Dave Christensen and Joe Foggia chuckle when asked to describe their relationship. "There wasn't anyone else (in the family) that could deal with Dave," Foggia, 38, says with a laugh about his stepfather. "We're comfortable with each other; he trusts me. We've got a good working relationship. On any given day, we can fight and argue over some stupid little detail, and 15 minutes later we're going to lunch together. It drives our staff nuts."

Of Christensen's three children and three step-children, Foggia is "the one that stuck" at Christensen Shipyards Ltd., the Vancouver-based business that Christensen developed over the past 25 years into a world-class luxury yacht building enterprise. Now, the two are accomplishing what many entrepreneurial family-owned businesses struggle to do: Grow successfully while transitioning from one generation of ownership to the next.

Christensen, who will be 76 in June, started out as a building contractor. Among his notable projects are numerous houses in Vancouver's Heights neighborhood, the Shorewood and Riverview condominiums, several Shilo Inn properties and industrial buildings along state Highway 14, home to such businesses as New Edge Networks. Christensen real estate investments include Ogden Business Park in Vancouver, and not long ago he bought the former Rose Vista nursing home property with plans to redevelop it.

Christensen's can-do style, love of boating, design skills and mastery of fiberglass materials got him into boat building, which evolved into the construction of ever-larger luxury yachts. His Vancouver waterfront shipyard at 4400 S.E. Columbia Way has produced 40 such vessels since 1982. After a recent $1.5 million expansion, the facility now has six 160-foot yacht projects under way, each with a $30 million to $35 million price tag. The business is basically booked up with orders through March 2010, said Foggia, who became president and chief operating officer in 2000. To meet delivery deadlines, Christensen Shipyards has 450 full and part-time employees rotating through the facility on two 10-hour shifts a day. The operation expects to hire another 100 workers over the next 12 months to meet production demands.

Phase-two planning
Foggia and Christensen see the business ready to move into a larger global market catering to buyers who want bigger even more luxurious boats costing as much as $65 million each. To that end in 2003, they partnered with Henry Luken, a wealthy telecom executive and a Christensen yacht customer for the past seven years. Luken is chairman of Covista Communications of Chattanooga, Tenn. He also has investments in America's Collectibles Network, Inc., doing business as Jewelry Television, headquartered in Knoxville, and Equity Broadcasting Corp. of Little Rock, Ark.

Christensen sees the 50-50 ownership alliance as a positive strategic business decision. With Luken's backing, the yacht business is establishing a new shipyard near Knoxville that will allow for construction of bigger and more custom-designed boats. The $20 million, 500,000 square-foot facility is being built on 50 acres on the shores of Tellico Lake, southwest of Knoxville. At some point, as many as 1,000 people could work there.

CHRISTENSEN SHIPYARDS LTD. • What: Vancouver-based luxury yacht-building business • Where: Seven-acre site at 4400 S.E. Columbia Way • Employees: 450 full and part-time in Vancouver • Ownership: Dave Christensen and Joe Foggia, Vancouver and Henry Luken, Chattanooga, Tenn • Looking ahead: Christensen is expanding into a $20 million shipyard near Knoxville, Tenn., where it expects to build ultra high-end yachts costing as much as $65 million

Anchored in Vancouver
The shipyard headquarters will stay in Vancouver, say Christensen and Foggia. "Truly, we do need an East Coast access point for sales in the 170-foot to 225-foot bracket," Foggia said. "Here, we're maxed at 165-feet. All the administration, the engineering, the woodwork for which we're famous, and the marble work will be done in Vancouver. And we'll still build yachts here at the same rate." Christensen made the decision to expand to Tennessee after spending two years trying to buy Alcoa's property and dock farther down the Columbia River at the Port of Vancouver. "Buying it would have meant tearing down a bunch of buildings, along with a big cleanup job. We just couldn't wait," Christensen said.

Who are Christensen Shipyards' customers? Most are Americans with a net worth of $100 million and up.

"The people who make the most money in the world are (land) developers," Foggia said. "That characterizes about 60 percent of our customers. Another 30 percent are auto dealers, with about 10 percent celebrities and others."

While Christensen sold several boats in the 1980s and 1990s to international buyers, customers in the past five years have all been U.S. based. That's changing as economies elsewhere in Asia and in Russia, for instance, have grown. At the same time, a weaker U.S. dollar is making the Christensen product more attractive on the global market where the Vancouver company competes with about 10 other yacht builders, worldwide.

The company's real success is tied to way more than the price of the dollar. "Dave never takes no for an answer from anybody," Foggia said. "He lives by the fact that there's a yes in everybody...at some point. You can apply that to a design challenge, any kind of problem. That's what's made him successful." Foggia started working for his stepfather at age 13, sweeping up the production floor. After graduating from Oregon State University, he returned to the company as a project manager and eventually was put in charge of a boat-building project, from start to finish. "I could see he was doing well," Christensen said. "He doesn't mind asking questions. He doesn't have trouble bringing up issues. Customers really appreciate his approach," said Christensen. "We've always been close." As company president, Foggia oversees day-to-day operations with a team of managers, and also works directly with customers before, during and after delivery. The process typically takes about three years from start to finish. "Can't is not a word in Dave's vocabulary," Foggia said. "I don't put up with it, either. I learned that from Dave. Where we differ is that I delegate a bit more."

At this stage of his life, Christensen spends about half his time at the yacht plant. He still loves the R&D side of the business, but doesn't have much direct contact with customers.

Management formula
Other aspects of the business also contribute to its success:

• Christensen Shipyards retains its highly skilled work force by giving employees stock in the company and at the same time uses a tough-love approach to underperformers. "We don't fire people, but we do send them home without pay to think about whether they really want to work for us," Foggia. As a result, the retention rate for its core group of workers is about 95 percent.

• To get a project started, customers must put $1 million down. Christensen then bills monthly based on the percentage of work that's been completed and uses a surveyor from the American Bureau of Shipping to verify the work.

"That way we don't get ahead of the customer and they don't get ahead of us," Foggia said. "We're the only shipyard in the world that does it that way. We pride ourselves on not operating on customers' money."

Since stepping away from daily operations, Christensen and his wife, Mary spend more time at a home in Palm Springs, Calif. They've been married since 1985. He continues to dabble in real estate with his latest project, redevelopment of the 17-acre former Rose Vista nursing home site. There he plans to build 98 high-end condominiums similar but larger than those at Tidewater Cove, and 450 living units in a retirement "village." The Rose Vista project is going forward in partnership with Christensen's brother, Paul Christensen and his partner Kerry Gilbert, who run RealVest development company in Vancouver.

"This has all just been an easy way for me to slide sideways," Dave Christensen said about his stepson's ownership position and corporate management role, as well as the partnership with Luken. The two say they talk to each other four or five times a day, no matter where they are. "Most of it is family stuff," Foggia said. "Mainly, it's, ‘how are ya doin?' " Pretty darn good.