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The Skinner Shipbuilding & Drydock Company consisted of two plants. They were in very bad condition. The upper woodwork of one of the drydocks was so rotted that it was dangerous to climb down the side. The machine tools had not been overhauled for years. The buildings were dilapidated. Some were propped up on the outside with shores.
The company hadn't paid its taxes for years nor its insurance premiums. The insurance brokers, having kept the insurance in force, were claiming a considerable sum. The firm owed substantial amounts to the foundry and other suppliers of material.
Even worse, the company had a bad reputation with ship owners and operators. The Baltimore-owned Merchants & Miners Company, with a large fleet, sent its vessels to New York for repairs. The two large drydocks would be unoccupied for weeks running. The permanent force of both plants consisted of about twenty men. When an occasional job came in, the foremen went to the gate and employed such men as they could pick up.
This was the institution into which I stepped in March, 1914, expecting to make a fortune.
Thomas H. Bowles, a director of the Baltimore Trust Company, became president of the company, without salary. I was vice president and general manager, in complete charge of the plant and business. Mr. Bowles served as watchdog for the bank. I made a mistake and consented to take on the former owner of the company as an assistant. Such an arrangement rarely works well, and this one I soon regretted.
p292 The first hurdle was to get any work at all to do. Little or nothing came in voluntarily. My recourse was to the underwriters who, when an insured ship suffered damage, called for bids on the repair job. I began to bid on every job offered.
An early opportunity came when a damaged vessel was brought into Newport News. I was preparing to jump down there when my assistant, the former owner, asked me how many foremen I intended to take with me to make the estimates.
"None," I said.
"Who will make the estimates then?" he asked.
"I'll make them myself," I told him.
He seemed greatly surprised and told me I was making a mistake. He told somebody else, too, for before I could get away Mr. Bowles called me up. When I repeated to him that I intended to bid on a repair job without estimates from my foremen, he expressed strong disapproval.
"Mr. Bowles," I said, "I'm perfectly competent to make estimates. If I were not, you had better have somebody else in my place."
My procedure in bidding on repair work was to accompany the surveyors and owner's representative when they went over the ship determining the work to be done. While they were preparing specifications, I studied the job, figuring to the best of my judgment about what it should cost. The ship-repair business was fast. Specifications were given out in the afternoon, bids opened the next morning at ten o'clock. With the specifications I made a detailed estimate, item by item, of the cost. If this didn't tally fairly closely with my general size‑up of the cost, I checked the detail estimates closely for error. I had great confidence in my first judgment.
Usually there were from four to seven bidders on a repair job. The size of my bid depended upon how badly I needed the work. If my drydocks were occupied, I could risk a bid insuring a good p293 profit. If it didn't land the job, no harm done. If I had an empty dock and no work ahead, I went low. In rare instances, I even disregarded "overhead" in bidding, satisfied with an apparent if not real profit. By bookkeeping, such a job showed "in the red," but I knew it was good business, if my banker employer did not. What I wanted was to build up a force of good mechanics and give them permanent work, so that they would always be on hand when rush jobs came in. Going to the gate for men was poor business.
From the start I was successful in obtaining work in open competition. My next task was to "deliver the goods," if the plant were to live down its past reputation. At such times I was no white-collar vice president in the office but the general foreman in overalls on the job. Ship-repair work was always a day-and‑night rush, a vessel being too valuable to the owner to spend an unnecessary hour in a repair plant. My men had never before seen the boss down in the drydock, directing and working with them. They responded well. I kept telling them to give me their best efforts. And I would soon have permanent work for them.
To that end I bid on a suction dredge to be built for the Army Engineer Corps. I figured in only a proper overhead and no profit at all. My bid was lowest, but on account of our past reputation the Engineers hesitated to award us the contract. It took the best salesmanship I ever displayed to land it.
Now I could take repair jobs with confidence. I no longer had to go to the gate to hire mechanics. I had them in the yard, ready to jump into any repair job and eat it up, knowing that when it was finished they would not be laid off but would go back to work on the dredge. I saw contented faces among my workmen.
The brokers rubbed their eyes when they looked at the books. From the very beginning this bankrupt, run‑down and rotting p294 establishment made money. I still had some annoyances with the bank. The bankers reminded me of line commandants at navy yards, only now I always prevailed. A banker will rarely quarrel long with one who is making money for him.
Automobiles were still regarded as a luxury, but we needed one for the plant. There were no taxicabs yet in Baltimore. Surveyors coming from New York to fix prices for repair work had to ride •four miles from the railroad to the plant in street cars that were slow and often crowded. After such discomfort no surveyor was in a proper frame of mind to give a satisfactory price on a non‑competitive repair job.
To Mr. Bowles, my banker president, I suggested the purchase of a car. He strongly disapproved — it wouldn't look well for a bankrupt concern to have a machine. Without arguing further, I bought a Chalmers next day, paying for it with my personal check. Mr. Bowles saw the car at the plant and asked for an explanation.
"I know the need for a company car, and you don't," I told him. "I paid thirty‑two hundred dollars of my own money for this one, and it's going to be used entirely for company business. When you are ready to admit that you were wrong and I was right, then you can make out a check to me for the purchase price."
Bankers are hard to convince, but before the year was out I had my check for $3,200.
I was paying cash for everything and taking the discounts but had not as yet begun to pay off the old accounts. All profits were needed to make urgent repairs to the plant. First and foremost I must have tools with which to work.
One of the Skinner Shipbuilding Company's chief creditors, Joe Lacey, owner of the foundry, came to see me. After admiring the changes that were taking place, he began, "Er — that old account of mine — been going for several years, you know. Suppose p295 we clean it up. I tell you — pay me now, and you can knock 40 per cent off the bill."
"Joe," I said, "I'm not accepting that proposition. Either you'll get 100 per cent of your account or not a damn penny. I don't know which it will be, but I think it will be the hundred per cent."
Joe Lacey told that story everywhere. The bank heard it, and the unescapable Mr. Bowles moved into the picture.
"The company has the money," he said. "Why didn't you accept Lacey's offer?
"Not good business," I answered. "We owe Lacey the entire amount, and he's going to get it. The advertising we get out of this incident is worth far more to the company than the money gained by discounting a just bill."
Soon Joe Lacey was paid in full, and the whole story did much to give the Skinner Company a reputation for fair dealing.
A large ship, loaded with grain and ready to sail, was rammed by a revenue cutter. Lloyd's surveyor, Mr. Stewart, called me and asked if I were willing to drydock a loaded vessel. No loaded ship had ever been drydocked in Baltimore. It was not considered safe.
But I had been docking ships all my life. If I could dock fragile torpedo boats and submarines, I could dock a cargo vessel, even though heavily laden. It was only a question of sufficient blocking and shoring to distribute the load. I told Stewart that docking ships was one of my specialties. He asked me to meet him on the disabled vessel.
The hold abreast the injury was filled with grain, so that I could not get in to inspect the inside damage. The captain refused to empty the hold for an examination but would empty it for repairs, if I gave him a satisfactory price. If he couldn't get a price, he would be on his way to Newport News, where he would empty the hold and ask for bids.
p296 "But, Captain," said Surveyor Stewart, "nobody will give you a price without examining the inside damage."
"Wait a minute," I said, much to Mr. Stewart's astonishment. "I'll give the captain a price I'm sure he'll like."
Under these conditions I was scenting a most profitable job. I took an hour to make a careful examination of the outside damage. With my knowledge of ship construction, I could visualize what had happened to the inside framing. After a little figuring, I named a price to Stewart.
"You must be out of your head," he said, "but it's your funeral. The price is satisfactory, and I'll recommend to the captain that he take it."
I sped back to the plant to arrange for the drydocking. Before the grain ship arrived, the story had gone all over Baltimore's banking and shipping circles. Enter Mr. Bowles. I explained to him in detail how I intended to dock a loaded vessel.
"Yes," he said, "but you don't know the interior damage. You haven't seen it. You're simply gambling."
"Mr. Bowles," I answered, "any time you find me gambling with company money, you can gamble that I'm gambling on a certainty."
We drydocked the vessel without mishap, thereby adding a new peak to the company's growing reputation. When the job was finished, I marched into Mr. Bowles's office and put the job‑account on his desk before him. It showed a profit over all of 125 per cent.
But we still had a sore spot — the refusal of the Merchants & Miners Company to give us any work. It still sent all its ships to New York for repairs. Competitors could use this fact against us. If a Baltimore shipping concern didn't know the inside of a Baltimore repair plant, who would? It took a lot of explaining.
The general superintendent of the Merchants & Miners fleet was a Mr. Blankenship, a former Naval Academy man, p297 two classes ahead of me. From this Navy brother I received less consideration than I ever got from any other owner's representative. Time and again I asked for a trial job, only to be refused. He had tried us in the past. We did poor work at large cost and took twice as much as the New York repairers. When I told I had changed all that and could now work as cheaply and quickly as anyone, he would smile skeptically and say, "Tell it to the Marines!"
A big damage job came up on one of the Merchants & Miners ships. The vessel was docked in New York for examination, and Blankenship had invited every repairer on the coast to bid, except the Skinner Shipbuilding Company. This was adding insult to injury. The Mercantile Trust Company, of Baltimore, controlled the Merchants & Miners. I would waste no more talk on Mr. Blankenship. I went to Mr. Fred Boyce, vice president of the Mercantile.
When I had told my story, Mr. Boyce called up Blankenship and asked for an explanation. The superintendent replied that he hadn't invited me to bid because I could not possibly do the job.
"Mr. Evans is in my office and says he can do it," said the banker. "Please send him the specifications."
Blankenship said he would send the specifications, but I was too late to examine the damage, as the ship was already out of the drydock. Mr. Boyce repeated this to me. I asked if I could have the ship's plans, along with the specifications of the damage. If I found the specifications explicit, I thought I could bid intelligently, working from the plans. Blankenship was directed to send me both plans and specifications.
This was really gambling to some extent, since I must rely entirely on detail estimates without my usual check of a general size‑up of the job. Finding the specifications clear, I decided to bid anyhow, my bid proving to be lowest both in price p298 and time — sixteen days against the next lowest guarantee of twenty days. Mr. Boyce, because of my disadvantage, offered to let me out of my bid, saying I needn't take the job just as a demonstration, since in the future I would be given more than a fair chance at company work anyway; but I took the job.
When the ship came out of the water in the drydock, I was dismayed. The damage looked much bigger than I expected. I knew I was right on price, but it was the sixteen days' time limit that frightened me. We would have to drive every minute of each twenty-four hours to get out. Mr. Blankenship was on hand to watch the docking.
"Aha!" he crowed." "You hung around the bank until you got a job you can't do, and I hope you're satisfied. You won't finish this work in twenty-five days."
My men were already on the job, and their boss was with them. At midnight it was the custom of the night shift to knock off for half an hour while they visited a small lunchroom near the gate for rest and coffee. On the first night of the Merchants & Miners job, just twenty minutes before midnight large pots of hot coffee with trays of good, thick sandwiches appeared in the drydock. At a quarter to twelve I shouted, "Down tools, and let's eat!"
We sat around together, munching sandwiches, drinking coffee, and telling one another how we were going to "show" Mr. Blankenship. There was no need of a taskmaster on this job. It had become a game, a drama, and every man was giving me every ounce he had. And it was not only the excitement of accomplishing the impossible. My workmen knew, too, that they were building a reputation for the plant and therefore security for themselves. We knocked off work at three in the morning, having made splendid progress. A few men came on then to arrange for the morrow. The next night I had a full second shift.
It was little sleep I got during the next fifteen days. I was p299 always at the shipyard before seven in the morning and did not leave until I had coffee and sandwiches with my men at midnight. We completed the job four hours before time was up, making a satisfactory profit. Afterwards we got our fair share of Merchants & Miners work.
Always breakfasting at six — five-thirty in winter — driving my car •eight miles to be at the plant before whistle-blow at seven, rarely leaving the yards before midnight, I was doing more work than one man should do. I saw my children only Sunday morning, for I did not go to the plant Sundays until after luncheon. I decided to take on an assistant. Of course, Jack Willis, now transferred to the Puget Sound Navy Yard, was my man. I telegraphed him that he had a new job. He accepted but did not have the money to pay railroad fares for himself and family. I wired him the money, and the Navy lost a good civilian superintendent.
Also I remembered about Harry Crosby, the promising young naval architect out in Seattle. I felt that there was no future for him there. Although I did not as yet really need an architect, I now offered him a job, writing him that I could pay him only $40 a week, although I knew he was getting $225 a month where he was. He accepted instantly and came East. He became a most valuable assistant to me, later designing all the ships I built at Baltimore and designing them well. Needless to say, he did not long remain on $40 a week.
The ship-repair game is a difficult and risky business, and the reader will, no doubt, wonder how I, a Navy man with no business experience whatever, could make such a quick success at it. I sometimes wonder myself. Perhaps I had some natural talent for business, and there is no doubt that my old friend, Lady Luck, helped me a lot.
But I had one advantage. The old‑timers at the game considered me a babe-in‑arms when it came to business deals, and p300 I encouraged that belief. Consequently when competing with me, they were never quite on their toes. I had the advantage of thinking just that fraction of a second quicker than they, which so often turned deals my way.
For example, I went to Newport News to bid on a badly damaged Norwegian ship. Six other prominent repairers were there. The ship's tanks were full of water, and no inside inspection could be made. The surveyors had assumed that the keelson was out of line. Their specifications called for the keel to be lined up and all inside damage to be made good.
I had a good eye, and I did not believe the keel was out of line. This keel had outside butt-straps. In coming down in the drydock, the ship had landed on the blocks on the butt-straps. This condition created an illusion. If the keel were straight, then the inside damage was not as serious as the specifications anticipated. I wondered if my six competitors had noticed what I had seen.
When the bids were opened, I was way below any other, so low that that Mr. Stewart, Lloyd's surveyor, asked sarcastically, "Since when did the Skinner Shipbuilding Company become a philanthropic institution?"
Having secured the job, I arranged with the Norwegian captain to take his vessel to Baltimore. I told him about our facilities, and he said that while he was there he might as well hold his regulation No. 3 survey. This was welcome news. It meant a large amount of additional repair work at good prices.
Getting Willis on the long-distance phone, I informed him that he had a ship coming and then told him about the keelson.
"Jack," I said, "that keelson is straight, and don't let Stewart or anyone else make you believe otherwise."
Then I jumped down to New Orleans to bid on a damage job there. Failing to get it, I returned to Baltimore, only to find a controversy going on between Willis and the surveyors about p301 the keel. The question was easily settled. We ran a line at night with candles and found the keel straight. The damage was less than estimated, and we picked up a large amount of work from the No. 3 survey, so this whole job was most profitable. And all because I had noticed those butt-straps when my competitors had not.
1914 was a bad year for the American ship-repairers. War had broken out, and shipping was paralyzed — the material benefits of the war were to come later. Nevertheless, when my first year's service ended in March, 1915, our books showed a net profit of $105,000. My bonus was $10,500. When I made my contract, which the gratified Baltimore Trust Company now hastened to extend, I hadn't had such a bad head for business after all.
Another development occurred at this time. Refinancing the business had been a slow process. There had originally been two plants, with two sets of bondholders. The bank held the bonds of one plant and the public those of the other. Now the bank had obtained authority from the public bondholders to reorganize.
The old company was thrown into receivership, and I was appointed receiver. The usual sale took place. The newly formed company bought in the old company. It was all an inner office transaction.
It resulted in the change of our name. I had never liked the name of Skinner, and certainly its slang implication did not apply to us. The new company was called The Baltimore Drydocks and Shipbuilding Company. It was not long before all Baltimore knew us simply as "The Drydocks."
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