Robert Horton, chairman and chief executive of British Petroleum Co. plc until he was ousted June 25, died (in a metaphorical sense) as he lived.
When he took control in 1990, Horton launched Project 1990, a program to cut the fat out of the giant company. He earned the nickname "Hatchet" Horton-and apparently was proud of it-on his way up the corporate ladder.
As head of BP Chemicals in 1980, Horton closed 20 plants and sacked almost two thirds of the workforce. He moved on to BP-controlled Standard Oil Co. of Ohio in 1986, when it was losing about $1 billion/year. Again, he sacked large numbers of staff and suspended 7,000 for a year. The company made a $560 million profit within 2 years.
REDUNDANCIES
The current series of BP cuts is believed to require 3,000 jobs to go in the U.K. and U.S. The day before the axe fell on Horton, BP Oil, the company's refining and marketing division, announced that its 1,200 head office staff had been invited to apply for voluntary redundancy.
On the same day, BP America said it intended to cut operating costs by $125 million by eliminating 600-700 jobs at its Cleveland corporate headquarters and refining and marketing divisions. Earlier in the month, BP Exploration announced that 350 jobs out of 650 would disappear when it moves its headquarters from Glasgow to London within the next 18 months.
Horton's place will be filled by two persons. Lord Ashburton, known before his peerage as Sir John Baring, former head of Barings, the merchant bank, takes over as chairman. David Simon, BP's former chief operating officer, becomes chief executive.
Lord Ashburton hinted that Horton's abrasiveness was an important factor behind the boardroom coup when he said there was nothing specific in Horton's handling of the company that had prompted directors to vote him out.
Simon said the upheaval will not result in dramatic changes in business direction. "This is about the style of running the company at the top," he said. "It is not about changes in strategy."
THE FUTURE
Horton's drastic surgery is unlikely to be halted, but some rethinking may take place. While Horton thought BP could go it alone, Simon engineered BP's recent strategic alliances, particularly with Norway's Den norske stats oljeselskap AS. Maybe Simon will look for other links.
BP denies that Horton was removed because of disagreements over maintaining share dividends, which cost 905 million ($1.68 billion) in 1991 and coincided with BP's first loss after the first quarter this year. But it seems likely that dividends will be cut simply because the damaging effect of the coup on BP's shares will reduce available funds.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
