Page 38: of Maritime Reporter Magazine (November 2002)

Workboat Annual

Lerchbacker Puts Austal USA on the Fast Track

By Angie Drobnic Holan

When Austal Ltd. of Henderson, West- ern Australia, started looking last year for a CEO to lead its U.S.-based opera- tions, the job description must have been daunting. They wanted a leader to take the helm of their newly built shipyard in

Mobile, Ala., and turn it into a major contractor for both military and com- mercial vessels in the United States.

Austal had recently entered the U.S. market for the first time, intent on com- peting with higher-profile rivals such as

Incat/Bollinger, Derecktor Shipyards and Kvaerner.

The company settled on Alan Lerch- backer, 50, an energetic former Navy

Aquanaut with a business background, who took the position in February 2002.

Lerchbacker had never heard of Austal until a headhunter contacted him. But the more he learned about the job, the more excited he got, he said. "Austal is very entrepreneurial. They don't have a lot of corporate layers of management and they're very on the edge technologically," Lerchbacker said. "I felt like I'd been training my whole career for this."

The son of Navy parents, Lerchbacker grew up in the Cleveland area before attending the U.S. Naval Academy in

Annapolis, Md. Over a 26-year military career, he worked with the Explosives

Ordnance Disposal Unit and headed up the Navy's recovery efforts for the doomed space shuttle Challenger in 1986.

Lerchbacker believes in keeping the troops well informed and loyal by dispensing state-of-the- market info via regular "town meetings."

His shipyard experience included run- ning operations for the 2,200-personnel

Naval Shipyard on Guam, as well as overseeing quality and strategic plan- ning for 22 ship repair facilities with a $574 million budget and 18,000 work- ers.

After retiring from the Navy, Lerch- backer earned a master's degree in busi- ness administration. He went to work for the Metropolitan Water District of

Southern California and then a state business incubator project.

Though 50 and a grandfather, Lerch- backer appears years younger and bears a strong if surprising resemblance to

Steven, the Dell Computer Dude. In his spare time, he plays professional volley- ball and enjoys renovating old houses as a hobby.

Lerchbacker leads a management team that combines equal portions American military and Australian shipyard experi- ence. Simon Thornton, a 30-year veter- an of Australia's aluminum shipbuilding industry, heads up operations in Mobile.

Another Australia transplant, Chris

Pemberton, serves as Austal USA's vice president of marketing and sales.

Rounding out the team as vice president of marketing and administration is Bill

Pfister, who, like Lerchbacker, is a for- mer Navy officer and Naval Academy graduate. Pfister has private-sector ship- yard experience as well: He worked at

Halter Marine's Mississippi operations before leaving to help Austal scout its location in Mobile.

The three vice presidents guided

Austal USA for two years before Lerch- backer's arrival. Because of federal mar- itime laws, Austal had to open a ship- yard on U.S. soil in order to sell ships that could sail between U.S. ports. In 1999, Austal selected Alabama, and tax breaks from a city government eager for high-paying welding jobs sweetened the deal.

Another factor in site selection was

Austal's partnership with Bender Ship- building & Repair Co. Inc., an 83-year- old Mobile shipyard revitalized in recent years by third-generation owner and president Tom Bender. Bender's invest- ment in laser-cutting technology has been a boon to both companies, and the shipyard also shares its dry-dock facili- ties with Austal USA when needed. Ben- der holds a 30 percent stake in Austal

USA, while Austal holds 70 percent. "Nothing is more important than local eyes and understanding what the local issues and the local dangers are," Pfister said of the partnership.

Since February 2001, when Austal

USA opened its boat-building shed, the operation has delivered two vessels and taken orders for four more. The first two vessels sold were not U.S.-flagged, but were bought by Otto Candies LLC, a

Louisiana-based oil and gas support company, for offshore use. Austal's first

U.S.-flagged vessel was sold to Light- house Fast Ferry of New York, which operates under the name New York Fast

Ferry. The 85-ft. (26-m) ship was sched- uled for delivery in October 2002.

The other three announced contracts include a small cruise ship for Island

Queen Cruises of Miami, scheduled for delivery in November 2002; a dinner cruise vessel for Cloud Nine of New

York, scheduled for April 2003 delivery; and a 141-ft. (43-m) catamaran for Cir- cle Line- Statue of Liberty Ferry Inc. scheduled for June 2003 delivery.

Though Austal USA won't disclose the prices for the vessels, Australian news reports have pegged most of them in the $12 million to $15 million range.

One contract the company lost, how- ever, was due to an overly high bid.

Austal submitted a proposal for two large car/passenger ferries to be used by the Alaska Marine Highway System, a division of the Alaska Department of

Transportation. Austal's designs were fine, project manager Gary Smith said, but the price tag came in too high. The

Austal bid was about 25 percent higher than the one offered by Derecktor Ship- yards of New York, Smith said. "It was pretty cut and dry, really," he said.

Lerchbacker said Austal sticks by its 38 Maritime Reporter & Engineering News