Workers Take Over Big Seattle Shipping Firm : Drexel Backs Unusual Union-Led Buyout
One of the West Coast’s largest shipbuilding and tugboat companies emerged from federal bankruptcy protection Tuesday when family ownership was transferred to employees.
Unimar International Inc., formerly WFI Industries, began operations with its 400 employees holding 73% of the company’s stock under a reorganization strategy orchestrated by the investment banking firm Drexel Burnham Lambert Inc.
“We already have some contracts, and we’re working on others,” said Donald Liddle, who resigned as president of the Inlandboatmen’s Union of the Pacific to become chairman and chief executive officer of Unimar.
“We will be marketing our services very aggressively. We are looking into fishing vessels and ferry contracts, and we would like to build a new relationship with the state of Washington,” Liddle said.
His comments came after a ceremony attended by more than 500 people, including the Woeck family, which founded WFI Industries in 1946.
WFI Industries was a major participant in the Alaskan and Hawaiian barge-towing trade and one of Seattle’s principal tug and barge and shipbuilding contractors, with major customers, including the U.S. Department of Defense the Navy and the Coast Guard.
The company once was one of the state’s largest employers before a slumping industry and financial problems forced it to trim 1,100 jobs and file for protection from its creditors under Chapter 11 of U.S. bankruptcy laws two years ago.
“This is a bittersweet time for the Woeck family,” Liddle said of the union-led buyout. “But they’re not doing what most owners do. They’re not just trashing the operation.”
Former owner Richard Woeck will serve as chief operating officer of the subsidiary United Tug and Barge and his son, Michael Woeck, will serve as chief operating officer of United Marine Tug and Barge, Unimar’s other subsidiary.
John Kissick, managing director of Drexel Burnham’s West Coast corporate finance department, said the financially strapped WFI wasn’t the kind of company Drexel Burnham likes to underwrite.
“But the Woecks and the employees were the success in this effort. We have a model for troubled companies around the country,” Kissick said.
Under the reorganization plan, about 4.5% of each worker’s gross earnings will be withheld for the next two years to ensure the company meets its obligations.
In return, employees will control the 10-member board. Drexel will hold a 5% stake in the company.
A March, 1984, financial statement of the Woeck family listed $165 million in assets and $14 million in liabilities. Drexel put Unimar’s current net worth at $9 million.
More than 8,000 companies in the United States are employee-owned, according to the National Center for Employee Ownership in Bethesda, Md.
The center called the Unimar-WFI reorganization one of the largest ownership transfers to employees since the 1984 transfer of the Weirton Steel Corp. in West Virginia.
