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I Am American Business

Dean Taylor

Producer Notes

Tidewater has elegant wood-paneled offices at their New Orleans headquarters, with stunning views of the city and the Mississippi River. But since the company has the world's largest workboat fleet servicing oil rigs, we decided to meet Dean Taylor at Tidewater's shipyard, south of the city. It was over 90 degrees out, and there's no way to air condition a dry dock. Wearing heavy protective gear, the shipyard workers were welding, sanding and painting Tidewater's vessels. One seagoing crew was still living aboard their vessel, helping with the maintenance. Dean Taylor, Tidewater's Chairman, President and CEO has worked for Tidewater all over the world and speaks four languages. He showed up in his blue jeans, happy to be out in the shipyard for the day. The company spread fresh gravel to cover the dust for our camera set-up. They made sure we had hard hats and safety glasses. They ordered us crawfish etouffee and bread pudding and served us lunch on a white tablecloth, with real china. Tidewater is a large, international company. But they have a very small management team, and a remarkable personal connection to their workers and their city.

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The "I Am" Q&A

What kind of car do you drive?
Pick-up truck.

What’s your favorite place to go?
Italy.

What website do you like to visit?
Google.

What was your worst moment in business?
Well we had a vessel sinking in Brazil. That was the worst time.

What’s your favorite drink?
I like them all.

What’s your favorite food?
I like them all.

What’s your idea of fun?
Having a drink by a fireside outside on a cool winter evening.

What’s fun at work?
Just being with out with people and doing what we do.

What personal weaknesses do you forgive in someone?
We can forgive anything except for a lack of integrity.

What movie star do you like?
Paul Newman.

What personal qualities do you admire in business?
Tenacity, fortitude, and the ability to deal with adversity.

What was your greatest moment in business?
Being hired by Tidewater.

What is your dream?
I’m living my dream.

Do you have a motto?
Work hard. Play harder.

What is your present state of mind?
Well, it’s pretty good.

Transcript

CNBC:
Could you describe Tidewater?

DEAN TAYLOR:
Tidewater is a low-ride transportation company that serves the oil and gas industry. And it also does some ancillary work related to maritime transportation for other customers. We have about four hundred and twenty vessels that operate in about seventy countries around the world. Tidewater’s vessels service the oil rigs, oil platforms, the floating production steward systems, and other equipment related to the exploration and production of petroleum.

CNBC:
You’ve been through a lot of ups and downs in the oil industry. Describe what’s going on right now.

DEAN TAYLOR:
Well, the industry is challenged by access around the world. More and more places are making it more and more difficult to get access to the product. As a result, that’s one of the reasons for the high prices. And it’s also one of the reasons why we think that there’s be a continued demand for our services for a pretty good time to come. Oil prices are high and that means that oil exploration activity will be increased around the world because of the high prices. But it also reflects though the increasing demand for oil and related products coming from Third World, what used to be Third World countries that are now trying to be First World countries. Because of that increased demand, prices have gone up, and it’s necessary to have more activity to fulfill that demand.

CNBC:
Are you the largest company doing this sort of work?

DEAN TAYLOR:
Tidewater is the largest company in this business, in the oil exploration services business providing these types of transportation services to the oil and gas industry.

CNBC:
Where is most of the oil exploration happening now?

DEAN TAYLOR:
Oil exploration is happening around the world. Unfortunately, not nearly enough is happening here in our own country. Eighty percent of our country is off limits for oil and gas exploration activity, which means that most of the activity is elsewhere in other places around the world. Certainly in the Middle East, but also the Far East, South America, and West Africa, which is our largest area for activity for our company, for Tidewater’s business in oil and gas exploration activity.

CNBC:
Has this been a dramatic change with the prices of oil going up?

DEAN TAYLOR:
Well, the price of oil has made some difference, but it hasn’t really made that much difference to us. We’ve been busy. We’ve been in business for fifty-three years so we’ve been doing this for a long time. We have had the increased activity over the last five years because of the higher prices, but high prices or low prices, we’ve been busy.

CNBC:
There’s a lot of speculation about the future of the oil industry.

DEAN TAYLOR:
I think the future of the oil and gas industry is much more important than most people realize. I don't think our general public understands how necessary hydrocarbons are be for, to power our industry, our country, and our ways of life. And I think that until the general public does understand that, they’ll continue to misunderstand the interplay of prices and activity, and prices. Our general public should be pleased that companies like Exxon, Mobil, and Conoco-Phillips, and Shell, companies that are subject to the laws of First World countries, are providing a good part of our energy supplies. Imagine if we had to rely upon some of the cast of characters of, and companies associated there with, and other countries around the world that don't have the same rules of ethics, that don't have the same high standards of integrity for our energy supplies. So consequently, I think that it’s very important that the American public and that the world public in general, understands how necessary hydrocarbons are be for our future energy supplies, and how important it is that people with integrity provide those supplies to them.

CNBC:
How important are they going to be?

DEAN TAYLOR:
Well they’ll be important for a lot longer than most people think. I think that the renewables will play an important part as well, but nearly as an important part as hydrocarbons will. I think that hydrocarbons will be very important for the next thirty to fifty years in our energy supply portfolio, and maybe longer than that. These high prices will provoke additional forms of energy that we’re not even thinking about today. But even when they do, hydrocarbons will continue to play a very important part in providing energy to our population.

CNBC:
What are the main priorities for Tidewater?

DEAN TAYLOR:
Well the main priorities for Tidewater are to continue to rejuvenate our fleet, to continue to recapitalize our business, and to grow as the industry grows around the world. And we’re about eighty-eight percent foreign in terms of our assets right now. That’s where most of the activity seems where it’s going to be in the near future. Although as I said earlier, I do think that the American public is going to recognize that with eighty-percent of our coastlines off limits to oil and gas exploration, that makes no sense. Real risks of an ecological and environmental incident occur in the transportation of a product, not in the exploration or the development of the product. The more we rely on imports to bring in product from around the world, the more transportation that is involved, the greater the risk of an environmental incident. So, it’s so important that we develop the resources that are here at home, close to home, and that also are not subject to be a political potential geopolitical problems that can be created in any, in any host of ways.

CNBC:
There’s a lot of political implications there.

DEAN TAYLOR:
Well liberals don't have a monopoly on the environment. We love the environment just like anybody else. I think our populous doesn’t truly understand one, how efficient and how safe our business is, and second, how environmentally safe, how environmentally pure it is. All of us in the industry are hunters and fishermen. We love the outdoors. We love clean seas. We’re not interested in polluting our environment, to the contrary. We want our environment just as clean as anybody else. And as a result we work awfully hard to make sure that none of our activity pollutes in any way shape or form.

CNBC:
So you believe we should develop more resources here.

DEAN TAYLOR:
I’m confident that the industry can and has responsibly developed the resources here along our coast of our country. It’s so important that we have the opportunity to do so, geopolitically, simply because it’s better to rely on our own sources of energy then sources coming from the Arabian Gulf, from West Africa, from South America, from Venezuela. If we can do so here at home in an environmentally responsible fashion, we’re all better off. There’s more oil that seeps into the sea from seepage, from natural seepage, than that results from any exploration or production activity. So we’re confident that we can continue to produce and explore for, for hydrocarbons way in an environmentally safe fashion.

CNBC:
What about safety in your workplace. You have a strong safety policy?

DEAN TAYLOR:
We call it a stop work obligation and it is important that it is an obligation, but more important still is that it’s a right. We feel that every individual in our company has the right to work safely even though we tell them it’s an obligation to stop an operation that seems to be unsafe, even if they’re wrong. But if they stop it because they think it’s unsafe we tell them that’s perfectly fine. And the reason is because we feel like everybody has the right to be able to return home in the same condition in which they came to work, and to provide services to our company.

CNBC:
But this is actually a pretty hazardous business that you’re in.

DEAN TAYLOR:
No it’s not hazardous. It’s a risky business. Tidewater works in an environment with lots of heavy equipment, lots of big loads that are overhead, that are lowered down onto the deck of ships that you see behind us. And it’s not a dangerous business but it’s a risky business, and it’s our job to mitigate the risks such that our employees can work in this industry safely.

CNBC:
I like that phrase. Stop work obligation.

DEAN TAYLOR:
Well it’s, it actually came from person who is in charge of safety. It was her idea. It's a great idea. But, the one thing that I get a little bit worried about with obligation is everyone already has a ton of obligations. And I don't want our personnel to feel like, oh it’s one more obligation. I want our personnel to feel like, not only is it an obligation, but much more importantly it’s their right. They have a right to be able to work safely.

CNBC:
But if the client complains then what happens?

DEAN TAYLOR:
If a client complains, we encourage all of our employees to keep the problem upstairs, to give it to somebody like me, give it to their immediate supervisor. We will deal with the clients, but all of our clients feel just as strongly about safety as we do. The trick is to get the problem to the right individual within the client base, and they will understand. They don't want anybody working and getting hurt.

CNBC:
They can call you?

DEAN TAYLOR:
They can call me anytime.

CNBC:
The oil industry doesn’t have a very good image in terms of protecting the environment.

DEAN TAYLOR:
The industry has let itself get backed into a corner that it’s not environmentally responsible, to the contrary. Our industry is probably more responsible than any other. By the same token, we need to do a better job of public relations to sell our story because it’s a wonderful story. The things that we do are equivalent to moon shots. We drill in ten thousand feet of water. We drill holes that are twenty thousand feet deep. The technology is phenomenal. The people are phenomenal. The work ethic of our personnel is phenomenal. It’s a wonderful industry and liberal, conservative, it doesn’t matter what your political frame of mind is. We think that in time our populous will come to understand how important it is that we develop energy sources off of our own coastline and not just in other places in the world, because remember when we do develop in other places of the world, that means we have to transport the product to our country. And if you recall, all the ecological environmental incidents are always resulting from transportation. Anchor groundings, barge groundings, pipeline ruptures, if we can develop the product, the oil and gas product offshore our country, we minimize the risk involved in transportation.

CNBC:
That’s not that popular a position right now.

DEAN TAYLOR:
Well, it may not be popular right now, but eventually economics rule, and as these high prices continue to get higher people will think more about what’s really involved in the industry. Most people think that all they have to do is flip a light switch and energy will be right there. They don't realize the infrastructure, the massive infrastructure that’s involved to be, to get that barrel of oil out of the ground into a pipeline, into a terminal, into a refinery, from the refinery to the gasoline, to the gasoline station at their local neighborhood. And the fact that we, we can do all that for less than four dollars a gallon is just phenomenal. It’s a phenomenal achievement. It’s something of which we’re immensely proud.

CNBC:
Gas is over four dollars a gallon now.

DEAN TAYLOR:
Well I just filled up. I have a little diesel Jetta, and it was four dollars and thirty-four cents, but it’s a lot more expensive in most places in the world. And unfortunately I’m afraid high prices are here to stay.

CNBC:
Do you think the price of oil is going to go up?

DEAN TAYLOR:
I do think the price of oil will go up. I think it’s not going up because of any nefarious plot by the oil companies, much to the contrary. They have sold oil as cheap as six dollars a barrel and they sold it as high as a hundred and twenty-seven dollars a barrel. They sell it at a price set by the market. They don't set prices, the market sets prices. What’s happening now is that there is increased demand from other countries that used to not have such demand for petroleum products. India, China, Malaysia, Indonesia, Venezuela, Mexico, Brazil. All those countries in the world that used to be under some sort of socialistic rule have awakened to the joys of capitalism and they’re now able to consume more. Why? Because their people, the capitalistic juices of their people have been freed so they want more. They want to live like us. And they only way they can live like us is to burn more energy. Energy for the most part, takes the form of hydrocarbons.

CNBC:
Your vessels are now active all over the world?

DEAN TAYLOR:
Tidewater’s vessels are active in about seventy countries around the world. We have employees from over ninety countries. Tidewater has a philosophy that we give people in many countries of the world a chance. Most people around the world, when you give them a chance, and they’re capable, and you treat them properly, they respond magnificently, and that’s how our employees respond to the opportunity to work for a great company.

CNBC:
What happened when Katrina hit?

DEAN TAYLOR:
Well Hurricane Katrina scattered our headquarters staff to the four winds. We had people heading in every direction, because no one knew exactly where the storm would hit. We had people heading to Houston. We had them heading to Memphis. We had them heading to Florida. We had people going everywhere, but Tidewater survived because of the strength of its people. The people that went to Houston immediately set up a, a temporary office. Joe Bennett, Chris, they immediately started making things such that people from other places where they happened to be stranded as a result of the storm, could call in and start to offer their services to help the company get back on its feet. We had one young lady actually was living in her car for three or four days after the storm. She called the Houston office. Chris gave her directions on how to get to the Houston office. We found her a hotel room. We gave her a place to work. The storm affected our company in many, many ways but the way that it affected our company the most was to solidify the teamwork that was already much evident within our company. We had people doing things that weren’t really their jobs. They did things because they needed to be done. You may recall that Hurricane Katrina hit New Orleans and the Gulf Coast of Mississippi on August the Twenty-ninth. August the Thirtieth was payday. John, our Information Technology Director, he had our computer systems up. He had to move from New Orleans to Houston. Within two days he had our computer systems up and running in Houston where we didn’t miss a payment to a single employee. We didn’t miss paying an invoice to a single vendor. We didn’t miss a beat, but it was all because of the strength of our people.

CNBC:
You were at home in Mississippi?

DEAN TAYLOR:
I think we had about twenty-nine people there with us. And fortunately, we were set up. We had a generator; we had water. And my wife told everyone to bring all their food out of their freezers and all their alcohol to our house. And so everybody brought big ice chests full of food and alcohol and we had a party every night, and we had power every night for the first three nights. And after the third night our generator broke down so I called up one of our people in our office in Amelia, Louisiana and I asked them if there was any way that they thought they could get an electrician over our way to repair our generator. And there was a long pause and the fellow that I was speaking to said, “Well, I’ll do what I can.” And I called him at maybe six o’clock in the evening, and you need to understand that all the roads were impassable. It was very, very difficult to get to where we were. And this goes to show the kind of people that we have in our company. This individual found someone to make the drive, which I drove in two hours this morning. They made the drive in eleven hours. They got there at four o’clock in the morning. They knocked on the window at four in the morning. Of course at this time everyone was concerned with looting, so everybody had loaded guns hanging around. And fortunately, they knocked on my brother’s window. He and his five-member family were staying in one room. And he’s a politician, but he’s also not really a gun guy. And so when they knocked on his window he didn’t shoot first and ask questions later. He asked what they wanted. And they said, “Well is this Dean Taylor’s house?” And he said, “Yes it is.” He said well we’re here to fix the generator. So these fellas had driven all night long, eleven hours, through impassable roads, to not only come fix the generator, but they brought another bigger generator with them. And then we had some other employees of our company that had pick up trucks loaded with diesel fuel, gasoline, ice, water, something for which I will be always grateful. Fellas that were driving the trucks for our company, they themselves had no word of their own families. They didn’t know the condition of their own homes. They didn’t know whether their own families were safe and yet here these guys were trying to help me out in the middle of the night a couple of days after the storm.

CNBC:
What are the advantages of staying in Louisiana?

DEAN TAYLOR:
One of the advantages of being a Louisiana company is the ingenuity and the talent of the people in this, in this area. People in southwest Louisiana very, very creative people. People in southern Mississippi are awfully hard-working people. You put the two of them together, you have a pretty good work force, and Tidewater has a great work force.

CNBC:
You made the commitment to support the rebuilding of New Orleans. Was that a hard commitment to make?

DEAN TAYLOR:
Tidewater made the commitment to stay in New Orleans at least for the time being in order to give the city and the state a chance to demonstrate that they’re the places where a company can do business and be proud of doing business, and know that it’s doing the right thing for its shareholders. Ultimately we’re not in business to help New Orleans, or to help Louisiana. We’re in business for our shareholders. And New Orleans has some tough competition. Houston’s a great city, offers a wonderful working environment for companies like our own, and is awfully attractive in terms of a company like ours that’s in the energy business, and Houston is really the energy capital of the world. So it’s, it provides tough competition to our city, but for right now we’re staying and we’re hoping that Louisiana and New Orleans provide the type of conditions that make it worthwhile for our company and for our shareholders.

CNBC:
You have a personal commitment to the area, but at the same time you have to look out for your company.

DEAN TAYLOR:
Well I have a personal commitment to our shareholders and our employees. And the most important thing we can give our employees is a job. And the best way to give them a job is to be a successful company in our industry. And if we’re a successful company in our industry, that means we’re paying lots of attention to what’s going on in the industry, and for that, we need to be close to Houston. But also, I think we can at least for the time being, remain in New Orleans, help the city get back on its feet, and then we’ll determine what seems to be best for the long-term.

CNBC:
What would you say to other businesses that are thinking of staying, or thinking of expanding there?

DEAN TAYLOR:
Well, what I would say to other businesses thinking of New Orleans is that it’s a, it really is a city of unique charm. Great history, wonderful people, but I think that the city needs to be paying more attention to business. I think for a period of time after World War Two, the city lost sight of what also makes a city great, and it’s not just charm, and it’s not just history, but it’s the businesses within a city. It’s the businesses that provide employment for people within a city, to live within a city. I think New Orleans lost its way. I do think our new Governor, Governor Jindal, is helping very much, the state get back on its feet, and we’re hopeful that the city government in New Orleans will do the same. When we were in, when we were in the midst of making a decision I got a lot of calls from people that said you should stay in New Orleans because it’s good for New Orleans. When I was in Houston, people would say you should stay in, you should come to Houston because it would be good for you, and there’s a difference. Not what’s good for the city, but what’s good for you. And I think the city of New Orleans, and any city that’s interested in attracting business, should pay attention to what’s good for the business itself. And we’re hopeful that New Orleans will do that because certainly the city of Houston is offering that.

CNBC:
What were the lessons of Katrina?

DEAN TAYLOR:
Well, what we found, during Hurricane Katrina is that even if you expect something never to happen, it probably can. And we never expected the city to flood. I remember speaking to our IT Director the few days before the storm, and his plan was to spend the night in the hotel across from the office and I said, “Well this is a low probability event, but what happens if one of the levies breaks and the city floods?” It was a long pause and he said, “Well, that probably won’t happen.” I said “Well probably won’t, but just in case it does. What do, what do we do?” And he said, “Well we’re on the nineteenth floor. Nothing to worry about. The water won’t get that high.” And I said “Yeah, when we might not have water. We might not have electricity. Then what do we do?” Long pause. “ Well, maybe we’d better go to Houston. Maybe we better bring the IT equipment to Houston.” Well, since that time of course we’ve duplicated our systems in a secure spot. We have flick of the switch capability. Anything should happen in our main server. So I would recommend that if any company that doesn’t have total back up capability in some secure place, well they should probably get it.

CNBC:
Are communications the most important thing in a time of disaster?

DEAN TAYLOR:
Well communications are always important, but at a time of disaster they’re even more important. And all the cell phone towers were down. The only thing that I had to communicate with was a satellite telephone and I only had that three or four days after the storm. Fortunately, by that time, we had reestablished a secondary office in Houston, but communications are just essential, and well without them, you shut down. You know we thought we had a back up plan, but the real back up plan was with our people. They, they made a back up plan happen. The back up plan we had wouldn’t have worked without, without the ingenuity and creativity of our people.

CNBC:
And that kept your company going.

DEAN TAYLOR:
It did because all of our command and control is centralized with our head office in New Orleans. Not just command and control, but also our paychecks, our, our payroll for around the world. Worldwide payroll is headquartered in New Orleans and if that’s down, people in the other seventy countries don't get paid. New Orleans was and is the headquarters of our worldwide operation. Without communications from that headquarters it would have been impossible for us to run our business worldwide. The fact that our IT personnel and our other personnel were able to reestablish communications within thirty-six hours after the storm, in a city that that was unreachable for two weeks immediately after the storm, and then have access to our offices for almost three months after the storm, it was imperative that we had communications set up in some other location immediately after the storm.

CNBC:
In general, you know people talk a lot about corporate responsibility and Katrina’s a really interesting example of a disaster where a lot of corporations have pitched in and helped out for understandable reasons. What do you think the role of the corporation is in a time disaster.

DEAN TAYLOR:
My opinion, the role of a corporation in a disaster is to provide work for its employees. That’s the first and foremost responsibility of a corporation. We kept everybody on the employee even on, excuse me, we kept everyone on the payroll. Even personnel that couldn’t get to work, we kept them on the payroll. We made sure that they were paid until they could get to work. So we feel like that was the first priority, keep people employed. Next, we did what we could to help the community thereafter. We feel like the first and, the first responsibility of any corporation in the time of a disaster is to its employees, and that’s where our responsibilities were.

CNBC:
Lots of people didn’t have a home and they didn’t have a job.

DEAN TAYLOR:
Well we kept everyone on the payroll, even when they didn’t have work to do. We also provided immediate relief. We gave cash payment to all of our employees in the affected areas right away, and then we provided a grant for them to help rebuild their homes. So we did that secondarily, but the first thing we did was to keep everyone on the payroll.

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