Texaco Press Release - Texaco 1997-98 Expenditures with Minority- and Women-Owned Businesses
Commitment to Diversity Results Affirmed
FOR RELEASE: TUESDAY, MARCH 16, 1999.
WHITE PLAINS, N.Y., March 16 - After two years, Texaco is more than halfway to its five-year goal of spending $1 billion with minority- and women-owned businesses, Angela E. Vallot, Director of Corporate Diversity Initiatives, remarked today in announcing the company's 1998 results of its diversity and economic outreach plan.
"The results achieved to date in our diversity initiatives demonstrate the commitment of Texaco's people and effectiveness of these programs," said Vallot. "These achievements occurred as the entire industry faced one of the most difficult economic environments in recent history, with the lowest crude oil prices in decades. At the same time, Texaco completed the formation of alliance companies with Shell and Saudi Refining, Inc. for our U.S. refining and marketing businesses."
Texaco continues to have great success with its Minority and Women Business Development Program. During the first two years of a five-year plan, direct expenditures with minority- and women-owned business enterprises (MWBEs) totaled $528 million, or 7.6 percent of total discretionary expenditures (excluding 1998 expenditures by the alliance companies). Purchases from African American firms in 1998 totaled $46.8 million, up from $30.8 million the previous year. Spending with Hispanic American businesses totaled $30.8 million, up from $26.7 million in 1997. In total, 1998 spending with MWBEs was $230.2 million.
"Broadening the company's supplier base is giving us a competitive edge in the purchase of goods and services; but it's only one of the benefits of our business partnering activities," Vallot explained. "Texaco's long-term commitment in this area is helping minority businesses to grow, resulting in greater economic empowerment and ultimately more jobs."
An example of success is the start-up of Four Star Marine, a new African American marine transport company. Using a four-year Texaco contract worth up to $21 million in future services as collateral, and working with Tidewater Inc., which owns the world's largest fleet of vessels serving the energy industry, Four Star Marine was able to secure financing for the purchase of two vessels and begin operations.
Texaco's U.S. employee base underwent a dramatic transformation last year. At year-end 1997, the company had a U.S. workforce of 20,000. During 1998, the company restructured as it completed the formation of the alliance companies (see Editor's Note). Approximately 11,000 Texaco employees were assigned to those new companies and the remaining workforce was reduced by an additional 1,000 positions. As a result, the company's U.S. workforce declined to approximately 8,000 by year-end 1998.
During the same time period, minorities and women accounted for 59 percent of the new hires at Texaco. Almost 38 percent of the new hires were minorities and 40 percent were women. Of the 243 promotions during the year, 21 percent were awarded to minorities and almost 39 percent went to women, or a combined total of nearly 49 percent.
"Texaco's workforce initiatives are producing tangible results and will be continued," Vallot said. "In light of the significant changes at Texaco, we are refocusing our workforce diversity goals. The new goals will be part of the company's strategic objective to develop a world-class, diverse workforce."
The alliance companies have established their own workforce diversity goals that are comparable to the overall goals established by Texaco, thus reflecting the companies' strong commitment to inclusion.
Marketing Sector Initiatives
Beginning with their establishment in 1998, Equilon Enterprises LLC and Motiva Enterprises LLC assumed management responsibility for the Texaco-branded retail and lubricant networks. During 1998, minority and women lubricant distributors, quick lube owners and store managers at company-owned stations all increased. Minority and women wholesalers and independent retailers decreased slightly.
- Company-Owned/Operated Stations: The number of minority and women store managers increased from 669 in 1997 to 719 in 1998, a three percent increase to 71 percent. African American store managers number 117, or 12 percent of the total, an increase from 103, or 10 percent of the 1997 total.
- Retailers: While the absolute number of minority- and women-owned independent retailers and lessee operators decreased from 547 to 486, they continued to represent 29 percent of the total, consistent with 1997.
- Wholesalers: Minority and women wholesalers decreased from 57 in 1997 to 54 in 1998. This represents 7.5 percent of the Texaco wholesale network, a slight drop from the 1997 level of 7.7 percent.
- Lubricants: Eleven minority and women lubricant distributors were added last year, increasing their representation from 36, or over 5 percent of the lube distributor network in 1997 to 47, or about 8 percent in 1998. Minority- and women-owned quick lube facilities now number 64, or just over 9 percent of the Texaco-branded quick lube network. This is an increase from 54 or about 8 percent in 1997.
These alliance companies will establish new business partnering goals that support a commitment to fairness and expanded opportunities for the Texaco and Shell brands. These goals will be appropriate for the restructured retail operations.
Editor's Note: The new alliance companies, which were established in January and July of 1998 respectively, are as follows:
- Equilon Enterprises LLC, which combines the major elements of Texaco's and Shell's U.S. refining and marketing businesses and their nationwide transportation and lubricant businesses in the western and midwestern states; and
- Motiva Enterprises LLC, which combines the major elements of Texaco's, Shell's and Saudi Refining, Inc.'s U.S. refining and marketing businesses in the eastern and Gulf Coast states.
Updated: March 1999