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It continues in the executive building's spacious lobby, decorated
with American flags and imagery of the country's most prestigious,
no-nonsense bird, the eagle.
It extends all the way into the office of Tim Wahlberg, a
former helicopter mechanic turned company president. On display
is a framed quotation by Hannibal, the brilliant Carthaginian
general who whipped the Roman army in 217 B.C. by hauling 40,000
troops and a contingent of elephants across the Alps during winter:
"We will either find a way, or we will make one."
Wahlberg's day often begins on a cell phone as he drives to
work in the early morning, arriving about the same time as Del
Smith, the company's founder and board chairman.
"For management, it's starting in meetings at 7 o'clock
in the morning, so you probably show up around 6:30," said
Wahlberg, describing a typical day at the campus where some 500
employees work. "We probably wrap up around 6:30 or 7 o'clock
every night. We work on Saturdays about half days, and if we're
in the middle of a big project, we forget about Saturdays and
Sundays and work right through."
Whether it's the gung-ho patriotism reflected by the flags
and eagles, the workaholism of its employees or the intense,
hard-edge work environment former employees speak of, it defines
Evergreen. A powerful work ethic and uncompromising can-do attitude
have built the company.
"I sleep with one eye open," said Smith, who founded
Evergreen in 1960 as a crop-dusting outfit. "Don't think
you can get complacent. You gotta keep scrambling."
Modest origins
Since the early 1960s, when Evergreen built its business flying
timber jobs for the U.S. Forest Service with a handful of helicopters,
Smith has spent a lifetime scrambling from one deal to the next.
In the process, he has built the McMinnville-based business into
what is generally regarded as one of the world's most dynamic
aviation companies.
To a public that is probably not versed on the difference
between a DC-9 and a Bell-205, the aviation industry is probably
as obscure as the industry magazines on display in the Evergreen
lobby - "Aircraft Technology" and "Transportation
and Distribution," for example.
Evergreen's airplanes and helicopters transport freight, equipment
and personnel around the world 24 hours a day, seven days a week.
That's the core of its business.
However, one of the company's strengths is the range of its
endeavors. According to the November issue of "Professional
Pilot," a trade magazine, Evergreen "has developed
the most diversified scope of capabilities offered by any global
aviation company."
Smith's company does everything from putting out oil fires
and plucking stranded climbers off Alaska's Mount McKinley to
hauling NASA's space shuttle around on the backs of 747s and
handling mail at the U.S. Postal Service's hub in Indianapolis.
Crews with EAGLE, the company's ground-support subsidiary,
are charged with overseeing the postal contract. But Evergreen
Vice Chairman Ron Lane said they actually do "everything
from mow the lawn to load the airplanes" - the model for
Evergreen employees everywhere.
Public contracts a key
Evergreen International Aviation Inc. is a holding company
formed in 1978 with Smith at its center. The chairman presides
over a diverse collection of subsidiaries, including Evergreen
Helicopters, Evergreen International Airlines, Evergreen Aviation
Ground Logistics Enterprises (EAGLE), Evergreen Aircraft Sales
& Leasing and Evergreen Agricultural Enterprises.
Evergreen's many and varied operations employ about 5,000
workers around the world, all but a handful of them nonunion.
The centerpiece is the airline subsidiary, which flies about
45,000 hours per year in its 747 aircraft and its fleet of DC-9s.
It topped $300 million in gross sales last year, accounting for
more than half of total Evergreen revenue.
To a large degree, Evergreen's fruits have come from doing
the government's labor.
Officials estimate that, depending on the subsidiary, anywhere
from 20 to 60 percent of Evergreen's contracts are with federal
agencies. Customers include the Forest Service, Postal Service
and Air Force.
Wahlberg ventures that about a fifth of the jobs at Evergreen's
aircraft maintenance facility in Arizona arrive through public
contracts. But then the Evergreen Air Center is one of only three
facilities in the United States approved for all types of aircraft
work.
Smith, a Republican who donates generously to like-minded
congressional candidates, makes no secret of his fierce patriotism.
"If there's a need, we'll be there," he said. "The
country doesn't have to ask. We'll volunteer. We're pledged to
serve God and mankind."
Evergreen's missions, particularly those for the federal government,
highlight that fact.
In addition to the routine business of handling the mail in
Indianapolis, the company has presided over more glamorous tasks.
In 1980, for example, it was an Evergreen DC-8 that flew the
deposed Shah of Iran from Panama to the relative safety of Cairo.
The international intrigue of missions like the 1980 shah
flight - and Evergreen operates in many far-flung parts of the
world, so it gets its share of them - has boosted the company's
mystique. However, it also has exacted a public relations price
at times.
In the mid-1980s, when the Reagan administration was flexing
America's muscles in Central America, hundreds protested in front
of Evergreen's Three Mile Lane campus after TV news reports probed
the company's activities abroad. In 1988, The Oregonian newspaper
explored long-rumored ties between Evergreen and the Central
Intelligence Agency in a massive, nine-part series.
Lane says that in retrospect, the series raised questions
that had "no easy answer" and was ultimately of no
consequence to the company. Smith doesn't much like talking about
Evergreen's so-called CIA connection.
He has issued denials in connection with several news reports
on the subject. At the same time, he makes no secret either of
his personal patriotism or of Evergreen's willingness and ability
to handle "sensitive" assignments for its country.
It bothers Smith that anyone would draw "the wrong impression"
from that.
"We support the activities of the U.S. government,"
he told Forbes magazine in 1990. "What's wrong with that?"
In any event, the allegations Evergreen faced in the 1980s
over its government ties pale in comparison with the challenges
it faced in the 1990s after getting itself badly overextended
financially.
The company's very survival moved to the front burner in the
early 1990s, though news reports at the time generally failed
to fully appreciate it. The reality, Smith says today, is that
Evergreen was walking through "the valley of death."
The formative years
Smith spent the 1970s and 1980s accumulating the pieces and
the players that today make Evergreen, which has emerged from
its financial crisis to become expansion-minded once again.
In 1975, he bought a CIA airfield in Marana, Ariz., now the
Evergreen Air Center, and a company called the Johnson Flying
Service.
The latter gave him a crucial piece of the puzzle, an international
transport permit. Such permits later became readily available,
but could be picked up at the time only through purchase of a
company that had one.
He then set about buying airplanes, starting with DC-9s, used
in shipping military cargo, and DC-8s, used for transporting
passengers internationally. In the 1980s, he began adding 747s
- big, wide-bodied aircraft that transport cargo domestically
and internationally.
It all nearly fell apart in the early 1990s, though, when
a recession began cutting cargo volume just after Evergreen experienced
a major problem with its fleet of 747s that had been leased to
Pan American Airlines.
Pan Am filed for bankruptcy, Lane said, and it turned out
that the company had not properly cared for the 747s. That saddled
Evergreen with huge maintenance costs on top of a big debt burden.
About the same time, Evergreen lost a key freight service
contract with Japan Airlines. And tighter times were cutting
into business elsewhere.
In the winter of 1994, a red flag went up: The company was
not going to be able to make an interest payment on time, triggering
discussions about a restructuring of its debt.
But even as the talks progressed, one Portland-based creditor
went to court to get more than $10 million in past-due interest.
By the time a U.S. District Court judge ordered Evergreen to
cough up $10 million in September 1996, the company had failed
to meet obligations on its debt for two years.
In 1997, Evergreen averted a meltdown by landing a $400 million
refinancing package from the New York banking firm Chase Manhattan.
The negotiations took an agonizing eight months.
Smith said Evergreen came "damn close" to bankruptcy.
Wahlberg played the lead role in working out the refinancing
deal. "It took a great weight off our back, primarily with
the interest," he said.
"The interest was the one thing that was giving us a
tough time, and they could clearly see that if they restructured
the loan, and got us into a lower interest-rate package that
we could be profitable," he said of officials at Chase Manhattan.
Company officials said the deal has given Evergreen its second
wind.
"Adversity is the launching pad to something bigger and
better," Smith said. "Now the banks are all over us
like grass. Some of them will strap in and go through the turbulence
right with you; some won't."
Good times again
Although Evergreen has experienced plenty of financial turbulence
in the 1990s, it is closing out the decade, century and millennium
on a high note in this, its 40th year.
An economic flu hit Asia in 1997 and 1998, and Evergreen does
a lot of business there. But this time, the economic turn worked
in the company's favor.
"You might think this is crazy, but it was a real benefit
to Evergreen," Wahlberg said. "The one thing the Pacific
Rim countries needed to do was export product. I mean, that's
really the labor force of the world. That was really good for
Evergreen, because the only way they are going to export that
product - at least the high-value product - is by air."
Evergreen International Airlines is expecting to add one 747
per year over the next five years, according to Lane. And he
said it is expanding its DC-9 capacity 20 percent this year.
EAGLE also has become a big contributor to company growth.
It is projecting a 20 percent increase in revenue this year.
According to "Professional Pilot," it is expected to
contribute a healthy $100 million to the company sales total.
Meanwhile, across Three Mile Lane from Evergreen's corporate
headquarters in McMinnville, construction crews are working on
a structure that may well rival the majesty of the F-16: A multimillion
dollar museum to house Evergreen's crown jewel, the Howard Hughes
"Spruce Goose" Flying Boat.
The fabled plane was acquired by Smith in 1992. A huge museum
showcasing it and other planes in Smith's collection is slated
to open next year.
While Smith is reveling in the company's current performance
and near-term prospects, he is about to enter his 70s with no
clear successor in sight. The issue was hit head-on earlier this
year in a Journal of Commerce story carrying the ominous headline,
"Evergreen flying 'for sale' sign."
Smith was quoted, based on a telephone interview with reporter
John Davies, as saying he was "thinking of an exit strategy"
and that meant the company was "available."
Key Evergreen executives, including Smith, Lane and Wahlberg,
were upset about the article.
Wahlberg, who recalls being in the room when Smith gave the
interview, said his remarks were taken out of context.
"He simply made the comment that everything's for sale,"
Wahlberg said. "The world's our marketplace and we really
have no boundaries, and if somebody wanted to buy into our company,
we'd certainly take a look at it, if it made sense for the growth
and the future of the company."
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