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About Kaiser Engineers
History
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About Kaiser Engineers History
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Henry J. Kaiser: The Legacy Continues The American West had never seen a man like Henry Kaiser. He combined a broadness of vision with courage and entrepreneurial instincts that astounded both his rivals and his associates. He built an international industrial empire of dizzying diversity spread across the world's inhabited continents. Born in 1882, he was a leading figure in the shaping of 20th-century industry, and the company he founded is leading the way into the next century. Henry Kaiser had a passion for building. He formed scores of companies during his lifetime to follow his enthusiasms in steel, chemicals, cement, aluminum, construction, automobiles, electronics, aviation, and more. But in a real sense, it was Kaiser Engineers, today a part of Kaiser Group International, that was his original company. The other companies were formed later, diversifying out of Kaiser's engineering and construction businesses. Eighty years ago, Kaiser's enthusiasm and appreciation for hard work and for getting the job done was such a passion that it became the essence of his company. For well over a generation, Henry J. Kaiser was a household name. He was one of the best known and most admired men in the world. His friend, Franklin Roosevelt, considered him for his running mate in the 1944 presidential election. Kaiser earned his greatest fame during the Second World War building ships that supplied Allied armies fighting a global war. As with many others who achieve "overnight success," Kaiser already had a record of solid accomplishments by the time the public discovered him. He was nearly 60 years old by then, and yet, his future held far more for him than his past. He was just beginning to hit his stride. Today, at Kaiser, these traditions and the commitment to quality remain as strong as ever. Henry Kaiser's standards of excellence and his energy in tackling an extraordinary variety of engineering challenges have been carried through generations of executives, engineers, and projects. One of Kaiser's greatest assets was his ability to inspire the best efforts of those around him. The sincerity and strength of Kaiser's ideals enveloped his employees. They sensed that Henry Kaiser was a man who deserved their best efforts. As a result, the company motto, "Together We Build," was nothing less than an accurate description of how they felt. They gave The Boss their best work often better than they thought they were capable of doing. Consistently, they provided him with projects finished ahead of schedule and below budget while meeting or exceeding their clients' needs. It was a tradition that began in Kaiser's earliest days in business in Vancouver, British Columbia, and still holds true today. Although the industrial empire he founded no longer exists, many of the individual companies do. Of the more than 90 companies he founded, none has more of the Henry Kaiser heritage of quality, daring, and client satisfaction than Kaiser Engineers. Kaiser The Entrepreneur And Salesman Kaiser understood intuitively what made a good salesman, and he was a remarkable one. He genuinely enjoyed people. His success in getting them to share his goals was based on his own sincerity, enthusiasm, and a commitment to identify and then meet the needs of his clients. For Henry Kaiser, sales were a means to his end, which he called, "doing things." In Henry Kaiser's estimation, there was nothing better than "doing things" - building. Henry Kaiser always seemed to have combined his enthusiasm for work with a natural energy. By the age of 13, he'd already grown impatient to begin a career and convinced his parents to let him leave school. During his early teenage years, Kaiser held a series of odd jobs while continuing his education with a correspondence course in sales. And then he discovered photography. Only a few years before, George Eastman revolutionized photography by replacing glass plates with roll film that any amateur could load into a simple hand-held camera. Now millions of people could participate in what had been a highly specialized activity. As he would many times throughout his life, Kaiser saw opportunities offered by a new technological development. He taught himself the fundamentals of photography and, by the time he was 17, he was a successful traveling salesman for a photo supply company. On a sales visit to the vacation community of Lake Placid, New York, the 18-year-old Kaiser found a place where he wanted to put down roots. He immediately made an irresistible offer to a local photographer, W.W. Brownell. With a rashness that could only surprise those who didn't know him, he offered to work for nothing until he doubled the store's profits. When that happened, he wanted half ownership of the company. It seemed like a classic win-win proposition, and Brownell took Kaiser at his word. Henry Kaiser's enjoyment of people was such that he could advertise himself in the photo shop as "The Man With a Smile" and mean it. Kaiser's enthusiasm and hard work soon made him the business' most valuable resource. Within a year, profits had not just doubled, they had tripled. True to heir agreement, Brownell made him an equal partner. However, the newly stimulated business was too active for Brownell. When he offered to sell Henry the rest of the business, the young entrepreneur leapt at the opportunity. At age 20, HJK was full owner of his first business. But the five-month tourist season at Lake Placid was not enough for someone with Henry's drive and ambitions, and a seven-month slow season was intolerable. He soon followed the tourists to his new market in Florida. Unfortunately, the opening of his store in Daytona Beach coincided with a downturn in Florida tourism, but Kaiser was determined to be successful. As Kaiser knew it would, his client-oriented service paid off. At age 24, he was earning a comfortable living. It might seem that he had found a career around which to build his life, but all this changed in the spring of 1906 when 20-year-old Bess Fosburgh came into his Lake Placid store to have her photographic portrait made. There she met "The Man With a Smile". Within a few weeks, they were deeply in love. Bess' father, Edgar Fosburgh, was not impressed with his daughter's first serious romantic interest. When Henry asked for Bess' hand, he told the young couple that he was dead set against his daughter leading a "gypsy" life shuttling from New York to Florida. He insisted that Henry demonstrate that he could provide his daughter with a stable home and financial security before he gave his approval to their marriage. Edgar Fosburgh agreed to withdraw his objections if Henry met some specific requirements. Fosburgh wanted Henry to head West and to get started in some substantial business. He challenged Henry to prove his stability by having an income of at least $125 per month and to build a home for Bess. He reasoned that if and when Kaiser accomplished all of this, he would be a suitable son-in-law. The Challenge That Changed His Life For his new life, Henry Kaiser selected the rapidly growing city of Spokane, Washington. His first success there actually grew out of a turndown he received from the owner of a local hardware store. James McGowan had recently had a serious fire and now was stuck with several thousand dollars worth of scorched plumbing fixtures that he could not sell. Kaiser knew that if he approached the situation right, McGowan's problem could be transformed into a Kaiser opportunity. Kaiser convinced McGowan to let him try to recover something from the damaged goods if he took all the risks. How could the store owner say no to that? It was vintage Kaiser. Kaiser simply hired a group of young women to clean and polish the damaged hardware and soon it was ready for sale. Both men made a tidy profit. Impressed with the young man's initiative, McGowan hired him immediately. McGowan Brothers Hardware was sufficiently large to offer the ambitious easterner a chance to move ahead. Years later, James McGowan recalled how Kaiser kept improving his abilities as a salesman, using the public library to teach himself technical aspects of the equipment he sold. Kaiser also visited construction sites where his equipment was being used, constantly looking and learning. He turned his position of salesman into a well-paid apprenticeship in the construction industry, and just 10 months after Edgar Fosburgh's challenge, Henry was able to tell his future father-in-law that he had met his requirements. On April 8, 1907, Henry and Bess exchanged marriage vows. "A Problem Is An Opportunity In Work Clothes" As Spokane continued to grow, Kaiser became certain that his future was in construction. Over the next six or seven years, he took a series of jobs with construction companies in Washington and British Columbia in order to gather experience and to build his knowledge of the construction industry. This preparatory period of Henry Kaiser's life came to an end unexpectedly in the spring of 1914 when his employer at that time, The Canadian Mineral Company, went out of business. Again, Kaiser built an opportunity out of what almost anyone else would have seemed to be a serious setback. Just before Canadian Mineral folded, the company won a $167,000 road-paving contract in Vancouver, British Columbia, that Kaiser took over himself. However, he needed $25,000 for a performance bond and a deposit. At this pivotal time in his life, Kaiser's only assets were the knowledge he'd carefully accumulated over the recent years, an unlimited amount of self-confidence, and a reputation for personal integrity. They were enough for one Vancouver bank, and Kaiser got the necessary loan. He finished his first project ahead of schedule and made an exhilarating profit of $19,000. In December 1914, he incorporated as the Henry J. Kaiser Company, Ltd., in Vancouver with Bess and Henry owning all 20,000 shares with a par value of $1 each. Over the next few years, Kaiser developed his straightforward philosophy that he applied to his projects from this time on: "Do it faster, cheaper, and better." Of course, every contractor would like to live by such a motto, but one of the things that already set Henry Kaiser apart was a finely tuned ability to find people who shared his passion for work, for "doing things." One of the first he'd found was A.B. Ordway, a young engineer whom Henry originally hired at Canadian Mineral. He met "Ord" one stormy night while Ordway was employed by another contractor. That night, Kaiser was satisfying his professional curiosity, driving by to take a took at a rival's work progress. Henry learned that Ord had stayed late at the site, cleaning up work someone else had neglected. They were two of a kind; it wasn't long before Ordway was working for Kaiser. When Kaiser went out on his own, he took his trusted friend and employee with him. It was the beginning of Ordway's 65-year career with Henry Kaiser and the Kaiser companies. Even though his company was still small, Kaiser institutionalized innovation by starting a research department that he called The Hobby Lobby. It was a shop where ideas for new machinery and modifications of existing equipment were tested. There, big ideas and small were tried out and evaluated. One of his creations was a two-man wheelbarrow with ball-bearing hubs and pneu- matic tires. It could move easily over marshy ground and dumped off the front end by gravity. His innovation spread rapidly throughout the construction world. Typically, when it was clear that the new wheelbarrow was a successful design, Kaiser immedi- ately improved it by adding a motor. Years later, an engineer who was present when the Kaiser wheelbarrow was introduced, said: "Since then, Henry Kaiser has done several other outstanding things, but the rubber-tired wheelbarrow is a lot of glory for any one man." Kaiser Leaps Into California If there is a single story that sums up the spirit of these early years, it is how Henry Kaiser got his first construction job in Northern California. Ordway had heard about a major road job coming up for bid in Redding. He and The Boss were already on the way to submit a bid when they discovered that their train didn't stop in Redding. Kaiser's singleness of purpose made the next decision for him. With the sense of humor that was so helpful to him throughout his entire career with Kaiser, Ordway later described how he and the internationally respected industrialist reached Redding:
While Kaiser was working on the Redding job, he met R.G. LeTourneau, an equipment manufacturer who also changed the construction business around the world. Kaiser must have recognized LeTourneau as a kindred spirit when he heard him say "There is no such thing as a big job, only, small machines." His achievements included many basic to modern construction, including the bulldozer and huge earth transport equipment. LeTourneau already had developed an impressive array of haulers, scrapers, and dumpers unlike anything available elsewhere. He was convinced that his equipment could do more, faster, and for less money than any alternative available to contractors anywhere. Kaiser realized that LeTourneau's machines were about to change the way construction was done, so he convinced the self-taught inventor/manufacturer to go into partnership with him. LeTourneau appreciated the fact that Kaiser was "the first contractor I ever met who didn't look on my machines as trick instruments to do small jobs faster. He saw them as instruments to make big jobs small." Together, they developed heavy equipment that transformed the road building and construction business. Toward the end of his life, LeTourneau recalled a day in 1926 when Henry Kaiser told him about a big earthen dam job high up in California's Sierra Nevada mountains near the town of Philbrook. The enthusiastic contractor said that it would be "like a boy damming a gutter." In his autobiography, Mover of Men and Mountains, LeTourneau placed Kaiser's Philbrook dam site in perspective. "It was the first major project in which the new broke entirely away from the old. There was not a mule on the site. We were still using some men with shovels and pickaxes for cleanup work, but the heavy work was done with power shovels, mechanized dump trucks and, in the starring role, my scrapers. ... The speed with which we completed the Philbrook Dam astonished the construction world. Kaiser was swamped with offers of even bigger jobs." Kaiser Steps Out Of The Country Despite bigger jobs, Henry Kaiser was still basically a local contractor. He ached to try out his teams and techniques on larger projects. In 1927, he got his chance. Warren Bros., a large East Coast firm with which Kaiser already had done business, received a contract to pave 750 miles of highway through the mountains and jungles of Cuba. Henry Kaiser got a subcontract for 200 miles of that job. The Cuba job with its miles of highway to construct, swamps to be drained, scores of bridges and culverts to be built was by far the largest job the company had ever tackled, but according to Kaiser:
Henry Kaiser felt that one of his great Cuban achievements was hiring George Havas, an engineer working on a local sugar plantation. Havas was a man of outstanding ability and well suited to carry out Kaiser's visions for his company's future. In a sense, Havas brought engineering to the Kaiser company. From now on, bids would be the result of reports and studies based on solid engineering rather than on Henry Kaiser's experienced guess at what a job would cost. From Cuba on, the Kaiser organization made a conscious effort to develop people with the ability to run the increasingly larger and more complex projects that were in the company's future. As a result, even during the period of exponential growth that was still to come, the company was able to supply itself with its own tested and amazingly able management teams. When the people of the Kaiser company finished their 200-mile portion of the Cuban highway one year ahead of schedule, not only had they added to Kaiser's growing reputation for speed and quality, they realized that they had transformed themselves into a team that now was ready for the big game. The Dam Builder Henry Kaiser was ready when there was a national need for highways. He and his company, through hard work, imagination, and an obsession with quality, were able to take advantage of the era of road building in the West. Now, while his company was involved in Cuba in what would turn out to be Henry Kaiser's largest and last highway project, the emphasis in U.S. construction was shifting. The nation was spiraling into the Great Depression. Local governments no longer had the money for the ordinary public service projects that had been the bread and butter of the construction industry. In a bold attempt to stimulate the economy, President Franklin Roosevelt decided to go ahead with a plan that furnished work for tens of thousands of men and transformed the West by providing what that entire region needed most: water control and distribution. The nearly 1,500-mile Colorado River had the potential to provide water and power to much of the West, but first it needed to be tamed. Boulder (later Hoover) Dam was the key to future Western development. The dam provided badly needed water for irrigation and cheap power for cities. Boulder Dam provided years of construction work during the Depression, and it was a task that Kaiser and his "boys" felt was worthy of their expanding abilities. Boulder was a huge project, far bigger than Kaiser could assume on his own. However, in a consortium, Kaiser could put his entire organization to work and share the risks. A winning partnership would have to be made up of companies with proven skills and the capital needed to take on this giant project. In Kaiser's own words, one reason for the difficulty of building a consortium made up of successful, self-assured construction leaders was that they were "as sensitive as the prima donnas of grand opera." Because the Boulder job was so big and was spread over many years, the principals of the companies involved not only needed to respect each other professionally, they had to trust each other implicitly. It's no exaggeration to say that the first big construction achievement of Boulder Dam was the building of the consortium that came to be known as the "Six Companies." Together, the Six Companies had extensive and specialized experience in railroad construction, tunnel building, dam construction, power plant erection, and highway building, all of which needed to be done at Boulder. In the middle of the Great Depression, this same group also was able to raise $5 million in capital. In recognition of his unique ability to get people to work together, his colleagues named Kaiser chairman of the executive committee. The partners also recognized that Kaiser's energy and enthusiasm could be a tremendous help to them in dealing with the federal government. Kaiser became the Six Companies' liaison to the federal government. He began to familiarize himself with the intricacies of the federal bureaucracy, even developing a personal relationship with President Roosevelt. Meanwhile at Boulder, the Six Companies board was managing the construction of the largest dam in history: building a railroad for carrying construction materials; drilling tunnels large enough to carry the entire flow of the Colorado River around the dam site; constructing miles of roads linking the town, the site, and the outside world; building scores of warehouses and machine shops; and building and running a medium-sized town. There were years of preparatory construction before work on the dam itself could begin. As complex as the problems were, the Kaiser company was ready for this kind of management responsibility, and they excelled at it, learning quickly from each new situation as it came up. The results were amazing. Despite the problems with personnel, weather, the canyon, and the river itself, the job that many said was impossible was finished more than two years ahead of schedule. One lesson Henry Kaiser and his organization learned at Boulder was the value of a good working partnership with labor. From Boulder Dam on, Kaiser was anxious to understand labor problems before they became critical and to negotiate differences honestly and fairly. In recognition of this, in 1965 he was presented the AFL-CIO's Murray-Green Award for achievements in health and welfare. Previous recipients included Harry Truman and Eleanor Roosevelt, but never before had an industrialist been so honored by American labor unions. Contractors tended to live in a "boom-or-bust" world making it difficult to build and keep together experienced teams with specialized knowledge. That was one reason why even though they were already deeply committed at Boulder, Kaiser convinced his partners to prepare a bid for construction of their next project, the Bonneville Dam on the Columbia River in Washington. At Boulder, the partners learned to respect the Colorado River, and now Henry Kaiser was recommending that they take on the far more powerful Columbia. The local Indians had a deep-seated belief that "no man will ever walk across the Columbia." In 1934, it was not hard to find well-trained and knowledgeable engineers who would agree with them. As big as they were, Kaiser had more in mind than building these monumental projects. For him, a major part of such work was the forging of an organization made up of people capable of meeting any challenge that he threw at it. Kaiser described his management theory this way:
Why would people be attracted to his organization where they worked harder than they ever thought they could? One former associate described working for Henry Kaiser like playing for a great coach who inspired game-winning efforts. "You got on the team and fought over your head. If you made a mistake, the coach went through the incident over and over until you both knew the problem ... And you tried again." Such support bred a loyalty that permeated the entire Kaiser organization both from bottom to top and from top to bottom. As large and as difficult as the Bonneville Dam was, the proposed dam at Grand Coulee dwarfed it. In fact, it dwarfed every other construction project in history. For 4,500 years, the Great Pyramid of Egypt held the distinction of being the largest man-made structure on earth, but it was about to lose that title to the dam at Grand Coulee. One indication of the gigantic size of the dam was that, under standard conditions, it would take 200 years just for the concrete to cure and cool. Once again, special techniques such as water pipes embedded in the concrete to carry away excess heat, would have to be developed to make construction possible. Four years earlier, Kaiser and the Six Companies had lost out on the contract to build the foundation for the dam and now it was time for the U.S. Bureau Of Reclamation to let the contract for the dam itself. Kaiser couldn't imagine not being involved in a project of such magnitude. Henry Kaiser had no doubt that he and the Six Companies had the experience and the skills for this gigantic project. Such a dam, if successful, would be a monument to the people who dared to build it. Meanwhile, Kaiser and the Six Companies added Mason-Walsh-Atkinson-Kier to their consortium. MWAK brought some very specific abilities to the expanded alliance now called Consolidated Builders, Inc. (CBI). MWAK knew this project well. They'd built the foundation on which the new dam would rise. Together, they submitted the winning bid and just as construction on the Bonneville Dam was finishing up, Kaiser and Six Companies had a new assignment for their equipment and their experienced work force. However, even the Columbia and Colorado Rivers were no longer able to contain the construction energies of Kaiser and his organization. While the dams were the biggest projects of this period, the company had the vitality and the resources during this same time to build an array of projects, such as a section of the Oakland-San Francisco Bay Bridge; tunnels in Colorado and Maryland; aqueducts in New York, as well as a collection of smaller projects that included a subway; dry docks, canals, and some smaller dams; and a new set of locks for the Panama Canal. Kaiser and the people he developed succeeded in creating a construction and engineering company with incredible vigor and unlimited confidence in itself. And still Kaiser was out looking for more opportunities. Surprisingly and characteristically, Henry Kaiser found one of the best business opportunities of his career when he lost out on the bidding for another big dam. How he dealt with what others would have seen as a setback is one of the best clues to the success of Kaiser and his organization. Simply stated, he turned this reversal into one of the best business opportunities of his career. Henry Kaiser often said, "I'm a big man, but I move quickly." It was true. He carried more than 200 pounds, sometimes much more, on a 5'10" frame. However, he wasn't referring to his waistline; he was talking about his business practices. He certainly moved quickly when he lost out on a contract to build the Shasta Dam in Northern California. Although disappointed that he was underbid, Kaiser was sure that this was another "opportunity in work clothes." The Industrialization Of Kaiser And His Engineers Kaiser knew that whoever built the dam at Shasta would need 6 million barrels of cement as well as huge amounts of sand and gravel. He assigned his key engineering people to study cement manufacturing techniques while he located a property containing high-quality limestone. The limestone deposit was along a pretty stream on the San Francisco peninsula called Rio Permanente. Kaiser had never manufactured cement. His competitors were sure that, even if he could somehow produce it at the price he quoted, he could never deliver on time for use at Shasta. Always looking for a better way to do things, Kaiser's engineers realized that Permanente limestone could be carried downhill to the mill via conveyor belt. They designed a braking system to produce electric power while keeping the belt moving at optimal speed. It was an efficient arrangement that, not incidentally, kept costs down. Just seven months later, on Christmas Day, the Permanente Cement Company presented him with its first sack of cement. Kaiser's team had built the facility and had it producing so quickly that the builders at Shasta weren't yet ready for it! Henry Kaiser was both competitive and deeply ethical. He knew competition was healthy only as long as it was fair. Tom Price used to delight in telling people how Henry Kaiser insisted that the owner of land containing a gravel deposit he needed for Shasta be told about its value BEFORE they made a bid on it. Although he knew that this might lead to his having to pay more for the land, Kaiser reasoned that, in the long run, a fair price was in the best interests of all concerned. Price used this anecdote to explain Kaiser's business practices and ethics. Kaiser turned obstacle to advantage when he and the Southern Pacific Railroad were unable to agree on a price for hauling the gravel to the dam site. Rather than paying more than he felt was fair, he built an unprecedented nine-and-a-half-mile conveyor belt up across rugged terrain, even crossing the Sacramento River twice. It delivered aggregate at a one-third savings over what the railroad would have charged. And there was a bonus: the aggregate contained tiny amounts of gold. Kaiser's engineers developed a way to recover what turned out to be $500,000 worth of gold from the gravel before delivering it! The Shasta Dam setback was transformed into an opportunity for the Kaiser organization to expand from heavy construction into manufacturing, a move that had a powerful effect on the American business scene in the postwar period. Henry Kaiser later said, "Losing out on construction of Shasta Dam was one of the best things that ever happened to us." Kaiser Goes To War More than any war in history, World War II was a war of industry. Battalions of workers manning tens of thousands of factories on each of the world's inhabited continents faced off, each hurling its output at the other side. As Axis and Allied ships, planes, and tanks destroyed each other, the Allies, with an increasingly efficient output of replacement equipment, pushed back the forces of Germany and Japan until they surrendered. If there were generals of industry on the home front, Henry Kaiser was arguably the most powerful. He had the equivalent of 20 military divisions, 300,000 workers, engaged in a war effort manufacturing munitions, planes, and ships. Of all of the Kaiser wartime activities, though, he is still most associated with his achievements in shipbuilding. If it was dynamic optimism for Henry Kaiser to seek out and win a contract to supply cement when the cement plant existed only in his imagination, it must have seemed positively foolhardy for him to compete for a contract to build cargo ships. Cargo vessels were desperately needed by the embattled Allies who were losing thousands of tons of shipping to enemy submarines every month. Axis undersea successes were threatening to cut the supply lines to the battlefields. However, the simple fact remained that Kaiser had no shipyards. It was both a measure of that desperation of the times as well as the effectiveness of Kaiser's bubbling enthusiasm and optimistic salesmanship that he earned the opportunity to bring the talents of his teams to ship construction. With what turned out to be well-founded confidence, Kaiser and his staff plunged into shipbuilding, certain that they could do it better, faster, and cheaper than anyone had ever done before. With crews and equipment moved from Grand Coulee to San Francisco Bay, they began building a shipyard in Richmond, California. Working 24 hours a day, they drained swamps, blasted rock, and built shipways. After only three months, shipyard workers laid the keel for the first of 1,490 vessels to come out of the most successful shipyards in maritime history. Simultaneously, Kaiser recruiters scoured the nation for more workers -- and what a work force it was! Able-bodied men already had been drafted by the military. The people available for service in the armies of shipyard workers were the physically unfit, the men too old for active duty, and the women who wanted to do their share for the war effort. What they had in common was that 99 out of every 100 of them had no shipyard experience. They needed to be trained in every shipbuilding craft. They also needed homes, schools, and medical care. Just getting them to and from their jobs meant developing a round-the- clock transportation system consisting of ferries, car pools, and even the New York City 3rd Avenue Elevated Railway, which was resurrected from an East Coast scrap heap and transported to California to be pressed into wartime service. In Oregon, where Kaiser was building more shipyards, his engineers designed an entire city for 35,000 people and built it in three months! Throughout the war, Kaiser forces continued to expand the shipyards, producing ships faster than they had ever been built before by anyone, anytime, anywhere. A new concept was introduced on a large scale. In a stunning example of the effectiveness of careful and detailed planning, ships were mass-produced, assembled from prefabricated sections brought together in the shipways on a precise schedule. By war's end, the Kaiser yards had built 1,383 merchant ships and 107 warships including 50 Kaiser-inspired aircraft carriers. A way that the Kaiser people were able to encourage unprecedented innovation and speed in shipbuilding was through one of Henry Kaiser's favorite devices - competition. In a burst of competitive spirit that must have delighted Kaiser, the Richmond yards set out to capture the world's speed record in shipbuilding. Vic Cole, who began his career with Kaiser Engineers during these shipyard days, remembered when a switching locomotive wasn't available to move freight cars around the shipyards, workers pushed and tugged the heavily laden cars to where they were needed rather than fall behind In their production schedules. In July 1943, they launched a Liberty ship built in an unheard of 29 days. The Kaiser yards in Oregon took the Richmond achievement as a challenge and snatched the title away when they launched and delivered the SS Joseph N. Teal after only 24 days of construction. The Richmond workers took the world title back when they launched the SS Robert E. Peary in an astounding four days, 15 hours, and 26 minutes after laying the first strip of steel that became the keel. "The wonder ship" was at sea on its first voyage carrying essential wartime cargo only 15 days after construction had begun. This kind of wartime success was making "Hurry Up Henry" one of the best known and most-respected men in America. The fact that the engineering capability of the Kaiser organization grew rapidly during World War II was due, in large part, to the personality of The Boss. According to Lou Oppenheim, who joined the company during the shipyard days and who later led Kaiser Engineers for 15 years, Henry Kaiser didn't have the patience to wait for outside engineering firms to deliver needed studies and designs. While he did use outside engineering firms to support his own engineers, he kept key engineering positions within his own organization. He was determined that his companies' engineering needs would be met with the speed and thoroughness that were the hallmarks of his organization. During the war years, Kaiser and chief engineer, George Havas, built up the capacity for meeting the variety of engineering needs of the expanding Kaiser organization. Variety was an accurate one-word description of the projects in which Kaiser involved himself and, therefore, his engineering department. In addition to the shipyards, Kaiser was building planes and ship engines and manufacturing munitions. Kaiser's engineers also were busy building airfields and other military facilities. When there was a shortage of steel plate for the shipyards, Kaiser built a steel mill in Fontana, California, and, despite wartime shortages, eight months later, the new, 12th largest steel mill in the United States was in production. The war gave Kaiser the opportunity to develop and train a large cadre of very capable engineers. While filling the organization's needs, they were developing a versatility that served them well in the postwar years. However, as the Fontana mill progressed towards completion, there was less work for them to do. At this time, the Kaiser Engineering Department made a decision to branch out and seek other engineering assignments. That was the beginning of Kaiser Engineers. However, the projects were small and were definitely secondary to meeting the needs of the Kaiser companies. Key to this frantic wartime activity and growth was the order imposed on it by planning and scheduling. The Kaiser organization learned over and over again that careful management was crucial to fast and successful completion of any project, but wartime shortages of vital materials could demolish production schedules. Overcoming deficiencies and undersupply was the responsibility of the expediters. They were experts on nationwide scrounging, cajoling, and improvising, people who seemed to be able to do anything except take no for an answer. These were the individuals who helped to solve the problem of getting tens of thousands of shipyard workers to and from their jobs by arranging to buy and transport several hundred trolley cars from New York's recently dismantled Third Avenue Elevated Railway. If the Kaiser organization was built on a "can-do" attitude, the expediters were the essence of that spirit and are a part of the Kaiser Engineers tradition. Henry Kaiser had an extraordinary ability to loosen the elemental energy in whatever he touched, including people. His vitality, and that of his companies, was prodigious. Sixty years old when the war broke out, an age when his contemporaries were considering retirement, Henry Kaiser stood on the brink of his greatest achievements. He built his career and his organization well. He succeeded in transmitting his vigor to his closest associates; they, in turn, communicated that spirit outward until the entire organization was infused with Henry Kaiser's often-expressed attitude, "The fundamental assumption is that there is nothing that reasonable men undertake which cannot be accomplished." By the end of the war, attitude, experience, and energy had fused into an organization whose potential was unlimited. Jim McCloud, who started with Kaiser in the wartime shipyards and who became President of Kaiser Engineers in 1974, recalled, "We could do anything, goddamn it, and that's the way we thought about it." Kaiser Plunges Into Peace One of the most unusual facets of the Kaiser story is that, even while leading 300,000 of his industrial troops into the production battles of World War II, the vigorous industrialist had the foresight to realize that the wartime economy in which he was flourishing was only temporary. It was already time to prepare for the postwar world. Unlike many other wartime industrialists, Kaiser was convinced that there would be an unprecedented postwar boom economy. He painted a picture of a peacetime America filled with unheard of opportunities for those who were prepared for them. Returning servicemen would need hundreds of thousands of new homes. The aircraft industry would grow as the technical advances of wartime made faster, safer, and more economical commercial aircraft possible. There was a huge pent-up demand for millions of new cars and trucks. He saw that there would be a need for tens of thousands of miles of new multilane highways for the millions of new cars and trucks. Kaiser crisscrossed the country preaching a new gospel of wonderful economic times to come. He spoke to groups of business associates, students, manufacturers, and the press, to anyone who would listen to his ideas about what lay ahead for peacetime America. Unlike Henry Kaiser, most investors saw the $43 billion War Bond total as a debt that the government would have to strain to repay. In their opinion, it might even cause the country to return to the prewar Depression. The optimistic Kaiser saw that same debt as a huge asset in the hands of potential customers who would use redeemed war bonds to buy the products of American capital and labor. Although few shared his rosy view, Kaiser was poised to make the leap into a peacetime economy. It would be a gigantic, self-assured leap, and the impact of his landing would shake up the way America conducted business after the war. For Henry Kaiser, the challenge of shifting over to a peacetime economy was just the latest and the largest "opportunity in work clothes." Seeing the new wartime applications of aluminum, Kaiser was convinced that the metal would be a basic commodity of postwar growth. However, his was a minority view even among his own executives. The prevailing opinion was that the hugely expanded wartime production capacity would flood postwar markets, reducing and perhaps eliminating profits. Kaiser was sure that new uses for aluminum would boost the demand beyond any prewar reference. He foresaw aluminum being used in a hugely expanded civilian aviation industry, ships, home construction, household ap- pliances, foil, and many other applications. Even with his wartime profits, Kaiser's biggest asset was still the organization that he'd built. It was made up of people tested in difficult situations who felt that, given what they had already achieved, there was nothing that they couldn't do once they put experience and spirit to the task. In early 1946, when the government notified 300 potential purchasers that it would be selling two wartime aluminum facilities, an aluminum reduction plant and a nearby rolling mill in Washington state, it was only the Kaiser group that made a serious bid. It was on the first of April, April Fool's Day 1946, that Kaiser began operation of the leased aluminum facilities. His critics pointed to the date as an omen. After a little more than a year of aluminum production, Kaiser had become the third largest producer in the nation. Kaiser was more certain than ever that the market for the versatile metal would continue expanding, and he kept his engineers busy preparing for the unfolding market. By July 1949, Kaiser had bought a war-surplus aluminum rod and bar mill in Newark, Ohio, installed new equipment, and had it in operation. If "location, location, location" are the three most important words in retail sales, the equivalent in manufacturing are "timing, timing, timing." Kaiser's timing in aluminum was fortuitous and once again fortune favored the prepared. When the Korean War broke out unexpectedly in the summer of 1950, Kaiser approached the new war's challenges with the same purposeful enthusiasm that he had shown a decade earlier. He announced major increases in every aspect of aluminum production. By 1951, Kaiser's engineers were expanding and modernizing an alumina refinery at Baton Rouge, Louisiana, were designing and building a bauxite mine in Jamaica, and were designing and constructing an aluminum smelter in Chalmette, Louisiana. In August 1951, Fortune magazine looked at the Kaiser expansion and exclaimed, "Not since the rise of Henry Ford has an industrial figure come so far in so short a time. And not in all history has any industrial figure successfully gone into so many and various projects. ..." Kaiser had forged an incredible array of new industrial activities, and his engineers provided the design and construction management for most of the facilities needed to support these endeavors. In the 1950s, if you were living in Northern California, the driveway and foundation of your home might well be Kaiser concrete from the Kaiser Cement and the Kaiser Sand and Gravel Companies. There was an excellent chance that your walls and ceiling were made of Kaiser brand gypsum wallboards. Kaiser Aluminum may have produced the wires that brought electricity to your home from a hydroelectric powerhouse, which well may have been built by Kaiser Engineers. Your bathroom fixtures and your kitchen cabinets could have come from Kaiser Fleetwings, the aircraft manufacturer that, after the war, also produced an ingenious Kaiser dishwasher powered only by water pressure. These fixtures were likely to have been made of Kaiser steel. And if you lived in the Los Angeles, Portland and later - the San Francisco and Honolulu areas, your home could have been part of a Kaiser Community Homes housing development. Kaiser built more than 10,000 such homes. By the end of the decade, yours might be one of the hundreds of thousands of families in California, Washington, Oregon, and Hawaii receiving health care from a non-profit medical program that grew from the original Kaiser industrial care program that began back in the Grand Coulee and shipyard days. It now covered 700,000 people and, because of the winning combination of high medical quality and low cost, was growing as fast as the Kaiser commercial operations. While you commuted in your Kaiser automobile, produced with Kaiser steel, on freeways made of Kaiser concrete, and protected by Kaiser aluminum guardrails, perhaps crossing the San Francisco Bay Bridge that Kaiser companies had helped to construct, you could dampen your traffic frustrations by tuning in to one of the five Kaiser radio stations in some of the largest urban areas of the country. Relaxing at home in the evening, you could enjoy the Kaiser-sponsored, highly successful "Maverick" television series staring the then-unknown James Garner. Your home and your car might be fueled by natural gas and oil transported through a labyrinth of pipelines that spread from coast to coast after the war, most of which were manufactured and many installed by Kaiser. Later, you were able to escape freeway traffic by using the new Bay Area Rapid Transit rail system. Kaiser Aluminum supplied the third rail that carried its electric motive power. Whizzing under San Francisco Bay, you were protected by a shell produced and fabricated by Kaiser Steel Corporation, which by then was the 12th largest steel manufacturer in the nation. There was a constant need to expand existing capacities and to build new facilities. Kaiser Engineers, as a part of the growing organization, was engineering and building a dazzling array of new facilities in a growing number of fields. It was being called on to design and build aluminum smelters, bauxite refineries, cement kilns, automobiles, and steel plants. The engineering department grew rap idly as new projects were developed. Being a Kaiser engineer meant variety, challenge, and professional growth in an organization whose accomplishments were admired worldwide. Engineers joining the company now worked alongside veterans of the Cuban highway project, the great dams, the shipyards, and other landmark projects in American engineering. People such as Edgar Kaiser, Eugene Trefethen, George Havas, and Clay Bedford received their professional training on the huge projects of the preceding decades. They were inspired and shaped by Henry Kaiser's passion for speed, excellence, and achievement. Now they were setting new standards and instilling pride in a growing cadre of experienced engineers who were meeting fresh challenges. Lou Oppenheim, Jim McCloud, Vic Cole, and others who later played pivotal roles in the history of Kaiser Engineers, now became a part of, and then carriers of, a proud tradition. Much to the satisfaction of Henry Kaiser, his code of resourcefulness, achievement, ingenuity, and hard work was being passed on. When Henry Kaiser was in West Virginia to receive an honorary degree in recognition of the local economic opportunities he'd created with the Ravenswood aluminum plant, a local dignitary went out of his way to praise a young Kaiser employee, Bob Fitzgerald, for the work he'd done at Ravenswood. "Mr. Kaiser, I want you to know about this young man. He's been here on your behalf for a year, and I just think he is terrific. He has done a very good job for your company." Kaiser looked first at the young engineer and then at the dignitary and said, "Well, Ray, that's the only kind we keep." As Kaiser interests expanded, there was a need for more executives to manage increasingly larger and more complex projects. Although Kaiser and Havas did some outside hiring to bring specific experience and design background into the department, for the most part, the organization trained the men and women it needed. Many of the executives of that period remembered how Henry Kaiser would invite even his youngest associates into business meetings, or to listen in on phone calls. Later, he would ask them for their opinions. They learned that their boss valued independent thinking, but he also insisted that disagreement be sup- ported by sound reasoning. Kaiser also valued thoughtful disagreement because he was also a salesman of ideas. Disagreement was a challenge. Of course, he knew that he could order people to agree with him, but in order to unleash the full energy of his organization's efforts, he knew that he needed them to share his goals. One associate described Kaiser as "... a happy elephant. He smiles and leans against you. After a while, there's nothing to do but move in the direction he's pushing." Under Lou Oppenheim, who became Executive Vice President and General Manager of Kaiser Engineers in 1958, the company was busy and expanded with projects originating in the growth of other Kaiser companies. As a member of the Kaiser family of companies, Kaiser Engineers was developing a style and ability of handling engineering and construction ventures in an integrated manner. Kaiser Engineers worked closely with its "clients," other companies in the Kaiser organization. In a sense, this is the root of the integrated approach Kaiser Engineers uses today to plan and engineer large-scale projects. In this manner, Kaiser Engineers takes total responsibility for the engineering and construction of huge enterprises, delivering a completed, working project to a satisfied client. A quest for efficiency has always permeated all parts of Kaiser Engineers. For instance, headquarters were located on the 18th floor, midway up the Kaiser Center in Oakland, California. It was one of the tallest in the West with a stunning view of the San Francisco Bay and the hills surrounding it. Lou Oppenheim chose the 18th floor location because it was the "break" floor for elevators serving the lower half of the building and those serving the upper portion. Unlike those with offices on the scenic top floors, Kaiser's engineers could travel, express, to its offices without wasting time stopping at intermediate floors. Although still primarily a service department within a larger company, Kaiser Engineers did take on some big outside clients beginning with a refinery project in Texas in 1950. As the Kaiser Engineering Department became increasingly known for the success of its projects, there were more and more offers for outside work, but the continuing expansion of Kaiser companies kept them busy. However, the engineering department did grow to the point where it had both the resources and the desire to take on non-Kaiser clients. In the mid-1960s, Henry Kaiser wrote,
Kaiser Goes Abroad Again: This Time In A Big Way Over 30 years had passed since Kaiser had taken on the highway project in Cuba. Since that time, there were more than enough projects within the United States and Canada to keep Kaiser Engineers busy without looking abroad for more work. However, the Kaiser automobiles companies were about to change this. For five years, Kaiser had been manufacturing passenger automobiles: Kaiser Frazer automobiles in Detroit, Michigan, and the Willys Jeep Line in Toledo, Ohio. Although advanced in both engineering and styling, sales were disappointing. True to form, the always-resilient Henry Kaiser was looking for the "opportunity in work clothes" represented by the problem of sagging car sales. He found the opportunity in Argentina. In January 1955, Kaiser and the Argentine government incorporated Industrias Kaiser Argentina (IKA). Less than a year later, a revolution overthrew Argentine dictator, Juan Peron. Surprisingly, the effect of the Argentine upheaval on the new company was minimal because the Kaiser business philosophy led to IKA being organized under Argentine control. This control protected the company during the period of political tumult following Peron's downfall. In June 1956, only 14 months after breaking ground for the car factory in Cordoba, jeeps and Kaiser automobiles began rolling off the IKA assembly line. The speed with which Kaiser engineers designed and built this facility was proof that the examples of the previous generation of engineers who had built the highways, the great dams, and the shipyards, had been well noted and well learned. Increasingly in the 1950s, the company looked abroad for opportunities for growth. In Argentina, the opportunity had been in industry - in automobile manufacturing - a comparatively new venture for Kaiser. On the other hand, Kaiser's activities during this time in Australia were almost like the good old Six Companies days" that older engineers had described to more recently hired staff. In 1949, the Australian government passed the Snowy Mountains Hydroelectric Power Act to provide irrigation water and electric power for Southeast Australia. As was the case a generation earlier on the Colorado and Columbia River projects, the concept was simple. In this instance, diverting the headwaters of the Snowy and two other large rivers so that they flowed westward would provide water and power to increase the potential productivity of a large region. The engineering required was as spectacular as the remote and mountainous land was rugged. The project contained 16 dams, seven hydroelectric stations, over 85 miles of tunnels, 50 miles of aqueducts, including a 14-mile canal cut through the granite heart of the Snowy Mountains themselves. Small towns, access roads, storage lakes, most in wilderness areas, needed to be designed and built. One storage lake, Eucumbene, had a capacity nine times that of Sydney Harbor! The Snowy Mountains project was one of the engineering wonders of the modern world. Kaiser, leading a consortium of six other companies, put together the winning bid for the project. Old-timers pointed out the similarities to the days on the Colorado and Columbia Rivers, but the most important resemblance was that Kaiser Engineers finished its part of this 25-year project on time and under budget. The people of Kaiser had proven again that they could live up to the traditions of quality, service, cost control, and timely delivery that had been established four decades before in Vancouver. That Kaiser Engineers could handle projects of this scale and breadth was further proof of the value of an engineering company capable of working in a wide variety of engineering fields. Over the next decade, Kaiser Engineers found more and more international work until, in 1965, Kaiser was ranked the number one contractor in the world by Engineering News-Record. Some skills learned by Kaiser's engineers working on site were never taught in college courses. On the Guri Dam project in Venezuela, Bob Fitzgerald recalled how the engineers learned to interpret calls made by the chattering monkeys living in the jungle canopy surrounding the work site. The most distinctive was the sound monkeys made when they spotted the local 25-foot Anaconda snakes hunting them. The company's monthly magazine, The Builder, a title that Henry Kaiser must have approved of enthusiastically, was filled with corporate and individual achievements. One issue told of an engineer who arranged to have a needed diesel engine brought to a remote exploration site by camel. Stories like this helped to build a spirit throughout the company, encouraging the view that Kaiser engineers could do anything and go anywhere to get a project done. Despite the fact that it was growing so fast, the company kept its family spirit. One reason was that the engineers moved around a great deal, finishing up one project here, joining another there. Wherever a Kaiser engineer went, there were people known from other assignments. Almost everyone was at least a "friend of a friend." Friendships, professional challenges and successes, and opportunities for advancement, combined to make Kaiser Engineers an excellent employer. Their experience made them "salable," but almost all chose to remain with Kaiser Engineers, giving the company a deepening reservoir of proven skills and tested teams. During this period, Henry Kaiser, now over 80 and supposedly retired, was busy in Hawaii with his own projects that were changing the face of Oahu. He extended Waikiki Beach, built hotels and affordable residential communities, operated a radio and a television station, and constructed a hospital and a cement plant. He was often at construction sites personally directing the movement of the heaviest earth moving equipment with all of the joy and vigor that stamped his entire life. Right up until his death, Henry Kaiser was a living example of the dedication and energy that he always promoted. When Henry Kaiser died in 1967, after 55 years in business, he had enterprises running in 50 countries. One of them was the original Henry J. Kaiser Co. Ltd. that he founded more than a half century before in Vancouver, British Columbia. And the backbone of his empire, Kaiser Engineers, was operating in 21 states and 14 countries. The various fields of engineering were becoming increasingly complex. Important technological developments were taking place all over the world; new processes were developed, older ones were improved. As leaders in their individual fields, Kaiser's engineers stayed up-to- date with new developments in the United States and abroad that might be incorporated in their work. In the 1950s Kaiser Engineers found a promising one in Austria. Today known as the BOF process, it is a more efficient way of producing steel by blowing oxygen through a lance inserted into the top of the blast furnace to flow through the molten metal. Kaiser Engineers licensed the BOF process from the developers and designed this new process into a Jones and Laughlin steel plant in Pennsylvania and the Kaiser plant in Fontana. The installations were real-world demonstrations of the advantages of the new process. As a result, other steel companies wanted it. These companies recognized the value of Kaiser Engineers' experience with BOF. Soon the company was responsible for building half of the new BOF steel-producing facilities in the United States. Kaiser Engineers' monitoring of specialized fields paid off in a big way again following the doubling and tripling of fuel prices during the Arab oil embargo in the 1970s. Until then, with low-cost energy available to them, American cement manufacturers were never very concerned about fuel efficiency in their processes. However, in Asia and in Europe, fuel historically was more expensive so Kaiser Engineers looked there for examples of how cement companies controlled fuel costs. There, the engineers found a variety of very promising preheating and other fuel-saving techniques. Kaiser Engineers offered seminars to its colleagues in the U.S. cement industry, sharing what it had learned. Because the company knew more about these processes than any other firm at this time, Kaiser Engineers I cement specialists were busy in the following years designing and building fuel-efficient cement plants all over the country, saving clients millions of dollars in fuel costs. Once again, the Kaiser organization had combined its knowledge and abilities with national needs and was "doing well by doing good." Kaiser Engineers has a long and successful history of working with coal. The United States has enormous coal reserves, far more than gas and oil. A commercially viable coal gasification operation reduces the reliance of the United States on unstable foreign energy sources. Kaiser Engineers was responsible for the construction of the Great Plains Coal Gasification project in North Dakota. The $2 billion plant converts plentiful lignite coal into pipeline-grade substitute natural gas. Conceived in the early 1970s as a response to the Arab oil embargo, the massive plant near Beulah, North Dakota, is the only full- scale substitute fuels project in operation in the United States today. It was a gigantic design and building job that took more than 12 years from the selection of Kaiser Engineers and C-E Lummus as principal contractors to full-scale production. The project took more than seven years to obtain the necessary local, state, and federal permits before the first shovelful of more than 8 million cubic yards of earth could be excavated. Over 40 major permits were required from state and federal officials so that the job could be completed. However, once construction began, Kaiser Engineers erected the plant at a dizzying pace. More than 3 million engineering office hours were utilized to complete the design of the new facility. The project included 10,000 isometric drawings, 5,000 drawings, 2 million field staff hours, and 13 million craft hours. Full-scale construction began in the summer of 1981. According to the state's natives, there are only two North Dakota seasons: winter and the Fourth of July. However, work proceeded on schedule, even when wintertime windchill temperatures fell to 100º below zero. Temperature extremes meant that new techniques for such basic routines as pouring concrete needed to be developed. In 1984, the facility went into in full production. Since that time, the Great Plains Coal Gasification Plant has been operating at 100 percent capacity and is providing experience that may be extraordinarily valuable to national security if the United States' access to international oil markets is threatened again. How To Pass On A Tradition Of Excellence Over nine decades, on many of the finest engineering projects in the world, the Kaiser tradition has been one of quality, speed, safety, and value. That tradition was passed on to the later generations of engineers who, in time, were able to point proudly to their own achievements and to encourage young engineers to live up to standards that already accomplished so much. As a result of the variety and scale of Kaiser Engineers involvement in many of the world's great projects, the company had invaluable experience in engineering, construction, and construction management. The Kaiser Engineers Management System (KEMS) evolved both out of that experience and out of the Kaiser philosophy of project management. Above all KEMS is a tool to plan and manage all aspects of a project, and continually is modified to take into account what Kaiser Engineers continues to learn from its projects around the world. Now computerized, KEMS helps to plan, monitor, and control the cost, schedule, and progress of engineering, procurement, and construction activities of a project against what was planned. It also identifies deviations and their trends for early corrective measures by managers. KEMS is rooted in the same "can-do" attitude that created the near-legendary projects of the past, as well as the outstanding achievements of recent years. However it takes more than software to make projects succeed. A former manager of cost engineering summed up the philosophy this way, "Our project managers have grown up with our management system and procedures, and they know how to bring them to bear on any kind of project. It's this combination of human talent and computerized controls that gives us a coherent management philosophy with which to approach any undertaking, however complex it may be." KEMS increases project productivity and management efficiency by integrating all project functions. For convenience of operating the system on microcomputers, these project functions are divided into different modules. The full integration of the system means data is Input only once- the modular architecture enables only those modules that are relevant to be used on a project. The Neves-Corvo project is an excellent example of how KEMS helped Kaiser Engineers ensure that its projects came in ahead of schedule and under budget. Successful project management made a remarkable difference in the outcome of a 8400 million ton copper mine. In 1986 in Portugal, so little industrial infrastructure was In place that nearly all equipment and material were imported. On this project that meant 680 purchase orders from 16 countries on five continents. Equipment and material orders were followed from foreign suppliers through customers right to the construction site. Obstacles - whether the result of material shortages, political problems, bureaucratic regulations, labor unrest, systemic inefficiencies, or unexpected expenses - were spotted early and dealt with immediately. In addition to the underground mine, the project facilities included construction of roads, a railroad, a copper concentrator, four dams, a 40-kilometer water pipe, and a port facility about 200 miles from the mine. Because there wasn't a trained work force in the country, people with basic skills needed to be identified, hired, and trained. The logistics were orchestrated like an intricate dance with resources and appropriate personnel coming together at the right time and the right place. And, of course, it had to be done within the limits of a tight budget. And it was. The lessons of 80 years of construction management are distilled into KEMS. It is one of the major reasons why a job of this magnitude took only 24 months from detail design to handing over an operating facility to the client, eight months ahead of schedule. The speed paid off in another way, too. Because of construction-related savings, the client was now in a position to take advantage of a significant tin deposit that was discovered during construction of the copper mine. The client had asked Kaiser Engineers to make a quick study of the tin's potential. The report clearly showed that a tin facility would be very profitable. Because Kaiser Engineers finished the copper mine assignment so quickly and because it reached design capacity so much sooner than expected, Kaiser Engineers was able to show how profits from the copper mine could be multiplied immediately with the construction of the tin facility. Once again, a satisfied client was leading Kaiser Engineers to expanded opportunities. The reasons were the same that Henry Kaiser learned and appreciated years before: the client's needs were met, a quality job was done ahead of schedule, and it was completed under budget. Today And Tomorrow Several of Kaiser Engineers' current projects are the largest of their kind in the world today. Each is breaking new ground in engineering and technology. The scope and scale are convincing demonstrations that the spirit of Henry Kaiser is deeply ingrained in Kaiser Engineers today. Projects That Matter Kaiser Engineers today is involved with three of the largest, most-complex, and significant program and construction management projects in the world. Two deal with the aftermath of a world war and the strain of decades of Cold War preparedness. The third seeks to minimize the impact of millions of people and thousands of industries on one of America's great historic harbors. During World War II, and for a number of years thereafter, the federal government built reactors and plutonium-processing facilities on a 560 square-mile reservation along the Columbia River in Washington state. One attraction of the site was abundant electrical power from Grand Coulee Dam, which was built by the Kaiser-led consortium only a few years before. In the early 1960s, at the height of the Cold War, Kaiser Engineers returned to the Columbia River to build the only dual-purpose reactor (power and plutonium) at Hanford. Since that time, Kaiser Engineers has continued to meet the changing needs of the U.S. Department of Energy's (DOE) Hanford Site. From 1982 to 1999, the company provided turnkey on-site engineering and construction services. Up until the mid 1990s, the emphasis at Hanford was on cleaning up toxic chemicals and radioactive waste from nearly a half century of industrial and research operation. Kaiser Engineers was the design, construction management, and base operations contractor for all cradle-to-grave facilities required to handle and treat waste generated by site cleanup activities at Hanford. Included were buildings, soils, and ground water. Because of the depth and breadth of Kaiser Engineers expertise, the company was able to provide engineering studies, conceptual designs, cost estimates, Title I and Title 11 design, procurement and subcontracting, construction, and construction management as well as operate and maintain railroad, highway, sewer, water, steam, and electrical systems. Two major construction projects Kaiser Engineers managed at Hanford were the Environmental and Molecular Sciences Laboratory (EMSL) and the Waste Receiving and Processing (WRAP) facility. The 200,000 square foot EMSL will house crucial research into molecules and microbes that someday may absorb, consume, and neutralize most hazardous waste. The WRAP facility is another essential part of the long-term Hanford cleanup plan. The WRAP plant will examine and identify the contents of drums and boxes of radioactive solid waste and then repackage the materials for permanent disposal. Most of the waste in Hanford's 177 underground tanks today comes from processing spent reactor fuel and is related to defense efforts over the past 50 years. Until recently, engineers felt that the best way to deal with such waste was to store it in tanks until time could be devoted to finding a permanent solution. Now that the Cold War is over, this is the time. Several years ago, one of the storage tanks became DOE's number one safety issue when potentially flammable gases, generated by waste decomposing in the tank, were found to be accumulating dangerously in the tank and vents. Kaiser Engineers craftspeople produced a huge pump that acts as a stirrer and mixer to blend the sludge on the tank bottom with the liquid floating above. Engineers expect that this will help to control the build up of these dangerous gases. The Hanford cleanup was successfully underway when in April 1995 Kaiser in association with CH2M Hill Companies, Ltd., was awarded a five-year, $3.5 billion contract to clean up the former Rocky Flats nuclear weapons facility near Denver, Colorado. Once again, it was the combined experience of a consortium put together by Kaiser that won a contract for a formidable project. The Kaiser-Hill Team brings together about 80 to 90 percent of the relevant plutonium experience in the world. This experience has made possible another sort of innovation, this one in the terms of the contract itself. According to DOE, "The real distinction we saw was Kaiser-Hill's incentive structure and the incentives they offered to base their fee on." Under this contract, Kaiser-Hill will share cost savings and performance fees with employees. What Kaiser-Hill and DOE are learning today about the safe and efficient handling, treatment, and storage of these materials likely will be applied in civilian and industrial projects to benefit the company and society tomorrow. With an estimated $230 billion to be spent on the cleanup of former nuclear weapons sites over the next 75 years, Kaiser is well positioned in an important field and one of increasing economic significance. Three thousand miles and the width of a continent away, Kaiser Engineers is easing the pollution burden on the waters of Boston Harbor by cleaning the wastewater from 2.5 million people and 5,000 industries in the 45 communities that surround it. As a result of a 1986 federal court order, Boston and neighboring cities and towns were obligated to clean up what was one of the dirtiest bodies of water in the nation. Rather than trying to manage a project of this size and complexity by itself, the Massachusetts Water Resources Authority selected Kaiser Engineers as a construction manager that would bring to the $3.4 billion Boston Harbor project management tools suitable for a project of this scale. The task was enormous. In construction and construction management alone, there were 87 contracts to prepare, let out for bid, and manage. There are several unusual aspects to the Boston Harbor project. The first is that Deer Island, the site of this huge treatment facility, is accessible from the mainland by only one road, and the island is just a bit larger than one-third of a mile square. There is literally no room to store equipment or supplies that won't be called for in the immediate future. In order to keep workers on one part of the project from stumbling inefficiently over workers involved in other, intensively detailed schedules and coordination plans were developed and enforced. In order to satisfy concerns in the adjoining town of Winthrop, Massachusetts, about a constant parade of heavy construction vehicles and personnel rumbling through the neighborhood streets for several years, Kaiser Engineers maintains off-site storage areas and even runs a formidable ferry service, using barges capable of carrying as many as two dozen, 35-foot trailers at one time. Half of the labor force travels to and from work on personnel ferries managed by the company. Whatever the problem, ingenious solutions have been found. Murphy's Law - which states, "whatever can go wrong, will" was suspended once again by the careful management of Kaiser Engineers. The project continues to meet or better most of the milestones set by the federal judge whose ruling set this project in motion in 1986, and most tasks were completed under budget. This is an extraordinary accomplishment, especially in this constricted construction space where multimillion-dollar contracts are occurring only a hammerswing apart. The project has required a great deal of coordination between contractors because a failure to finish an area on schedule may well mean that another contractor will not be able to begin its work. Both client and Kaiser Engineers are quick to share the credit for these accomplishments with the Kaiser Engineers Management System which is, after all, the distillation of decades of extraordinary engineering achievements all over the globe. A Success Story: When Industry And Energy Meld July 28, 1989, was an important date in both Australia and Japan and it came two months ahead of schedule. On that date - after 12 years of planning, engineering, and construction - Australia's huge Woodside Northwest Shelf energy project exported its first shipment of liquefied natural gas (LNG) to Japan. The Woodside Northwest Shelf project consists of offshore natural gas wells and onshore storage and processing facilities. At that time, it was the largest energy undertaking in the world. The onshore complex is made up of a port, processing facilities, permanent housing for workers, and much more. The main contractor for the onshore portion was a consortium comprised of M.W. Kellogg, JGC, and Kaiser Engineers doing business as KJK. Kaiser Engineers was established in Australia in 1954 for work on the Snowy Mountains hydroelectric complex. Since then, the company developed an enviable reputation for excellence in aluminum, iron, and other large-scale construction and engineering projects throughout Australasia and the Far East. The first LNG shipment in 1989 marked the completion of the second of the project's three phases. The first was to build the infrastructure and the natural gas processing plant in a part of Western Australia that is one of the most remote parts of the world. In this harsh and fragile environment, KJK built a high-technology natural gas processing facility while keeping environmental impact to a minimum. Phase Two was technically far more complex. According to the contract schedule, the project needed to deliver increasingly larger amounts of LNG beginning in October 1989 through mid -1994. Studies indicated that it would be cost-effective to replace the standard steam turbine/sea water coolant technology used to liquefy the natural gas with a state-of-the-art, more efficient as turbine system, working in conjunction with large-scale air cooling. The fact that this new technology was put on line effectively and within limits of budget and schedule demonstrated that Kaiser Engineers as part of the KJK consortium had engineers who were able to meet changing project demands and had the capacity and the ingenuity to lead the way in a new technology. In order to ensure fast and direct Communication between all parts of this complex project, the three-nation engineering, procurement, and construction management consortium took advantage of the latest in communication technology, linking itself through an international network. The joint venture, in its temporary construction offices on site, was supported directly by its home offices, and the sites and offices also had immediate access to each other. Another successful aspect of the project was the outstanding improvement in construction safety over the three phases. Phase Three achieved arguably the best safety record in the world for such a project. According to KJK, the concern for safety was a fundamental reason for the project being completed ahead of time and under budget. Today the Northwest Shelf project is tapping reservoirs of natural gas more than two miles below the ocean floor and processing it in the new LNG trains. When Phase Two was completed, the Woodside Northwest Shelf project became a major supplier of LNG to Japan. The $8 billion project, underway since 1980, is an important factor not only in the industrial growth of Australia but of the expanding economies of its Southeast Asian neighbors as well. Phase Three, the expansion of the LNG processing facilities, was completed three months ahead of schedule in January 1993 and will continue to enhance the Australian economy while providing a reliable source of clean energy for Japan. Henry Kaiser would have been proud of what his engineers had accomplished, once again breaking new ground and setting new standards. Kaiser Engineers is leading the engineering and construction efforts to build a $262-million steel mill in Ostrava, the Czech Republic. The project began in 1993, when Kaiser Engineers produced a feasibility study financed by the U.S. Trade and Development Agency. The new mill will help modernize the Czech Republic's metals industry and make the country more competitive in the modern, global marketplace. The mini-mill consists of a ladle metallurgy facility, medium slab caster (with twin slab capability), equalizing/reheat furnace, and a two-stand reversing hot strip mill. In another successful blending of engineering and industry, ICE Kaiser developed and improved a licensed technology, pulverized coal injection (PCI) systems. Although it may seem odd that a company that has built 2,200 coke ovens, including some of the most advanced ever designed, would be on the lookout for alternatives to that technology, Kaiser Engineers recognized in PCI the potential for steelmakers to function effectively in the face of increasingly strict environmental standards. Many steel companies already have closed down their coke-making facilities. Constrained by the increasing costs of complying with the new regulations, some plants face complete shutdown unless a cost-effective alternative to coke is found. PCI promises to reduce the need for coke while, at the same time, cutting steel production costs, a powerful combination of benefits. And in many instances it costs less to install a PCI system than it does to do a major overhaul of a coke battery. Infrastructure: Building The Framework Of The World's Technological Society Manila, the capital city of the Philippines, is notorious for its traffic congestion and resultant air pollution. One of the most heavily traveled corridors in downtown Manila, along the Epifanio de los Santos Avenue (EDSA) corridor, carries over 300,000 motor vehicles per day, transporting up to one million passengers. A light rail system is currently being constructed along the EDSA corridor. The $655 million system includes 13 stations and will carry in excess of 600,000 passengers per day and 200 million passengers per year. The first 10 stations on the 17-kilometer transit line opened in December 1999; the entire system will be operational in June 2000. A unique project development approach was used to make the EDSA project possible. Under a build-lease-transfer concept, private financing is used to construct infrastructure projects that will improve the quality of life for local citizens. Thanks to a private consortium that financed and built the system and Kaiser Engineers' program and construction management capabilities, the EDSA line will help alleviate traffic in one of the world's busiest traffic corridors and dramatically improve the quality of life in one of the world's most populous cities. In each of the five lines of business in which Kaiser Engineers is involved in today - Alumina/Aluminum, Transit and Transportation, Facilities and Wastewater, Iron and Steel, and Microelectronics and Clean Technology, the Company is working on some of the largest ongoing projects in the world. This kind of participation ensures that the people who comprise Kaiser Engineers are staying in touch with the latest developments in their fields and will be able to apply this hard-won knowledge to the widest variety of new challenges throughout the world. What Henry Kaiser said so proudly of his organization in 1955 remains true today:
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