Private Empire: ExxonMobil and American Power (6 page)

Every meeting at every Exxon office, no matter the agenda and no matter the personnel assembled, had to begin with a “safety minute,” akin to a blessing before a meal, in which a randomly chosen employee would speak briefly about one safety issue or another. “Please take note of the Exit sign in the hallway,” the briefer might say, “and note that the stairway to the outdoor plaza lies to the left of the meeting room door.” If a group of employees worked together for years in the same office and held a lot of meetings, it could be very difficult to come up with a fresh safety minute, and so the briefings could become as repetitive as the routines of commercial flight attendants before takeoff. Safety minutes gradually became commonplace at many corporations engaged in dangerous industrial operations, but few companies enforced them like Exxon. (Chevron Corporation and British Petroleum later adopted the safety minute idea, and a scientist at one of the competitors reported to a friend at Exxon, “They’ve been assimilated into the Exxon Borg.”) Reportable injuries tracked in statistical reports would soon include food poisoning, bee stings, stapler pricks, and paper cuts. As one of the corporation’s senior safety managers would later explain: “If we have a whole lot of paper cuts going on, we have to ask ourselves, ‘Well, what do we do to avoid paper cuts? Do we ask people to use gloves when they use the copy machine?’”
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The group safety confessionals at Exxon offices and plants covered conduct beyond the workplace: The correct use of a ladder while cleaning gutters at home might be discussed, or the imperative of wearing seat belts during the daily commute, or the danger of getting too much sun on a beach vacation. At these meetings employees stood and shared with their colleagues stories of “near-misses,” as in a 12-step recovery program. One twenty-eight-year manager recalled listening to a colleague confess that an object had flown out of his lawn mower while he was cutting the grass at home and had struck him in the leg.

On Exxon billboards, office walls, and corporate vehicles worldwide the company would ubiquitously post a motto adopted from its oil drilling division: “Nobody Gets Hurt.” In Africa, workers were required to submit to blood tests to prove that they had taken their antimalaria medication, Malarone; if they failed the test, the workers could be fired and sent home on a plane ticket they paid for themselves. Particularly in poorer countries without traffic enforcement, if accidents became a chronic problem, Exxon would install electronic monitoring systems in its vehicles to track drivers’ whereabouts remotely, to ensure they did not exceed the company’s own imposed speed limit. Managers purchased radar guns and dispatched oil workers onto rudimentary clay African roads to monitor their colleagues’ speeds. Drivers might be fired for a single violation.
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Raymond integrated the new corporate safety rules into an intensified top-down culture of command management emanating from Exxon’s headquarters. At his yearly meeting with Wall Street analysts, he conspicuously announced Exxon’s safety record before enumerating the corporation’s profit performance. He described his safety drive as a proxy for more far-reaching changes that would ultimately manifest themselves on the bottom line: “The only way you can be successful in the area of safety is through disciplined commitment and day-to-day management of the business.”
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In 1992, the year of Sidney Reso’s death, Exxon unveiled to its employees and executives a universal new management regime, the Operations Integrity Management System, or O.I.M.S., “more vinyl binders than you can possibly imagine, every single goddamn aspect of how we operate,” as a former executive put it. “So there could be no excuses.” O.I.M.S. involved “Framework Expectations” about eleven “Elements.” These included the basic challenge of risk assessment and management. O.I.M.S. section 2.1 declared, “Risk is managed by identifying hazards, assessing consequences, and probabilities.” Five subsections of the rule outlined how to achieve this goal through the use of data, documentation, and outside evaluators.

The system also addressed human frailty in the workplace. Section 5.5 prescribed that Exxon employees should “routinely identify and eliminate their at-risk behaviors and those of their co-workers” while ensuring that “Human Factors, workforce engagement, and leadership behaviors are addressed.”
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The legacy of catastrophic failure in Prince William Sound proved nonetheless to be persistent.
Fortune
had ranked the corporation as America’s sixth most admired before the accident; afterward, it fell to one hundred and tenth. Telephone operators in the Exxon credit card department heard so much abuse from angry customers who used the
Valdez
accident to vent their spleens that the corporation made counselors available to console its employees. Many years after the grounding, the corporation’s public affairs department organized focus groups with North American opinion leaders. When the moderator pronounced the word “Exxon” and asked for a free-association response, more than half of the participants blurted out,
“Valdez.”
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Initially Raymond sought to address the claims of Alaskan fishermen, cannery workers, and small business owners affected by the
Valdez
spill by handing out $300 million in compensation without asking for legal releases. Soon he chose to defend Exxon’s position by fighting lawsuits filed by the state of Alaska, the federal government, Alaskan businesses, and individuals. Raymond rejected all efforts to extract punitive damages from Exxon. He accepted in principle that his corporation was liable for actual damages in Alaska where such claims could be proven—he settled virtually all of those claims by 1994. But punitive judgments levied as a deterrent or as a source of emotional satisfaction Raymond would fight as long as it took. “It was a very tough time for them,” but increasingly Exxon’s leadership group concluded that the anti-Exxon campaigning after the
Valdez
spill “was unfair,” recalled Kathleen Cooper, who joined Exxon as its chief economist in 1990. “They paid compensation immediately—sooner than some companies might have. . . . At some point we said, ‘We’ve spent a lot of money, we have done it on a proactive basis, and we just can’t keep going.’ We need to say, ‘This is it.’ That is what Raymond was saying and I think the whole company was behind him.”
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The seeming virulence of Exxon’s permanent opposition—Greenpeace and other environmentalists, dissident shareholders, Manhattan and Hollywood liberals, and assorted magical thinkers about wind and solar power (as Exxon executives tended to view those who believed renewable sources could meet America’s energy requirements anytime soon)—strengthened the solidarity among Exxon’s besieged executives. Gradually they returned to the operation of their oil and gas business for the profit of their shareholders. And they found a setting more compatible with their Alamo attitudes: They moved to Texas.

A
click, click, click
of heels on marble echoed through the vast lobby at intervals as women in charcoal pantsuits and men in dark suits and white shirts slipped through electronically controlled glass security chambers and crossed before a reception desk. The passing Exxon executives politely acknowledged the uniformed guards, who replied in turn with a formal “Mr.” or “Ms.” The corporation’s new campus in the featureless exurban city of Irving resembled a high-end condominium community or a prosperous modern college set amid pine trees, wind-bent mesquite trees, and green lawns. Breezes rippled a small man-made lake. The main building was of modest height and sleekly constructed from granite, smoked glass, and polished marble. On one side of the lobby rose a tall, photo-realistic oil painting of a pristine alpine village on a lake with snowcapped mountains in the distance; opposite was an equally large canvass depicting a desert canyon. Visitors killed time in square-backed leather club chairs beneath the paintings. The aesthetic suggested a Four Seasons hotel without many guests. A second wall of security-controlled glass doors awaited visitors entering the top floor. There, it was necessary to wait for the doors behind to close before access to the inner executive suite—known to employees as the God Pod—would be granted. The God Pod contained about twenty thousand square feet of office space housing just four or five executive suites, including Lee Raymond’s, as well as conference rooms. Inside, it sometimes felt as if a neutron bomb had recently detonated, killing off the local population but leaving the elegant physical facilities intact. The persistent quiet and formality of the headquarters building had an ominous quality; some employees referred to Irving as the “Death Star.”
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Until its retreat to Texas in 1993, Exxon had been rooted in Manhattan since 1885, when John D. Rockefeller and his founding partners at Standard Oil of Ohio had moved their headquarters from the city of Cleveland to 26 Broadway. The son of a traveling elixir salesman, Rockefeller had rebelled against his father’s example by following his frugal mother’s advice and growing up to become disciplined, orderly, circumspect, earnest, and religiously devout. As American oil consumption boomed in the late nineteenth century, he and his partners methodically seized control of the industry, destroyed their competitors, innovated with technology, and built the first “integrated” oil company, meaning that they controlled the profitable exploitation of oil from the wellhead through the refining process to the retail sale of gasoline. At its peak Standard Oil controlled 90 percent of the American oil market. From its early days it attracted the same kind of opposition that would shadow Exxon a century later—muckrakers, journalists, trustbusters, and other American factions suspicious of concentrated industrial power. The muckraker Ida Tarbell’s nineteen-part
McClure’s Magazine
series, published in 1904 as the book
The History of the Standard Oil Company
, attacked the corporation’s power but acknowledged the strengths of its scientific culture: “From the beginning the Standard Oil Company has studied thoroughly everything connected with the oil business. It has known, not guessed at, conditions. It has had a keen authoritative sight. It has applied itself to its tasks with indefatigable zeal.”
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“Bringing order to chaos” was the way Rockefeller had once described his monopoly. That ambition had not ebbed within Exxon almost a century later.

Tarbell’s investigation accelerated a movement to break up Standard Oil on antitrust grounds. By the time the United States Supreme Court ordered the company’s dismantlement in 1911, John D. Rockefeller had retired and taken up philanthropy. The largest of the “baby Standards” born from the breakup was Standard Oil of New Jersey. It later marketed itself and its products under the Esso, Enco, and Humble Oil labels before modern branding specialists settled on Exxon in 1973. At the time of the
Exxon Valdez
spill the corporation remained by far the biggest oil company in the United States—twice the size of the next largest, Mobil Oil, another baby Standard, the successor to Standard Oil of New York; larger still than Chevron, the successor to Standard Oil of California; and ten times the size of the Atlantic Richfield Company, initially born of the Standard monopoly as a refiner.
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Exxon hewed most closely to the Rockefeller inheritance of discipline, rigor, technological research, and unsentimental competition. By the 1990s, there were “lots of wrong ways of doing projects—and then there [was] the Exxon way,” as Ed Chow, a longtime Chevron executive, put it. Exxon’s managers and engineers were “very, very prickly as partners . . . and they don’t like to be partners, unless they’re the operator,” a competing executive said. At industry meetings the Exxon participants could be easily identified: conservatively dressed, hairstyles that seemed influenced by military rules, cliquish, secretive, and businesslike. Senior executives who rose through Exxon’s ranks reinforced with one another that they served a corporation whose “fundamentals” traced in important ways all the way back to Rockefeller, as Raymond put it.
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Executives at other oil companies tended to regard their Exxon cousins as ruthless, self-isolating, and inscrutable, but also as priggish Presbyterian deacons who proselytized the Sunday school creed Rockefeller had lived by: “We don’t smoke; we don’t chew; we don’t hang with those who do.” Ethics rooted in Judeo-Christian religious tradition were part of the fabric of Exxon. “They encourage you to get married,” a former manager recalled. Such values were “not just a lot of lip service,” said another longtime executive. “J. D. Rockefeller went to church every Sunday and his employees better by God go to church on Sunday or they were not good employees. It is kind of a legacy. When I went to work for the company in the 1970s, managers would have employees join hands around the table and pray for the success of Exxon.”
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Compared with executives at San Francisco–based Chevron or the international behemoths of British Petroleum and Royal Dutch Shell, a British-Dutch conglomerate, senior executives at Exxon sometimes lacked what bicoastal American or European executives would call worldliness. Many of Exxon’s U.S.-based executives traveled extensively but remained insulated, introverted; when they mingled, it was to golf or hunt with others like themselves.

Manhattan no longer seemed a suitable base. Striving senior executives would typically arrive at Exxon’s modern headquarters, a towering white skyscraper, at around 7:30 a.m., only to find it vacant because there were no early-morning go-getters. Long commutes from the suburbs seemed to deter early birds; in any event, the sense among some executives was that a lethargy had set in. “You could have thrown a bowling ball down the fifty-third floor,” where top executives work, “and it wouldn’t have hit anybody,” recalled one manager. Howard Kauffmann, the corporation’s president at the time, advised the executives he met who were anxious for change: “If you ever get this place in a van, make sure it drives at least two days before it stops.” When Rawl and Raymond decided to move, around 1987, Rawl pulled a map of the United States out of his desk and they quickly drew
X
s through one section of the country after another—the West Coast because its taxes were high, the North because it was cold, the far Southwest because it seemed too out of the way. That left them with the Confederacy, essentially. They scouted new headquarters sites in Atlanta, Jacksonville, Charlotte, Houston, Austin, and Dallas; narrowed the choice to Texas; and bought some land in Austin. They ultimately selected Dallas because it was easy to reach from around the world and would keep the headquarters away from the oil provincialism of Houston, where Exxon already had a large presence. They sold the Sixth Avenue building in Manhattan and reaped $477 million.
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