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1999 - 2008: Building a New Century

As it reached its 100th anniversary in 1998, Bechtel had a lot to look back on and be proud of—and an exciting future ahead. In the decade to follow, the company would alter its global business model, focus on pursuing quality projects, continue to diversify its portfolio, and roll out a quality-improvement initiative that would save Bechtel and its customers time and money. The company—privately held and family run since the beginning—also would gain a new public profile as a result of key projects that thrust it into the news as never before.

In the mid 1990s, Bechtel had restructured its operations along regional lines, in part to bring decision-making closer to a growing number of international customers. By the turn of the 21st century, however, the newly emerging “global economy” was reducing the need for regionalization. Individual projects increasingly involved multiple, far-flung offices, and project teams used sophisticated communication networks and the Internet for everything from detailed engineering to managing an international supply chain. So at the start of 2001, Bechtel created industry-specific global business units (GBUs), each one capable of managing worldwide operations in key industries. However, the knowledge of international regulations and commerce gained during the years of regional business units was hardly wasted. It carried over, enabling the company to provide “global reach with a local touch,” a signature capability that today sets Bechtel apart from the competition. 

Strength in Diversity

As Bechtel began its second century, the company’s diverse business portfolio allowed it to pursue work in the fastest-growing industry sectors, while shielding it from downturns in other sectors. For example, in the late 1990s and early 2000s, worldwide demand for power led to new natural gas-fired power plants in places ranging from Brazil, Mexico, and the United States to the Netherlands, Turkey, and the UK. When the power-generation market peaked temporarily, the demand for raw energy skyrocketed, leading to a string of new production facilities for liquefied natural gas in Australia, Egypt, Equatorial Guinea, and Trinidad. In 2005, the company also began working on one of the first LNG receiving terminals built in the United States in a generation.

Petrochemical and refining projects also took center stage, including the huge Jamnagar oil refinery on the western coast of India and the massive CSPC Nanhai petrochemical complex in southern China—the largest Sino-foreign joint venture undertaken to that point.

Pipelines—a mainstay of Bechtel work during its early years—also continued to contribute to the bottom line and were among the most challenging projects during the first years of the new century. A project in Thailand required laying pipeline in rain-soaked marshland, while in Algeria, workers had to contend with sand dunes and searing heat. On Trinidad, a pipeline with the largest-diameter in the Western hemisphere was built to transport natural gas across the island—from a gas field off the east coast, to a liquefied natural gas processing plant on the west coast.
Bechtel’s mining and metals business also grew, building or expanding massive copper mines in Peru and Chile, and strengthing its leadership in aluminum production with large smelter projects in Canada , Bahrain, Oman , and Iceland . The company’s first project in that island nation, the Fjarðaál smelter, won acclaim for its safety and environmental record.

Telecommunications also entered Bechtel’s portfolio in a big way as the company helped large carriers including AT&T (formerly Cingular) expand their wireless networks and upgrade equipment for high-speed voice and data. 

Infrastructure Business On Track

Civil infrastructure, a major part of Bechtel’s business right from the beginning, really took off as the company turned 100. Fresh off its work salvaging the Channel Tunnel project linking England and France in the 1990s, the company engaged in a series of new rail projects in the UK: the expansion of London’s Jubilee Underground line in time for the country’s millennium celebration; the modernization of the busy West Coast Main Line from London to Scotland; the renovation of three Underground lines ; and the historic High Speed 1 line (originally called the Channel Tunnel Rail Link). Britain’s first high-speed rail line, it completes a high-speed link between central London and the European continent.

In Greece, work was completed on a major extension and renovation of the Athens Metro in time for the 2004 Olympic Games, Other rail jobs included a light-rail line in Portland, Oregon, and a high-speed rail line in South Korea.

Other civil work included airport projects in Saudi Arabia, Peru, Curacao, and Qatar (where the New Doha International Airport will be the first built to accommodate super jumbo jets), and new motorways in Croatia, Romania , and Albania. In 2007, a Bechtel joint venture completed the new Tacoma Narrows Bridge south of Seattle Washington—the longest new suspension span built in the United States in four decades. 

Power Makes a Comeback

When the power market staged a comeback in 2004, Bechtel took the lead in building and expanding coal-fired plants, including the massive Elm Road Generating Station in Wisconsin and an expansion of the Springerville power plant in Arizona. The company also continued its role as the top choice for renovating and modernizing existing nuclear power plants, replacing aging steam generators and reactor pressure vessels at a number of U.S. facilities. At the Comanche Peak project in Texas, Bechtel set a world record by replacing four steam generators and a reactor head during a planned outage that lasted just 55 days—eight days less than the previous best. With the completion of the historic Browns Ferry Unit 1 reactor in Alabama—which had been dormant for 22 years—Bechtel helped kick-start the rebirth of the nuclear power industry, positioning the company  to help utilities build the next generation of safe, efficient nuclear power plants. 

Serving the U.S. Government

During the first decade of its second century, Bechtel solidified its position as a leading service provider to the U.S. government. The company helped build a missile defense test site on Kwajalein Atoll in the south Pacific and constructed an installation for the nation’s Ground-based Missile Defense system in Alaska. In the Nevada desert, early work was completed on the proposed Yucca Mountain national repository for nuclear waste. The company worked to eliminate stockpiles of chemical weapons at several U.S. defense sites, and helped states of the former Soviet Union destroy their stockpiles. At a former nuclear production site in Washington state, Bechtel began construction of a massive Waste Treatment Plant plant to treat hazardous waste left over from the Cold War And in Ukraine, the company played a major role in preparations to permanently enclose the Chernobyl reactor damaged in history’s worst nuclear accident. Bechtel also made a name for itself by managing and operating large, complex, and diverse government facilities, among them the Nevada Test Site, the Idaho National Engineering and Environmental Laboratory (INEEL)

In 2006 and 2007, teams led by Bechtel and the University of California began managing and operating Los Alamos National Laboratory in New Mexico and Lawrence Livermore National Laboratory in California. The two labs are the premier U.S. institutions for national defense and scientific research, monitoring the nation’s nuclear stockpile and turning swords to plowshares with breakthrough research into medicine, physics, astronomy, and other areas of science. 

Iraq and Katrina

Two of the highest-profile projects in Bechtel’s history unfolded in the first years of the 21st century. Following the Iraq conflict of early 2003, the company helped the U.S. government in a broad-based effort to rebuild vital infrastructure in that country. The work was daunting, especially due to security conditions, yet it resulted in improvements to schools, roads and bridges, telecommunications, and power and water systems. Despite that success, however, the work was marred by violence, which claimed the lives of 52 employees of Bechtel subcontractors, including 47 Iraqis.

When Hurricane Katrina ravaged the U.S. Gulf Coast in August 2005, the Federal Emergency Management Agency immediately turned to Bechtel to help provide temporary housing for tens of thousands of Mississippi residents whose homes were badly damaged or destroyed by the huge storm. Within days, Bechtel teams were on the ground and by September 8, the first mobile housing units had been installed. In less than six months, the company delivered and installed more than 35,000 temporary housing units, providing shelter to more than 95,000 people. It was the fastest housing operation of its kind in history.

It didn’t stop there. Working with other member companies of the Business Roundtable, Bechtel helped create Gulf Rebuild: Education, Advancement, and Training, an initiative with a goal of training as many as 20,000 workers in skills needed to rebuild the Gulf Coast. By 2007, the program already had trained some 7,500 individuals, with an additional 2,000 enrolled in classes. 

Also in the News

Throughout its history, Bechtel’s performance and commitment to quality have garnered praise from customers, partners, employees, and local communities. When you engage in thousands of projects, however, inevitably a few will draw controversy. Such was the case in 2000, when a water modernization project in Bolivia turned into a referendum about privatization. Seeking to bring abundant clean drinking to Cochabama, the country’s second-largest city, Bechtel and a joint-venture partner entered into an agreement with the national government to build and operate the new water system. As part of the agreement, a large dam project also would be completed. To cover the project’s costs, water rates had to be increased. In a country already beset by social unrest, the rate increases triggered public demonstrations in Cochabamba, prompting Bechtel to withdraw from the project.

Another controversial project involving Bechtel was the Central Artery/Tunnel project—Boston’s Big Dig, a massive renovation of that city’s highway system. The project took more than a decade to complete, and when it was done, at the end of 2006, Boston had dramatically changed for the better. An aging elevated central artery had been replaced by an underground expressway, and other new tunnels and bridges contributed to a network that vastly reduced driving times within the city.

The Big Dig was plagued by rising costs—most associated with inflation and the growing scope of work—which ended up to be far more ambitious than the original estimate. Criticism of the project and Bechtel/Parsons Brinckerhoff, the joint-venture charged with managing it, increased in 2005 when a leak flooded one of the new tunnels. Then, in the summer of 2006, a faulty tunnel ceiling panel collapsed, killing a motorist. Litigation ensued, and in January 2008, Bechtel and Parsons Brinckerhoff settled legal issues with federal and state officials. 

Improving Quality

In 2000, Bechtel became the first major engineering and construction company to adopt Six Sigma , a data-driven approach to improving efficiency and quality. Although Six Sigma was originally developed for manufacturing companies, Bechtel realized it also could work for a big and fast-growing services organization. Within three years, it had been rolled out in offices and on projects throughout the company and, and the investment in Six Sigma had reached the break-even point. By 2007, half of all Bechtel employees had been trained to use Six Sigma tools, enabling them to save the company and its customers time and money. Projects benefiting from Six Sigma quality improvements ranged from a big rail modernization project in the UK to a chemical demilitarization project for the U.S. government.

Another effort, Performance-based Leadership, also came to the fore as the company strove to sharpen the people skills of management personnel. Although Bechtel had long embraced a philosophy of teamwork, its rapid growth into a multinational company had created a generation of leaders who excelled at engineering and cost control but were less effective managing a workforce. Performance-based Leadership training, through seminars and online courses, gave them the tools to manage and motivate staffers, thereby improving efficiency and morale.  

Technology Goes Global

As the new global economy emerged and grew quickly in the late 1990s, multinational companies needed to overcome challenges posed by geographical distances and different time zones. Bechtel’s response was to open offices in key locations worldwide that permit engineers to work on projects 24/7. For instance, when designers in Frederick, Maryland, finish their day, they can hand off work to their counterparts in Brisbane, Australia, where the day is just beginning. By 2007, Bechtel had engineering hubs in Australia, Canada, China, Taiwan, India, Poland, the UK, and the United States.

The company took advantage of technology in other ways as well. Sophisticated software—some of it home grown—made it possible for workers in far-flung offices to collaborate in real time. And online reverse auctions let Bechtel get the best prices for commodities and other materials. 

Safe and Sustainable

Bechtel’s commitment to safety—long a top priority—grew into a crusade in the years following the company’s centennial. Employees at every level, from the board room to the field, embraced a “zero accidents” policy that deemed every accident avoidable. The mandate was simple: If it’s dangerous, don’t do it. The heightened emphasis on safety paid off with a safety record that year in and year out ranked Bechtel at the top of the industry—despite the fact that many Bechtel projects are large and complex, and must be carried out in remote locations and bad weather. In 2007, the company had its best safety record ever. Some 90 percent of all projects completed the year without losing time because of an accident, and more than 50 projects each recorded more than 1 million consecutive safe job hours.

As a business-to-business company, Bechtel does not set policy for environmental protection and sustainability—its customers do that. Yet Bechtel makes sure that every project meets all environmental regulations, and it has helped customers meet their goals for sustainability. Such goals can involve training local employees in skills required to work on Bechtel projects, or helping local companies qualify to supply projects with goods and services. In the first years of the new century, Bechtel teamed with customers and government agencies to create breakthrough worker training programs on a pair of  aluminum smelter projects in the Middle East, and on a big liquefied natural gas production facility in Equatorial Guinea. Worker and supplier enhancement programs also helped local economies on refinery projects in the southern United States.

Bechtel also teamed with GE Energy to develop designs for a new generation of coal-fired power plants that emit far fewer emissions than traditional plants. 

110 Years and Building

In 2008, Bechtel marked its 110 anniversary. From a small railroad-grading operation in the Oklahoma Territory, the company had grown to be a global leader in engineering and construction, with hundreds of ongoing projects, 42,500 employees, and more than four dozen offices around the world. Bechtel reported record financial results for 2007, and major new projects booked during the year guaranteed a strong backlog of work going forward. With its diverse portfolio, expert workforce, and more than a century of experience, the company had truly become the world’s No. 1 choice for engineering and construction.

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