Like it has done nearly 200 times before, Nichols Brothers Boat Builders will christen a newly completed vessel this weekend.
This simple ceremony, meant to formally welcome and bless a boat into the realm of Poseidon, has been done so many times by the shipyard over the years that it’s practically routine. But the Oscar B, a stout but seemingly insignificant 23-car ferry, isn’t just any boat. It’s special.
It was constructed for Wahkiakum County as the replacement vessel for a ferry built by George Mark Nichols in 1961 in Hood River, Ore. A short time later in 1964, Nichols’ son Frank Nichols relocated to Freeland and opened his very own shipyard, which would later be taken over by his sons, one of whom includes current Executive Vice President Matt Nichols.
So, Saturday’s ceremony is more than a simple christening — it’s a celebration of 50 years in business, and a reminder of one family’s mark on the shipbuilding industry.
The machine shop 
When Frank Nichols moved to Freeland and opened Nichols and Downing Boat Works with business partner Jack Downing, he already had more than 40 years of shipbuilding experience under his belt. The family had been building boats in Oregon since the 1930s.
But starting out somewhere new isn’t easy. The shipyard was nothing like the mega complex that it is today, but rather was a half-acre lot on the shoreline with a single machine shop. Under that roof was a steam engine, which powered every other machine in the shop, and the entire Nichols family, including Frank Nichols, his wife and their 11 children.
Windows covered by plastic and parts of the building lacking flooring, the family slept in one room with a kitchen in the back.
“It was tough living in those days,” Matt Nichols recalled. “But we never complained and we all got along OK.”
The fledgling business’s first job was a 42-foot steel beach seiner, commissioned for a fisherman who lost his boat in the great quake that decimated the Alaskan fleet earlier that year.
In a January 1965 interview, Nichols told The Record that he hoped the vessel would lead to more business, allowing him to “take over [the family’s] living quarters for more work space.”
“Maybe, if this boat comes out as well as we hope, that is what will happen,” Nichols said.
Well, it did.
Half a century and 184 ships later, Nichols Brothers Boat Builders is a heavyweight among Washington shipyards, employing hundreds of workers and dumping millions into Whidbey’s economy every year.
Characterized as medium-sized yard that produces a wide variety of vessels, the yard has earned a reputation for quality among customers and competitors alike.
“It would be hard to overstate the value Nichols Bros. has had throughout the years to the maritime industry and our community,” said Frank Foti, CEO of Seattle-based Vigor Industrial. “They’re a quality operation with a commitment to service and industrial job creation.”
And while rocky financial times in recent years have resulted in new ownership, with two generations of Nichols still working at the yard — one in a key leadership role — the business remains a family affair.
Economic heavyweight
Quantifying a single business’ impact to an area’s economy can be tricky and imprecise, but Nichols Brothers is to Whidbey Island what Boeing is to Snohomish County, according to Ron Nelson, executive director of the Island County Economic Development Council.
“The big impact of Nichols is the number of living-wage jobs in a retirement community,” he said.
Commanding a roster of about 235 employees, the shipyard is the largest private employer located in rural Island County — not counting Boeing at 1,175 — and is the sixth largest overall under Wal-Mart and public agencies such as the Navy base, hospital, county government and Oak Harbor School District.
Nichols Brothers, which is now owned by Ice Floe, LLC, declined to release its annual payroll information, but a report issued by the economic development council in 2007, said the company was shelling out about $20 million annually for approximately 200 employees.
Equally important, said Nelson, is that manufacturing jobs add a diversity to an area’s economy that provide stability, but it also is a job creator in itself. According to a 2002 report by the state Office of Financial Management, for every manufacturing job two other positions are created in the surrounding area.
“So take [the total number of jobs] and double that, and you have the total number of jobs that are created by Nichols Brothers,” Nelson said.
Chet Ross, president of the Freeland Chamber of Commerce, added that where employees live is important. If even 50 percent of Nichols Workers live on South Whidbey, that’s $10 million dumped into the economy every year, he said.
The exact number is unconfirmed, but Matt Nichols said he believes the vast majority, “99 percent,” live on Whidbey Island.
The economic impact of the company’s payroll and sales taxes alone is “major,” he said.
“They are kind of the [financial] elephant of Island County,” Ross said.
Nichols Brothers has seen its share of troubles as well, suffering community criticism for environmental issues, and struggling with permit issues in recent years. The yard has since installed expensive water treatment systems that discharge water that exceeds federal minimums.
The shipyard faced its greatest challenge in 2007 when it filed for chapter 11 bankruptcy and laid off its entire workforce. The financial problems were largely the result of a lawsuit by Hornbeck Offshore Services for defaulting on a contract to build two offshore supply vessels.
In February of 2008, Nichols was purchased by Ice Floe, a limited liability corporation backed by Treadstone Capital Management, L.P. of Dallas and Joseph E. Usibelli, of Alaska, for nearly $9.2 million.
Nelson and Ross both noted that Nichols has for years been a community supporter. Every year the shipyard brings in a barge for the Celebration of America July 3 fireworks. A couple of years ago yard workers volunteered time and equipment to take down and recondition the Trinity Lutheran Church steeple.
And Archie Nichols, a former company owner with Matt Nichols, shepherded students from three island schools in rebuilding part of the lighthouse at Fort Casey State Park. The company has been doing stuff like that for years, Nelson said.
“It goes beyond what they do economically,” he said. “The bottom line isn’t the only line.”
What’s next
At the moment, the shipyard’s financial troubles seem to be water under the keel. The firm has work lined up through 2016, and employee numbers are holding steady.
Along with the Wahkiakum, the company is partnering with Vigor to build three 144-car state ferries. One is already built, another nearing completion and the third just begun. The contract for the final boat alone will bring $26 million for the Freeland shipbuilder.
According to Matt Nichols, another 50 years in business is entirely possible. They’ve made it this far not by luck, but by focusing on quality and staying on top of new technology, he said.
“You have to be prepared and ready to change,” Matt Nichols said.
He maintains that diversification is one of the company’s chief strengths. Like agriculture, shipbuilders have to remain flexible and be able to produce vessels that are in current demand. For example, the yard began building fishing boats, but made a name for itself as a producer of high-speed catamarans when the market demanded. They’ve built nearly 40 of them.
Its current ferry contract aside, Matt Nichols said passenger boat orders are slow but it seems the company can’t build tug boats fast enough. They’ve built at least six since 2006, according to Nichols Brothers’ website, and are currently working on two articulated tug and barges (or ATBs) for Kirby Offshore Marine. Large, ocean-going tugboats, they operate differently than standard tugs in that they lock into a barge from behind to form a single vessel.
It’s another example of building for the existing market, and staying on top of new technologies. One of the company’s greatest triumphs in terms of producing advanced boats was the construction of the $60 million X-craft for the U.S. Navy in 2005. The vessel can hit speeds of 74 mph, and remains in operation today in Florida.
Such victories were probably unimagined by founder Frank Nichols, according to his son, Luke Nichols. A master shipbuilder at the yard, Luke Nichols said he was the company’s first paid employee.
“Nobody ever had a clue,” he said, of the firm’s growth. “You just kept adding on. You can’t plan something this big.”
Matt Nichols, Luke Nichols’ brother, said the company’s future looks bright, but it’s unclear whether another Nichols will be at the helm once he hangs up his hard hat. He has sons in the industry, but it’s simply too hard to predict where their careers will lead them. He suspects he’ll be the last.
“It’s probably a true statement, that I’m the last of the Nichols [to be in a key leadership role],” Matt Nichols said.
“I think it’s run its course,” he added.
His youngest son George Nichols, 28, drafts ship mechanical systems at the yard. His other boys in the business are Justin Nichols, owner of his own marine services firm, and Bryan Nichols, director of sales for Vigor. George Nichols said it’s hard to know what their futures hold, but he did say anything is possible.
“Boat building is kinda in the blood, and it’s hard to get it out,” he said.
CHRISTENING OF THE OSCAR B
The event is scheduled for 12:30 p.m. Saturday, Jan. 10, at Nichols Brothers Boat Builder in Freeland.
THE BOAT
Length: 115 feet
Beam: 47 feet
Draft: 4 feet
Vehicles: 23 cars
People: 100 passengers
