CEO Jerry Miller reacquired the assets of his original business and formed Earl Industries LLC in 2000. The company took a new approach following 9/11.

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When President Ronald Reagan announced his 600-ship Navy plan in the 1980s – an effort to strengthen the Navy following the Vietnam War – Naval Academy classmates Jerry Miller and Frank Wagner decided to start their own ship repair company. With the help of Wagner’s stepfather, Jim Earl, they founded Earl Industries in 1984.

The company decided to delay the investment in its own shipyard location and, instead, focused on building its staff and providing on-site service for the Coast Guard and other clients.

“Once the Cold War ended, there were still 590 ships that needed to be maintained, but the budget dropped and the military was looking for cheaper ways to fix their ships,” Miller recalls. “Our proposition was, ‘With an infrastructure of 600 ships, why do you need yards? We’ll come to you.’

“That sold, and we picked up contracts to do work at bases and Naval shipyards,” he continues. “We built our business around that. They didn’t call it outsourcing at the time, but that’s what it was.

“Our work was ideally suited for the company we were building at the time, and we kept growing through the process of outsourcing and doing things cheaper.”

The company says it learned early on to not be dependent on critical-path subcontractors. Instead, it developed in-house capabilities that include the United Coatings and manufacturing divisions.  

In 1989, Wagner and Earl left the company to pursue other interests and Miller became the president and sole owner.

In 1995, the company merged with Digital Systems International Corp., an information technology-based engineering firm.

The companies were split off again in 2000. Miller reacquired the assets of his original business and formed Earl Industries LLC in January 2000.

Big Changes
Throughout changes in ownership, Earl Industries had maintained its “we’ll come to you” approach, but that changed in 2001.       

“After 9/11, the Navy took a different approach to maintenance,” Miller explains. “Before that, after a 6-month cruise, a ship would stand down and people would go on leave and the intensity level would decrease.

After 9/11, the Navy realized their highest state of readiness for ships was at the end of deployment and they didn’t want to lose that level of intensity.

“They decided to assign ships to specific contractors who would be part of the maintenance team,” he adds. “The contractor ‘owns’ that ship, knows what work needs to be done and can plan for it.”

This transition meant Earl Industries finally needed to secure its own shipyard facility to compete with other contractors.

“There were several ships in Portsmouth, Va., and I approached the closest shipyard that did this type of business and laid out my ideas to the owner,” Miller says. “I said we’d make a great team and suggested we bid together.

“He said, ‘Why don’t you just buy this business?’ It had about 120 employees, and we hired most of them and integrated them into my company.”

Earl Industries won several five-year contracts, which was another big shift in the company’s operations.

“We were used to taking on projects for a couple weeks to several months – one-shot deals,” Miller says.

But he says the company’s well-trained staff and expertise helped it handle the transition smoothly.

“I always manage to hire the highest-quality people,” he says.

“When we didn’t have a shipyard, we were always shuffling around and there would be slow periods, but I didn’t lay anyone off, in an industry notorious for layoffs. I maintained the same people and found other work rather than lay them off.”

The company now has a staff of 900 stationed at its facilities in Virginia, Florida and California. It continues to work with some private clients, although its focus remains government ships.

Staying on Course
In the near future, Miller says, he expects to see business remain steady. “The Navy is having some difficulties building ships,” he says. “The Navy leadership has a goal to have a 313-ship Navy, and several shipbuilding programs.

“Over time, we plan to maintain our existing ships and look at what we can do to grow.

“There are several technology companies we’ve invested in, mostly to support government initiatives,” he adds. “We’re working with different branches of the military on an unmanned vehicle and a company that works in procurement automation.

“We’re looking into a lot of different businesses right now and we hope to continue to expand the ship repair business. We’re also doing more work on submarines now than ever before.”