War Brings Uncertainty, Promise for Companies
By MICHAEL LYSTER
Fluor Corp. embodies the peril and promise for Orange County companies as the U.S. goes to war with Iraq.
The Aliso Viejo-based engineering services company last week followed the U.S. Embassy and relocated workers and their families from Kuwait to Saudi Arabia.
Another 15 Fluor workers have been called to duty as military reservists. Early last week Chief Executive Alan Boeckmann sent an e-mail to employees saying the company’s thoughts are with workers deployed in the Persian Gulf.
Fluor workers also were urged by Boeckmann to “act with respect and integrity despite differences of opinion on military action.”
“Because we’re an international company with people all over with all sorts of views, Boeckmann is just asking us to uphold our corporate integrity,” Fluor spokeswoman Lori Serrato said.
That ambivalence cuts to the core for Fluor. Like other companies, Fluor is feeling initial war fallout, though Serrato said the company’s work in Kuwait goes on with local workers. Fluor officials monitor things from Khobar, a port city on Saudi Arabia’s Gulf coast south of Kuwait.
Yet the war also holds prospects for Fluor. The company was among the winners of work rebuilding Kuwait after the Gulf War ended in 1991.
And Fluor’s already in line for work in Iraq,it’s one of five U.S. companies bidding on a postwar Iraq rebuilding contract that could be worth as much as $900 million.
In 1994, Fluor won a $1.4 billion contract to build a petrochemical complex in Kuwait for Equate Petrochemical Co. The project was the first in Kuwait for Fluor since it built an oil refinery there in 1968. That site was destroyed in the Gulf War.
Fluor also recently did a study for a proposed gas pipeline between Qatar and Kuwait. A construction pact is yet to be awarded and could be worth $500 million.
Other companies also could see some business from Iraq. They include drug makers such as Costa Mesa-based ICN Pharmaceu-ticals Inc. and Allergan Inc. ICN is supplying a nerve-gas antidote to soliders.
The Iraq war isn’t likely to spur any immediate big defense contracts, though some military suppliers could be in for more orders.
Among them: Costa Mesa’s Ceradyne Inc., which makes bulletproof vests, Irvine’s Eaton Aerospace, part of Cleveland-based Eaton Corp., which makes fighter jet parts, and Guardian Parachute, a unit of Santa Ana-based FXC Corp. that makes military parachutes.
Security companies, already doing brisk business since the terrorist attacks, also could see added demand. They include Irvine’s HID Corp., part of Sweden’s Assa Abloy AB, and General Electric Co.’s InfoGraphic Systems Corp. in Garden Grove. Both make building access products.
Of course, there are a lot of what ifs.
Higher oil prices could send anemic economies back to recession. U.S. occupation of a Muslim country could bring terrorist reprisals. And then there’s the cost of war and rebuilding, which will crimp the U.S. budget and could bring cuts to healthcare and other spending.
OC’s already reeling hotels and tourist attractions could be among the losers. War and any related terrorist attacks could further dampen the already weak travel market that has yet to fully recover from 2001.
Walt Disney Co. cut its 2003 profit forecast last week, citing lower-than-expected attendance at its theme parks, including in Anaheim.
Media companies, including Freedom Communications Inc.’s Orange County Register and The Los Angeles Times, could see less advertising as companies pull back on marketing during the war. The Register last week hawked 30,000 extra copies of a war edition of the paper.
Most companies last week were trying to sort out what the impact of war would be.
Fullerton-based Beckman Coulter Inc. had a message ready to issue to workers when U.S. troops moved on Iraq, spokeswoman Anne Warde said. The maker of medical diagnostic gear said it doesn’t plan to alter travel policies but restated guidelines put in place after the terrorist attacks.
Workers also are being told to consider travel alternatives such as video and Web conferencing, Warde said.
Santa Ana technology products distributor Ingram Micro Inc. told its government sales representatives to make sure to have their mobile phones handy to take care of any emergency orders.
The company’s distribution centers were put on “heightened alert,” a spokeswoman said. Travel abroad,especially to the Middle East,was suspended last week.
And a big-screen projector normally used for corporate presentations was showing war news in Ingram’s Santa Ana lunchroom last week.
Fluor has adopted the color-coded security alerts issued by the government and posts them on a company Web site for workers here and abroad to monitor.
“Employees can click on that and get straight to our corporate security Web page, which gives them a lot of information,” spokeswoman Serrato said.
Fluor also tracks each of its workers electronically.
“We know where they are,at what hotels and on what airlines,at all times,” Serrato said.
For most companies, a wartime footing doesn’t mean much change from the way things have been done since the terrorist attacks.
Irvine drug maker Allergan Inc. “already had strict guidelines” when it comes to overseas plant security, spokeswoman Christine Cassiano said.
Chris Cziborr, Vita Reed and Andrew Simons contributed to this story.
