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Houston Chronicle
Section C **
Tuesday. Jan. 7, 1997BUSINESS
finance &MarketsMarkets, 5-9C
Jim
BarlowGordon Cain
tells his story
ORDON CAIN is a near-mythologi-
cal figure in the petrochemical
business.
At an age when most people are think-
ing about retirement, Cain left a long-
time corporate career and became an
entrepreneur - primarily buying chemi-
cal plants from large corporations.
In the process he made himself and a
number of others very rich - and
shared that wealth with all who worked
for the companies involved.
The 5,000 nonmanagerial employees -
with companies such as Arcadian Corp.,
Vista Chemical Co., Sterling Chemicals,
Cain Chemical and others - collected
payoffs from their profit sharing and
Employee Stock Option Plans equal to
from three to five times their annual sal-
dries.
Cain recounts his career in a new
book, Everybody Wins!, Chemical Her-
itage Press, $19.95 until Feb. 15, then
$24.95. Order by calling (215) 925-2222,
extension 237.
Part charmingly told biography about
growing up in rural Louisiana, the book
is mostly about Cain's entrepreneurial
career.
Cain bought companies in highly cyclic
industries - ones where prices and
profitability have frequent highs and
lows - at the right time.
He has a highly developed sense of
timing - based apparently upon experi-
ence, study and gut instinct.
Success through cost-cutting
But while that timing boosted the pay-
off, his real accomplishment came
through taking commodity businesses
like petrochemicals, plastics and fertiliz-
ers, which succeed by having the lowest
price, and running them more efficiently
than his competitors. He cut corporate
overhead costs of his acquired plants by
two-thirds to three-quarters of those of
the previous owners.
How? By rejecting all the things he
had been taught in the first 60 years of
:is life about how to run large corpora-
Cain relied upon lessons learned in the
Total Quality Movement led by people
like Dr. W. Edwards Deming. Deming
helped transform the Japanese economy
by teaching businesses about statistical
controls, which enable them to continu-
ously improve their products and servi-
ces.
And Cain substituted low-cost comput-
erized management information systems
for the horde of middle managers used
by most companies to spread informa-
tion throughout the company.
Bottom line, Cain's success can be
halked up to a change in attitude about
*ow corporate management should work.
"Those of us in management finally
started to accept what any good work-
man could have told us: The workers did
iot need the amount of supervision they
were getting. The function of a manager
has changed from directing the efforts of
the people under him to being a coach, a
goal-setter, an internal consultant."
Financial tools
Cain used two financial tools - the
leveraged buyout and junk bonds -
which have been described by others as
nstruments of greed. And indeed, like
any tools, they can be misused.
Those tools aren't the villains, Cain
says.
"The real villains were the inertia and
he bureaucracy of large institutions ..."
From his second deal on - in the first
tnehe couldn't get the people lending
'im the money to agree - Cain struc-
ured all his leveraged buyouts so that
'verybody in the company had a share in
their outcomes through profit sharing
and Employee Stock Option Plans.
This wasn't because of any political
stance. It was a desire for profitability.Hissinsistence on sharing the wealth,
Cain said, "came primarily from my con-
viction that success was more likely if
everyone had a stake in the business. I
was not interested in social theory but
was convinced that the combined knowl-
edge of all involved would achieve better
results than relying only on the skills of
a few."
Not every deal prospered. Houstonians
will remember his ill-fated UltraAir,
Which offered upscale flights from Hous-
on to Los Angeles and New York. It
ailed after only a few months - al-
though other Cain forays into the avia-
tion business, like a commuter airline on
the East Coast and one in Trinidad,
were successful.
The difference? When he has worked
with professional managers, Cain says,
things have gone well. When he hasn't,
neither have they.
c But the rare failure only burnishes
Cain's successes.
And the real lesson of his accomplish-
ments as recounted in this book is not
that he did them, but how he did so.
To voice comments, telephone (713) 220-
2000 and punch in access code 1-0-0-0.
Send e-mail to jim.barlow@chron.com.Same-sex partners extended benefits
By L.M. SIXEL
Houston Chronicle
In a pioneering move, the law
firm of Vinson & Elkins has ex-,
tended its benefits package to the
same-sex partners of its gay and
lesbian employees.
Annise Parker, past president of
the Houston Gay and Lesbian Po-
litical Caucus, said she can't think
of another Houston-based com-
pany that offers such benefits.
Many companies now offer same-
sex benefits, but they're not from
Houston, she said.Gay activists praise Vinson & Elkins' move
Vinson & Elkins' policy, which
went into effect Jan. 1, gives
same-sex domestic partners' the
same access to health insurance
and family and medical leave as
married couples.
The law firm has had a written
policy since 1995 that it doesn't
discriminate based on sexual ori-
entation, said Harry Reasoner,
managing partner. The new pro-
gram assures that the firm's ben-
efits program complies with thatpolicy, he said.
Vinson & Elkins also surveyed
other law firms around the coun-
try that it considers its peers and
found that several include same-
sex domestic partners in their
benefit plans, Reasoner said.
Vinson & Elkins' move was
lauded by gay and lesbian activ-
ists.
It sends the message that gay
and lesbian employees are just as
valuable as heterosexual em-ployees, said Mitchell Katine, an
employment lawyer who special-
izes in AIDS-related issues. "I feel
it will spur other companies to do
it. It's the wave of the future."
High technology companies
have led the move to same-sex
benefits, but IBM's decision in
September to join the trend was
particularly influential, Parker
said. When companies saw that
IBM, with its staid corporate im-
age, had extended benefits, thingsReal estate trust in acquisition mode
By RALPH BIVINS
Houston Chronicle
Weingarten Realty Investors
is on a shopping center shopping
spree.
Capping off a record year of
purchases, the Houston real es-
tate investment trust recently
acquired a $40 million shopping
center in First Colony.
"Last year we bought more
than we've ever bought before,"
said Weingarten Realty In-
vestors President Martin De
brovner. Weingarten now owns a
total of 182 properties - mostly
shopping centers in Texas.
The jewel of Weingarten's bu:.
ing spree is the new Market :
Town Center, a 383,000-square
foot shopping center on Texas 6,
next to First Colony Mall. The
Market at Town Center is an-
chored by Marshall's, Ross.
Linens 'n Things, Old Navy, Ven-
ture, Barnes & Noble and Pier i
Imports.
Weingarten purchased the
center from Sugarland Prop-
erties, which is planning to start
construction in 1997 on another
large shopping center a short
distance away from the Market
at Town Center, said Steve Ew-
bank, vice president of Sugar-
land Properties.
The purchase price for the
Market at Town Center was not
disclosed, but people in the real
estate community said the price
was about $40 million.
Weingarten already owns
another project in the First
Colony area, the 263,000-square-
foot Williams Trace Shopping
Center.
In other year-end purchases,
Weingarten bought the Town
and Country Plaza Shopping
Center in Hammond, La., andThe Market at Town Center on Texas 6 was
bought by Weingarten Realty Investors, the lat-the Carefree Shopping Center in
Colorado Springs, Colo.
For the year, Weingarten ac-
quired nine shopping ceders
and three industrial properties
for a total of 2.1 million square
feet, up from 1.4 million square,
feet-in 1995. The 1996 purchases
cost about $99 million, up from
$74 million in 1995. Part of the
First Colony purchase will be
booked in 1997.
Weingarten, which started in
Houstdn as an outgrowth of the
old Weingarten grocery chain,
has more than 70 percent of its
holdings in Texas. But it has
been expanding in other mar-
kets, including Phoenix, KansasSteve Campbell / Chronicle
est in its string of purchases. The center report-
edly sold for about $40 million.City and Las Vegas.
Real estate investment trusts
such as Weingarten have be-
come a popular investment as
the nation's real estate markets
are generally healthy and im-
proving, said Barry Curtis, an
analyst with the Alex. Brown &
Sons investment firm.
Some REITs that focus on re-
tail centers are in disfavor with
investors, because many re-
gional malls and department
stores are not on the rise. But
Weingarten is an exception be-
cause it specializes in grocery-
anchored shopping centers, not
See SHOPPING on Page 4C.3 - art
610
59
6
. I Willams Trace
Weingarten i--
purchase Torn
Sweetwater 6
59 Frs
ofMall
ChronicleRaytheon to pay $2.95 billion for TI defense unit
By MICHAEL ELLIS
Reuters News Service
BOSTON - Raytheon Co. said
Monday it has agreed to buy
Texas Instruments' missile and
defense business for $2.95 billion
in cash, raising speculation that it
will bolster its defense operations
through further acquisitions.
The buyout - Raytheon's third
in the past two years - strength-
ens the company's leadership in
defense electronics as it seeks togrow further in an industry that
has been consolidating in the
years since the end of the Cold
War.
The deal was not expected to re-
sult in any job cuts, the companies
said.
The deal, welcomed by Wall
Street analysts, is expected to in-
crease Raytheon's annualized de-
fense electronics sales to $8 billion
and its current defense electron-
ics backlog to $9.3 billion, boosting
total annualized revenues to
about $15 billion.INSIDE
Mexican stock market rises to new high
Mexico's bolsa index reached a record high as the peso
strengthened, interest rates fell and investors speculated
that company earnings are headed higher: Page 2C.
Avis will have to try even harder
The company that owns Alamo Rent A Car is buying
National Car Rental System for $600 million,
bringing two of the nation's five biggest
auto rental chains into one
garage. Republic
Industries,
run by former
Blockbuster
Entertainment
chief H. Wayne
Huizenga, will
absorb $1.7
billion worth of National's debt as part of the deal. The
combined rental operations would displace Avis as the
No. 2 chain: Page 3C.
Chilly forecast fuels jump in natural gas
A blast of frigid Canadian air is pushing south into the
Great Plains and the Rocky Mountains, sending natural
gas prices soaring. Forecasters said temperatures could
fall as much as 20 degrees below normal in central
regions of the country: Page 3C."We have consistently said that
we intend to remain a top-tier
playerin the defense business and
that we see defense as an area of
growth for us," Raytheon Chief Fi-
nancial Officer Peter D'Angelo
told reporters in a telephone con-
ference call.
Both Raytheon and Texas In-
struments' Defense Systems &
Electronics Group, to be renamed
Raytheon TI Systems, manufac-
ture missiles, sensors and seek-
ers, and aircraft and ground
radar, but do not overlap, analystsBRIEFCASE
FBI publication has bugs in it
Even the FBI isn't immune to the impish pranks found
on the Internet. Two researchers writing in the December
1996 issue of the bureau's Law Enforcement Bulletin
include a discussion of computer viruses in a piece on
computer crime. Unfortunately, the five viruses David
L. Carter and Andra J. Katz cite in detail - including
the "Clinton" and "Gingrich" strains - are part of a joke
e-mail that regularly wafts
across the Net. For example,
the Clinton virus "is designed
to infect programs, but it
eradicates itself when it
cannot decide which program fore
to infect." Carter, a professor
at Michigan State University,
said he talked to computing
experts about the
viruses before
publishing the piece:
some said they wer ,
real, some said the,
decided to go
ahead with them,"
he said. Either way.
he's not chagrined.
"If they're not real,
they are not real,"
Carter said.said.
TI Systems has about 12,000 em-
ployees and is expected to have
1996 revenues of about $1.8 billion.
Its products include the High-
Speed Anti-Radiation Missile and
the Paveway laser-guided weap-
ons program, which were heavily
used by coalition forces in the Per-
sian Gulf War.
Raytheon is a leader in air-to-air
and ship-defense missiles, and
ground-based and shipboard
See RAYTHEON on Page 4C..MARKET SUMMARY
.
The Dow Jones industrial average
closed at 6,567.18 Monday.
6,600 Up 23.09
6,550
6,500-
6,450
6,400.
6,3502
26 27 30 31 2 3 6started to change, she said.
"No company wants to be way
out in front of their peers on
things that are controversial,"
Parker said.
Now, hundreds of companies
offer domestic partner benefits,
said Andrew Sherman, vice presi-
dent of the Segal Co., a benefits
consulting firm in Boston. Such
companies once were predomi-
nantly on the East and West
coasts, but the movement has
been spreading, said Sherman
who specializes in domestic part
See BENEFITS on Page 4C.
Chrysler
shifting to
fuel cells
A breakthrough
for electric cars
By BRIAN S. AKRE
Associated Press
DETROIT - Chrysler Corp. on
Monday announced a major de-
velopment in the search for a
practical, long-range electric car
- one that relies on inexpensive,
low-grade gasoline instead of bat-
teries.
Yes, a gasoline-powered elec-
tric car. What makes it possible is
the development of a way to ex-
tract hydrogen from gasoline
while the car is being driven.
It's called "fuel cell" technology.
A fuel cell is a device that pro-
duces electricity from a chemical
reaction between hydrogen and
oxygen. The hangup for automo-
tive use has been how to get and
store the hydrogen efficiently and
inexpensively.
"We believe hydrogen needs to
be processed from gasoline on
board vehicles because hydrogen
isn't a practical fuel choice today,"
said Francois Castaing, Chrysle
vice president of vehicle engineer-
ing. "Simply put, there are not any
filling stations supplying it to a
mass market."
In Chrysler's system, a plati-
num catalyst and an on-board fuel
processor break down the gas-
oline into hydrogen and water.
The hydrogen is used by a series
of fuel cells to produce enough
electricity to power the car's drive
motors, air conditioner and other
equipment.
Chrysler says the development
will cut up to 10 years from the
time it will take to create a practi-
cal prototype of a fuel-cell car. The
No. 3 domestic automaker says it
hopes to have a prototype as soon
as 2005.
The car is expected to be at
least 50 percent more fuel-effi-
cient and 90 percent cleaner than
a modern, gasoline-powered in-
ternal combustion engine,
Chrysler advanced technologies
specialist Christopher E. Borroni-
Bird told a news conference at the
North American International
Auto Show.
Last month, General Motors
Corp. began leasing the first mod-
ern electric car designed solely as
an electric vehicle, as opposed to
an existing vehicle retrofitted with
See CELL on Page 4C."
Light, sweet crude oil for February
closed at $26.37 a barrel Thursday
on the New York Mercantile Exchange.
$27
26
25
24.EERUE
26 27 30 31 2 3 6----
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Sixel, L. M. [Clipping: Same-sex partners extended benefits], clipping, January 7, 1997; (https://texashistory.unt.edu/ark:/67531/metadc947562/m1/1/?q=%22~1~1%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Special Collections.