For the uninitiated, the Williams Cos. holdings seem like an odd alliance of energy and telecommunications, but if you ask CEO Keith Bailey, his firm is providing the "basic food groups" needed by business.
The mix seems to be working as Williams embarks on an aggressive $5 billion investment in its telecommunication system and expansion of its energy system. At the same time, Williams boasts its 826 percent return on investment between 1991 and 1998.All of that is good news for Utah. Williams' pool of 600 Utah workers, and the energy and communications crossroads they operate, is likely to grow.
The company is building on its past, when in the 1980s they discovered the value of stringing fiber optic cable through decommissioned pipelines. With its new fiber optic systems, Williams is betting on the explosion of the Internet and electronic commerce to grow business on its telecommunication network.
Included in the company's holding is Williams Gas Pipeline, a network of five natural gas pipelines stretching from coast to coast. Wasatch Front residents may be most familiar with Williams' Kern River gas pipeline, which caused controversy in Davis County before its completion in 1992. Utahns may also be familiar with Northwest Pipeline, which Williams bought in 1983.
Williams Communications is a leading single-source provider of national business communication systems and international satellite and fiber-optic video services. Its businesses include communications solutions, a fiber-optic network and network applications.
"(Salt Lake City) is going to be a major hub on our fiber network. It is going to be a point and presence and switching center here. As you look at network map, you will see a lot of cable coming from the different western markets intersects in Salt Lake and extends on to the East," Bailey said.
Williams Vyvx network is a leader in sport video transmission and is the way Utahns usually see Jazz away games. A western sales office in Salt Lake City employs nearly 50 people.
Williams' Energy Services owns an interest in 35 gas wells in Utah that are in the development phase. That segment of the business employs about 175 people in Utah.
Bailey visited Salt Lake last month to have a chat with local employees and hookup with company's far-flung work force via video and audio links. He noted optimism for the company in an interview.
"(The telecommunication budget) is the largest capital budget we have ever had. That reflects the sort of growth engine we have built over the course of the '90s," said Bailey, who became Williams president in 1992 and took on the roles of CEO and chairman in 1994.
Observers say Williams made a savvy move to get back into the wholesale long-distance business last January after a three-year hiatus. That break was forced by a noncompete agreement with MCI WorldCom. MCI WorldCom, formerly LDDS, bought the WilTel fiber optic network from Williams in 1994 for $2.5 billion.
At its base in Tulsa, Okla., the company's optimism led company officials to recently announce the construction of a new 15-story office tower. Employment in Tulsa is expected to double to 8,000. The expansion plans lead employees to wonder if the company was considering consolidating operations. Bailey said the answer is "no." The company has 22,000 employees worldwide.
While the company is putting money into its telecommunications units, Bailey sees growth in the gas pipeline business particularly as deregulation of electricity will make smaller regional gas-fueled generation plants preferred over much larger "mega" generating projects. The company is also expanding gas delivery to Southern California through the Kern River pipeline.
"Gas pipelines had a very successful year in 1998 even with a one-time charge effected report income. On a recurring basis, we had a record year," Bailey said, noting that the companies' pipelines perform five times the industry standard. He sees bargain gas prices and the lessened environmental impact of natural gas as boons to Williams.
In an environment of mergers, Bailey said that performance is a key to remaining independent. He wants to be the one courting and not the company being courted.
"With our performance level, it is very unlikely that we be a target of a merger," Bailey said. "We have a pretty good ability to control our destiny. We have the reponsibility to our shareholders to the do right thing, but when you outperform the world it gives us a lot more options," Bailey said.
Bailey takes a dim view of federal and state regulators attempting to regulate business. He points to the Microsoft antitrust trial as regulators gone amok.
"It is silly to regulate the advance of technology. You should let the marketplace go. We have got to be less comfortable (without regulation)," Bailey said.