Portland-based Vigor Industrial LLC has been sold to global investment firm The Carlyle Group and private equity firm Stellex Capital Management, the firms announced July 25. As part of the deal, Vigor will merge with MHI Holdings, LLC, an 800-employee ship repair and maintenance company in Norfolk, Virginia. MHI is owned by Stellex. The Carlyle Group will be majority owner of the combined company, which it has named Titan Acquisition Holdings. It is not clear whether the headquarters will remain in Portland.
Vigor builds and repairs ships and performs complex fabrication projects for several industries. The company employs 2,300 people and operates eight dry docks across the Pacific Northwest and Alaska.
It has a large union workforce at the Portland Shipyard on Swan Island, with approximately 750 workers currently employed there. The shipyard’s workforce fluctuates, and can at times top 1,000 workers. Another 405 union workers are employed at Vigor Works (formerly Oregon Iron Works) at facilities in Clackamas, Oregon, and Vancouver, Wash.
In Puget Sound, the union workforce is around 250 to 300 at Washington Marine Repair Seattle, Vigor Marine Seattle, and Vigor Shipyard Seattle.
The shipyard workers are represented by 10 unions affiliated with the Metal Trades Council of Portland and Vicinity, and the Puget Sound Metal Trades Council. They are in the middle of a contract that expires Nov. 30, 2021.
Pat Christensen, president of the Portland Metal Trades Council, told the Labor Press he was aware that the company was looking for investors, “but we were blind-sided by the announcement.”
Christensen said the transaction is still subject to review, and the sale isn’t slated to close until the end of the third quarter 2019.
“It’s very early, so we’ll just have to wait for the process to play out,” Christensen said. “Our hope is that it brings investors in who have a long term interest in growing the company and bringing more work to Portland.”
At Vigor Works, approximately 350 workers are represented by Iron Workers Shopmen’s Local 516; another 55 are represented by IBEW Local 48. Local 516 is currently in negotiations for a contract that expires Aug. 31. IBEW Local 48’s contract expires Dec. 31, 2020.
“Negotiations are going well, My belief is we will have a contract in place before the Carlyle deal closes,” said Local 516 Business Manager Phil Casciato.
Casciato told the Labor Press his union also has a memorandum of understanding with Vigor to represent workers who will be doing aluminum fabrication work at a new facility in Vancouver, Washington. Vigor landed a 10-year, $1 billion contract with the U.S. Army to build a new class of landing craft. Reportedly, 300 jobs will be created once the facility is up and running.
Just hours before the announcement of Vigor’s sale went public on July 25, owner Frank Foti sent an email to all employees saying, “Operationally, you won’t see any change. Our current frontline operating leaders will remain in place.”
In a press release, Foti said “this evolution takes us where we want to go, growing sustainable jobs into the future.”
Foti said he will continue as CEO until a new CEO is found. He will retain a stake in the combined company and also serve on its board.
“Together, Vigor and MHI are well positioned with their unique, national assets to grow in the highly attractive ship repair and fabrication markets,” noted Derek Whang, principal at The Carlyle Group.
MHI Holdings LLC consists of MHI Ship Repair and Services, Seaward Marine Services, and Accurate Marine Environmental. All reportedly operate non-union.
The 10 labor organizations affiliated with the Portland Metal Trades Council are Plumbers and Fitters Local 290, Operating Engineers Local 701, Boilermakers Local 104, IBEW Local 48, Laborers Local 737, Painters District Council 5, Sheet Metal Workers Local 16, Teamsters Local 162, Machinists District Lodge W24, and Insulators Local 36.
