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Insight: Ocean Alexander President Johnny Chueh on leading the next generation

Business
Written by
Georgia Tindale

The man at the helm of Ocean Alexander, Johnny Chueh, never expected to be where he is today. Becoming President and CEO of the Taiwanese shipyard wasn’t exactly part of the plan for the 46-year-old, as he explains to me during a rare moment of calm at the Cannes Yachting Festival. Taking refuge in the galley on board the Ocean Alexander 90R which was making its European debut at the show, we take the opportunity to escape the stifling heat and go back to the beginning.Ocean Alexander 90 RevolutionPhoto: Marc MontocchioChueh’s early years were spent in Taiwan, moving to Australia for his schooling and enrolling in the highly prestigious and demanding University of Chicago economics programme for his bachelor’s. After this, it was a stint as a research assistant for psychology and then a business professor with the idea of earning himself a doctorate in organisational behaviour for a future career in academia. Next up, to gain some practical business experience before starting graduate school, Johnny joined Mitchell Madison, a Chicago consulting company. And then? A serious fork in the road.Johnny CheuhPhoto: Alexander MarineJohnny’s father, Alexander Chueh, had launched his Taiwanese boat-building company in 1977 and had allowed his children to follow their own paths, with Johnny’s elder sister choosing to study divinity. As Johnny explains, “He was resigned to that. I know that deep down he wished one of us would take over the family business, and it is traditional to pass on the family legacy to your own blood in Taiwan, but he was mature and modern enough in his thinking that he knew he couldn’t force us.” But then fate threw one of her curveballs and Alex fell and suffered a stroke in 1998 at a dinner he was hosting for the yard’s workers. This impaired his speech and mobility and resulted in him being unable to run the company. To ensure the orderly succession of the company to professional managers, Johnny and his sister agreed to spend a year each in Taiwan to support their father with the transition period. Ocean Alexander 84 RevolutionPhoto: Ocean Alexander Resigning from his Chigaco job, Johnny moved back to his birth country and, at the age of 24, started his year’s experience in boat building and managing Ocean Alexander. With no experience whatsoever, Johnny got stuck in, spending a month in the plant production cycle and getting to grips with the basics of woodworking, fibreglass laying, electricals, mechanical systems, boat finishing and more by working side by side with the workers and earning their trust, proving that he was so much more than just the boss’ son. Next, he went to the office to perfect the art of communication, learning all about the business’ inner workings and clients and making the most of his fluency in Mandarin and excellent English. He also shadowed the managers and spent time inspecting the yachts in various stages of construction, learning everything he could and asking endless questions until his curiosity was satisfied. Ocean Alexander 90 RevolutionPhoto: Marc MontocchioDespite all this effort, Johnny was determined that this experience would only be for a year, after which he would be able to enrol in graduate school and his real career could start. Except, of course, this hasn’t happened yet. “My sister said, ‘I know I promised I would come, but I’m not coming back, so you deal with it, Johnny.’ I was fine with doing it for another year.” And then another year, and another, and so on. His father’s health continued to fluctuate and Johnny gradually began to take on more responsibility at the yard, checking on projects from abroad while visiting his mother in Australia, who passed away from a serious illness in 2000. As Johnny remembers it, his father’s uncertain health helped to maintain a frictionless relationship between the generations. Ocean Alexander 90R yacht foredeckPhoto: John Lair“When I came back, my role gradually changed. I think if you’re a first-generation businessman, you need to be a bit of a control freak because you have to manage everything in order for it to work out right, but because of his health he wasn’t able to do a lot of things, so gradually different pieces would come to me. In terms of the friction that usually happens between the first and second generation, this was reduced because of his health.” By 2002, Johnny was fully in charge of the company. “I actually applied to and got accepted for a PhD programme. I was going to be an academic and then a professor, but life sent me down a different tangent.” 

For the affable CEO, however, there are no regrets about this unexpected turn of events and it is clear that he has been caught in the spell of boat building. “I don’t really regret it because at any time I could have said, ‘No, I made a commitment for one year and then I am gone.’ I don’t want to say that the business ‘grew on me’ but I’ve always had an interest in business generally. One year lead to two, lead to three, and I’ve never left. The academia thing is probably just something that I’ll do when I’m 60,” Johnny notes with a smile.  Ocean Alexander 90R yacht beach clubPhoto: John LairWhen it comes to managing the yard and its employees, Chueh’s approach differs markedly from his father’s: a fact which he attributes to his age and international upbringing. “My father was very hands-on and controlling and in some ways, quite militaristic. This meant he was much stricter about the various bureaucracies and the various levels of regulations, with a kind of military chain of command. As part of a younger generation, I don’t think I’m particularly unique: the younger generations understand that sometimes you have to allow a little more freedom for people to just throw ideas onto the board. My particular upbringing meant I could see lots of different ways of doing things, whereas my father was born in China and then moved to Taiwan so his scope was very Asian.” 

Indeed, Johnny’s approach to running Ocean Alexander certainly has an international flavour to it which spans across the Pacific. The majority of the manufacturing takes place in Taiwan, with the parent company of Ocean Alexander, Alexander Marine, owning four factories spread across Kaosiung - each of which is designated with its own area such as tooling - and additional manufacturing also taking place in Merritt Island Florida. In terms of timings, the typical turnaround for building an Ocean Alexander yacht is 5-6 months after an order is placed. Notably, the majority of builds are semi-custom and usually warrant the construction of a new hull in order to build the perfect boat for the owner. Ocean Alexander 90R yacht saloonPhoto: John LairThere is also the retail side of the business which operates on the West Coast of the US (where Ocean Alexander is a dealer for Azimut, Tiara Yachts and numerous other brands) and marine operations in service yards on both sides of the US. Having this strong American focus has been a vital component of the Ocean Alexander business model, as Johnny highlights. “We are very concentrated on and very integrated in the US. We like to make sure that if a customer joins us in any of those chains or touchpoints, we can service them throughout the entire marine relationship.” Aside from the US, there are also dealers for Ocean Alexander boats located in Italy, Switzerland and Australia.

The trans-Pacific partnership goes back decades and, with the majority of Ocean Alexander clientele hailing from the US (around 70%), it is clearly working. Indeed, the look of the classic Ocean Alexander yacht finds its origins in the close relationship between Alex Chueh and the Pacific Northwest designer Ed Monk Jr, son of the legendary 20th-century naval architect and designer by the same name, who was the brains behind the design of the entire Ocean Alexander line at the company’s foundation. The vessels, such as the 15-metre Ocean Alexander Mark 1 (the first-ever vessel in the line) are built for long-distance, rugged cruising and are still highly sought after today thanks to their combination of classic looks, modern amenities and seaworthy performance.Ocean Alexander 90R yacht master's cabinPhoto: John LairJohnny informs me that the company is also looking to build on its production capabilities in the US in the future. “We’ve been operating in the US for four or five years now and what we’ve found is that we needed to have a manufacturing location closer to the market because once you take into account shipping, duties and taxes, it’s uncompetitive to build in Taiwan, especially at the smaller sizes. We will continue to expand our product offering and the obviously the production capability in the US factory. We’re also expanding in Taiwan and have two new factories under construction - a fibreglass factory expansion and a brand new assembly factory which will keep us in good shape for the next two or three years.” Indeed, this expansion makes sense, with the company having tripled its number of employees and doubled its sales revenue since the downturn in 2008. 

Since Ocean Alexander has expanded into superyachts, introducing their first 30-metre model in 2005, they have kept their sights firmly fixed on the US. Last attending the Cannes Boat Show in 2008, the turbulent economic situation encouraged the OA senior management team to think hard about their business strategy. “On the third day of the show, the Lehman Brothers collapsed. We talked amongst ourselves and said, ‘This is clearly not the right time to enter into a brand new market. Let’s pack up shop and concentrate all of our energy there.’ In hindsight, it was definitely the right move because the US market improved faster than the European one.”Ocean Alexander 90R yacht upper deck saloonPhoto: John LairIn 2020, however, it is a different story, and the time is finally ripe for Ocean Alexander to take on Europe. “Our market share in the US is so incredibly high that it’s harder and harder to gain any more or to grow. So, about three years ago, we started developing our product range for Europe and the international market. A lot of international markets - Asia, the Middle East, Russia, even Australasia to a lesser extent - are following European trends and design sensibilities and we wanted to develop a new product range which would enable us to take on these markets.” 

Which brings us neatly back to Cannes and the boat on which I am sitting with Johnny. Making her European debut at the show, the Ocean Alexander 90R is part of the Revolution series and comes from the drawing boards of the American-born and London-based Evan K. Marshall. Designing a 120 flagship back in 2012 and then taking on the entire new line for Ocean Alexander, Marshall has put his own twist on this new generation of yachts in order to appeal to buyers from different parts of the world, with the addition of contemporary interiors and modern, cohesive lines.Ocean Alexander 90 RevolutionPhoto: Marc MontocchioOriginally showcased in Fort Lauderdale 2018, this particular, grey-hulled 90R (hull five) is the five-stateroom version and is specifically designed with the European market in mind (the US version has four staterooms). At 27.43 metres, the boat feels both wide and tall, with clear attention given to maximising lifestyle on board thanks to her comfortable and stylish seating areas, numerous bars and generous galley. With her floor-to-ceiling windows and freestanding furniture, the boat has an open-access feel which could well appeal to a new generation of yacht buyers, as well as the capability to reach a generous top speed of 27 knots (also a clear nod towards the younger generations). Ocean Alexander 90 RevolutionPhoto: Marc MontocchioFor Chueh then, 2020 could be the year that Ocean Alexander makes a serious impression on the European market, but he’s not pushing it too quickly. Within the next two years, Ocean Alexander will be introducing a 110-foot (33.5-metre) model in the R series in a similar style which will also be orientated towards a more European clientele. “I have to accept that Europe is very foreign to us. We’re students who are still trying to learn about this market. We are not pressuring ourselves too much at this stage: we are angling for Europe, but we will go slow as we have a lot to learn.”  

That said, thinking back over all of the lessons which Chueh has learned and the tests at which he has excelled since being unexpectedly plunged into the world of boat building all those years ago, I have a sneaking suspicion that Ocean Alexander is on track to pass with flying colours. 

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