Tackling the Beast and Crafting Yachts
A $12,000 loan in 1959 helped a ship fixer stake a big corner of Gulf diesel work. “Wild and wooly” ventures have since yielded one of the largest yacht companies on the Gulf Coast.
Taking risks, staying tightly leveraged to change and grow, Saunders has adapted from a diesel engine repair shop to a prime yacht repair facility.
When you get put on hold at Saunders Yachtworks, a pleasant voice comes on the line and says, “Saunders Yachtworks, the can-do company.”
That simple statement contains the company’s defining operational principle for all of its 54 years. During that history, the company has thrived by taking risks, keeping pace in a changing world and expanding into new markets.
“All my life, I’ve been fixing things that are bad broken for people. And a lot of times, it’s a source of great distress for them. They blow something up, burn something up, crack something up. We’re a fix-it company,” said Andrew Saunders, sitting in the cabin of his immaculately maintained 42-foot Grand Banks trawler.
Started by his father in 1959 with a $12,000 loan, the company originally specialized in diesel engine repair for tugboats and other commercial workboats. Over the years, Saunders became the authorized repair shop for Detroit Diesel, Caterpillar and Cummings, cornering the diesel repair market along much of the northern Gulf Coast.
Gradually, in the 1970s, Saunders moved into the burgeoning world of fine yacht repair, ultimately spinning off the commercial diesel engine side of the company to focus entirely on high-end pleasure vessels.
“We didn’t have any particular advantage other than my father’s know-how. He was 40 years old; I was a freshman in high school. He mortgaged his house to the hilt to do this business. It is an American story,” Saunders says. “He never had a doubt. I inherited that gene. Take risks, stay highly leveraged, drive ahead toward big time stuff. We have grown every year. We haven’t made profit every year, but we’ve grown every year.”
Prior to starting the company, Andrew Saunders Sr. learned how to work on diesel engines in the U.S. Navy in the pre-World War II era. The elder Saunders’ in-depth knowledge of how to work on and fabricate engines and parts helped him create a company that said yes to every technical challenge presented by clients. When a new engine came out, too big for the company’s crane, “We’d go into debt to buy a big enough crane, then we’d start trying to get the business for the crane.”
“Years ago, when we were really small, we tried to do the hard stuff, and do it well, because other people already had the easy stuff. So we tried to do the hard stuff, and we actually developed a reputation based on that,” Saunders says. “My dad was a can-do guy. Baker’s dozen, always give the guy more than he asked for, tackle anything that’s technically interesting. Company still has that attitude.”
Saunders says part of that attitude was taking care of the workers. One year, in the late 1960s, the company had expanded but failed to make a profit. There was no money left in the bank at Christmas for employee bonuses.
“My father and I went down to the bank and borrowed some money. Now, we didn’t tell the banker what we wanted it for, because he never would have given it to us. But we used that money to give Christmas bonuses. And they were nice bonuses!” Saunders remembers. “The banker would have called that bad business, but I tell you what: That banker is gone, that bank is gone, and we’re still here. That’s how we did things, kind of wild and wooly. We stayed leveraged. We borrowed money to the hilt every time we wanted to do something.”
The first big transition for the company came shortly after Andrew Jr. started working alongside his father after college. It wasn’t an easy time.
“We had old bull, young bull problems, big time.
I mean big time. I did bring some order to the process. That was what I knew better than engineering, was orderly process. He didn’t care about that. He wanted to tackle the beast. ‘Everybody get your spears, let’s go.’ That was the way he ran the business,” Saunders says.
But coming of age in the ’60s and ’70s, the younger Saunders had been exposed to a more modern side of the diesel industry, particularly during an apprenticeship in a New Orleans shop specializing in fuel injection, governors and magnetos, the heart of the diesel engine.
“That was the cardiovascular surgeon side of it, the really, really clean side. They ran their shop like a hospital. This was in the middle ’60s. At that time, I promise you on the river, everywhere, it was ‘Do the dirty work in dirty places.’ That was the way. Nothing was cleaned up, sparkly, environmentally friendly. My daddy’s shop was like that. It was dirty. Engines are full of oil and grease,” Saunders says.
“I came back, 23 years old, and I started cleaning up the shop. I started being engineering crisp and squeaky clean as much as I could. That was big. It caught on. It was a way of dealing that people hadn’t seen much of, and they liked it. Our shop today, we do all kinds of dirty work — grinding, painting, oil — but our shop is clean. Every day.”
Today, Saunders Yachtworks prides itself on a state-of-the-art facility, designed with the environment in mind. No oils, paints or other chemicals leave the property. Andrew Saunders has long been active in the state’s environmental community, even serving as chairman of the board for the state chapter of the Nature Conservancy. Sitting on a table during this interview was a well-thumbed copy of E.O. Wilson’s “On Human Nature.”
“Every morning since 1994, I’ve done early morning science reading,” Saunders says, when asked about the book. “Dr. Wilson, he’s a personal hero of mine.”
The new attention to how the shop looked and treated its customers’ equipment in the ’70s began to attract a new clientele, just as the large pleasure boat industry began taking off in the ’70s. Manufacturers, like Hatteras and Bertram, were turning out boats worth hundreds of thousands of dollars, owned by wealthy people who seldom frequented places like diesel ship repair shops. As the authorized dealer for most of the engine manufacturers, Saunders was getting repair work on everything from oil industry crew boats to high-end pleasure yachts.
A mechanic from the diesel shop might be working on a dirty work boat in the morning and then heading to a marina to work on someone’s yacht in the afternoon, says John Fitzgerald, Saunders’ son-in-law and now president of Saunders Yachtworks.
“Pretty quickly, Andrew figures out that you can’t do that. You can’t have a guy working a tugboat one day and then going to somebody’s yacht. It’s just a different business model,” Fitzgerald says. “So he asks a guy, ‘How would you like to specialize in yachts? Instead of this big service truck, we’re going to put you into a van, you’re going to wear tennis shoes and look nice, dress nice and take care of the thing in a whole different way, a more refined way.’ That was 1979. It evolved into a yacht service industry that is now our core business.”
By 1995, yacht repair work represented about half of the company’s income. Saunders decided to lease a big space at the Orange Beach Marina, with access to a 60-ton boat lift, for hauling 50-foot yachts out of the water for maintenance, painting and bottom work.
“Andrew was running a very successful engine repair operation, but he had the vision to know that the yacht business was going to grow. He went into that lease at the Orange Beach Marina and made special improvements to the yard, brought it up to modern standards. Then he started hiring carpenters, painters, anybody who could do structural work on the boats. Flash forward to 2007, Saunders Yachtworks is 50 employees, a branch of a 130-employee company out of Mobile.”
Two major developments have transformed the company in the last decade. In 2007, the Kirby Corp., in the midst of an effort to consolidate the engine repair business along the Gulf Coast, made a lucrative offer for the commercial engine repair side of Saunders, the core of the original company. With the sale consummated, Andrew Senior’s original investment from that mortgaged house had increased a thousand fold. The family retained the yacht business and has expanded it greatly in the years since, growing into one of the largest yacht repair facilities on the Gulf Coast.
“Andrew came to the rest of us in 2005 and said, ‘Lease that property on the Intracoastal Waterway.’ It looks really smart right now. He was the entrepreneur,” Fitzgerald says. The property in Gulf Shores has evolved into a serious moneymaker.
Created through a $6 million economic development authority grant from the U.S. Commerce Department related to Hurricane Katrina, the facility includes a harbor basin and a 150-ton boat lift. The lift capacity means Saunders is one of the only facilities on the Gulf that can handle the newest generation of yachts, measuring 70 feet or more.
“We invested $2.6 million in the buildings and lift and have since put an additional million into the facilities. The grant covered the ground and below, and the family invested in everything from the ground up,” Fitzgerald says.
“We sold that core business, but the yacht company is still a strong company. We have been a great survivor,” Saunders says. “It was never me at the head and everybody else is a peon. Right now, if we call a supervisors meeting, we only have 65 employees, but there will be 20 people at the meeting. A lot of them are pulling tools, but they are responsible, part of the team. Either their longevity or skills or earnestness or some combination of all of the above mean they are part of the team. We’ve always played it that way, and it’s worked very well.”
Ben Raines is a freelance writer for Business Alabama. He lives in Fairhope.