Timothy D. Statton

    "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.