Senior Project Research Paper

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  • 1. Doughty 1Kyle DoughtyMrs. CorbettAP Literature 4th Period17 November 2011 Large-scale engineering projects contribute greatly to the world economy, and BechtelCorporation (Bechtel Group) represents the largest engineering firm in the United States ofAmerica. The company resides in San Francisco, California, but its reach stretches across theglobe. In less than a century, Bechtel transformed from a small firm with little capital to apowerhouse of development in both America, and around the world. The company’s existence began at the dawn of the twentieth century. Warren Bechtel rana railroad and construction company in California, but as the Gale Encyclopedia of U.S.Economic History puts it, “In 1931 the elder Bechtel organized six companies in a successful bidto build one of the largest construction projects in history, the Hoover Dam” (Bechtel, StephenDavison 85). Bechtel was gaining both momentum and clout with the Hoover Dam Project. Afterthis project, the projects only got bigger and more elaborate, because Bechtel now had areputation to keep. World War II proved to be most advantageous, because “…Bechtel, inaddition to its shipyards, built bases and ran plants that modified bombers and rebuilt jeeps. Atthe same time Steve [Warren’s son] built a top-secret 1,600-mile pipeline through the Canadianwilderness to Alaska, under primitive conditions” (Church 114). Ships, planes and jeeps weremanufactured or repaired by the thousands, which greatly aided in the war effort. The AlaskaPipeline served a necessary purpose as well, since the American war machine required greatsupplies of fuel. Bechtel, therefore, solidified its role as a key player in the economic and
  • 2. Doughty 2political arenas of American society. With this stable foundation, Bechtel began a long period ofunprecedented growth. The first stage for Bechtel was to position itself firmly into the energy sector of thepostwar global economy. “[In 1947, Bechtel Corporation built] the Trans-Arabian (1,068 miles)pipeline that opened up Mideast oil reserves to the world” (Bechtel, Stephen Davison 86). Oiland natural gas were the primary means of growth in the postwar economy, as they are today,and Bechtel made sure that it controlled in some way the largest reserves of these fossil fuels.Now the company controlled domestic reserves in Alaska and oil reserves from Lebanon downto Kuwait. Add to that scenario the fact that Bechtel was a company that already resided in therichest country on the planet, and it is easy to see how an already large company became larger.Moving into the Eisenhower Era, “Bechtel was part of the Nuclear Power Group to constructnuclear reactors for electric power plants....” (Stephen Davison Bechtel 98). In the Atomic Age,people became interested in the power of the atom as an alternative to fossil fuels, so Bechtelmade sure to diversify enough to satisfy demand and maintain its image with the public. Becauseof this motivation, the company built or oversaw the construction of half of the nuclear powerplants in the United States. Atoms proved their worth, but for most nations oil remained thechampion, so Bechtel prioritized its projects. This led to Jubail, a small fishing village in SaudiArabia that was transformed into an industrial complex that “is Saudi Arabias industrial heart,accounting for 7% of the countrys GDP” (Lewis 4). Oil fueled much growth in the Middle East,but Saudi Arabia was smart enough to diversify its economy. The leaders of the country choseBechtel Corporation for their prestige and expertise, which resulted in an industrial complex thathouses 150,000 people and already has plans in the works to be doubled in population. By now,
  • 3. Doughty 3it was apparent that Bechtel stood as the pinnacle of industry and infrastructure development,and this caused some presumptions to be formed about the company. As Reagan entered the White House, Bechtel Corporation was seen from a new angle bythe American public. Time magazine wrote “…the privately owned and operated Bechtel GroupInc. of San Francisco (1981 billings: $11.4 billion) has probably done more to transform thelandscape of America and the world than any other company of this century” (Taylor 76). Publicperception had moved from impact on America to impact on the world. Bechtel was, and is,enormous; it earns billions of dollars in revenue, but the exact amounts might never be knownbecause the company remains in the hands of the original Bechtel family. This characteristichelps make Bechtel unique and at the same time explains why it possesses such uniqueness.Labaton speaks frankly when he says, “It [Bechtel] remains one of the last major Americancorporations that steadfastly declines to go public, thus avoiding the broader scrutiny that is theprice for access to capital provided on a stock exchange by investors” (39). This corporationrefuses to completely reveal its finances because, in the eyes of most pedestrians, its currentsystem works. Bechtel’s cloak of secrecy allows for its own kind of freedom, which it canevidently exploit with enough effectiveness to become a significant player, and remain asignificant player, in the global economy. From there, the only obstacles appear to be newprojects and maintenance of image, which Bechtel handles delicately but impressively. As Bechtel and the rest of the world slowly moved toward the end of the twentiethcentury and into the twenty-first, the company began a return to its traditional sectors.Transportation became a priority again when the company “participated in the construction ofthe Eurotunnel between England and France [in the 90s]” (SIC 8711 Engineering Services 1485).Tunnel-digging was combined with high-speed rail, and the English Channel was thrown in for
  • 4. Doughty 4good measure. Europe, part of the Western World but definitely not America, relied on Bechteljust as much now. In fact, some would argue that it relies on Bechtel even more than Americadoes, since Europe’s countries are richer than America when all are under the same banner. Forexample, “In 1995, Bechtels R&Ds International Technology and Resources teamed withSouthern Electric International and Arthur Andersen and Company in a consortium to assist 11eastern European countries with energy programs under the auspices of the U.S. Agency forInternational Developments Regional Energy Efficiency Project” (1485). Eleven countries, injust one section of a continent, were relying on the same industrial giant. Bechtel networkedAmerica’s infrastructure in the past, but now the focus for new growth in old sectors had turnedto networking multiple countries at the same time. Projects were constantly being scaled up,because Bechtel had to repeatedly improve its image doing essentially what it had been doingfrom the very start. SIC 8711 Engineering Services also made clear that globalization was a hugefactor in this growth when it states, “By 2001 roughly 89 percent of Bechtels revenues wereattributable to international contracts” (1485). Industrialized countries, like America, were nolonger primary clients. Yes, the industrialized world still required infrastructure, but nowherenear what developing countries required. Those countries, mainly in the Third World and theformer Eastern Bloc, provided blank slates for economic and industrial change that Bechtel couldbe a part of. That being said, the current economic and political situation of the globe has allowedBechtel to branch out again, or simply redefine what it has been doing. Raw materials in theThird World present some potential for the company, where Rubin says, “Bechtel is building$1.4-billion copper concentrator in Peru. The countrys mine investment grew 70% in the firsthalf of 2011[sic]” (12). Bechtel’s traditional pattern has always been to go for goods and services
  • 5. Doughty 5that economies crave, so it makes sense that a basic industrial metal would catch the attention ofa company involved in both the transportation and energy sectors. This new pattern of intenseinvestment in previously untapped sectors may become the new tradition for the corporation.Economically, it certainly makes sense to diversify. Then again, Bechtel seems to re-invent oldsectors when writers like Russell tell the public that “Bechtel Corp. moved into the renewable-energy sector in a big way on Sept. 14 [2010], announcing it would develop and own an offshorewind farm on Lake Erie” (16). One hundred million dollars shall go to this project, and it willbuy Bechtel a new source of electrical power, but also a new public relations tool. With fossilfuels approaching the end of their effective life cycle, companies will either need to adapt or die.Bechtel simply leads the pack when it invests in projects like this wind farm. Simmons furthersthat argument when “Babcock & Wilcox Nuclear Energy, Inc., (B&W) and Bechtel PowerCorporation have entered into a formal alliance to design, license and deploy the worlds firstcommercially viable Generation III++ small modular nuclear power plant” becomes publicknowledge (8). Modular nuclear power plants represent what Bechtel as a whole seems to be: aneverlasting phoenix, which rises and falls with time, but endures forever. Nuclear power wasexploited by the company in the 1960s, and now it is finally returning to public attention. Sureenough, Bechtel knows this, and wants in on the action and the money involved. Bechtel Corporation remains the epitome of an engineering firm. Constant innovation,but also strong management to ensure stability allow for unbelievable prosperity. From thiscompany’s prosperity, the entire world benefits because of the infrastructure and population ofemployees that are inherent in its existence. Bechtel started out like any other, but through goodplanning and sheer tenacity, it became a legend.
  • 6. Doughty 6 Works Cited"Bechtel, Stephen Davison." Gale Encyclopedia of U.S. Economic History. Ed. Thomas Carson and Mary Bonk. Vol. 1. Detroit: Gale, 1999. 85-86. Gale Virtual Reference Library. Web. 14 Nov. 2011. <http://go.galegroup.com/ ps/i.do?id=GALE%7CCX3406400086&v=2.1&u=cant48040&it=r&p=GVRL&sw=w>.Church, George J. "Stephen Bechtel." Time 7 Dec. 1998: 114. Galileo. Web. 14 Nov. 2011. <http://proxygsu-sche.galileo.usg.edu/login?url=http://search.ebscohost.com/ login.aspx?direct=true&db=a9h&AN=1326487&site=ehost-live>.Labaton, Stephen. "Government by Bechtel." The New York Times [New York] 22 May 1988: 39. Galileo. Web. 14 Nov. 2011. <http://proxygsu-sche.galileo.usg.edu/login?url=http://search.ebscohost.com/ login.aspx?direct=true&db=a9h&AN=31022067&site=ehost-live>.Lewis, Scott. "Jubail II Industrial Complex." ENR: Engineering News-Record 12 July 2010: 4. Galileo. Web. 14 Nov. 2011. <http://proxygsu-sche.galileo.usg.edu/login?url=http://search.ebscohost.com/ login.aspx?direct=true&db=a9h&AN=52706901&site=ehost-live>.Rubin, Debra. "Global Demands Push Project Scale." ENR: Engineering News-Record 29 Aug. 2011: 10-12. Galileo. Web. 14 Nov. 2011. <http://proxygsu-sche.galileo.usg.edu/login?url=http://search.ebscohost.com/ login.aspx?direct=true&db=a9h&AN=65311323&site=ehost-live>.Russell, Pam Radtke. "Bechtel Tests the Wind for Great Lakes Alternative Energy." Time 27 Sept. 2010: 16. Galileo. Web. 14 Nov. 2011.
  • 7. Doughty 7 <http://proxygsu-sche.galileo.usg.edu/login?url=http://search.ebscohost.com/ login.aspx?direct=true&db=a9h&AN=55517539&site=ehost-live>."SIC 8711 Engineering Services." Encyclopedia of American Industries. Ed. Lynn M. Pearce. 4th ed. Vol. 2. Detroit: Gale, 2005. 1481-1488. Service & Non-Manufacturing Industries. Gale Virtual Reference Library. Web. 12 Nov. 2011. <http://go.galegroup.com/ps/ i.do?id=GALE%7CCX3434501007&v=2.1&u=cant48040&it=r&p=GVRL&sw=w>.Simmons, Jud. "New Energy." Nuclear Plant Journal 28.4 (2010): 8. Galileo. Web. 14 Nov. 2011. <http://proxygsu-sche.galileo.usg.edu/login?url=http://search.ebscohost.com/ login.aspx?direct=true&db=a9h&AN=53473697&site=ehost-live>."Stephen Davison Bechtel." Encyclopedia of World Biography. 2nd ed. Vol. 2. Detroit: Gale, 2004. 98-99. Gale Virtual Reference Library. Web. 12 Nov. 2011. <http://go.galegroup.com/ps/ i.do?id=GALE%7CCX3404700516&v=2.1&u=cant48040&it=r&p=GVRL&sw=w>.Taylor, Alexander L., III, Bob Buderi, and Joseph J. Kane. "The Master Builders from Bechtel." Time 12 July 1982: 76. Galileo. Web. 14 Nov. 2011. <http://proxygsu-sche.galileo.usg.edu/login?url=http://search.ebscohost.com/ login.aspx?direct=true&db=a9h&AN=54223293&site=ehost-live>.