For a lot of locals, it's about the pineapple. They worked in the cannery as teenagers. Their uncles drove truck. Every day they pass a landscape of spiky fields on their way to work.
The only time they see Kapalua is on TV.
That's not how David Cole thinks about Maui Land & Pineapple Co.
— David Cole, CEO Maui Land & Pineapple Co.
Pineapple will remain a part of Maui Land & Pineapple, although the ML&P board on Oct. 15 imposed conditions on continued planting. On a field in Haiku, worker Domingo Ancheta tossed a bundle of pineapple tops to be planted at about the time the board was giving its approval to a plan to cut down but maintain pineapple operations.
The Maui News / AMANDA COWAN photo
Worker Ben Balenga cleans the dirt from his tools as he crosses a pineapple field Friday afternoon.
Planting luna Lito Yadao keeps an eye on the progress of workers replanting a Haiku field recently
The Maui News / AMANDA COWAN photo
For Maui Land & Pine's chief, it's about Kapalua. That's where projects are happening. That's where his board of directors meets, where most of his employees work. It's where he's staked hundreds of millions of dollars on the company's future.
Most of the Upcountry fields locals see as the face of the company, Cole sold as "noncore lands."
In 2003, AOL co-founder Steve Case, who owned 43 percent of ML&P, brought in Cole, a former AOL executive.
ML&P was land rich but struggling to break even. Canned pineapple was a money loser.
The resort was aging. Case wanted Cole to make a change. He did.
In five years of Cole's leadership:
ML&P laid off more than 800 workers, almost all in agriculture.
It reduced pineapple from 6,740 acres to about 2,000 acres.
It sold 4,000 acres, mostly Upcountry.
The cannery closed, and the company switched to only fresh fruit.
The company took control of its hotels and overhauled Kapalua.
And this month, ML&P took a hard look at pulling the plug on pine for good.
At a meeting Oct. 15, the board of directors decided to allow planting to proceed at Haliimaile. But it imposed strict conditions on the plantation, including negotiating with labor, reducing costs and establishing "triggers" to automatically shut down pine operations if monthly and quarterly losses get too deep.
Pineapple cannot be allowed to drag the parent company down, Cole said.
"I am personally committed to do whatever I can to sustain this (pineapple) business within reason," he said. "But the board has placed very stringent boundaries on what 'reason' is."
Cole says he inherited a company that was slowly sinking under a 40-year-old business model. He acknowledges missteps but insists aggressive, fundamental changes were needed to turn ML&P around.
"We have to deindustrialize," he said. "The culture that grew up around steel making and canning and commodity pineapple - it's hard for some people, but it has to go."
Cole's critics say he's impulsive, and that his half-baked decisions have cost millions in mistakes. They say he's taken the heart out of a business that once stood for a commitment to its people, lands and community.
Claire Sanford, a former board member and the niece of former company CEO Colin Cameron, said her family saw ML&P as "a legacy, an obligation in the best sense."
She said when Case and Cole took charge in 2003 she knew things would change.
"Here was a group of people that was really going to be looking at the bottom line a lot more," she said.
Most say Cole's biggest mistakes were in pineapple - and he agrees.
The company accelerated the switch to a new variety of pineapple better for the fresh market.
Longtime managers were replaced, and the plantation saw frequent turnover.
The cannery shut down, laying off hundreds.
After previous management had shut down the Honolua operations, Cole moved pineapple back there.
He spent $17.5 million on a "multi-commodity, multi-client" processing plant that will be closed.
This year, he again shut down Honolua, moving pineapple back to Haliimaile.
Cole's management has been mercurial, said International Longshore and Warehouse Union Maui Division Director William Kennison. Constant change has unsettled employees, and poorly thought-out plans have wasted money, he said.
"When things are rough, they don't have the willpower to continue," Kennison said. "They change right away, rather than staying with the plan."
Cole still believes moving faster into fresh pineapple and out of canning was right.
The new variety, Maui Gold, was a better product but more temperamental to grow than the old canning pine, Champaka. Cole said he moved operations to Honolua because that's where Maui Gold grew best.
But when the plantation downsized again this summer, Haliimaile became more economical, he said.
The cutbacks also leave the company with an expensive packing plant in Kahului it doesn't need.
In 2005, Cole spent $17.5 million on the new plant, but the project came in so far over budget that only a fresh-pine packing facility was completed. ML&P sued the designers.
Now that pineapple is less than a third of its former size, the facility is too big. Cole plans to move some equipment to a modest plant in Haliimaile - exactly what his predecessors planned five years ago.
Former Maui Pineapple Manager Doug MacCluer called the project a "fiasco" that showed Cole's ignorance of pineapple. The plant had expensive gadgets like scanners to sort fruit - which were foiled by pineapple's uneven color.
"They spent all this money, huge amounts of money, for something that didn't work very well," MacCluer said.
Kennison said the blunder reflected Cole's style.
"Maybe it's Monday-morning quarterback, but they should have stayed the old course," he said. "The money they poured into making these changes could have been used to strengthen the company."
Today Cole calls the project "unwise."
"I think we did that prematurely, and in retrospect it was a mistake - and clearly my mistake," he said. "If we had to do it over again, I would have kept it at one farm, kept it at one plant."
Some also think Cole was too quick to replace experienced managers who had valuable knowledge of the company, lands and crop.
Almost as soon as he arrived at Maui Land & Pineapple, the company saw rapid turnover in upper and middle managers - some because they were asked to leave, others who quit.
"People in management were dropping like flies," said Vance Honda, who headed the Field Development Department until he was let go last November.
The changes threw workers off balance, he said.
"There was always uncertainty," Honda said. "A lot of employees were wondering what was going on and why all these people were leaving the company."
MacCluer, who retired in 2003, said the company lost experience when longtime managers left.
"One side of the farm gets 12 inches of rain, and the other gets 125," he said. "Someone's got to understand that."
Cole said new blood was needed. He recruited managers from Del Monte who had experience growing the hybrid low-acid variety for the fresh fruit market jointly developed by the two companies. Del Monte markets its version as Del Monte Gold Extra Sweet; Maui Pine as Maui Gold pineapple. But Cole said he wasn't impressed with some members of the old Maui Pine team.
He recalled that in 2003 when he asked for field and harvest data, he couldn't get it.
"There was no effort to do the most rudimentary record-keeping," he said. "That kind of 'institutional knowledge' I don't need."
Cole's ML&P is planting just 30 percent of the land it had in pineapple in 2003, and has cut agricultural jobs from 1,040 to 240.
But question his commitment to pineapple and he bristles. He says the company's poured $100 million into losses and investments in agriculture since 2003.
"I don't know what could be a greater commitment than investing in new machinery, new skills, new plants, new markets - huge amounts of capital," he said. "I'd turn the whole thing around and say, 'You're nuts.' ''
But MacCluer said that by throwing money at risky projects, selling farmland, losing experienced managers and cutting jobs, Cole's driven pineapple into the ground.
"I don't see how they can make it," he said.
ILWU director Kennison said layoffs hurt the most.
"It's been very painful," he said.
Altogether the cuts are "drastic," but dragging them out year after year was demoralizing, he said.
"People kept wondering, what's going to happen next?" Kennison said. "I can imagine how they're feeling, working there, not knowing when your number is going to be called."
Cole said he had to cut the plantation to save it.
"We went too far in our investments in pineapple," Cole said. "In retrospect, it should have been smaller, faster."
Kapalua Farms Manager Wes Nohara agreed, saying the only way for pineapple to succeed is if it can be flexible and react to a changing environment.
"We need to simplify operations, get it smaller and set it up for success," he said. "Some of the things we've done recently move us in that direction. Painful, but the right thing to do."
Kennison gave pineapple a "50-50" chance. He said the union was telling members to prepare for more bad news.
"My feeling is the next one will be it," he said.
If pineapple is Cole's headache, Kapalua is his elixir.
"That's probably been our strongest performance, in retrospect, the repositioning," Cole said.
When he arrived, the 30-year-old resort was deteriorating and attracting lower-spending customers.
Just as bad, the Kapalua Bay Hotel and The Ritz-Carlton, Kapalua were managed by outside firms that competed with each other. ML&P's only revenue from the hotels was from its ground leases.
Cole moved fast to bring the hotels back under ML&P's flag and give them complete makeovers.
In 2004, ML&P partnered with Marriott International and Exclusive Resorts - a company owned by Steve Case - to demolish the Kapalua Bay Hotel and replace it with a pair of luxury residential condominium projects. Marriott and Exclusive Resorts provided most of the initial cash, and ML&P kicked in the land for a 51 percent interest in the project.
The company also took over the Ritz-Carlton property, selling the fee-simple interest in the site to acquire an operating interest in the hotel itself. It partnered with the hotel-development firm Gengate, and the hotel closed in July 2007 for a $180 million, six-month upgrade, including the redevelopment of one wing into residential units.
The two projects combined represent more than a $600 million investment.
Cole calls it "the most ambitious repositioning effort in the history of the Hawaiian hospitality industry."
But the overhaul wasn't easy.
Closing almost the entire resort, including golf courses, for upgrades resulted in multimillion-dollar losses for 2006 and 2007.
Last month, the company lost financing for the Kapalua Bay redevelopment when Lehman Brothers, which had agreed to loan $370 million, went bankrupt. The partnership had to come up with cash to pay contracts.
The two projects - 84 individual-owned Residences at Kapalua Bay and 62 joint-owner units in the Ritz-Carlton Club - which are 80 percent complete, could be in jeopardy if ML&P can't find a new lender. Any new financing is expected to come with stiffer interest rates, eating into the project's profitability.
Now Kapalua is reopening just as tourism takes a slide.
"Now we're in the middle of a recession, and lift is down, and there's a bunch of things working against us," Cole said. "But we are taking share, and we are executing every element of our resort."
Cole says his plan to develop Pulelehua, a new affordable project for workers, remains critical to the future of the company and the resort. The project district needs approval of zoning and community plan amendments from the Maui County Council, and could be pushed back until the economy improves.
"Can you finance it today? Absolutely not," he said. "Should we proceed with its planning and hope to build it as soon as we see an improvement in the financial markets? Without question."
While ML&P was long owned by the Maui-based Cameron family, which also owned The Maui News, its present owners made their fortunes in Silicon Valley.
Steve Case bought 41.2 percent of the company in 1999, and now owns more than 47 percent.
The Honolulu-born Case likely found the company's 28,600 acres "intriguing," said Kahului-based stock analyst Irwin Yamamoto.
"The first thing when you look at Maui Land & Pine, the earnings don't jump up, but the real estate does," Yamamoto said. "Case being a smart businessman would look at that as an undervalued asset."
In 2000, Case also bought Kauai's Grove Farm, a 22,000-acre former plantation and ranch that was owned by the kamaaina Kauai Wilcox family.
Also in 2000, Case, the co-founder of America Online, initiated what proved to be a disastrous merger of AOL with Time Warner. The deal cost stockholders over $100 billion, and the company later paid $450 million to the federal government to settle charges of improper accounting. Case stepped down as CEO in 2003.
Cole, who was also born in Honolulu, was an executive with AOL from 1994 to 1997. He was named in a 1997 lawsuit that accused 19 former AOL officials of inflating earnings and selling stock at artificially high prices. AOL paid $35 million to settle in 1998.
Cole bought 422-acre Sunnyside Farm in Virginia for $1.5 million in 1996 and reportedly spent $20 million restoring it as a successful organic operation. He sold it for $7.5 million in 2006.
He is president of investment management firm Aquaterra Inc., CEO of Hawaii Bio-Energy, and is on the boards of Hawaii Superferry, Sunrise Capital LLC and Grove Farm.
Under Cole, ML&P has courted other high-tech investors. Last year, a company controlled by eBay founder Pierre Omidyar bought $10 million in stock, and a company controlled by former AOL executive Miles Gilburne bought $5 million in stock, in a private sale of new shares.
Claire Sanford, the former board member, said Case handpicked Cole to lead the company.
"It was very, very clear who Steve Case wanted, and the people who were his allies on the board didn't look at other people quite as seriously," she said.
Her cousin, former board Chairman Richard Cameron, declined to comment.
While Case in 1999 helped save the company, Sanford said that by 2003 she realized that he wanted to make changes.
"All I knew was that it was going to be spearheaded much more directly by people who were not family," she said. "And perhaps we were going to be looking at the land, and what Maui Land & Pine had in a much more direct way."
She sees "opportunities for abuse" in deals made with other Case companies, such as Exclusive Resorts.
"You're representing Maui Pine, but you're also connected to Exclusive Resorts," she said. "You may make a different kind of deal that isn't necessarily only watching out for Maui Pine."
A plan to develop a spa with Case-owned company Miraval did not go forward.
After being forced off the board in 2005, Sanford sold all but 10 of her shares, many of which had been given to her as a girl as part of her family's legacy.
"I don't even recognize the company currently," she said. "There's no heart left. It's become a very different kind of place."
Ilima Loomis can be reached at firstname.lastname@example.org.