Boat Industry Tugged At Businessman's Heart -- Nordic Tugs Gaining Attention

From the outset, Roger Drill seemed a natural to head Nordic Tugs, one of this area's up-and-coming boat manufacturing companies, which features tugboat-style pleasure craft. He had grown up messing around with boats on Lake Superior, where his father owned boatyards in Duluth, Minn.

But before coming to Seattle's boating industry in 1989, he tacked through the mortgage banking business in Colorado, even thinking he had given up the boating business forever as he moved from a bank job to founding his own lending company in Colorado Springs.

But when he brought his sailboat to Seattle for a vacation cruise, he succumbed to the lure of boating.

"Boating here is a real industry with both pleasure boaters and commercial interests that are supportive of each other," he said. "I knew I had to get into it."

Drill sold his business and moved here with his wife, Kaylan, and their two children. He and Kaylan began selling boats as a team on Lake Union, living on their sailboat. Kaylan continues as his major adviser in the Nordic Tugs venture.

Friendships in Minnesota and Drill's reputation as a savvy entrepreneur led Stan Lovestedt, a Minnesota investor, to ask Drill to assess Nordic Tugs as an investment.

Lovestedt got involved and became company chairman, joining longtime owner Ed Shelton, a Florida boat dealer who had purchased the business from founding brothers Jerry and Jim Hustad. The new owners asked Drill to run the business.

Drill became president and an owner in February 1994. He was charged with bringing new life to the business, based near Burlington, Skagit County.

Now the production of tugboat-style fiberglass pleasure boats is taking off. The boats' interiors are reminiscent of earlier times but are modernized with built-ins and the latest in appliances and pilothouse technology.

The distinctive boats are popular here and on the East Coast and in Europe.

"People think the tug style is cute and are attracted by the quality woodworking," Drill said.

Although the pleasure-boat business is highly speculative, the future for Nordic Tugs seems promising:

-- The company will produce and sell 25 pre-ordered boats this year, up from 16 in 1994, for sales totaling about $2 million. It is heading toward sales of 30 or more boats in 1996.

-- Although barely profitable (less than $100,000 this year because of expansion and retooling), the company has no major debt.

-- Increased sales have boosted employment to 47 from 16 since the company moved from Woodinville in the late 1980s.

-- New tooling and production streamlining have shortened construction time by 40 percent, so boats can be delivered in as little as eight weeks. Space is being added to increase production of the popular 26-foot model, which retails for $92,000.

-- Planning for a 37-foot version is moving ahead.

-- A 42-footer priced at $400,000 to $425,000, the company's largest boat, is expected to compete successfully with some longtime pleasure-boat favorites such as Grand Banks and Krogen.

-- There's no competition from other tug-style pleasure boats today. Lord Nelson and Sundowner Tugs, earlier rivals, are out of the market.

Shelton said that demand for the boats is greater than the factory can meet and that a charter operation in the Virgin Islands is eager to buy a fleet of them.

All Nordic Tugs have single engines. In addition to the 26- and 42-foot models, the company sells a 32-footer for around $175,000. Base price for the company's Pacific Trawler, a more traditional 37-foot boat, is $195,000.

As is customary in the industry, boats are built to order, either for one of Nordic Tugs' seven dealers or for individual customers.

When Drill joined Nordic Tugs, the company was at a turning point. The owners either had to find a way to move ahead or close down.

They agreed to continue with new investors but also decided not to go into major debt.

Lovestedt, Shelton and others contributed cash for fiberglass molds and other expansion as needed, Drill said. Small owners - including Lee Knudsen, owner and president of Doc Freeman's Inc., a boating-supply company on Lake Union - offered credit when it was needed to keep the company going. Landlord Oran Jones sometimes waited for his rent.

Drill's goal is to double production in the next 24 months and lock in at about 50 boats a year.

From the company's start in 1980, Nordic Tugs' boats have been designed by Lynn Senour, longtime shipwright-designer who began his career in the 1930s at Lake Union's Grandy Boat Yard.

Successful at designing and building all kinds of boats, he linked up with Jerry Hustad in the late '70s. Hustad dreamed of a pleasure boat that resembled a classic Foss tug of the 1920s. Hustad started Nordic Tugs with Senour's design, which still is used.

"This boat has some magic. I've always felt something special for it," Senour said recently as he admired owner Shelton's 32-foot "Reminisce," being prepared for shipping to the East Coast.