Friends in High Places: The Bechtel Story : The Most Secret Corporation and How It Engineered the Wo by Laton Mccartney (readict .txt) 📗

Following graduation, McCone, who was determined to learn the steel business from the ground up, found work as a 40-cents-an-hour riveter for the Llewellyn Iron Works, a Los Angeles-based fabricator of steel frameworks for office buildings and storage tanks for the booming California petroleum industry. Before long he was promoted to foreman, and at the age of 26 he became construction manager. While Steve Bechtel was laying pipelines, his future partner was overseeing the production of the tanks they would fill.

It was not until 1931, however, that the two former schoolmates connected again. That year, McCone quit Llewellyn to become sales manager of Consolidated Steel. Headquartered in Los Angeles, Consolidated liked to boast that it was the “biggest steel fabricator west of the Mississippi,” and until the Depression it had been prospering nicely, if unspectacularly. The Depression, however, changed everything. All at once, builders weren’t buying enough steel to keep even a mid-sized concern such as Consolidated solvent. The company, which had lately built a big new fabricating plant, was in desperate straits, and McCone had been summoned in a last-gasp effort to turn corporate fortunes around. “It [1931] was a memorable year for sales managers,” McCone later remembered. “I was in search of my first customer when the other sales managers were sure they had seen their last.”

There was, however, one project that was using steel-tons and tons of it. That project was Boulder Dam, where, as it happened, John McCone’s old friend from Berkeley was in charge of purchasing.

At Boulder, Bechtel was deferentially called “Mr. Customer” by the 52

STEVE

armies of peddlers and salesmen who called on him. Most he found a nuisance, and he hired an old Berkeley fraternity brother, William E.

Waste-later to become executive vicepresident and director of Bechtel-for the express purpose of keeping them at bay. McCone, however, was an old friend, and Bechtel welcomed him cordially. The terms McCone offered were favorable ones, and Consolidated eventually supplied Boulder with a total of 55 million tons of steel. The sale saved Consolidated from bankruptcy and young John McCone from unemployment.

In the years since, Bechtel and McCone had kept in close touch, hoping one day to go into business together. Both sensed that the core of America’s industrial might, so long centered in the big smokestack cities of the East, was shifting westward, and that what was moving it was oil. “Steve and I shared a sense of imminent change,” McCone recalled, “of great projects about to break at last upon the West. We were sure we could have a place in them. “12

Securing that place was made easier by McCone’s contacts in the oil industry-in particular with another Berkeley classmate, Reese Taylor, then chairman of Consolidated, and on his way to becoming chairman of Union Oil. Froin his pipelining projects, Bechtel had friends of his own in oil, especially at Standard Oil of California (Socal), where he had managed his first pipeline job at the age of 28. Both men, then, had entree. The trick was coming up with something to sell after they got through the door. And here Steve Bechtel had an idea. Why not, he proposed to McCone, offer the oil companies an entire construction package? Not just pipelines, but storage tanks, refineries-the works. It woul-d appeal to the oil companies, which would be spared the chore of dealing with dozens of subcontractors, and handling the complete job would enrich them both. John McCone peered through his wirerimmed glasses and smiled. Why not, indeed?

The grand plan settled, Bechtel and McCone drew up a contractone that named McCone president