New CEO a boost to ferry
image above: Lehman's last coffeebreak with Garibaldi. Altered by Juan Wilson
by Edwin Tanji on 27 April 2008 in The Maui News
Retired Adm. Fargo’s appointment coincides with influx of financing.
In naming a new president and chief executive for the Hawaii Superferry, the chief investor in the interisland transportation business also made a “significant increase” in financing the business, outgoing President John Garibaldi said Friday.
Garibaldi, who will remain vice chairman and a board member, said the move to appoint retired Adm. Thomas Fargo as president/CEO is an indication of “the commitment to bring really big talent here.”
“We’ve had an increase in the capital base from J.F. Lehman & Company that bodes well for taking us through the difficult times and really supplements the commitment,” he said.
In a telephone interview arranged by the Superferry, Fargo said he was invited to join the company, adding that he has known former Navy Secretary John Lehman — the head of J.F. Lehman — for many years.
While he said he needs to study the operations and understands the changeable ocean conditions that have been a factor in the ferry’s difficulties, he saw no reason the vessel cannot operate successfully year-round.
Garibaldi guided the Superferry through its startup, which has run into major obstacles in the courts and at the docks.
In August, a Hawaii Supreme Court ruling found that the state Department of Transportation improperly waived a requirement for an environmental assessment in setting up state harbors for the ferry operations. Legal disputes held up ferry operations from August through December last year, with the state Legislature in October approving a law to allow the ferry to run while an environmental impact statement is prepared.
A state auditor’s report two weeks ago detailed the debate within the Department of Transportation in 2004 that had top state transportation officials rejecting recommendations that an environmental assessment be required. A key factor apparently was a federal Maritime Administration loan guarantee that would have been lost if the ferry operation was held up for an environmental impact statement.
Even after the ferry was allowed to operate beginning in December, it was first delayed by damage to the docking barge in Kahului Harbor caused by harbor surge. The service was shut down periodically because of heavy seas in December and January that ultimately forced the 350-foot catamaran into drydock to repair damage to its auxiliary rudders.
The Alakai finally resumed service April 7 between Oahu and Maui. Its planned Kauai operation remains shut down, with Garibaldi saying the company is focused on establishing its ability to provide “good, reliable service. . . . We want to get our Maui service going well first.”
“On Kauai, we’re still monitoring the situation,” he said.
The Oahu-Kauai service, initiated Aug. 26, was shut down Aug. 27 after protesters in Nawiliwili Harbor blocked the ferry despite Coast Guard and state enforcement officers being on the scene.
Garibaldi declined to detail the amount of the capital infusion provided by J.F. Lehman to keep the business operating except to say it will allow Superferry to continue to work on building its loads. He said bookings have been steadily increasing with the revival of regular service.
“When we were operating in December, January and February, we saw increased bookings every day. Since the day we came out of drydock, every day it’s been increasing; we’re seeing a continual upturn in bookings,” he said.
Over the weekend, he said, there were more than 2,000 passengers booked on the four round trips from Friday through Monday. While the ferry has a capacity of nearly 900 passengers, the company was projecting that a normal load of 400 to 450 passengers could cover its operational costs.
The ferry can also carry as many as 282 vehicles, and its marketing plan includes use by businesses transporting products and workers between the islands. Maui Land & Pineapple Co. is a local investor in the Superferry and indicated interest in using the ferry to transport its products between the major islands.
Fargo, who was commander of the Pacific Fleet at Pearl Harbor beginning in 1999 and took over as commander of all U.S. military operations in the Pacific in 2002, said he remained in Hawaii after he retired in 2005 because “we really liked it here and we got a lot of encouragement from folks to stay.” But he had no role with Hawaii Superferry until he was asked to take over the top executive positions, he said.
“I had actually gone out on the Superferry in January and watched it from a distance in my capacity in Hawaii, and I think it provides an opportunity. Both John Lehman, whom I’ve known for a long time, and some other local folks suggested that my skill sets might bring a great deal to this company,” he said.
He said the month of May will show that the Superferry provides a “really necessary capacity for Hawaii” in terms of transportation options, with the shutdown of Aloha Airlines and the loss of air travel capacity a factor in the development.
Fargo’s skill sets include a familiarity with the ocean conditions around Hawaii in all seasons, and he said he understands the conditions that create Hawaii’s best-known surf breaks. He said he also understands that Superferry needs to show it can provide reliable service.
“The vast majority of the year, the operations will be very easy. During the tough periods, when the sea states are high, we’re going to have to adjust our operations and procedures. But there is nothing that’s going to prevent the ship from operating 12 months of the year,” he said.
“I’m going to fulfill the role as president and CEO. I’m the guy responsible and by my very nature, I’m a hands-on guy who’s going to be working on every facet of this business.” |
