La Conner Community News staff
Less than three years after executives touted expansion plans, American Tug filed for Chapter 7 bankruptcy Monday, leaving employees without jobs and ending a 27-year chapter in the town’s maritime economy.
Its parent company, Kadey-Krogen Yachts, also filed for Chapter 7 bankruptcy Monday.
Chapter 7 bankruptcy allows individuals and businesses to liquidate non-exempt assets to discharge unsecured debts, according to Investopedia.
The layoffs may have impacted an estimated three dozen workers, based on a workforce count from 2023 that are the most recent figures available. La Conner Community News reached out to American Tug for comment and to confirm the number of workers affected, but the business did not return requests for comment by press time.
“Truly a loss for not only La Conner but the entire region,” Mayor Marna Hanneman wrote in an email.
Linda Tyler, communications director for the Port, wrote in an email that the Port will wait for official word on the bankruptcy filing and proceedings before determining next steps.
“The Port was very sad to learn that the business had shut down their operations on Monday. American Tug was a long time and valued tenant at the Port of Skagit,” she wrote.
American Tug was founded in 1999 and operated in a 28,000 square foot facility in the Port of Skagit at 800 Pearl Jensen Way, where it built semi-custom cruising vessels ranging from 36 to 48 feet that attracted buyers from across North America.
The company also became an example cited by the Port of Skagit as it explored long-term marina redevelopment, with officials pointing to the need for workforce housing to support expanding maritime employers.
Just three years ago, American Tug appeared to be entering a new era of growth.
The Kadey-Krogen Group acquired American Tug in May of 2023. Company leaders at the time told La Conner Weekly News that the acquisition would bring new investment while keeping boat production in La Conner.
The last Port tenant census, conducted in 2023, reported 33 employees.
Kadey-Krogen retained the local leadership and its executives projected expanded sales, engineering collaboration and a larger service operation at the La Conner Marina.
Then-general manager Troy Olason described to the Weekly News a two-year backlog of customer orders and said the company’s greatest challenge was hiring enough skilled workers to meet demand. American Tug planned to increase production from six boats completed in 2022 to nine in 2023, with expectations for continued growth as Kadey-Krogen expanded its East Coast sales network.
Company officials also envisioned the La Conner facility becoming the Northwest service hub for hundreds of Kadey-Krogen and Summit yachts, creating additional business for marine service companies and other downtown businesses.
By the fall of 2023, American Tug was emphasizing workforce development as a cornerstone of that growth strategy. The company partnered with Skagit Valley College’s Maritime Center to allow employees to work mornings in the factory and attend afternoon classes, while also developing internships through the Northwest Career & Technical Academy’s marine program. Hiring continued across a range of skilled trades, including fiberglass fabrication, carpentry, electrical work and marine systems installation.
The company reported an 18-month backlog of orders and anticipated building eight boats in 2023 and as many as 10 to 12 in 2024. Olason said at the time that demand could increase further with the launch of a new East Coast sales team, noting that finding qualified workers — not customers — was the company’s primary constraint.
Luisa Loi and Kari Mar contributed to this report.
