Stone & Webster
TypeSubsidiary
IndustryEngineering
Founded1889 (Boston, Massachusetts)
FounderCharles Stone
Edwin Webster
Headquarters
Stoughton, Massachusetts
,
U.S
Number of employees
3,500
ParentWestinghouse
Websitewww.stoneandwebster.com

Stone & Webster was an American engineering services company based in Stoughton, Massachusetts. It was founded as an electrical testing lab and consulting firm by electrical engineers Charles A. Stone and Edwin S. Webster in 1889. In the early 20th century, Stone & Webster was known for operating streetcar systems in many cities across the United States including Dallas, Houston and Seattle.[1] The company grew to provide engineering, construction, environmental, and plant operation and maintenance services, and it has long been involved in power generation projects, starting with hydroelectric plants of the late 19th-century; and with most American nuclear power plants.

Stone & Webster was acquired and integrated as a division of The Shaw Group in 2000, and in 2012, the French engineering conglomerate Technip acquired Stone & Webster's energy and chemical business, and process technologies and associated oil and gas engineering capabilities from The Shaw Group. The CB&I acquisition of other assets of The Shaw Group, also in 2012, resulted in the formation of a nuclear power subsidiary, CB&I Stone Webster, which operated for about 4 years, being sold in January 2016 to Westinghouse Electric Company.

History

Founding through 1930s

Stone & Webster logo c. 1922

Charles A. Stone and Edwin S. Webster first met in 1884 and became close friends while studying electrical engineering at the Massachusetts Institute of Technology. In 1890, only two years after graduating, they formed the Massachusetts Electrical Engineering Company. The name was changed to Stone & Webster in 1893. Their company was one of the earliest electrical engineering consulting firms in the United States.[2]

Stone & Webster's first major project was the construction of a hydroelectric plant for the New England paper company in 1890. Stone & Webster not only had valuable insight into developing and managing utilities, but they also had keen intuition for businesses to invest in. For instance, due to the panic of 1893, Stone & Webster were able to acquire the Nashville Electric Light and Power Co. for a few thousand dollars and later sold it for $500,000.[3]

Throughout the next ten years, Stone & Webster acquired interest in large number of utilities while offering managerial, engineering and financial consulting to a number of independent utility firms. Even though Stone & Webster were not a holding company, their financial and managerial presence meant that they had considerable influence in policy decisions. They would often be paid in utility stock.[3]

Advertisement in McGraw electric railway manual for Stone and Webster Securities of Public Services Corporations

As of 1912, Stone and Webster served as general managers of the following utilities:

Stone & Webster became involved in Washington State engineering projects—Washington's natural resources, and hydroelectric power, and resulting development opportunities brought companies like Stone & Webster to the state—beginning with Puget Sound area street railways. By 1900, they had controlled and merged eight small rail lines in Seattle; soon after, they also took over the street railway systems of Tacoma and Everett. By 1908, Stone & Webster listed thirty-one railway and lighting companies under its management including five located in Washington State: the Puget Sound Electric Railway, Puget Sound International Railway and Power Co., Puget Sound Power Co., The Seattle Electric Co., and Whatcom County Railway and Light Co.[3]

Stone & Webster leadership was sensitive to the concerns of large utility holding companies and were careful to emphasize the complete independence of these utilities, but Edwin Webster believed that outside capital was crucial to develop the resources of Washington, and chided those who thought otherwise. In 1905, Stone & Webster bought out the power and lighting properties that were once owned by the Bellingham Bay Improvement Co., including the York Street Steam plant and the partially built Nooksack Falls Hydroelectric Power Plant.Stone & Webster took over construction operations and on September 21, 1906, Bellingham received power from the plant via a 47-mile-long (76 km) transmission line.[4] Despite the independence allowed its subsidiaries, J.D. Ross, superintendent of Seattle City Light issued a report critical of Stone & Webster's presence in Seattle, listing 49 companies under Stone & Webster's management at the time.[3]

By 1912, the company, nationally, had divided itself into three specialized subsidiaries:[3]

  • Stone & Webster Engineering
  • Stone & Webster Management Association
  • Stone & Webster Investments

In 1927, Stone & Webster expanded the investments business, merging its securities subsidiaries with the investment banking firm of Blodget & Co. founded in 1886, to form Stone & Webster and Blodget, Inc.

1940s activities, including in nuclear power

Stone & Webster was selected as the overall contractor for building the plants producing the necessary fissionable material for the Manhattan Project. The company was selected in June 1942 by the first head of the Manhattan Engineering District, James C. Marshall.[5]

In January, 1946, the name of the business, was changed to Stone and Webster Securities Corporation. Stone and Webster Securities was one of the 17 U.S. investment banking and securities firms named in the United States Department of Justice's antitrust investigation of Wall Street commonly known as the Investment Bankers Case.[6] The Stone & Webster investment banking operations were eventually acquired by Kidder Peabody which already had overlapping ownership.

1950s and 1960s

Challenges in the 1970s–80s

The investment banking affiliate, Stone & Webster Securities, had attempted to grow by acquiring two smaller, regional brokerage houses in 1968: Hayden, Miller & Co., based in Cleveland, and Atlanta-based Wyatt, Neal & Waggoner. That increased the number of offices of the firm from nine to 28, but cultural and style differences between the parent company's traditional engineering management and retail brokerage management led to an exodus of key employees, and the Securities firm closed its doors in 1974.[7]

Stone & Webster headquarters at 245 Summer St. in Boston in 1980

1990s

2000s

The company collapsed in 2000 after a major bribery scandal. It had attempted to pay $147 million to a relative of Indonesian President Suharto to secure the largest contract in Stone & Webster's history. But the plan went bad, and the company fell along with it.[8]

Subsequently, Stone & Webster filed for Chapter 11 bankruptcy protection in 2000 because of cash flow problems. It was bought at auction by the Shaw Group for US$150 million.[9][10]

The Shaw Energy and Chemicals division integrated Stone & Webster branded technology. Shaw's E&C division attempted to compete with other more successful engineering contractors such as Bechtel, Foster Wheeler, Jacobs and Technip. Since the Shaw buyout, the Power group performed record business in engineering and construction of coal-fired power plants and power plant environmental control retrofits including FGD and SCR technology. Shaw's alliance with Westinghouse led to substantial Stone & Webster technology and engineering applications in the nuclear power industry. In 2008, ENR ranked the Stone & Webster subsidiary of The Shaw Group subsidiary as first in revenue for Power EPC, and fifth by Revenue in Process & Petrochemical EPC.

In 2012, Technip, a French engineering conglomerate,[11] agreed to purchase most of the Energy and Chemical Division of Shaw Group[12][13]

The remainder of The Shaw Group assets were ultimately purchased by Chicago Bridge & Iron Company, for about US$3 billion,[14][15][16] completing the acquisition in February 2013.[17] A subsidiary that was formed as a result, CB&I Stone Webster—a result of Shaw Groups earlier acquisition of Stone & Webster during its bankruptcy—was again sold, in January 2016, to Westinghouse Electric Co., for US$ 229M.[18]

See also

References

  1. ↑ Middleton, William D. (1967). The Time of the Trolley, pp. 122–128. Milwaukee: Kalmbach Publishing. ISBN 0-89024-013-2.
  2. ↑ "Nooksack Falls Hydroelectric Plant; HAER WA-18". Historic American Buildings Survey/Historic American Engineering Record. Library Of Congress. p. 7.
  3. 1 2 3 4 5 "Nooksack Falls Hydroelectric Plant; HAER WA-18". Historic American Buildings Survey/Historic American Engineering Record. Library Of Congress. p. 8.
  4. ↑ "Nooksack Falls Hydroelectric Plant; HAER WA-18". Historic American Buildings Survey/Historic American Engineering Record. Library Of Congress. p. 9. Archived from the original on July 4, 2014.
  5. ↑ Nichols, Kenneth (1987). The Road to Trinity. New York: William Morrow and Company, Inc. pp. 36–40. ISBN 0-688-06910-X.
  6. ↑ United States of America, Plaintiff, Against Henry S. Morgan, Harold Stanley, Et Al., Doing Business as Morgan Stanley & Co., Et Al., Defendants
  7. ↑ Keller, David Neal (1989). Stone & Webster, 1889-1989. Stone & Webster Incorporated. p. 288. ISBN 978-0962367700.
  8. ↑ Steve Bailey (March 15, 2006). "'The Bribe Memo' and collapse of Stone & Webster". Boston Globe; Business. Archived from the original on August 24, 2011. Retrieved June 21, 2011.
  9. ↑ NYT Staff (May 10, 2000). "Company News Stone Webster to Sell Assets and File for Chapter 11". The New York Times. Associated Press. Archived from the original on October 14, 2022. Retrieved February 15, 2017.
  10. ↑ NYT Staff (July 8, 2000). "Company News: Shaw Group Wins the Bidding for Stone Webster". The New York Times. Dow Jones. Archived from the original on February 16, 2017. Retrieved February 15, 2017.
  11. ↑ Technip Staff (September 3, 2014). "Technip Completes Acquisition of Stone & Webster Process Technologies and Associated Oil and Gas Engineering Capabilities From The Shaw Group" (company press release). Technip.com. Archived from the original on September 24, 2015. Retrieved February 15, 2017.
  12. ↑ Emily Pickrell (May 22, 2012). "Technip to pick up Shaw technologies". Houston Chronicle. Archived from the original on June 3, 2012. Retrieved July 9, 2012.
  13. ↑ Emily Pickrell (August 31, 2012). "Technip completes acquisition of Stone & Webster". technip.com. Archived from the original on September 24, 2015. Retrieved November 1, 2012.
  14. ↑ Polson, Jim & Black, Thomas (July 30, 2012). "CB&I to Buy Shaw Group for $3 Billion to Add Nuclear Unit". Bloomberg News. Retrieved July 30, 2012 – via SFGate.com.{{cite journal}}: CS1 maint: multiple names: authors list (link)
  15. ↑ CB&I Staff (July 30, 2012). "Current Report, Chicago Bridge & Iron Company N.V., The Netherlands". Form 8-K. Washington, DC: United States Securities and Exchange Commission. Archived from the original on March 4, 2016. Retrieved February 15, 2017 – via secdatabase.com.
  16. ↑ Chaudhuri, Saabira (July 30, 2012). "Shaw Group Agrees to CB&I's $3.04B Takeover Bid". MarketWatch. Archived from the original on September 19, 2018. Retrieved April 26, 2020.
  17. ↑ Zacks (February 14, 2013). "CBI Completes Shaw Acquisition". Yahoo Finance. Chicago, IL: Zacks Equity Research. Archived from the original on February 16, 2017. Retrieved February 15, 2017 – via Finance.Yahoo.com.
  18. ↑ Downey, John (January 6, 2016). "CB&I Completes Sale of Nuclear Subsidiary". Charlotte Business Journal. Charlotte, NC: American City Business Journals. Archived from the original on February 16, 2017. Retrieved February 15, 2017.

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