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Bdc6 E Chapter 1 Essay

5097 words - 21 pages

In August 1980, I was named general manager of the newly created Westinghouse Synthetic Fuels Division (SFD). The division’s nucleus was a department engaged in coal gasification research and development and supported, in part, by the U.S. Department of Energy The technology was highly regarded, and the outlook for synthetic fuels was promising. Oil prices were continuing to rise; worldwide oil shortages were forecast, as were crude oil prices of $100 per barrel; and the Carter administration had just created the Synthetic Fuels Corporation to stimulate the production of synfuels from domestic resources and reduce U.S. dependence on imported oil.
Before my assignment at SFD, I had been ...view middle of the document...

(In fact, it took me nearly four years before I could feel comfortable discussing the technology with a knowledgeable customer.)

My first impressions of the people at SFD were also mixed. Some employees made me feel welcome; with others, I sensed skepticism, perhaps even resentment of my intrusion. And in a way, I felt like a hired gun, an outsider brought in to win a position for a group I barely knew. Further, while the technical people were highly competent, I thought the marketing, financial, and personnel functions were underdeveloped. So early in the assignment, I brought in a new controller and new marketing and human resource managers. They, in turn, bolstered their staffs to develop the organization ‘s commercial capability.
Other than staff, what concerned me most was the need for a strategic plan to transform our promising, fledgling technology into a competitive, profitable business. Accordingly, I spent much of my

Mr. Peace is vice president and general manager of KRW Energy Systems Inc., formerly the Westinghouse Synthetic Fuels Division. He joined Westinghouse Electric Corporation in 1964 and held a number of sales management and marketing positions before taking on worldwide marketing responsibilities as general manager of the Steam Thrbine-Generaror Marketing Divisionin 1978.


first year learning the business and beginning to formulate a transition plan with my staff. (A chronology of key events at SFD appears in the Exhibit.) We concluded that a full-scale demonstration project that would prove the technical and economic feasibility of the fluid bed gasifier was an essential stepping-stone. By late 1981, we had identified a partner who had the
technical and financial muscle to supplement Westinghouse strengths and to make the demonstration a success.

After much soul-searching as to what customers wanted, what Westinghouse could accept, and what had a reasonable chance of yielding good financial returns, we chose a system supply concept to approach the market. We would sell coal gasification systems in much the same way that Westinghouse sells nuclear steam supply systems: we would design them to satisfy the customer’s coal resources and application; Westinghouse would build the proprietary components; and we would buy the balance of the hardware outside, We would provide some construction, start-up, and training services, but others would be responsible for many of the field man-hours and bulk materials.
Thus my assignment, as I saw it in 1980,was to tackle a set of business issues: to develop a strategic plan that would position the business technically and commercially and to become profitable in a new and unfamiliar environment. That (here might be people problems that were even more challenging didn’t occur to mc. After all, if there were such problems, somebody would have told me about them.

Trouble brewing

An employee attitude survey taken several months before my arrival at Waltz Mill seemed...

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