Fluor Corporation

Headquarters of Fluor Bros Construction in the early 1900s

Fluor Corporation's predecessor, Rudolph Fluor & Brother, was founded in 1890 by John Simon Fluor[2] and his two brothers in Oshkosh, Wisconsin[3] as a saw and paper mill.[2] John Fluor acted as its president[2] and contributed $100 in personal savings to help the business get started.[4] The company was renamed Fluor Bros. Construction Co. in 1903.[2]

In 1912 John Fluor moved to Santa Ana, California for health reasons without his brothers[5] and founded Fluor Corporation out of his garage[6] under the name Fluor Construction Company.[5][7] By 1924 the business had annual revenues of $100,000 ($1.56 million in 2021 dollars)[2] and a staff of 100 employees. John Fluor delegated most of the company's operations to his sons, Peter and Simon Fluor.[8] A $100,000 capital investment was made that year and it was incorporated.[2] John's eldest son Peter served as head of sales and grew the company to $1.5 million ($20.4 million in 2013 dollars) in revenues by 1929.[8] In 1929 the company re-incorporated as Fluor Corporation.[2] By the 1930s, Fluor had operations in Europe, the Middle East and Australia.[4][9] Business declined rapidly during the Great Depression, but picked up again during World War II. During the war Fluor manufactured synthetic rubber and was responsible for a substantial portion of high-octane gasoline production in the United States.[4] A Gas-Gasoline division of Fluor was created in Houston in 1948.[2]

Fluor's headquarters were moved to Alhambra, an inner suburb of Los Angeles, in 1940 in order to be closer to its oil and gas clients, before moving again to Orange County, California in the 1960s due to concerns about the cost of living and traffic.[6] John Simon Fluor died in 1944. He was succeeded by his son Peter Fluor, who died three years later. Peter was followed by Shirley Meserve (1947) and Donald Darnell (1949), then John Simon "Si" Fluor Jr. in 1952 and J. Robert (Bob) Fluor in 1962.[2][10] Fluor was listed on the New York Stock Exchange in the 1950s.[11] In 1961, Fluor acquired an interest in construction, design and contracting firm William J. Moran.[12]

Fluor diversified its business more extensively in 1967, when five companies were merged into a division called Coral Drilling and it started a deep-water oil exploration business in Houston called Deep Oil Technology. It also created Fluor Ocean Services in Houston in 1968[2] and acquired an interest in other fossil fuel operations in the 1970s.[11] Fluor acquired a construction company, Pike Corp. of America[2] and the engineering division of its prior partner in Australia, Utah Construction.[10][13] In 1972, Fluor bought land in Irvine, California and started building its new headquarters on it.[6] The following year, the company's oil and gas operations were consolidated under a new entity, Fluor Oil and Gas Corp.[2]

In 1977, Fluor acquired Daniel International Corporation.[14] Fluor's business had become predominantly international, while Daniel International's $1 billion construction business was mostly domestic. The acquisition allowed the company to use union labor at Fluor, or non-union labor at Daniel, for each client.[11] Fluor made a $2.9 billion acquisition of a zinc, gold, lead and coal mining operation, St. Joe Minerals, in 1981[15] after a bidding competition for the business with Seagram.[16][17]

By the 1980s, Fluor's primary business was building large refineries, petrochemical plants, oil pipelines and other facilities for the gas and oil industry,[18] especially in the Middle East.[18][19] By 1981, Fluor's staff had grown to 29,000 and revenue, backlog, and profits had each increased more than 30 percent over the prior year.[20] However, by 1984 the mining operation was causing heavy losses[21] and the oil and gas industry Fluor served was in a worldwide recession[22] due to declining oil prices.[18][23] From 1981 to 1984, Fluor's backlog went from $16 billion to $4 billion.[18] In 1985 it reported $633 million in losses.[24] David Tappan took Bob Fluor's place as CEO in 1984 after Bob died from cancer[18][25][26] and led a difficult restructuring.[27]

The company sold $750 million in assets, including Fluor's headquarters in Irvine, in order to pay $1 billion in debt.[26][27] Staff were reduced from 32,000 to 14,000.[18] In 1986 Fluor sold all of its oil assets and some of its gold mining operations.[2][28] Fluor Engineers, Inc. and Daniel International were merged, forming Fluor Daniel.[2] By 1987, Fluor had returned to profitability with $26.6 million in profits[29] and $108.5 million by 1989.[26] By the end of the restructuring, Fluor had three major divisions: Fluor Daniel, Fluor Construction International and St. Joe Minerals Corp. Each division had its own smaller subsidiaries.[2] Fluor started being named by Engineering News as the largest construction and engineering company in the United States.[18][22] Fluor's international revenues rebounded.[30] Having postponed his retirement to help Fluor, Tappan stepped down at the end of 1989 and was replaced by Leslie McCraw.[22][31]

During the restructuring, Fluor's core construction and engineering work was diversified into 30 industries including food, paper manufacturers, prisons and others to reduce its vulnerability to market changes in the oil and gas market.[18][22] In the 1990s, the company tried to change its image, calling itself a "diversified technical services" firm.[18][32] It started offering equipment rentals, staffing services, and financing for construction projects.[18][32] The company began offering environmental cleanup and pollution control services, which grew to half of its new business by 1992.[21] Fluor's mining business grew from $300 million in 1990 to $1 billion in 1994.[33] The US government passed environmental regulations in 1995 that led to growth for the Massey Coal Co. business, because it had large reserves of low-sulfur coal.[34] In 1992, Fluor sold its ownership of Doe Run Company, the world's largest producer of refined lead, which was losing money at the time due to declining lead prices.[35] By 1993, Fluor had revenues of $4.17 billion and 22,000 staff.[2]

In 1997, Fluor's revenues fell almost 50 percent, in part due to the Asian financial crisis[36] and a decrease in overseas business.[30][37] Additionally, it suffered losses from an over-budget power plant project[38] in Rabigh, Saudi Arabia. Fluor was a sub-contractor to General Electric for the project. Fluor's subsidiaries sued GE alleging that it misrepresented the complexity of the project.[39] Though revenues declined further the following year, profits were increasing.[2] In 1999, nearly 5,000 workers were laid off from Fluor Daniel and 15 offices were closed. Fluor Daniel was re-structured into four business groups: an engineering and construction firm called Fluor Daniel; an equipment rental, staffing and telecommunications division called Fluor Global Services; a coal-mining business called A.T. Massey Coal Co. and an administrative and support division called Fluor Signature Services.[36][40]

In January 1998, McCraw (age 63) resigned after being diagnosed with bladder cancer[41][42] and was replaced by former Shell Oil President, Philip J. Carroll.[43] That same year, IT Group purchased a 54 percent interest in Fluor Daniel GTI, Fluor's environmental division, for $36.3 million.[2] Two years later, the coal mining operation under the A.T. Massey Coal Co. name (part of St. Joe) was spun off into its own business.[36] In 2001, Fluor's four primary subsidiaries were consolidated into a single Fluor Corporation.[10] In 2002 Alan Boeckmann was appointed as the CEO, followed by David Seaton in 2011.[10] In 2005, Fluor's headquarters were moved to the Las Colinas area in Irving, Texas.[9]

In December 2015, Fluor announced that it would take over Dutch industrial services company Stork.[44] The acquisition of this company, which modifies and maintains large power plants, was completed in March 2016, in a stock purchase worth $755 million.[45]

In May 2019, David Seaton stepped down as CEO and was replaced by Carlos Hernandez, who joined the firm in 2007.[46]