When candidate, Jimmy Carter talked about energy policy during the 1976 presidential debates, he pointed to Dow Chemical Co. as an outstanding example of corporate conservation. Dow had cut its energy consumption per unit output by 40 percent in the preceding decade.
As president, Carter went on to bring together many disparate agencies and divisions under one new roof, the Department of Energy. Gerald L. Decker, who was responsible for Dow's fuel procurement and conservation program, went on to become director of a new corporate energy department at Kaiser Alumium and Chemical Co. With the title of vice president for energy, he administers what were formerly separate departments for purchasing, planning and conservation.
Decker represents a relatively new breed of corporate executive, the energy manager. After the Arab oil embargo quadrupled fuel prices, many companies became acutely conscious for the first time of saving energy. To the other duties of plant managers, directors and occasionally executives were added the responsibility of finding ways to conserve.
Gradually, as it became clear the cost of energy would henceforth be a major factor to heavy users like the chemical and packaging industries, energy was kicked upstairs, as it were, to a corporate-level spot alongside planning.
The Wall Street Journal reported earlier this year that companies have begun to pour hundreds of millions of dollar into energy conservation even at a time when capital spending is sluggish, because with quick return on investment, "it is about the most profitable use for capital these days." And, once the easy and more obvious conservation steps such as insulating buildings are completed, companies often find they need more expertise than they have in house to develop more sophisticated programs.
Enter the second-generation specialist, the energy manager.
"There's a new day dawning for energy users," remarked Decker, who joined Kaiser last August after many years at Dow. He began a conservation program there back in 1953 and worked his way up to corporate energy manger. "What attracted me to Kaiser was (president and Chief Execitive Officer Cornell C.) Maier's decision to formalize various areas of expertise into one department," Decker said. He works in Kaiser's corporate headquarters in Oakland, Calif., and reports directly to Maier.
Phil Verret, 35, is FMC Corp.'s new director of energy. A chemical engineer by training, he was recruited from Mobil, where he was manager of chemical and additive procurement. Verret, who works in the Philadelphia office, reports to the director of administration who in turn reports to the chairman, Robert Malott. "There was an energy group in the environmental planning department, but it suffered from lack of resources and attention," Verret said. Malott wanted more emphasis on utilization, which was why FMC hired an executive search firm to find an energy manager.
Jack Henard, vice president of the Dallas office of Lamalie Associates, an executive search firm, estimates that at least 50 companies among the Fortune 500 have named - or are still looking for - energy execs, although not all have turned to outside help. One reason is the qualifications. Ideally, said Henard, the energy manager should be an engineer with a good corporate planner preferrably with a masters degree in business administration, and someone able to communicate with company president in non-technical language.
With that background, the manager can expect to set conservation goals and approve plans from the various company divisions, oversee fuel purchases and seek alternative sources of energy, and know and analyze the effect of changing government energy regulations. And as if that weren't enough, the manager may be called upon to lobby for the company's positions on energy issues before legislators and environmentalists. (It should be noted that energy manager is a very amorphous term, and at some firms a person with that title may perform only one or even none of the previously listed functions).
Excutive headhunters find the ideal energy manager a rara avis. Karin Bergwall of the Chicago firm of Keating, Grimm & Leeper received more than 100 resumes and conducted 200 telephone interviews over an eight-month period to find an energy manager for a large manufacturer. Others report similarly lengthy - and not always successful - searches. Consequently, the talent can name the price, says Joseph Conlin, editor of Industrial Gas magazine. In a field that is just beginning to gain its own identity, salaries range from $50,000 to $100,000.
Henard, who puts the salary range at $40,000 to $75,000, says his clients can expect a 20 to 40 percent incentive bonus potential based on performance. In the same way that other executives' compensation may be related to sales or profits, the energy manger is judged in part on how much conservation is achieved - though it is not really a dollars-earned-for-BTUs-saved deal.
In the year that Charles F. Feledy, 42, has been director of corporate energy programs at United Technologies Corp. in Hartford, he has overseen the start of an ambitious five-year energy conservation program calculated to save an average of 35 percent of its energy costs per product. Feledy, an engineer with an MBA, was pulled from corporate ranks to coordinate at management level the programs of UTC's 22 divisions. From an outlay of $33 million plus a lot of engineering and development, he calculates the corporation will realize savings of $66 million in energy costs.
UTC, formerly United Aircraft, is building on its already impressive record of reducing consumption 20 percent between 1972 and 1976. One division, Hamilton Standard, developed a minicomputer to monitor and control energy usage. Comsumption of oil in its Windsor Locks, Conn., plant has been cut in half; electricity use is off 25 percent.
Another energy manager who worked his way up the corporate ladder is Robert H. Steder of PPG Industries, the Pittsburgh paint and glass manufacturer. Jokingly he says what he likes best about the new job is that "it gives me a license to stick my nose into anything where energy impacts." Steder is also chairman of the five year-old Industrial Energy Group comprised of energy managers from companies such as Kimberly Clark, International Telephone and Telegraph, and General Motors. The group gives them a chance to discuss common problems informally; there are no minutes.