Several hundred jobs will be added to the former Fairfax County headquarters of Mobil Corp. as a result of the company's acquisition by Exxon Corp., sources said yesterday, despite new indications that overall job cuts in the two companies will be far greater than originally predicted.
The site will be the center of the refining and marketing operations of the newly created Exxon Mobil Corp., and sources said employment there could ultimately be as high as about 2,500 jobs, compared with about 2,100 now.
But that doesn't mean the jobs of former Mobil employees in the area are secure.
Exxon Mobil Chairman Lee R. Raymond said yesterday that the savings from the merger will be greater than the original $2.8 billion estimate a year ago and the projection of a 9,000-job reduction in the worldwide work force may also be revised. Analysts immediately predicted the job cuts could go as high as 15,000.
At the same time the new company was beginning the process of sorting out the future of its employees, it also announced the $860 million sale of 520 Exxon stations in New England and 1,220 Mobil stations in the Mid-Atlantic. The company is selling the stations, including 130 Mobil stations in the Washington area, to Tosco Corp., the nation's fifth-largest refining company and the operator of Circle K convenience stores.
In addition to the stations, yesterday's deal also gives Tosco the right to acquire Mobil's Manassas oil-storage terminal.
For the 2,100 former Mobil employees in Northern Virginia, however, the focus of attention yesterday was the process of rationalizing the work forces of the two corporations.
Exxon Mobil, headquartered in Irving, Tex., began the process by announcing selections for the top jobs in the company, with Exxon executives overwhelming dominating the new top management team.
On the personnel front, as previously announced, Exxon's Raymond will head the new company. Lucio A. Noto, who had been chairman of Mobil, will be vice chairman of the combined company, and Mobil's president, Eugene A. Renna, will be a senior vice president of Exxon Mobil.
Out of the four senior vice presidents, the other three are from Exxon, and former Exxon executives head eight out of nine corporate departments.
In the upstream organization--the parts of the company that explore for and produce oil and gas--all five presidents come from Exxon. And in the downstream organization that includes marketing and refining, which will be based in Fairfax County, the four top jobs are split down the middle. Of the company's four other divisions, three will be headed by Exxon veterans.
"Precious few Mobil people got senior positions," said Frank P. Knuettel, an analyst with PaineWebber.
At the lower levels of both companies, however, workers were still waiting to hear their job fate. despite employee forums held at more than 100 Exxon and Mobil offices around the world.
The process of filling jobs begins at the top of the departments. Then, as jobs are accepted or declined, the process will move slowly down the ranks. Some Mobil employees who choose not to become part of Exxon Mobil will be eligible for severance payments equal to two to three years' pay.
In Fairfax, yesterday, hundreds of former Mobil employees jammed meeting rooms at their former headquarters and at the companion Willow Oaks facility a short distance away along Gallows Road to watch a video of Raymond and Noto extolling the virtues of the merged firms.
"Basically it was motherhood, apple pie and welcome aboard," one long-term Mobil employee said of the Raymond-Noto presentation, a short part of a three-hour meeting at Willow Oaks. "But it wasn't all sweetness and light. They were leveling with us. They said some would be let go and that we're unhappy about that, but that it's a fact of life."
The employee, an engineer who has worked at Mobil for 31 years, quoted other officials, in separate presentations, as saying that there "will probably be more" layoffs than the original estimate of 9,000 because Exxon Mobil was forced by the Federal Trade Commission to divest itself of "more assets than we planned" when the merger was announced a year ago.
The engineer, who declined to be identified, said one new benefit in particular had drawn a smattering of applause: Mobil employees will now get a 10 percent discount on gasoline and oil purchases they make at Exxon Mobil stations and 15 percent on tires and batteries, benefits Exxon employees had already enjoyed.
Retirement, health-care and savings benefits have also been boosted, according to company spokeswoman Lauren Kerr.
But the big unknown for Mobil employees in Fairfax remained just that yesterday: Except for those at the very top of the new company hierarchy, no one knows who will be offered a job in the merged venture.
The engineer, who wants to stay with the new firm in Virginia, said he's been told he'll find out next week and then have two or three days to decide whether to accept a job offer.
Another Mobil veteran, an environmental, health and safety professional who has worked at the firm for 23 years, said workers were told that it might take four to six weeks to handle individual stay-or-leave meetings with the 2,000 Mobil workers in Fairfax, but that he personally expects to know his fate by Christmas.
"I'd rather be doing similar work and staying here," he said, but did he not rule out a move to the new company headquarters in Texas, a state where he has already spent a six-year stint for Mobil.
Mobil has promised its top 1,460 officials severance pay equal to two to three times their current salaries if they are not offered comparable jobs in the merged company. The company has not spelled out severance arrangements for rank-and-file employees, but several have said they were told they would get four weeks' pay for every year they have worked at Mobil up to 26 years, meaning that some long-term workers would receive two years' pay, which Kerr confirmed.
The Mobil workers can accept the severance offer if they are offered new jobs more than 50 miles from the Gallows Road headquarters and choose not to accept. But they may not be able to take the severance if they are offered jobs in Fairfax comparable to what they have now.
The job-reduction announcement wasn't news to industry analysts, who said they had thought the figures announced a year ago when the two companies agreed to merge were low. Especially when it comes to job-loss figures, said one analyst, "they save that until after the federal regulators have approved it."
Michael C. Young of Deutsche Bank said he thought that the near-term savings from the merger could be as high as $5 billion before taxes and that the job losses could be from 12,000 to 15,000.
"Downsizing is an inevitable part" of mergers, said John Challenger, president of Chicago-based Challenger, Gray and Christmas, a consulting firm that focuses on workplace issues. "These are two big and very complex global companies with operations all over the globe. So as they begin to see and think how the organization really should look, often the take at first blush that they made on the downsizing [number] was just a guesstimate, often to just make the analysts happy."
The sale of the area service stations to Tosco should not have much impact on consumers because, under conditions set by the Federal Trade Commission, Tosco has the right to use the existing brands on the station, to accept Exxon and Mobil credit cards and to sell gasoline with Exxon or Mobil additives.
Tosco, based in Stamford, Conn., is the nation's largest independent refining company. It has grown rapidly in recent years through acquisition, including its earlier acquistion of Exxon's Bayway refinery in New Jersey in 1992 and its service stations in Arizona in 1994. The company has more than 700 Circle K convenience stores and other outlets stretching from Florida through North Carolina. It sells gasoline under the "76" brand, whose symbol is a blue number on an orange globe.
Staff writer Amy Joyce contributed to this report.
AN EXXON-HEAVY TEAM
The executive composition of the new Exxon Mobil is much more ex-Exxon than ex-Mobil.
Lee R. Raymond, Chairman and chief executive, Exxon
Lucio A. Noto, Vice chairman, Mobil
Rene Dahan, Senior vice president, Exxon
Harry J. Longwell, Senior vice president, Exxon
Eugene A. Renna, Senior vice president, Mobil
Robert E. Wilhelm, Senior vice president, Exxon
Donald D. Humphreys, Vice president and controller, Exxon
Timothy J. Hearn, Vice president for human resources, Exxon
T. Peter Townsend, Vice president and corporate secretary for investor relations, Exxon
Charles W. Matthews Jr., Vice president and general counsel, Exxon
Frank B. Sprow, Vice president for safety, health and environment, Exxon
Paul E. Sullivan, Vice president and general tax counsel, Exxon
Frank A. Risch, Vice president and treasurer, Exxon
P. C. Tan, General manager for corporate planning, Mobil
Ken P. Cohen, Vice president for public affairs, Exxon
Upstream organizations (explores for and produces oil and gas)
Five presidents, Exxon: 5
Downstream organizations (marketing and refining)
Four presidents, Mobil: 2
Chemical; coal and minerals; Imperial Oil; global services
Four executives, Mobil: 2
SOURCE: Exxon Mobil
CAPTION: Exxon Chairman Lee R. Raymond, left, and Mobil Chairman Lucio A. Noto discuss the merger at a news conference Wednesday in New York.