Fueling up a family business

By Elise Hamner, City Editor
Thursday, March 01, 2007 | No comments posted.

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You can take the business out of the family, but you can't take the family out of the business. Or, maybe the reverse is true with the Davis family in North Bend.

Harry Davis and his son, Chris Davis, are now co-owners of Carson-Davis Oil Company. The new company took over the assets of the former Dedicated Fuels Inc. in a recently completed deal with Portland-based Carson Oil. Together, the Carson and Davis families formed the subsidiary that bought out Dedicated Fuels in February.

“We're a full service petroleum jobbership,” Chris Davis said.

That means the company sells fuel wholesale and retail, while also managing a lubricant supply trade. There's also a fleet of 18-wheelers that carries fuels on down the line, and tank-and-wagon trucks that deliver residential and heating fuel.

The company employs 50 to 60 people, depending on the season, according to Davis. It owns all the Shell and some Chevron gas stations on the South Coast between Coos Bay and the California border.

It's not a case of big oil controlling the South Coast, rather that's what it takes to stay in business, said Paul Romain, the Oregon Petroleum Association's executive director. Fuel companies these days make pennies per gallon, so owning more stations makes financial sense.

“It doesn't affect the competition, but you might be able to be more competitive,” Romain said.

In reality, major oil companies own fewer than 10 percent of the stations in Oregon, according to Brian Doherty, an attorney with Miller Nash LLP, a law firm in Portland that represents big oil.

“I think they have found that these folks do it more efficiently than we can,” Doherty said.

While there's been talk over the years of big oil companies taking over gas stations, Doherty said that just hasn't materialized.

“Having someone there who's kind of invested in the ownership of it makes it a better situation for profitability for the station,” he said.

Chris Davis echoed that opinion.

“We're local people. We own houses here. We have families here,” he said.

It was his dad, Harry Davis, who stepped into the local oil business in 1965, operating Davis Fuel Services. Over the years, the business grew. In 2001, however, Harry Davis sold out. His son stayed on with Dedicated Fuels up until last month's buy out - or buy in from the Davis perspective.

On the Carson family side, despite the main company being based in Portland, there is a local tie there, too. John Carson, the founder of Carson Oil, lived in Coos Bay as a youngster, Chris Davis said.

“It's neat to see how people who originally came from this area grow out and come back here,” he added.

Chris Davis is managing day-to-day operations here, while Harry Davis will serve primarily as an overseer and advisor. He plans to rely on his dad as a sounding board.

“He's like a petroleum encyclopedia to me” Chris Davis said.

Harry Davis is pleased to have seen the business grow over the decades, and recalled how his wife, Vicky Davis, was his right hand helper in years past. But with the elder Davises retired, there's only room for one boss and Chris Davis is competently it, Harry Davis said last week.

“I'm going to stay at arm's length,” he added.

Chris Davis will face a formidable challenge. The gasoline business is volatile, as people have noticed just with prices on the street over the last several years.

“Many people don't realize it's a public commodity tied to the stock market,” Chris Davis said.

That's led to the price instabilities. Twenty years ago, Davis explained, prices changed maybe twice every six months.

“Dad would rant and rave and stomp around,” he recalled.

Nowadays, the company employs one person full time to sit in front of a computer screen and monitor fuel prices. Trying to buy low helps level out prices, Davis said. There are 13 potential suppliers for wholesalers such as Carson-Davis, and in all, probably 60 to 70 variations on pricing on a typical day.

And when it comes to prices at the pump, the business isn't immune to local politics. Should Coos Bay-North Bend add a local gas tax to fund road repairs, Davis' company would get the task of passing on the fees and sending the money to the cities.

“We're not driving the issue,” he said, adding he would prefer to see the issue go to a public vote first.

Politics aside, Carson-Oil is looking to the future. Davis said his company is becoming involved in the biofuels business. Already, it is stocking 100 percent soy-powered fuel at the main facility at the end of Newmark Avenue in North Bend. The hope is to begin offering the fuel at two retail tanks later this year. The biofuel blends, known as B5 and B10, cause no adverse effects on engines, Davis said.

Unlike regular fuel, biofuels aren't publicly traded so the prices are very stable. The flip side, though, is that type of fuel is more expensive than fossil fuels, at least until fossil fuels prices are high.

While change is guaranteed these days, there has been one constant that has kept the Davises in the fuel business.

“One of the factors that we looked hard at in buying the business ... was the people,” Davis said.

He added that some employees have been with the North Bend operation for 15 or 20 years.

“They've kept us around here for a long time.”
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