of the American streetcar industry. Today the streetcar business is on hiatus in the United States, and Oregon Iron Works is crafting boats for the Alaskan fishing fleet.
Vigor’s effort to reboot the shipyard industry wraps up new business divisions and dry docks with service-oriented millennials and welders-turned-artisan craftspeople. TREL is the shorthand for all those complexities. Says Foti: “It’s about redefining our work in modern and common terms.”