10 Questions With PAE’s Dan Streech on Nordhavn
and a “Big Secret”
November 3, 2009
Editor’s Note – In this series we feature a Q&A with the leading executives of passagemaking boat companies. The first installment features the thoughts of Dan Streech, President of Pacific Asian Enterprises, the parent company of the famous Nordhavn brand of passagemaking boats. The following bio is taken from the Nordhavn website:
Dan’s boating career began in high school with the purchase of a small cruiser used for SCUBA diving and exploration of Catalina Island and the California coastline. Upon graduation from California Polytechnic State University, Pomona in 1970 with a degree in business, Dan and his family cruised for a year aboard their lovely yawl Malabar VII. Unfit for “office” work after that, Dan became a yacht salesman in 1972. In 1974, he opened a small yacht brokerage in the still young Dana Point Marina. That brokerage was the nucleus which developed into the present day Pacific Asian Enterprises. Dan has done every job in the company at one time or another, but he is proudest of the fact that for over 30 years and through turbulent times and changing world situations, he has helped guide PAE from its tiny humble beginnings to a world recognized and respected company. The safety, health and integrity of PAE, the quality, value and innovation of Nordhavns and the respect and appreciation for Nordhavn customers and PAE employees are Dan’s highest priorities.
The questions asked are all from OceanLines and the answers from Dan Streech are verbatim.
- OceanLines: How long did it take for P.A.E. to really come together and begin making money as a boat-builder?
Streech: We began in 1974 and I would say that we “broke free” and started making a legitimate profit and decent personal incomes in 1995.
- OceanLines: What, in your mind, defines the Nordhavn “brand?” In other words, what is it about Nordhavn that customers and boaters think, that they don’t think about other brands?”
Streech: The passage making ocean crossing capabilities of the boats together with the looks, style and quality. Anyone whose heart beats faster when they see a rusty tramp steamer probably dreams about plying the oceans of the world and that kind of passion drives the Nordhavn brand.
- OceanLines: What was the smartest (or luckiest) single tactical business decision you and your partners have made over the years? I realize no company gets as far as PAE on one success, but just for discussion’s sake, let’s pick one “pivotal” decision…
Streech: Following our intuitions rather than the advice of people from outside of the boat business.
- OceanLines: Obviously, a successful company brings its own creativity to its products and services, but it also has to listen to its customers. What are some examples of ways in which customer requests or inputs have led to changes and innovation in Nordhavn boats?
Streech: Most of the evolution from simple boats (which were based on our Mason sailboats) to elegant and complex boats has come from the requests of Buyers. What seems laborious and “too much trouble” when asked quickly becomes the norm as the bar keeps getting raised. Without the customerspushing us, the evolution would be slower.
- OceanLines: As a young man you participated in some, shall we say, “adventurous” passagemaking. As we write this there are several “adventurous” passages being made by Nordhavn boats and owners; some of which might even be called “risky.” While I’m sure you’re proud of the accomplishments of both boats and owners, do you ever worry about some of the challenges being posed by these trips? I’m thinking here, for example, of non-ice class fiberglass boats doing ice-breaking work and the like…
Streech: Well, we know that both of this summer’s adventures had happy endings. That said, we do worry about it and in fact, there were several naysayers who believed that Sprague’s passage was too risky. I personally didn’t think that it was too risky.
- OceanLines: To what extent is PAE continuing to look at more advanced propulsion technology, such as hybrids, diesel-electric, fuel-cell, etc.? What are the “long poles” in those tents? With all due respect to Beebe, would you ever consider catamaran or SWATH hulls?
Streech: The two DE boats that PAE built were complete failures and we will never attempt that again during my tenure at PAE. Given the energy losses in the making and consuming of electrical power and the fact that a boat doesn’t give any opportunities for “regenerative” power (such as braking on a car), there were no gains found. The concept seems still born in my opinion. Catamarans or SWATH hulls are not on our radar. Frankly, the more experience we get, the more we come full circle back to the basic Beebe concepts. Also, we have a full fledged battle against complexity; but unfortunately, it is a losing battle.
- OceanLines: If you could have three wishes granted from your suppliers – of any category; systems, equipment, materials, etc. – what would they be?
Streech: Make sure that the product is fully developed and free of bugs before it is made available, understand that their product must not be temperamental or subject to interference with other products on the boat, provide friendly rapid competent worldwide service.
- OceanLines: The relatively dramatic growth in recent years of the “trawler market,” to the extent there is such a single market, seemed to be significantly a result of boomers moving from sailboats to power boats. These were (are) people at or near retirement, with money to spend on a vessel like a Nordhavn. Has this demographic (if that assessment was correct) changed at all recently? Do you see a way for younger customers and families to get into a Nordhavn?
Streech: I think that your assessment is accurate. I haven’t seen any good way for younger customers and families to get into a Nordhavn. There are of course the exceptions such as the Grabs who made a recent circumnavigation and the families who are cruising with children using home schooling. We absolutely cheer them on and I think that it is great, but I don’t see that becoming the norm.
- OceanLines: Has your team done any conceptual planning for designs significantly different from the traditional “shippy” monohull, full-displacement Nordhavn?
Streech: Yes, there is a BIG secret brewing in Jeff Leishman’s office. Stand by.
- OceanLines: Given that most yachts are still largely made “by hand,” even if their designs and mold plugs are from 3-D CAD drawings, how much can you expect to achieve in containing or reducing the costs of building? Why are China and Taiwan still the right places for you to build Nordhavns?
Streech: We don’t try very hard to control the “hard” costs of a Nordhavn. We have been over this subject many times, and there isn’t much that can be done (OK, I know that the manufacturing guys out there are freaking at reading this). We actually go the other way.. Given that there is a base line of costs that can’t be improved upon no matter what you do, the dynamics reveal that for “a little bit more”, you can have the best of everything from start to finish. The biggest wastes of money come from mistakes and interrupting a smooth flow of production, so we spend a lot of time on those subjects and very little time on “where can we cut”.