Saunders Yachtworks, John Fitzgerald, Gulf Shores

In March, Linda and I attended the annual Saunders Yachtworks Boatyard Bash party held at their facility in Gulf Shores. They host the party annually in conjunction with The Wharf Boat & Yacht Show each year. I’ve always been intrigued by Saunders Yachtworks.

Traveling down Canal Road from Gulf Shores to Orange Beach, you can see their large facility and yacht basin teeming with beautiful yachts at the dock or in the boatyard on blocks. It’s the largest yacht service facility in the Central Gulf Coast and is very impressive.

Saunders will celebrate 65 years in business this year, and the company has evolved and grown tremendously. Begun as Saunders Engine Company, an industrial diesel engine service repair center on Mobile’s waterfront, John Fitzgerald is the President. We sat down to discuss its evolution and to take a peek into the future. John is the son-in-law of Andrew Saunders, who took over the business his father, Andrew Saunders, Sr., founded. 

Andrew Saunders served as the Alabama Board Chair of the Nature Conservancy when Linda was Director of Development. They have enjoyed a long, mutual friendship. Andrew is now retired and serves as Chairman Emeritus of Saunders Yachtworks. He is still quite active in conservation efforts in the Scenic 98 Coastal area, particularly around North Wolf Bay where he has a home. 

On many occasions, Andrew and I have discussed the need to protect and preserve the coastline, and his environmental interest has left an indelible impression on Saunders Yachtworks. As John and I get started, he tells me how he came into the picture. He grew up in Arlington, Va., and earned his education degree at the University of North Carolina.

He taught math in middle school for five years before earning his Masters in School Administration at the University of Virginia. He met Andrew’s daughter, Andolyn, who was studying counseling at the School of Education. They married in 1995 in Mobile. By then, John was a high school assistant principal in Virginia, where they lived, and had their first child in 1996.

Andrew and his late wife, Carolyn, wanted to get Andolyn and John back to Mobile, and he approached his daughter about coming to work for the business in a human resources position that he would create for her. She told her father that she preferred to stay home and raise her growing family, but her husband John was interested. 

“This was all a new relationship,” says John. “At that point, Andrew didn’t know me well and expressed that the position was strictly to entice Andolyn to move home. I knew a little bit about the company. I attended the Christmas party and was impressed by how the employees took ownership of the company as if it were their business. It was like one big family.” 

By this time, Saunders Engine Company had 130 employees and had opened a facility in Panama City, Fla., that serviced both trucks and boat diesel engines. John’s interest grew, but he needed to convince Andrew that he was up to the task.

“It’s rare in education that you have a cohesive group. I worked in good schools, yet getting people on the same page was difficult. There are lots of competing interests. I was very impressed by the people Andrew employed. They had a strong sense of responsibility to get things done. It was a dynamic place. It was compelling to me to take on a challenge. I already had experience working with people and thought I could do the HR job and had the tools to do it.”

In 1997, John wrote Andrew a letter formally requesting an opportunity to be considered for the position, including his resume. Andrew famously turned John down, telling him it was a job he designed specifically for Andolyn and that he wasn’t really looking for an HR person. 

In 1998, Andrew and Carolyn, still wanting John and Andolyn to raise their growing family in Mobile, suggested that if they could get to Mobile on their own, he would consider John for the position. “It’s possible, but we need to get to know each other better,” Andrew told him. They did make their way to Mobile, and John got a job at Callaway Smith School in the Mobile County School System.

The school is located in Detonti Square near Saunders Engine Company’s facility on Conception Street. Each afternoon, John would visit with Andrew and talk about the company. The company was growing, and after a year, Andrew offered John the HR Manager job. 

“I started in the summer of 2000. I remember everyone was worried about Y2K, and they were bringing in all manner of consultants. I wanted to get through that before leaving the school system.” He tells me that Andrew made two important decisions. First, he had John report to Mike Hofto, the CFO, and not himself. 

“Mike was tight with money and always wanted to assess the risk and reward before moving on something. Andrew is a big thinker, and always ready for the next big idea, so it was a nice balance. I learned from being in the middle and gaining perspective on moving forward with the business from two opinions.” 

Secondly, as a company, the business was mature. The employees had a great sense of what they were doing, and there wasn’t a lot of turnover. John tells me management knew how to handle personnel problems without much guidance. It gave him more opportunities to learn each aspect of the business. 

Mobile’s commercial division was well established. Panama City never really found its footing and didn’t have a strong identity. It operated more like a local diesel repair shop. Andrew wanted to make a distinction between servicing industrial boats and recreational boats. That led to the creation of Saunders Engine Company’s Yacht Service Division. In 1995, they launched Saunders Yachtworks at Orange Beach Marina as a separate LLC with outside investors. 

John credits Andrew’s ability to hire skilled people with a strong work ethic. “He always said talent attracts business, and he is right. Yacht service needed a different approach. Andrew wanted yacht-savvy employees in white vans and tennis shoes to access engine rooms of larger yachts.” 

With 8-10 employees, Saunders Yachtworks was brought into the fold by Saunders Engine Company in 1998. “By the time I joined the company, the management group for Saunders Yachtworks was relatively new. There was more of a need for management and employee support. I had a stronger connection with the Yachtworks side of the business than the engine repair side.”

”From 2000 on, John spent time with every person and manager hired and was exposed to all aspects of the business. “Yachtworks was a new venture, adding a lot of specialized people. It needed my help more than the Mobile division, which was stable.” A couple of key things happened that helped John gain his footing. 

“I became the tech guy,” he says. He transformed the internal communications systems to more cellular and PC use. He attended a seminar and learned that the thing employees disliked the most was being on 24-hour call to service clients. “I asked to be on the call rotation. This created a whole new opportunity for me to learn what our people were dealing with day-to-day.”

This enabled John to strengthen the relationship between employees and management and to become more involved in the business. “By going on call and then working with the mechanics addressing the issue, I learned a ton about the mechanical side of the business. I now had an interface with the people doing the work, a greater appreciation for how the business worked, and we became totally interdependent.”

A deep study on Yachtworks revealed its great growth potential... In 2006, John went to Andrew and asked to become the VP of Yacht Services. He and Andolyn were living in Spanish Fort, and he was spending most of his time in Orange Beach at the Yachtworks facility. “I was less involved in the commercial marine side and had helped hire 80% of the Yachtworks employees.” 

Then a few major events happened. In 2007, Florida Detroit Diesel bought the Panama City division. Six months later, Kirby Corporation purchased Saunders Engine Company in Mobile. In January 2008, the company reorganized. Andrew retired to become Chairman of the Board and John became President. Andrew remained the majority stockholder but relinquished day-to-day management duties. 

At the same time, Saunders Yachtworks leased 13 acres on the Intercoastal Waterway from the City of Gulf Shores. “We were limited at Orange Beach Marina. We were on top of each other and our 60-ton Travelift was completely landlocked. Boats were getting bigger, and we were limited to three or four boats at a time. We needed more capacity.” 

John tells me the company was financially secure and not beholden to anyone. They built a new facility that opened in January 2009 and celebrated the company’s 50th anniversary in May 2009.

“By the end of 2009, the recession was in full swing, and we had to lay off 20% of our employees. Then the BP Oil Spill happened in 2010. People didn’t come to the beach for a year. There was oil in Perdido Pass. There was so much uncertainty, conspiracy theories, it was a strange, uncertain time for everyone.”

The message early on was that BP and the government planned to make Saunders Yachtworks whole. “We claimed a two-year business loss and were treated fairly,” says John. “We had good records and skilled employees and continued to pay them as instructed. Our strategy was to get back to work. We settled early and didn’t join in any of the later claims. We were made whole.” Within two years, all of the laid-off employees were offered their jobs back. 

Then Andrew discovered a Department of Commerce Economic Development grant that required an infrastructure improvement but had to be applied for by a municipality. The grant called for 80% to be paid by the Feds and 20% by the municipality, in this case, the City of Gulf Shores. Following the oil spill, the City was struggling. 

The intention was to build a yacht basin next to the new facility with increased capacity for larger boats. Putting in the service bay qualified as an economic improvement project, and Saunders Yachtworks decided to cover 20% of the funding required by the City of Gulf Shores. It all came together in June 2012. “It was a public/ private partnership in the truest sense. We now have the largest recreational boat lift on the Northern Gulf Coast.”

At the grand opening celebration, the first yacht lifted out of the water by the new 150-ton Travelift was a 102’ Broward. “That was quite a day, and the entire company celebrated.” The lift can handle 125’ aluminum or 120’ fiberglass yachts. I commented on how clean and neat Saunders Yachtworks always appears. The party we attended was held in the facility and cleanliness is a hallmark of the company, not just during parties.

“Andrew has always been a stickler for presentation. Anyone should be able to walk through our shop, whether you are a banker, a truck driver, a doctor, or a boat owner. We strive to keep things clean and organized, and it’s instilled in our employees. We gained a lot of clients by keeping our facilities clean and orderly.”

“Conservation is a big part of our mission. Without clean water, we don’t have a business. We believe in the vibrancy of the fishery, sea grasses, and crustaceans. Regeneration of the species is our livelihood. There are no 70’ Viking sportfishing yachts if there aren’t 600-pound marlin in the sea. We have to run with the idea that clean water and a pristine environment give our customers a place to enjoy their recreation.” 

John tells me this is what drives and motivates Saunders Yachtworks. “Nothing goes into the water here. We have a saying, ‘Don’t let it slip.’ We want to go above and beyond what is required by the EPA. It is a constant consciousness of safety, efficiency, and ‘engineering crisp.’ It is a part of every meeting we have. It has become an extra advertisement that earns us customers. We want people who visit us to think, ‘Somebody thought about this before they did it.’”

He continues, “Environmental issues are all created by industry, and we must do better. It’s all about the water. It feeds our environmental mission, but it’s also good business.” 

We spend a minute discussing the economy, especially concerning boats. From 2008 to 2009, Saunders Yachtworks business was down 25%, so it’s not recession-proof. “Nobody needs a recreational boat. Period. You may want it, but you don’t have to own one. People will go to low maintenance or drop contracts in hard economic times. Fortunately, we haven’t seen demand drop at Saunders Yachtworks.” 

He tells me that demand for boats under 40’ has dropped recently, and dealers' inventory is not moving as fast as it was during the pandemic. “High inflation and high interest rates have had a negative effect. If you are in the market to repower your boat, it’s a good time to do it! Our business is a high fixed-cost business that creates a machine that has to eat every day. When we are doing well we are still operating at a low margin. Volume and efficiency are key.” 

As employees have reached retirement age, they’ve seen more post-Covid retirements. “Recruiting and retention of employees is critical.” He says that the freedom of potential employees to do what they want in the current environment is a new reality. “Employee turnover is as high as I have ever seen it. I think that is true for most businesses. We’re looking for young people with the energy, skills, and ambition to grow their careers.”

Saunders Yachtworks offers growth for those with a skill set and a cooperative spirit that can be applied to their business. “We have a concerted effort underway to build a great team. We want people who ask, ‘How can I contribute?’ My goal is to position the company in a healthy state for the next generation to keep it going. We want to have people with a servant leadership mentality.”

Regarding the Scenic 98 Coastal area, he says they are blessed to live and work in Baldwin County. “We are fortunate to have a great relationship with our community. We are well-positioned for the future. People will always come to the water, especially by boat. There will always be boats here, so business should be good.”

I appreciate everything about the family atmosphere of Saunders Yachtworks. They are exceptionally good people, and it shows in everything they do. Thank you, John, for your time and hospitality. You have a great story. Thanks for sharing it with us. We wish you and your team much continued success!