He dines with Muhammad Ali, has a James Bond-pad, and oh yeah, runs a $400-million shipping empire.
By Alison Bate, BC Business magazine, Cover story, June 2003.
Kyle Washington is just back from Dallas, where he’s been checking out the price of helicopters. The 33-year-old bachelor got his helicopter pilot’s licence in December and is eager to put his skills to the test. Washington is unashamedly rich, but even he balks at the million-dollar price tag of new machines and is leaning toward leasing one for now.
The chairman and CEO of Washington Marine Group (now Seaspan Marine) has all the trappings of a wealthy playboy: luxurious pad in Vancouver’s West End, use of the family’s private fishing lodge on Stuart Island, windsurfing shack in Maui, and the disposable cash to flit around North America with enviable ease.
He’s the eldest son in the Washington family empire, controlled by Dennis Washington, the Montana-based construction, real estate and transportation magnate who started the business in 1964. The Washington Companies now employ 40,000 people in 38 countries, placing him 236 on Forbes Magazine’s 2003 list of the world’s richest people, with an estimated fortune of US$1.7 billion. Kyle’s kingdom, or Washington Marine Group, is part of that pie.
UPDATES (as of April 2018): Kyle Washington is currently executive chair of Seaspan ULC. The Canadian-based maritime company formerly known as Washington Marine Group is now called Seaspan Marine. Frank Butzelaar is currently CEO. Seaspan Corp., formerly Seaspan Container Lines, is the separate publicly-traded containership division.
Locally, Kyle Washington is now known as the guy who bought the three PacifiCat fast ferries for the rock bottom price of $19 million at auction in March. The Washington empire has already pumped at least half-a-billion dollars into B.C. in the last nine years, has set up an international container shipping company, and is still looking to expand. It may bid for Vancouver Wharves, the North Shore bulk terminal put up for sale by BCR Group last year.
If it does acquire the Wharves, don’t look for too many announcements to be made. When its subsidiary Seaspan Container Lines signed the order last year for five of the world’s biggest container ships, each capable of carrying more than 8,000 20-foot containers, barely a word was uttered. Why the low profile? To Washington, the answer is simple; it’s not a public entity, it doesn’t need the hype. But that doesn’t mean Washington doesn’t have a very demanding stakeholder. “We still have one shareholder to impress, trust me,” he says. How easy is it to impress Dennis Washington? “It’s not,” his son says firmly.
Conversations with Washington are more likely to veer toward his passions for snowmobiling and flying than his 16 marine companies. “Everyone expects a business person to be very serious, and Kyle’s not like that. He’s the opposite of arrogant,” says Graham Porter, vice president of Seaspan Container Lines.
Washington’s a charismatic guy. He’ll talk openly about making a disastrous deal in a non existent gold mine, and he’s quick to call the Americans “a bunch of babies” when discussing the softwood lumber dispute, but ask him about the love life of a rich, handsome bachelor with a ritzy West End penthouse, and all you’ll get is a wink.
Certainly, his pad overlooking Coal Harbour shows no signs of a regular female companion. The lair is worthy of James Bond. A classy pool table, hidden TV screen that pops out at the press of a button, hammered-metal ceiling, zebra-striped carpet in his bedroom, and a giant painting by Montana artist Lane Timothy of one of his all-time idols, boxer Muhammad Ali. He flew down to Phoenix recently to have dinner with the former heavyweight champ, and had him sign the painting. Washington moved in here about two years ago, after living in an apartment on Beach Avenue for several years. “We spent two years building this thing. It’s pretty cool,” he says. The apartment includes several other Lane Timothy paintings, such as a collage of the Canadian and U.S. flags that expresses Washington’s love of both countries.
It’s designed for entertaining, with an informal conference area, unusual glass table inlaid with a nautical map of the Stuart Island region, outside patio with panoramic views, and his favorite room: a huge steam bath and shower capable of accommodating a crowd.
Apart from hosting parties for his buddies, Washington signs deals here and entertains marine executives, politicians and the International Olympic Committee. Carrying the Washington name means he is always working, always an ambassador, he says, although he’s very comfortable in the role. Asked what it’s like not to have to worry about money, Washington replies: “There’s no question it’s a benefit, but it does come with responsibilities. I’d take it over not.”
PASSION FOR WINTER SPORTS
A former professional ski-jumper, Washington was one of the first to jump the new Olympic ski-jump facility in Salt Lake City, which opened up three years before the main event last year. He chairs the organizing committee of the 2003 World Weightlifting Championships, being held at the Vancouver Convention & Exhibition Centre in November, and he’s heavily involved in promoting the Vancouver Whistler Olympics 2010 bid.
Outside his window, one of the company barges has been adorned with a huge placard supporting the Vancouver Whistler bid. Washington works closely with former Olympic silver medallist Charmaine Crooks, a member of the IOC, and co-chair of his organizing committee for the weightlifting championships. They have been friends for more than four years and often work out in the gym together. “He’s a Montana guy – very down-to-earth and grass roots orientated, and he keeps that humble spirit,” she says of her friend.
His passion for winter sports is a holdover from his youth in Missoula, a town tucked in the Rocky Mountains of western Montana. There he played football and skied, moving into professional ski jumping when he was 14. “I goofed around with that for a little while, until I was 28,” Washington says. “I was fair. I was real middle-of-the-pack. It was kind of a weekend thing, you know, while you are going to school. Bust out there on a Thursday and come back Sunday night or Monday.”
Washington bounced around various U.S. colleges, looking for the best ski conditions. His search eventually took him to the University of Utah in Salt Lake City. Asked if he ever stepped foot in the library, he laughs. “My dad said: ‘I don’t care what you study, I don’t care where you go, just get out in five years.’ ”
Tiring of the powder in Utah, Washington switched schools, returned to his hometown, got help studying, and finished up with a B.A. in finance from the University of Montana in 1994.
He’s still very close to his parents, who live in Palm Springs, California in the winter, and split their time between Montana and B.C.’s Stuart Island in the summer. Brother Kevin, two years younger than Kyle, is also active in the family business, working with Aviation Partners Boeing in Seattle.
When Washington graduated, his dad owned just one company in B.C., the tugboat firm of C.H. Cates & Sons. Cates’s tugs are best seen from Lonsdale Quay in North Vancouver, sitting outside the market café. These are the sturdy little harbor tugs that help ships to dock, a David and Goliath affair. They scurry out to greet new ships arriving in port, nudging and pushing the big vessels safely into their berths.
Kyle was sent up to Cates at the age of 24, and spent the next 18 months learning the ropes, more on land than water. The tug guys were great, says Washington. While the marine scene was new to him, he grew up around construction workers and found them much of a kind. “They’re all the same kind of guy, and I hope I am. Work hard, play hard. They’re guy’s guys.”
However, in 1996 the prospect of investing in a potential gold mine in Utah lured him to the financial hubs of London, Paris, Zurich and Geneva. He laughs today, but admits the memory still makes him nauseous. “I got involved in the typical Vancouver thing. Got into a mining deal, thought there was a pot of gold at the end of the rainbow. So I ran around Europe raising money for this mining deal that was a total disaster. Basically, I blew my brains out on that.”
Dennis Washington’s reaction to this investing escapade? “Now you’ve got your master’s degree.”
RAPIDLY EXPANDING EMPIRE
Washington says his dad gave him an opportunity to redeem himself in 1997 by finding a role for him in his rapidly expanding B.C. empire. Having bought Norsk Pacific in 1995, Dennis Washington added Seaspan International a year later. The acquisition included the Seaspan subsidiaries now called Vancouver Shipyards, Vancouver Drydock and Victoria Shipyards.
Seaspan International could more accurately be called Seaspan B.C., for it includes the tugs, barges, log booms and logships familiar to anyone traveling in our coastal waters. From a distance, the barges look like floating houses, drifting quietly across the water. In fact, they are full of wood chips or sawdust being carried from sawmills to pulp and paper mills.
Washington’s role at Seaspan International began as executive assistant to then-president Allen Fowlis, who ran the company for more than 20 years. The following year, Washington took over Fowlis’s job, becoming both president and CEO. The same year, the umbrella name of Washington Marine Group was introduced.
Since then, Washington says he has brought in a new team and integrated five significant marine companies: Seaspan International, Cates, Norsk Pacific, Kingcome Navigation and Delta-based Seaspan Coastal Intermodal Co. (formerly CPR Coastal Marine Operations). In the process, 36 per cent of combined overheads were eliminated, getting rid of duplicate facilities and staff, including early retirements.
Brent Geen, the company’s chief financial officer, was promoted to president in 2001 to help manage the umbrella company, while Washington added chairman to his list of responsibilities. Geen handles the gritty details, Washington the big picture. “I am definitely a broad strokes kind of guy,” he says. He also sits on the boards of Washington Rail Group and Washington Corporations, and works on specific projects with Washington Development, the empire’s real estate arm.
Last October, Marine Group won a controversial bidding process conducted by B.C. Ferry Corp. (now B.C. Ferry Services) that allowed international tenders for the first time. Washington says the company’s bid to refit the Queen of Coquitlam at Vancouver Drydock was substantially lower than any of the other competitors. “The worst thing that could have happened was to have one of these contracts go offshore,” he says.
Those who do business with Washington say privately that his light-hearted banter masks a good brain and strong entrepreneurial spirit. His main rival, John Cosulich, Canadian area manager for Vancouver-based Rivtow Marine, says: “I find Kyle to be a very charming individual, very clever and very competitive.”
BIRTH OF SEASPAN CONTAINER LINES
While the biggest chunk of Kyle’s kingdom is scattered along the North Shore, another hub is growing in downtown Vancouver, involving the three deep-sea shipping companies (Seaspan Container Lines, Seaspan Shipbrokers and Seaspan (Cyprus) Ltd.) that are colloquially known as Seaspan Offshore. At its current pace of acquisitions, it will be one of the world’s top 10 container shipping companies by 2005, owning between 12 and 15 vessels.
The birth of Seaspan Container Lines changes the status of the marine group from a largely regional outfit to that of a big league international player. The company is a logical extension to work carried out by two key players at Seaspan Shipbrokers and Seaspan (Cyprus) Ltd., Graham Porter and Gerry Wang, now also vice-presidents and shareholders in Seaspan Container Lines. They oversee most of the deals, yet when a good prospect comes their way and passes their smell test, they send it along to Washington. Drawing from his European barnstorming adventure, Washington’s job has been largely financial, finding the money, and using his charisma and connections to help cement the deals.
The first deal came in 1999, when Seaspan got together with Israel’s Ofer Brothers Group to place a bulk order for seventeen 4,250-TEU ships with Samsung Heavy Industries in South Korea. (Container ships are usually described by how many containers or boxes they can carry, measured in TEUs or 20-foot equivalent units.)
Seaspan kept five of the vessels and chartered them to China Shipping Container Lines (CSCL) for 10 years. All five are now in service and performing well, says Washington, and some have already called at Vancouver. Under the deal, Seaspan owns the vessels, designs them, gets them built, operates and maintains them. It also arranges for the vessels to show up at whatever port CSCL needs them, while the Chinese company handles the cargo side.
The second deal, worth US$400 million, involves building five of the world’s biggest boxships, and was signed by company president Brent Geen on Christmas Day last year in Shanghai. Seaspan plans to keep at least two of these 8,100-TEU ships, chartered to CSCL for 12 years, but may sell the others. The ships are due to operate between Los Angeles and the Asian ports of Hong Kong, Yantian and Shanghai by 2005. Washington signed the third deal for another five 4,250-TEU ships with Samsung Heavy Industries president J.W. Kim at his downtown apartment this February.
Washington talks to his dad at least every other day, but says he’s left to run things pretty hands-free in B.C. Has he redeemed himself after his initial investing misadventure?
“Yes, I would hope so,” he says. “On the shipyard side, we have had three years in a row of record numbers. And the deep-sea shipping is just going outstanding.” He concedes, though, “We’re battling on the tug and barge side the toughest market that B.C. has ever seen. We’re trying to do our best with costs and stuff.”
The softwood lumber dispute has hit the company hard, causing hundreds of job losses in Seaspan International alone. Washington has harsh words for both U.S. and Canadian governments, saying they’ve handled it abysmally in not reaching a solution, and have cost the province tens of thousands of jobs.
He doesn’t buy into the argument the U.S. government makes, that B.C.’s stumpage system subsidizes our forest industry. “Of course they dislike our system, but are we subsidizing? No. I think they’re a bunch of babies down there, big, tough babies.”
Interesting comments from an American businessman, whose family empire is based largely in the U.S. Asked where his loyalties lie, Washington insists he feels pretty Canadian, having lived up here for nine years. “I look at us as North American, and I understand the differences. There are some great things about the U.S. and there are some great things about Canada, and I just think I’d like to have them both. All the good on both sides – including both holidays.” He laughs.
Although Washington is a U.S. citizen, he’s almost through the process of getting a Canadian passport. “Vancouver’s my home, and I will be here as long as the good Lord says I’m alive,” he explains. “I just love it. It’s home, looks like home, feels like home. My business is here, my friends are here, it’s got everything that I could ever need.”
One of his best friends, personal trainer Mike Talic, describes watching the Olympic gold medal hockey game with Washington at Salt Lake City last year. The two friends traveled to Utah together and met up with Charmaine Crooks to watch the Olympics. “He was so for Canada, it was unbelievable,” says Talic.
Last year, Washington worked with Talic to build a first-class gym free for his employees. The 3,200-square-foot fitness centre opened in October and already has 300 members. Talic says it’s by far the best gym in town, and he regularly brings his celebrity athletes to train alongside shipyard workers.
Washington, who works out four times a week, says the rehab and training programs have improved the company’s safety record dramatically, and it’s also a good way for people to mix.
When asked what accomplishments he’s most proud of, Washington cites the container shipping deals, adding, in typical fashion, that he’s also pretty pumped about getting his helicopter’s licence.
Washington appears to waltz through life, on his cell phone a lot, difficult to pin down, but totally engaging when he does arrive. On this day, he’s on his way to meet Alistair MacLennan, chairman of Helijet International, to discuss leasing a helicopter. He knows he’s going to be late. He’ll probably get away with it.
© Alison Bate, 2003.
* Top 10 questions about life on a containership (my post about crossing the Pacific)
* Pix of Kyle and wife Janelle at Vancouver Olympics parties (Feb.22, 2010)
* Dennis Washington’s super-yacht, the Attessa IV
* Seaspan completes $170 million shipyard modernization (Nov.6, 2014)
* About Seaspan
* Seaspan swallows SMIT/Rivtow (Oct.15, 2010)
* Seaspan’s container fleet summary
* The merger of COSCO and China Shipping
* BCBusiness online website