Employees at North River Boats in Green have suddenly become owners of the company.
Tuesday afternoon, the owners of North River, Brent and Chrys Hutchings, announced that they were starting an Employee Stock Ownership Plan (ESOP) for the employees that are eligible. And there was even more good news for the employees. The program is retroactive back to Jan. 1, 2016.
Brent Hutchings told the employees he wanted to share the wealth with them and they would keep all the other benefits they currently have. And Tuesday afternoon, he informed the employees the company is transferring 33 percent of the ownership of the company to the ESOP to benefit the employees.
“The employees are a most deserving group, because they went through the downturn and came out the other end and they already behave like owners,” said Hutchings. “It feels just and right for them to become owners. And the good news is it doesn’t cost them anything.”
Beneficial State Bank, based in Oakland, California, financed the multi-million dollar deal, helping Hutchings achieve partial liquidity and rewarding employees.
“Beneficial played a huge role three years ago providing the necessary debt financing to enable me to buy the business and again today by providing the debt funding for the ESOP,” Hutchings said.
Each qualifying employee will receive an initial contribution for 2016 equal to 16 percent of a year’s gross pay, with additional allocations each additional year that they stay with the company.
“The goals of the ESOP match very well with the goals of the Roseburg community and North River to keep the company here versus sell to a buyer that might move it somewhere else, and to retain really good employees and to share the wealth,” said Chrys Hutchings.
It was welcome news for the employees, especially the ones who have been through tough times, when the company went from highly successful, to extended receivership, before the Hutchings bought the company and turned it around.
Jay Conn has been with the company almost since the beginning, starting in 1987, and he’s seen it go through all the uncertainty and climb back to a well financed company again.
“It’s pretty amazing that we work for an owner who’s willing to do so much for his employees. It’s been a long time coming and a lot of hard work getting here and to have Brent and Chrys do the things they do for their employees and share the wealth is absolutely amazing,” said Conn. “We look for many more years of exciting times with North River Boats.
North River has gone from about 65 employees in 2012 to 131 today, and revenue has more than tripled during that time.
More than a hundred of those employees are eligible for the stock ownership program.
“It’s incredible, Brent’s always been very good to us,” said Rob Cross, who has been with the company since 2001. “Everything that Brent and Chrys have done have already made it better and this is just adding to it.”
Hutchings became the CEO in 2012 before buying the business two years later. The company saw record growth after the downturn in the economy coupled with a leadership crisis that nearly put the company out of business, but the employees would not let that happen.
“The reason the company made it through that period was the sheer will and dedication of the remaining employees,” said Hutchings. “Their commitment to service and quality and their ability to even win new customers, even during a period when their future was uncertain is a testament to their will and their commitment to doing the job well.”
North River has gone from producing 118 boats per year to 350 now, and about half of the business is for government and commercial contracts nationally and around the world. The other half is for recreational boats.
Hutching said the fact that they build for the Navy and the Coast Guard and other demanding customers, puts them in a better position to create a better recreational boat.
“We borrow from the design, the technical difficulty of satisfying those other customers, and that’s why I believe North River can command a premium price for a premium product,” said Hutchings.
The employees average length of tenure is over 10 years, and some have been there for 30 or more. Hutchings said they have always had a commitment to the employees, so the ESOP was just one more step in that direction.
He and his wife are co-owners and will remain the majority owners, and he emphasized that it won’t change anything for the employees, but they will have a very good retirement package to look forward to.
