Q&A with Kristina Hebert, president of the Marine Industries Association of South Florida

Posted on Written by Reagan Haynes

kristina_hebertKristina Hebert hadn’t planned to work in the family business, but now she’s glad she does. Hebert was on track for a career in law when she reversed course and became the third generation to join Ward’s Marine Electric in Fort Lauderdale.

She is the company’s chief operating officer, her father is CEO and her mom is CFO. Her brother also plays a dominant role in the business that her grandfather formed in 1950.

Hebert also is president of the Marine Industries Association of South Florida — another legacy in part created by her grandfather, who helped form the trade organization in 1961.

She has two sons, 9 and 14, and they, too, are “part of the company fold.” Long-term plans for the business include making sure it’s around to celebrate 100 years.

Q: Tell me about working within such a close family business. It’s got be both fantastic and difficult at the same time.

A: I was a pre-law major and I never had major plans to come work for the family business. It happened that my father was interested in producing a catalog. I’d just taken the LSATs and was in between getting my bachelor’s and going into law school, and he said, “You know, we could really use some help,” so I actually did the catalog part time in 1995. And then I got more involved and more involved.

I’m so thankful now, but if you had asked me in high school or college, it wasn’t as if my plan was laid out as, “You have to come and work for the family business.” Nor will I put that on my sons. But I couldn’t be happier, and therefore I appreciate it. And I had a lot of jobs before working here, so that also gives me the perspective of not only how fortunate I am, but what a great company we have.

12_a_aAs far as working together with family, the key is you don’t walk on eggshells. If there are issues, you address them right away. The politics are left aside. When we’re here, we’re officers and we make those decisions; when we’re having a barbecue or we’re out on a boat, yes, sometimes those issues come up, but your role is family, not CFO, for example.

The best thing is we all want the same thing and we’re all moving forward. When you have partners, somebody may have a different vision, but all of us want our business to be here for the long term. So with that as a given, despite how you get there — there may be some dialogue or different perspectives — but it’s such a comfort knowing everyone wants it to go in the same direction.

My father has a Grady-White, and Balancing Act is the name of the boat. And that’s exactly what it is; it’s a balancing act.

Q: Tell me about your history with the Marine Industries Association of South Florida, as well as plans for the group moving forward.

A: I’m a third-generation board member of the Marine Industries Association of South Florida. My grandfather was part of the original group that got together and said, “We need to have one voice” because they were trying to convince members of, I think at time they were called the city council, to increase power at the docks to have more boats come to Fort Lauderdale. At the time, the docks — especially city docks — weren’t equipped for the boats, so they weren’t coming and staying here, even though all the work was here.

My father served on the board in the late 1980s, and I’ve served on the board for the last 10 years. This is my second time as president. The first time was in 2005 and 2006. I was asked to rejoin and become president again, and it’s really exciting because of some of the changes we have ahead.

It’s been ingrained in me that, in addition to being part of an industry and a longtime business, that you need to … dedicate time and be part of the solutions. You need to roll your sleeves up — take a proactive role.

14_q_aThe Marine Industries Association of South Florida has been around since 1961, so we’re going on 51 years. And associations, just like businesses, go through all types of economies. The association was around during the luxury tax times and has been around during this economic downturn, so what’s exciting now is that we’re really focusing on three main areas.

One of them is promotion of South Florida as the yachting industry capital of the world.

No. 2 is regulation — making sure we work closely with local, state and federal politicians to educate them that “yacht” is not a bad word and that boating is not bad. We’re all the greatest environmentalists because we understand that without the water, we don’t have an industry. We work very diligently to educate [lawmakers] on the economic impact and the importance of and significance of that. While yachting can be perceived as the “1 percent,” the reality is it’s the 99 percenters — it’s small businesses. Our membership is 100 percent small businesses.

The third is professionalism. We’ve been working hard on a unified standardization of professionalism and a code of ethics so that when you come here and you are working with a business, especially one that’s a member of Marine Industries, this is what you can expect — this is the type of services you will receive. It doesn’t matter what company (and there is competition within them), but we are one industry.

Q: Tell me about the capabilities of Fort Lauderdale to service the yachting industry.

A: South Florida has the greatest concentration of skilled artisans in the yachting industry. Worldwide companies have hubs in Fort Lauderdale. In my company we travel all across the world, and all of our electricians are ABYC-certified, all of our facilities are ocean-certified with regard to safety.

We have two facilities in South Florida that can tow larger boats and haul them out of the water. That means they can have larger refits, it means they can get the paintwork done and that triggers all the other list of jobs that trickle down. The key is getting them out of the water, and the key is having a place for them to stay.

We have dredging projects coming through this year to [give us] the depth of water needed for the bigger boats. Dade County and Palm Beach County already have this.

Facilities are investing, reconfiguring because again in South Florida we have 12-month boating. Yes, you have hurricanes and, yes, you have to have plans for that, but the reality is that we have 12-month boating and you have to have service capabilities and haulout capabilities to support that.

South Florida is also a jumping-off point for the Caribbean, so it’s geographically unique in that way.

Q: Is there anywhere like Fort Lauderdale in the world in terms of being a hub?

A: Absolutely not. There are places that compete for it and there are some phenomenal facilities up and down the Eastern Seaboard. However, there is a limitation on weather, a limitation on the employees and it’s very different if you’re in a climate when it’s only seasonal work. In South Florida these are skilled laborers; it’s not like they work on boats in summer months and in winter months go back into residential or land-based jobs. Their work is 100 percent marine.

16_q_aAlso, it’s not all about big boats. The big boats get attention because of the accommodations and because it takes more to haul them out, and also because of job concentration. Larger boats get the most jobs created — whether it’s in repair, facility, provisioning, the amount of crew, the numbers get bigger

Still, there is a huge population of owner-operators in the 45- to 65-foot yachting market that absolutely can have the same services. My company, for example, builds switchboard distribution for custom sportfish boats as well as superyachts, and almost every company has the same philosophy — that regardless of the size of the boat you’re going to get the same quality.

Q: Tell me about your work with elected officials.

A: We bring anybody, whether it’s state, local or federal legislators, down into the engine room of a boat that may not be U.S.-flagged, but when you get down to that engine room I can almost point out at least 10 South Florida companies that have manufactured goods on that boat.

One of the greatest testaments to the work we’ve done with the Florida Yacht Brokers Association is the tax cap. It is about a 6-year effort to get the state to realize that boating is not just a hobby, it’s an industry, and here are the numbers, and these are the jobs created when these boats come here.

Next was to get the state to recognize that these boats have choices. They can come here or go other places, and owners can register them in other places. However, we have three of the biggest boat shows — obviously No. 1 being the world’s largest boat show, the Fort Lauderdale International Boat Show, and then Miami and Palm Beach — so these transactions are occurring in Florida, so let’s give them an incentive to stay.

When we started walking [legislators] through and showing them which companies manufactured each part, we also said, “Let’s look at your community. This person is spending $65,000 at Whole Foods and buying wine coolers that hold 500 bottles of wine. Look at the linens; look at the food. All of this to get provisioned here, and guess what? They’re going to go to North Carolina because they couldn’t keep the boat here. And they’re going to go ahead and spend all that same money instead of spending it here. They don’t want to leave.”

So we worked with the Department of Revenue and found the break at which the boat owners were not willing to pay the tax and register it in other states was at $300,000. So you have an $18,000 tax cap so you can keep that boat here and you can register it in Florida, so that has had a huge impact.

The state thought it was going to cost them money for this to happen … but instead there was about an 800 percent revenue direct because that many boats chose to stay in Florida.

Putting on my federal legislative hat, I worked, along with the Florida Superyacht Association, with the regulatory agencies to educate captains. They just need to know what they need in terms of documents. The Coast Guard, Custom Border Protection and the State Department have been so helpful in educating captains and encouraging boats to come. We’ve been working on these things for a lot of years, but we’re just starting over the last couple of years to see the fruits.

This summer, many of our facilities were very busy and did not see a summer slowdown. Some yards are predicting this will be their busiest fall ever.

It’s been very helpful because we’ve been able to predict labor demand, we’ve been able to forecast, and this anchor group, my company just hired one and will hire another to keep up with the amount of work coming.

This year, for the first time, the Marine Industries Association of South Florida will have an actual presence at the Monaco show. We’re hosting an event at the Monaco Yacht Club to let businesses know, “This is what’s going on in South Florida, so when you go across, this is what you can expect in terms of facilities and services.”

Q: You were also in Washington in July testifying on a separate issue. Can you talk about that and tell me where it all stands?

A: That was a hearing that originated at a Fort Lauderdale International Boat Show, where we asked legislators to come together for a roundtable [to discuss] some of the issues facing the marine industry in Florida.

There was a federal act created in 1927 called the Longshore and Harbor Workers’ Compensation Act. It was created because if a guy was on a boat at sea, he was [covered under other federal legislation], and if he was on land, there was applicable state compensation. But what if he was in between, along the navigable waters, or at the dock? There was a gap. So in 1927, when there really wasn’t a recreational marine industry to speak of, this act was created for workers at port, loading and unloading cargo and so forth.

As the recreational marine industry got larger we got clumped up into this act. So now working on navigable water didn’t only apply to a port, it applied to marinas, so in 1984, in an effort to capture the recreational boat industry, Congress came up with some amendments saying if you work on a recreational boat under 65 feet, you’re excluded. If you manufacture a boat under 65 feet, you’re excluded. If you work at a marina, you’re excluded.

Fast forward to the year 2000. A 65-foot boat is [no longer] big. So what was happening was the insurance industry didn’t know what to do and there was a tendency to put all of the industry in this act.

So the local association, MIASF, was able to get an amendment added to the American Restoration and Recovery Act that said if you repair recreational vessels or dismantle [them], you’re excluded. There was no footage, so therefore I was able to predict my overhead. Insurance companies were able to get coverage for workers because the reality is this [coverage] was expensive. And three- and four-man businesses were unable to afford a $20,000 or $30,000 premium. So workers were going without coverage.

We got this done in 2009, but in 2011 the Department of Labor … decided to redefine what a recreational vessel was and threw everybody back under the act. So as of January this year every company all across the country that deals with recreational boats was having to pay for all this duplicative coverage.

At the hearing, we were there to say, “This is wrong. You got a lot of it right, but this part of defining recreational vessel you got wrong.”

After that I met with the Department of Labor, and we’re working with them to submit a different definition only as it applies to recreational repair, not manufacturing, to have them understand and afford relief.

Because what it has done is forced workers to go without federal coverage and forced people not to hire. If your overhead is so cumbersome you can’t afford to hire people, companies are going to have to lay off workers even though [they are] busy. We have huge bipartisan support. We actually have a meeting the week they come back from recess to reword the language so insurance companies aren’t confused and people can get back to what they’re doing.

Q: Talk about changing and evolving technology today on large yachts.

A: A lot of people talk about, ‘Where is American boatbuilding?’ I will tell you there is a lot of innovation. South Florida being a hub, you see a lot of products. These boats are constantly changing. There are a lot of technologies allowing these boats to go farther than they ever did before. For example, when you’re talking about bigger boats or where they travel, they’re going to places that they’ve never been, so they need to have reliable communications.

[Our company has] developed two-way communication that enables a boat to be under watch. We can two-way remote and work with them all across the globe. We can look at their power, read their logs. We have video capabilities, so we can see what’s going on in the engine room so there’s immediate troubleshooting, immediate diagnostics, there’s immediate data. Five or 10 years ago you could have emailed it, but now I could be on a laptop in Monaco and have a boat in St. Martin and we would be able to two-way and help them diagnose where they are, offer them some data to isolate the problem and offer troubleshooting. That’s also helpful for the technicians that we’re going to fly out because immediately they know what they’re looking at and what needs to get done. That gets the boat to safety. For my company, customer service is not first, it’s safety.

Q: You travel a lot for what you do. What parts of the world do you see as emerging markets?

A: We are currently working on trying to be a part of a new build in Turkey, and Turkey has been projected as an emerging market. There are manufacturers over there that have a fair amount of new builds and orders and know how to build new boats.

I went to Taiwan and Kaohsiung and met with the Taiwan Yachting Association, and they are going to be hosting a show in 2014 and invited some members of the media and industry to go look at their plan. I was very impressed.

The government there is spending money to help support that; they recognize it’s an export market and they’re working very hard at investing a lot of money in the entire industry, to build infrastructure and marinas. I can tell you firsthand, I toured probably nine facilities, and they have really invested. They want to be a yachting industry capital over there, and the government is subsidizing that. John Lu of Horizon Yachts in Taiwan is No. 7 on the global order book, and they’re pretty proud of that. They’re exhibiting at the Fort Lauderdale International Boat Show.

This article originally appeared in the October 2012 issue.

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