Once one of the nation's largest independent oil refiners, Ashland has been speeding down the road to diversification like the Fresh Prince in his parents' brand new Porsche. Most of the expansion has come through acquisitions - in chemicals, automotive products, and highway construction. In 1998 alone, Ashland made 20 acquisitions; and contenders are nervously wondering if the company will ever slow down.
Ashland's predecessor was a Kentucky-based oil and gas exploration concern called Swiss Oil Company, which was founded by Fred Miles. In 1924, Swiss Oil bought an unprofitable refinery in Kentucky and named it the Ashland Refining Company. Under the direction of general manager Paul G. Blazer, Ashland quickly became a successful business. In 1927, after struggling with Swiss Oil directors, Fred Miles was forced to resign from the company.
Buy, buy, buy
In the early 1930s, the company picked up Tri-State Refining Company and Cumberland Pipeline Company's eastern Kentucky network. In 1936, the company went public, after Paul Blazer combined Ashland Refining and Swiss Oil to form Ashland Oil Refining. During WWII, the company set up an aviation gasoline plant to aid the government effort; and after the war, Ashland began acquiring smaller oil companies, including Aetna Oil and the popular Freedom-Valvoline. With the purchase of Frontier Oil Refining (Buffalo, NY) and National Refining of Cleveland in 1950, Ashland gained control of two more refineries and a new customer base in the Great Lakes region.
The Ashland Chemical division, formed in 1967, unified a number of acquired properties, including ADM Chemical Group (purchased that year) and RJ Brown Company, a chemical distributor purchased in the mid-1950s. In 1969, the company established Arch Mineral, a 50% owned coal concern, and Ashland Petroleum, the company's largest operating division. The following year, the company changed its name to Ashland Oil and bought Northwestern Refining, whose holdings included yet another refinery and the SuperAmerica chain of convenience stores.
Orin Atkins, you naughty boy!
The Ashland Coal and Construction divisions were formed in 1975, the same year that CEO Orin Atkins admitted to making illegal contributions to Richard Nixon's 1972 presidential campaign (he was fined $1,000). Atkins was eventually relieved of his post in 1981, after Ashland made questionable payments to "consultants" with connections to Middle Eastern governments. In 1988, Atkins was in trouble again - this time for selling stolen documents to the National Iranian Oil Company (NIOC). Atkins plead guilty and was given probation. Ashland, which initiated the federal investigation that led to Atkins' arrest, settled with NIOC in 1989.
After a scandalous decade in the 1980s, Ashland has spent the 1990s concentrating on further expansion. In 1991 the company nearly tripled its domestic crude oil collection capacity when it merged with the Scurlock Oil Company and purchased Permian Corporation. A year later, Ashland Chemical purchased most of Unocal's chemical distribution business, and two companies that produce chemicals for the semiconductor (computer chip) industry.
In 1995, the company changed its name (again) to Ashland Inc., to reflect the diverse nature of the business. That year, fourteen acquisitions bolstered the company's energy and chemical units - to the tune of $368 million. Paul Chellgren, hired as CEO in 1996, initiated a major restructuring that would begin with the merging of Arch Mineral and Ashland Coal to form Arch Coal - in which Ashland holds a 54% stake. The company then sold off its oil and natural gas exploration division (Blazer Energy). In 1997, Ashland and USX-Marathon Oil combined their refinery and marketing subsidiaries to create Marathon Ashland Petroleum, in which Ashland holds a 38% stake.
Good corporate citizen
In July 1998, Ashland moved its corporate HQ from Ashland to Covington, KY. The subsequent restructuring led to the elimination of many jobs in the Ashland area (about 250 positions were preserved), and the transfer of about 125 positions from the Ashland area to Covington. The change is part of the company's transition from a firm focused on refining and marketing to one concerned with diversity. Covington, located in a metropolitan area (across the Ohio River from Cincinnati), is more centrally located among its major operations than Ashland, and is closer to providers of financial, legal, and marketing services - not to mention an international airport.
To mitigate the economic impact of the move on the residents of Ashland, the company is working with members of the community to attract new businesses to the area. It donated a portion of its 160-acre Ashland headquarters to serve as a charitable foundation dedicated to community development. The company also provided funding to help the local government hire a community development consultant.
Well, not really . . .
Though it made a positive effort to help the residents of Ashland, the corporation has some skeletons in its closet that are more pernicious than even Atkins was. In October 1998, the company agreed to spend more than $32.5 million to address violations of pollution control laws. Ashland was charged with violating five environmental acts, including the Clean Air Act, the Clean Water Act, and the Toxic Substance Control Act at refineries in Kentucky, Minnesota, and Ohio. The money will be used to pay civil penalties, to correct the violations, and to fund supplemental environmental projects, such as air monitoring and the restoration of 274 acres of prairie grass in Minnesota.
In February 1999, Ashland Chemical began construction on its first manufacturing plant in China. A month later, the division was split into two wholly-owned entities: the Ashland Distribution Company and Ashland Specialty Chemicals Company. Also that month, Ashland agreed to sell Scurlock Permian LLC, a division specializing in crude oil transport, trading, and marketing, to Plains All American Pipeline.
Large and in charge
Ashland's buying spree is unrelenting. Since summer 1999, the company has bolstered its APAC Division by acquiring Rainbow Conrete Company and Buster Paving Co.; it has enhanced its international market share by purchasing the water treatment divisions of France-based Otene, STTE and Grai companies, and by creating V C Lubricating Oil Co. Ltd., in conjunction with Cummins China; and it has moved into the realms of the Internet by teaming with Commerx, Inc., the developer of PlasticsNet.com.
Recruiting and hiring at Ashland is managed by each division. Visit the Ashland home page for links to individual subsidiaries, then check for employment opportunities and contact information by company. Most divisions recruit at major colleges and universities nationwide.
Insiders say "interviews really vary," but add that there are some managers who "use interview 'templates' that one might find pretty impersonal."
Learn for free
Ashland employees are proud to share the fact that "the company has had a record-setting five out of the past five years." Insiders say, "we're still growing through acquisitions." No foolin. They also stress that Ashland "is concerned for its employees as people, not merely as cogs in the machine." In addition to "more than adequate" salaries, and a company stock option plan, many positions have built-in annual pay raises and "generous" incentive bonuses. One source notes, "the company takes the whole idea of corporate continuing education very seriously." In addition to on-the-job training, some divisions sponsor off-site learning through tuition reimbursement programs.
Bye bye 'good old boys'
Employees describe the corporate approach as "very team-oriented" and say that "there is a lot of opportunity and room for advancement." As the company matures, contacts opine, "the culture gets a bit loser. There has definitely been in increase in the number of minorities and women in management." Adds another source, "people who have been here for a while say the company is getting over its 'good old boy' image."
While divisions vary, overall, employees report that Ashland fosters a "casual and collegial working environment" with "genuinely friendly people." Sometimes, however, "the competition can become fierce for particular projects or promotions." Rumor has it that Ashland employees are expected to use Valvoline in their cars - fortunately, they get it for free.
Philip W. Block
Chemicals;Construction;Coal;Oil & Gas;Retail;Auto products and services;Refining & transportation
More Company Profiles
For more career information, go to Vault.com
©2000, Vault.com Inc