The Master Builders from Bechtel

By Alexander L. Taylor III

A secretive construction giant enters the limelight

The California-based engineering and construction firm from which Secretary of State-designate George Shultz resigned as president two weeks ago is one of the true anomalies of American business, a globe-girdling behemoth that operates throughout the U.S. and 20 foreign countries, but a company so private and unobtrusive in its ways that most people have never even heard of it. Yet the privately owned and operated Bechtel Group Inc. of San Francisco (1981 billings: $11.4 billion) has probably done more to transform the landscape of America and the world than any other company of this century. Among their many engineering extravaganzas, Bechtel's master builders have helped to design and construct everything from the Hoover Dam and the San Francisco-Oakland Bay Bridge to the trans-Alaska pipeline and the Washington metro subway system.

As a private, family-run corporation, Bechtel has maintained a cloak of secrecy rivaled only by modern-day monarchies. Still, some new insights about this prodigious builder are almost certain to emerge during Shultz's Senate confirmation hearings later this month. Most of the attention is expected to focus on Bechtel's longstanding ties to the Middle East, especially Saudi Arabia, which helped the company to land the job of construction manager on the Saudis' gargantuan Jubail development project (see following story).

To help nurture its friendships both in the U.S. and abroad, Bechtel over the years has benefited from the aid of a stunning array of officials and advisers with excellent Government contacts. At one time or another, these have included: John McCone, former chairman of the Atomic Energy Commission and later head of the CIA under John Kennedy and Lyndon Johnson; Parker Hart, former Ambassador to Saudi Arabia; and Charls Walker, Deputy Secretary of the Treasury under Richard Nixon. Today two powerful members of the Reagan Administration are former top Bechtel officers: Defense Secretary Caspar Weinberger and Deputy Secretary of Energy W. Kenneth Davis.

Often Bechtel's blue-ribbon executives are in a position to provide insights and spot opportunities that give the company a jump on its competitors. For example, last week Company Chairman Stephen Bechtel Jr. recalled that ex-CIA Chief Richard Helms, a Bechtel consultant, was able to help it head off potential losses in Iran in the late 1970s.

Despite its reputation for finishing complex jobs on time and under budget, Bechtel has occasionally stumbled. Some employees were publicly involved in a bribery scheme ten or twelve years ago over the construction of a New Jersey pipeline. The firm was further embarrassed in 1977, when it installed a 420-ton nuclear-reactor vessel backwards at a San Onofre, Calif., power plant.

Bechtel began life virtually as a one-man operation, when a young German rancher named Warren A. Bechtel decided in 1898 to hire himself out with his mules to help construct a railroad line through Indian territory. The company established its name nationally in 1931 by helping to lead the eight-company consortium that built the Hoover Dam.

Warren Bechtel's son, Stephen Sr., prospered during World War II by building Liberty ships. At war's end, Bechtel expanded his company's pipeline work and moved into oil refineries and later into nuclear plants. In 1960 Bechtel handed control of the firm over to his only son Steve Jr., who holds the titles of chairman and chief executive officer and last week took back the title of president as well, after Shultz's resignation.

As the business has grown, the Bechtels have become one of the world's wealthiest families. Steve Sr., now 81, is said to be worth upwards of $750 million, while Steve Jr., 57, has a personal fortune estimated to exceed $200 million.

Last week Steve Jr. tried to belittle his firm's easy access to world leaders. Said he after returning from a fishing trip to the trout streams of Alaska: "I only feel it is appropriate to see leaders when there is business to conduct and it is worth their time." Characteristically, he merely mentioned in passing a new project, rather simple by Bechtel standards, that the company had just announced: the construction of a $100 million company office building in downtown Oakland, Calif. --By Alexander L. Taylor HI. Reported by Bob Buderi and Joseph J. Kane/San Francisco

With reporting by Bob Buderi, Joseph J. Kane/San Francisco

This file is automatically generated by a robot program, so viewer discretion is required.