Bell: You asked a good question.
I have observed over the last 30 (or so) years that these horizontally integrated companies usually end up feeding off one sector or the other. It is rare that both divisions make the same amount of profit. When the new owners figure that out (ala Hornbeck HOS) they tend to either dump the less profitable unit, or make radical changes. Remember when Hornbeck bought Leevac, and the Hess fleet. Everyone was scared shitless of them, A few guys quit other places and went there thinking it was going to be the ânext big companyâ to work for. Then the HOS President finally figured out that the GOM was the place to be (like they were used to) and they just stopped the tug and barge expansion. How many new HOS OSVâs do you see in the maritime reporter, or workboat? Whenâs the last time you saw a HOS tug in the mags?
In this economy, and with there being a over supply of bottoms, I donât see how Ksea can be âmadeâ profitable. Too much cutthroat competition only depresses wages and opportunities. A while back I heard through he gravevine that Ksea was doing a several trip contract to Puerto Limon job for cost!!! Just cost. no profit!!! Itâs noble to say youâre just trying to keep the guys employed, and the equipment running, but even me, a non owner can figure out that that is pretty dumb way to run a business.
It sounds really simplistic, but these marine companies CAN be managed by MBAâs, and the bean counter divisions, but the ones that seem to stand out are the ones still being managed by actual experienced marine operators. Throw into the mix when an INland corporation buys an OFFshore (coastwise) corporation. These are two distinct separate operating challenges. Usually the âegoâsâ of the purchasing company gets in the way of reality.
Time will tell if Kirby will gut and run Ksea, or just cut off the deadwood and keep moving.