Fire half of them
July 24, 2002
Seventy-odd years ago, Continental Oil Co. (Conoco) was a relatively small company with a little crude oil production, a refinery in Denver and another in Casper, Wyo., a couple of tank farms, and filling stations scattered throughout Colorado, New Mexico and Wyoming.
During the “Roaring Twenties” this company prospered. Salaries were raised, non-essential employees were added to the refineries and tank farms, executives got bonuses, supervisors drove around in new, bright green Buicks, the marketing department was expanded, a company building was constructed in Denver, the shareholders were paid a small dividend, and everything was lovely.
Then came 1930. Business started shrinking and by 1932 more money was going out than coming in. Unwilling to cut back on salaries, services and perks, the company started borrowing money.
The Marlin Oil Co. was an Oklahoma-based oil producing company started at about the same time as Conoco that had also prospered throughout the ’20s.
Its wells were producing nicely. There was a good market for oil. Raises were given to all employees and the half-dozen vice presidents spent more time on the polo field than they did in the office.
Then came 1930. The demand for crude slackened and by 1932 was reduced to a trickle. Unwilling to give up its corporate high living lifestyle, the company started borrowing money.
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Doesn’t this sound a bit like what is happening in Aspen and Pitkin County today? Only instead of borrowing money, our commissioners want to raise taxes.
In 1933 J.P. Morgan decided to get into the oil business. He bought up the debts of the two aforementioned companies at about 50 cents on the dollar and consolidated them into a new, vertically integrated company.
He hired a hard-nosed Irishman named Dan Moran to run it. On Dan’s first day as CEO, he fired all but one vice president of the second oil company. On his second day, he sold all the polo ponies. On his third day, he hired a bus – CEOs didn’t have airplanes in those days – had a desk installed in the rear and set out to visit every facility owned by the combined companies.
Each facility got exactly the same treatment. The head man was called in and Dan would ask to see his payroll. He would look it over briefly, hand it back, and say, “Fire half of them.” Then on to the next stop.
In less than a month he had visited every company facility, and in less than two years the slimmed-down company was operating in the black and the fear of God was in the hearts of all the survivors (I was one of them).
Last night I dreamed that Dan Moran had come back to life and had been put in charge of the city of Aspen and Pitkin County. Unfortunately, it was just a dream.