"Big" is not a word that worries Tim
Statton, executive vice president and managing director of Bechtel Enterprises
Holdings, Inc, and a Senior Vice President of Bechtel Group, Inc.
It's "small" that keeps his mind busy.
"Small" as in "small costs," "small delivery
periods" and the like. Giant Bechtel is working mightily to create
lower-cost bids, faster construction schedules less expensive plants and
more. "Reduce, reduce" might be a catch-phrase. In any case,
looking to compress and lessen has paid off exceptionally well over the
last four years.
Statton has worked at Bechtel for 25 years. Prior
to his current Bechtel assignment, Tim was president of Bechtel Power
& Industrial Company, a new Bechtel company serving the nuclear and fossil
fueled power, pulp an paper, microelectronic, biotechnology, pharmaceutical
and consumer products industries. Bechtel calls this (and others such
as Telecommuni-cation, Pipeline, Mining & Metals) a Global Industrial
Unit, or GIU. Statton's charge is to increase the Power and Industrial
GIU business around the world.
The GIU concept for Power and Industrial is
meant, of course, to leverage the synergy of diverse disciplines and industries
into exceptional product for Bechtel's customers. But it is also meant
to enhance the idea of a "center of excellence" by which the
whole unit is not only focused on delivering a project to the best of
its ability but also to retain a focus as well on "less tangible
business aspects." "These are, says Statton: Strategy, competitive
position, partnering opportunities, technological offerings and pricing.
In a 1998 interview with Statton, before he
accepted his new position at Bechtel Enterprises Holdings, he said, "It's
easy and fun and it's what everyone wants to do-go ride herd on a project.
You can touch it and see it and you know instinctively what needs to be
done to make it better-put in the pipe faster and so on-all this is very
tangible. But you have to remember the intangibles, the things that are
vital to your business. For these you have to be more cerebral. A 'center
of excellence' can help you focus on them: it puts a premium on them at
this level, more so than on a project or a regional level."
Much of what Statton has been doing is putting
economies of scale-and employee talent-to work creating "lower, faster,
smaller." Statton believes in "faster" and "less"
especially in the power field. "Four years ago we really began to
work hard on our cost structure," he recalls, "really put our
shoulder to the wheel. We said to ourselves that we have to be the low-cost
provider if we are going to be in this business."
And he did it. "We've taken 50 percent out
of the cost of a fossil fuel plant over the last four years. Back then
I would have said it was impossible. "We've worked hard with our
CADD system. We've developed very sophisticated 3D walk-through plans.
We've also maintained discipline with respect to what we will take on.
If a company comes to us with five feet of specs, we might often say,
"We'll just bid our standardized plant."
With respect to power in this country, Statton
is optimistic. "Many of the plants in the U. S. are relatively inefficient.
Merchant plants will be built by entrepreneurs in an attempt to oust the
old power providers. On top of that, the spinning reserves in this country
have fallen to about 10 to 12 percent from 43 percent in 1983, and it
is likely to fall to something just below 10 percent," Statton predicted.
"Plus, some nuclear plants may shut down, and some of our imports
of Canadian power may stop for a few years."
"For all these reasons, we see a good market
here for power plants over the next three years. Four years ago, most
of our power business was in the U.S. Today about 70 percent of our power
business is outside the US But we'll recapture more business here with
the increasing demand," Statton concluded.
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