Tag Archives: board

Business, News, Politics, Transportation

Op-Ed: Making Political Hay Out of Port’s Tay Yoshitani

Tay Yoshitani

It’s difficult to get business done when someone else is playing politics.

For all the uproar over Port of Seattle CEO Tay Yoshitani’s appointment to the board of Expeditors International (where he joins former University of Washington president Mark Emmert), critics have had an uphill battle when it comes to demonstrating actual impropriety.

Some context is helpful. After the tenure of Mic Dinsmore at the Port of Seattle, the Port had acquired a reputation as a sort of clown-car, disgorging unseemly revelations. Tay Yoshitani was the commissioners’ unanimous pick to turn the Port around, both in terms of efficiency and in terms of the frequency of scandals hitting the front pages.

The commissioners coaxed him into moving to Seattle–certainly that industry-leading salary, a precedent set by Dinsmore, couldn’t have hurt. Yoshitani was supposed to be a triple-bottom-line CEO, but in the event, it has been the fiscal bottom line that he’s watched most closely. The Port’s green credentials haven’t always been a selling point.

It wasn’t an easy task to turn to the culture around–one of Yoshitani’s first challenges was riding out the porn-and-racist-email scandal–but over time, the Port made the news more reliably because of its legitimate operations, rather than backroom deals. Now, the Port is “considered among the most admired and efficient in the country,” notes the Maritime Professional blog.

Very recently, the Port has seen itself embroiled in an unhelpful dispute with the “bring back the Sonics” crowd, after weighing in against a SoDo arena. There was a hint of the bad old days to the way that it developed that “concerned private citizen” Peter Steinbrueck was actually on the Port payroll as a consultant. Now embittered Sonics fans are grinding their axe on anything that says “Port of Seattle.”

This wrong-footing was out of character for the “new” Port. But now it’s becoming clear that Yoshitani is negotiating an exit when his contract is up in 2014, and people are jostling to take political advantage of the shift. How else to read Port Commission President Gael Tarleton’s actions?

The Port Commission agreed to an employment contract with Yoshitani that specifically permitted his appointment to a for-profit board. (Tarleton was against it, in fairness, but it passed a vote. Presumably she knows something about the stress of juggling two jobs, though, since she’s also running for state representative while acting as Port commissioner.)

In any event, when the Seattle Times runs a headline that notes “Port CEOs elsewhere rarely sit on boards of for-profit companies,” it’s somewhat off-the-mark. It would be better phrased: “Port commissions elsewhere rarely allow Port CEOs….” And yet ours did. It seems churlish to blame Yoshitani for that

The level-headed Jon Talton (also at the Times) wonders what Yoshitani is thinking. The Puget Sound Business Journal has the answer to that:

Now age 66, Yoshitani said joining a private company board fit his long-term plans for what he called the “twilight” of his career. That was why he had secured a clause in his port contract three years ago permitting him to join such a board, because he saw that as a way to transition from full-time work.

Still, the conflict of interest question–even though people have trouble nailing down precisely how Yoshitani might use his influence to benefit Expeditors at the expense of the Port–is a fair one. The Port’s missteps often arise from failures of governance, and this is no exception: Here, a Port employee was in the position of vetting conflicts of interest in his boss’s retirement strategy.

It is genuinely worrisome that the Port Commission, even before Yoshitani has left, has shown signs of slipping back into its former role as a CEO rubberstamp. It happens that I think confidence in Yoshitani’s integrity is well-placed, but why expose your CEO and organization to this when outside counsel is available?

Business, News, Transportation

New Engines to Put Boeing 737 Family on a Fuel Diet

Boeing 737 image courtesy of Boeing

It’s hard to fathom the sheer tonnage of fuel used by air travel. Today’s official announcement by the Boeing Company board that the 737 family will be re-engined, creating a line of 737REs, is frequently being described in terms of percentages: “The U.S.-based manufacturer expects the 737RE’s 737 MAX‘s fuel burn to be 16 per cent lower than the current A320 family and 4 per cent lower than the A320neo family.”

You start getting more of an idea of the scale when Boeing says: “When compared to a fleet of 100 of today’s most fuel-efficient airplanes, this new model will emit 277,000 fewer tons of CO2 and save nearly 175 million pounds of fuel per year, which translates into $85 million in cost savings.”

Counterpoint: Airbus head John Leahy shoots back, “Once again, Boeing is in denial. The re-engined 737 cannot possibly match the fuel efficiency and maintenance cost savings of the A320neo family.” Boeing claims to have 496 orders in hand already, so at least a few airlines are willing to make the bet that Boeing can compete. Squishily, from an engineer’s perspective, Boeing points to improvements in fuel efficiency of “up to” seven percent since its Next Generation 737s launched in 1998.

The new boost will be due simply to strapping on new CFM International LEAP-1B engines and calling it good. (The Airbus A320neo will also use a LEAP engine, but CFM has optimized the 1B for Boeing’s use.)

Looking at the company functionally, besides its planes, Boeing primarily flies fuel around the world. Secondarily, in terms of weight, come passengers and other cargo. The Boeing 737-600, itself an advance in fuel efficiency, can carry some 46,000 pounds of jet fuel…and 132 passengers. (If the passengers are 200-pounders, that’s 33,000 pounds.)

Boeing’s earlier fuel-savings estimates were based on a 100-plane fleet, but the company is also forecasting demand on the order of 23,000 737s over the next 20 years (nearly $2 trillion in sales). That’s 40,250,000,000 pounds of fuel saved annually. A percent here and there really starts to add up.

Arts & Entertainment, Theatre

Andrew Russell and the Intiman in October

A message from the Intiman (Photo: MvB)

“I’m a little dumbfounded,” I wrote Bruce Bradburn, Intiman’s board chair, “that there’s not been a full public accounting prior to what sounds like a praiseworthy attempt to reinvent the theatre artistically.”

I’d just read Misha Berson’s story in the Seattle Times, on Intiman’s plans to reopen with Andrew Russell at the helm (while wishing Berson had asked a business reporter to collaborate):

Russell’s goal for 2012 is to establish a loose collective of playwrights, directors, actors, designers and others to devise projects for Intiman to produce, in a short “micro-season” mounted next summer.

Russell came to Intiman in 2009, from New York, to take the position of Associate Producer; he also conceived and directed The Thin Place, a show that was more interesting, I think, to talk about later than to sit through. More recently he staged the Seattle Men’s Chorus production of Jake Heggie‘s For a Look or a Touch, a work originally commissioned by Seattle’s Music of Remembrance.

Still, nothing in the announcement of Russell as consulting artistic director cast new light on how Intiman planned to reinvent itself as a company that wouldn’t financially crash and burn in spectacularly public fashion. Last fall, Intiman’s managing director left abruptly, a substantial amount of debt was “discovered,” and a desperate fundraising drive’s “success” was followed by the news that Intiman would close its doors.

While initially the Board claimed that it was “Shocked! Shocked!” at this evident gambling with Intiman’s financial future, it also developed that at least part of the Board had approved spending down millions of dollars from Intiman’s endowment over the past few years (it’s now been entirely spent on retiring debt).

The decision to hire Russell as consulting artistic director is a very preliminary step, Bradburn told me. In October, the full plan for the theatre will be revealed. That’s when Russell and the Board will present their artistic and business strategy to arts funders and to the Seattle Center, which remains on the hook for rent for the Intiman Playhouse. (Bradburn also disputed the accuracy of some of the points I raised in my email–though of course the Board has yet to release an official audit of the crisis, which would make accuracy a little easier to come by.)

With these early details, you get the impression that Intiman plans to follow in ACT Theatre’s footsteps, which is not surprising since they’re being advised by consultant Susan Trapnell, author of ACT’s near-death turnaround. In particular, Intiman may become as much a hosting venue as a self-producing one, though (since Intiman doesn’t own the Playhouse) it remains to be seen if that’s as financially helpful as it is for ACT Theatre.

Another thing that may strike loyal Intiman-goers as strange (besides the members of the original “hold-up gang” appearing to circle around for another run at them) is the emphasis on how this reinvention is a return to Intiman’s core identity and roots.

The announcement makes reference to Intiman’s history of “staging innovative work and attracting a loyal following of patrons committed to exploring contemporary topics through the lens of epic stories”–“contemporary” and “epic” have to be precisely the wrong words. Simply put, Intiman was Seattle’s home for classic plays, with the space’s intimacy trumpeted in the very name.

That’s troubling because if there’s a tendency I’ve seen in this Board, it’s a willingness to believe their own spin even as it divorces itself from a reality apparent to everyone else. Break from a classics tradition if you’d like, just don’t claim that it’s not a break.

Russell told Berson that “one of the main things the board learned” from the crisis was the need to be “financially viable and artistically robust. We’d become a leaner and more nimble organization, more pay-as-you-go.”

That sounds good, but it is boilerplate that anyone on the Board could have produced for you before that last crisis–no one sets out to be artistically non-viable and artistically frail. What matters is actual practice. The group of people in charge of Intiman’s “financial viability” is the same group that oversaw the Intiman that spent itself out of existence. How they have developed a new concept of viability while being unable to divulge how Intiman reached outright closure is a mystery fit for the stage.