Word: exxon
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Dates: during 1980-1989
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...Exxon's cash squeeze has been intensified by management miscalculations in a series of unsuccessful attempts to diversify. Examples: Exxon spent $857 million during the past five years to develop uranium, copper, lead, zinc and molybdenum mines from Nevada to Papua New Guinea. But the company has lost $383 million on these operations because of the slowdown in nuclear reactor construction and a fall in metal prices. After investing nearly $1 billion in a project in Colorado to develop synthetic fuel from shale, Exxon abruptly suspended the program last spring. Exxon Senior Vice President Jack Bennett says the company...
Attempts to move from raw materials into high technology have been troubled too. In the early 1970s, Exxon entered the market for electronic office equipment with innovative products like the Vydec word processor. After a good start, sales wilted under competition from IBM, Wang Laboratories and other office product specialists. In the past three years, Exxon's office division lost $150 million...
...Exxon unveiled a new electronic device called the "alternating-current synthesizer" that the company claimed could save energy by making electric motors more efficient. To help in developing and marketing the product, Exxon bought Reliance Electric Corp. of Cleveland for $1.2 billion, which was roughly twice as much as many industry analysts thought the firm was worth. Exxon has since discovered that its synthesizer is too expensive to be practical, and Reliance last year earned a mere $31 million for its new parent...
...Exxon's stumbling in nonoil fields may stem in part from the inbred nature of its management. Many of the top executives, including Chairman Clifton Garvin Jr., 60, are engineers who have spent their entire careers at Exxon. Wall Street analysts have begun to wonder if these lifetime oilmen have the versatility to venture out of the petroleum industry...
Sensitive to such criticism, Garvin is now pursuing a back-to-basics strategy. Said he at May's annual meeting: "We are emphasizing established business lines of demonstrated profitability." Despite ambitious efforts to find new oil, however, Exxon's results have been mixed. Since 1978 its oil reserves have dwindled 13%, to 7 bil lion bbl. In the meantime, costly drilling in the Baltimore Canyon and in the Destin Dome region of the Gulf of Mexico has turned up a discouraging number of dry holes. Wall Street stock analysts think that other oil companies may have greater growth...