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Executive Summary
Company. Hendry Marine Industry. Maritime Key. Employee ownership can be a crucial tool in company succession.
Aaron W. Hendry was born into the maritime business, and he will likely you-know-what in it.
The thing is, the 80-year-old Hendry wanted others who give their lives to his family business to share in the same good feeling and support it gave him, so in 2015, he began the process of overhauling its corporate structure.
For the first time in its history, the 90-year-old Tampa ship repair, conversion and modification company has a board of directors. And Hendry instituted an employee stock option plan (ESOP) to benefit employees who make his company a career, not just a job. As a result, Hendry Marine is owned 51% by the Hendry family and 49% by its 391 employees.
“He loves his employees,” says Hendry Marine general counsel and CFO Dennis E. Manelli, “and he thought it would be great to give them an ownership interest. He has a strong emotional attachment to the business, a strong attachment to his father. He loves the port community and he's loyal to his employees. It's a great way to continue the company.”
Hendry doesn't often come into the office he now shares with new company President and CEO Jim Long, judging by the unopened mail piling up on his desk, but he left behind a structure to the operation that he hopes will endure long past his time with it.
“The Hendry family has been part of the port fabric since its inception in the 1940s,” says Edward Miyagishima, vice president of communications and external affairs for Port Tampa Bay.
Employee owners
The structure and scope of the company — founded in 1926 by Aaron Hendry's father, Captain F.M. Hendry — has been reorganized so that Hendry Marine Industries LLC, the holding company, oversees Gulf Marine Repair Corp., Universal Environmental Solutions LLC, Port Hendry Terminals and Port Staffing Inc.
Another change in corporate structure occurred in November 2015 when Gulf Marine Repair Corp., Hendry's tug-barge shipyards, consolidated operations with Hendry Corp. Gulf Marine is headquartered side-by-side with Hendry Marine.
“It's neat to say you've been working with a company that's 90 years old,” Manelli says. “The Hendry name is familiar to a lot of people in the maritime business because it's been around so long. So it's good to use that and Gulf Marine. That's why we have the holding company.”
In addition to switching to oversight by a board of directors, Hendry Marine this year hired Long, its first outside president.
Long, 57, grew up in Polk County and attended Florida Southern, where he met his wife, Tere. The father of three worked as a CPA in Orlando for Arthur Andersen before his work took him overseas, then back to the U.S. and Chicago. Most recently, Long worked at Oldsmar-based Trinity Group, which operates kitchens in jails and prisons in 46 states.
Joining a company with an ESOP in place was certainly a motivating factor for Long in joining Hendry.
“One, the industry was interesting to me,” Long says. “Two, the ESOP is an opportunity to really engage our people at a different level. And three, it's here in Tampa. One of the things I feel strongly about is jobs and economic growth. This is a pretty humble business. What our people do, there's probably not a much harder job in the area. But it's a good job that can provide a good income, and good work for people and that was appealing to me.”
Long and Marinelli expect the ESOP will cause employees to see the company - and their place in it - in a different light in the years ahead.
“If you're the shareholders,” Long says, “you want to look at the bottom line, right? For our employees, what's been important in the past is, am I working throughout the year? Or, if there's a slow time, what happens then? We're positioning ourselves to avoid it if we can with better business development and scheduling. Now, as owners, they'll start to appreciate the other side of it, too, as they see the value in their ESOP accounts start to grow.”
Average employee tenure at the Hendry companies is seven years, but many on the senior management team - such as Rick Watts, the president of Gulf Marine - have each been on the payroll for more 35 years.
“We realize now that we are part owners,” Manelli says. “We have the ESOP. And when we retire, the company has to continue going, because that's how you get paid out. That's how you maximize what you're going to get paid out.”
Long says Hendry employees are learning their role as owners is a different one than they had before. The first thing he did was put together a strategic plan using 11 of the firm's senior people.
“We asked, 'What's our vision? What do we aspire to be? What's our mission? What do we do every day? And what are our goals?'” he says.
If the group found things that weren't tied to its goals, its members then questioned if the company should continue them.
The second step was setting up rapid action teams to engage employees to solve problems. For example, when the company needed a new radio system, it wasn't a task given to a senior person to make the decision and the purchase, as it had been in the past. “Instead, we put a team together, gave them a disciplined process to follow and they get to the right answer, but it's their answer,” Long says. “They have buy-in. We've engaged them in improving the business.”
New horizons
With the ESOP and consolidation complete, Long is ready to further grow a business that in 2016 alone has swelled from 287 employees in January to 391 in July. Two-thirds of the workforce consists of skilled welders and iron workers. A quarter of Hendry's employees is made up of marine electricians, crane operators and specialized machinists.
“We'd like to find some acquisitions,” he says, adding that he'd also like to find a 600-foot floating dry dock to expand the type of ship repairs Hendry could accommodate in the future.
Long says the demand exists, but finding a used dry dock is rare. The company recently chased one down in Italy, but was out-bid on it.
“It's sort of a dance out there because we're really slammed right now,” Long says.
Boat repairs are always challenging and no two are alike. For example, when the U.S. Coast Guard Station in St. Petersburg has a vehicle in need of repair, it will wind up here, as was the case when one of its ships was in dry dock recently for 77 days.
In addition to dry dock facilities, Hendry — which controls 50 acres of port land and more than 3,000 feet along the Ybor Ship Channel waterfront — has enormous cranes that can pick up ships and put them on shore for repair.
“We turned away the equivalent work of 50% of our annual revenue last year,” Long says. “That's why we went looking for a dock.
“The ship repair industry is cyclical,” he continues. “We'll hire some people who drive in from Louisiana if they meet our certifications and pass all the tests when we have to flex up. But we'd rather have a good, consistent group here. We need to increase our velocity. These are working assets for our customers. Today we run one full shift during the day, and then a smaller shift at night. And we need to look at how we can drive more business through, utilizing the same number of hours and the same resources.”
Long says the company is studying the possibility of hiring an outside sales team such as Salesforce.com in the future.
“In the past we've probably been a little more reactionary,” Long says. “We're working to be more proactive and trying to get commitments further out.”
Five goals
New Hendry Marine president and CEO Jim Long has set five goals for the company:
Teamwork. “To attract, hire, develop, retain and reward the best team in the industry,” he says. “A simple goal. Our people stuff should be driving it.”
Safety. “To take care of ourselves and each other, ensuring no one gets hurt. Again, we kept it simple and everybody can understand that.”
Customers. “Maintain relationships with our customers as we provide on-time quality service to meet their evolving needs.”
Structure. “To continually evaluate and build the right structure and provide the needed resources based on our industry, community, and company.”
Performance. “That's where the rubber meets the road.”
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