By BEN KESLING
Fluor has been a prime
beneficiary of the US shale oil and gas boom as the engineering
and construction group starts to build
out energy infrastructure, but like rivals, it faces the
challenge of navigating one big possible bottleneck: the
availability of skilled workers.
Big chemical companies plan an array of new and expanded facilities along the US Gulf Coast
to handle the surge in gas and liquids supply, and Irving,
Texas-based Fluor reckons its can use some "home-field
advantage" to avoid its projects being delayed by the squeeze
on craft labor such as electricians, welders and riggers.
"We've seen a lack of willingness on the craft part to
travel more than one state away. I think we're going to see a
change in that," Fluor CEO David Thomas Seaton said on an
investor call last month. He also said he thinks craft labor
could be a "pinch point" for new projects.
"So we're going to have to be careful about craft labor, but
I don't see that being an Achilles' heel to the schedules
people are thinking about or cancel in any way the projects we
are focused on," he said.
The shale gas boom is touted by many economists as a
transformative event for the US economy, generating an $88
billion in infrastructure spending over the next decade,
according to Macquarie Group Ltd.
Fluor, which posted $27.6 billion in revenue last year,
estimates the need for 20,000 to 50,000 craft workers for construction of US oil and gas
projects over the next decade, depending on how many
projects move forward.
The aging workforce of US engineers is a well-known issue
for companies such as Boeing, but the shortage of craft workers
is less publicized. Craft workers are two of the top 10 most
difficult types of jobs for companies to fill, according to
temporary hiring specialist Manpower Inc.
Fluor is the prime contractor
for the new ethylene cracking plant being built for Dow
Chemical in Freeport, Texas. The project is already underway
and is expected to require 2,000 workers at its peak, with both
companies counting on first-mover advantage to avoid being
caught in a labor-shortage trap as rival plants seek regulatory
Fluor is beginning the Dow cracker project ahead of a potential rush in
petrochemical construction, said
Richard Meserole, the company's vice president of energy and
He said this will help it attract workers and establish a
beachhead with the supply of labor. Fluor also has a network of
factories in the Philippines, Mexico and Canada that can allow
it to build modular components off-site and then assemble them
The company also works closely with local schools and
governments to recruit and train local labor rather than trying
to woo workers from around the US.
"Fluor, in particular, has a lot of initiatives set up with
local junior colleges for apprenticeships and training
programs," said Sameer Rathod, an analyst with Macquarie Bank.
"Being a large player lends itself to attracting more people.
Fluor is a name that everybody knows, maybe others don't have
Fluor had almost 36,000 salaried staff and 8,601 craft and
hourly employees world-wide at the end of 2012. In North
America, it employs 5,000.
"We have a fairly well-established network of technical
colleges," Mr. Meserole said in an interview. "We take a large
portion of those who come out of high school and see construction as a long career."
Fluor lists more than a dozen universities on its website with
which it shares official partnerships, including specialty
training support and scholarships.
Crackers -- plants that break
gas into its component parts -- are popular projects for
contractors to chase because of the increase in gas volume
available and the continuing low cost of domestic gas feedstock. Crackers are the first
step in a long processing, storage and distribution chain, as
well as further production of other gas derivatives, much of
which remains to be built.
By establishing themselves early in the process, Fluor has said
it will position itself for major contracts as projects ramp up further down the
"Everything is sort of focused around crackers, of course,
because you need to build crackers first before you can build
downstream units," said Peter Oosterveer, president of Fluor's
energy and chemicals group, at a recent investor
"A lot of people get excited about the prospect of maybe as
much as 10 crackers, which have been on our radar screen... I'm
quite happy to say that I will be disappointed if we can't win
or at least have a share on 50% of those crackers," he
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