Tuesday, March 11, 2008

Caterpillar Inc.


Caterpillar Inc.
Type Public (NYSE: CAT)
Founded 1925
Headquarters Peoria, Illinois, USA
Key people James W. Owens, CEO & Chairman
Industry Heavy equipment
Products Construction & Agriculture Machinery
Revenue ▲$44.958 billion USD (2007)[1]
Net income ▲$3.441 billion USD (2007)[1]
Employees 85,116
Website http://www.cat.com/

Caterpillar Inc. (NYSE: CAT) is a United States-based corporation headquartered in Peoria, Illinois. Caterpillar (commonly referred to simply as Cat or CAT) is, according to their corporate website, "the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines."

Famous for their products featuring caterpillar tracks and a distinctive yellow paint scheme, Caterpillar produces a wide range of heavy equipment, mainly engineering vehicles, including the Caterpillar D9 bulldozer.

Caterpillar is one of the thirty companies whose stock is tracked in the Dow Jones Industrial Average. It is a Fortune 100 company ranked first in its industry, with more than $40 billion in assets.

History

Two Caterpillar 45 steam tractors team up to pull a long wagon train in the Mojave Desert during construction of the Los Angeles Aqueduct in 1909
Two Caterpillar 45 steam tractors team up to pull a long wagon train in the Mojave Desert during construction of the Los Angeles Aqueduct in 1909
D2 Caterpillar on display in the Serpentine Vintage Tractor Museum, Serpentine, Western Australia
D2 Caterpillar on display in the Serpentine Vintage Tractor Museum, Serpentine, Western Australia
D10N at work near Rishon LeZion,Israel.
D10N at work near Rishon LeZion,Israel.

The story of Caterpillar Inc. originates in the late nineteenth century, when Daniel Best and Benjamin Holt experimented with ways to fulfill the promise that steam tractors held for farming. By 1904, these large steam-powered tractors had been plowing California fields for 14 years, and occasionally got bogged down in the soft California soil, especially after heavy rains. These huge tractors were difficult to pull free, even with teams of horses. Benjamin Holt had an idea: why not carry the road with the vehicle? On November 24, 1904 he added wooden block-linked treads around the idlers on Holt No.77, his test tractor. The results were impressive, and the modern tractor was born. Caterpillar became famous for its Caterpillar 30 and its Caterpillar 60 tractors.

Caterpillar formed on April 15, 1925 with the merger of Holt Manufacturing Company of Stockton, California and the C. L. Best Gas Traction Company of San Leandro, California, forming the Caterpillar Tractor Co. Sales the first year were $13 million. By 1929, sales climbed to $52.8 million, and CAT continued to grow throughout the Depression of the 1930s. The Holt Manufacturing Company had earlier pioneered the use of the caterpillar track during World War I.

After the companies merged, Caterpillar went through many changes, including the adoption of the diesel engine. Caterpillar products found fame with the US Navy "Seabees" who built airfields in the Pacific War. Following World War II, the company grew at a rapid pace and launched its first venture outside the US in 1950, marking the beginning of Caterpillar's development into a multinational corporation.

Caterpillar products range from track-type tractors to hydraulic excavators, backhoe loaders, motor graders, off-highway trucks, wheel loaders, agricultural tractors, diesel and natural gas engines and gas turbines. They are used in construction, road-building, mining, forestry, energy, transportation and material-handling industries.

Caterpillar's crawler tractors inspired the first military tanks, which helped end World War I. Many of their machines helped build the Hoover Dam, tunnel under the English Channel, tumble the Berlin Wall and construct cities and neighborhoods across the United States.

Caterpillar was one of the "excellent" companies featured in the 1982 best-selling management book In Search of Excellence by Tom Peters. The company's written principles are the "Worldwide Code of Conduct" document that stresses integrity in every action.[2]

Corporate governance

Caterpillar has a governance structure where the Chairman of the board acts as CEO. The Board of Directors is fully independent and is made up of outside (non-employee) directors. Several "group presidents" report to the CEO, and multiple vice presidents report to each group president.

The board has four committees: Audit, Compensation, Governance, and Public Policy.

The behavior of all employees is governed by a Code of Worldwide Business Conduct, first published in 1974 and last amended in 2005, which sets a high standard for honesty and ethical behavior. All management employees are retested on this code annually.

Current board of directors

Sales and facilities

Caterpillar boots
Caterpillar boots

As of the first quarter of 2006, 44% of Caterpillar's sales are to overseas customers. Caterpillar products are sold in nearly 200 countries. The company has a worldwide network of 220 dealers: 63 dealers in the United States and 157 in other countries. Caterpillar products and components are manufactured in 51 plants in the United States and 58 plants in Australia, Belgium, Brazil, Canada, England, France, Germany, Hungary, India, Indonesia, Italy, Japan, Mexico, the Netherlands, Northern Ireland, the People's Republic of China, Poland, Russia, South Africa and Sweden.

Caterpillar's historical manufacturing home is in Peoria, Illinois, where its world headquarters and core research and development activities are located. Although Caterpillar has "farmed out" much of its local parts production and warehousing to outside firms, it still has four major plants in the Peoria area: the Mapleton Foundry, where diesel engine blocks and other large parts are cast; the East Peoria factory, which has assembled Caterpillar tractors for over 70 years; the Mossville engine plant, built after World War II; and the Morton parts facility.

The Caterpillar Defence Products subsidiary, headquartered in Shrewsbury, Shropshire, provides diesel engines, automatic transmissions and other parts for the UK's Titan and Trojan engineer tanks, Terrier combat engineer vehicles, and tank transporters; the Romanian MLI-84 armored personnel carrier and the Swiss Piranha III light armored vehicle, which is currently being developed for American light armored formations; large fleets of military trucks in both the US and UK; and the CV90 family of infantry fighting vehicles used by the armies of Sweden, Norway, Finland, Switzerland, the Netherlands and Denmark.

Caterpillar Defence Products also provides both propulsion engines and power generation systems to the naval shipbuilding industry, supplying the Series 3512B turbocharged V-12 diesel engine for the American Virginia-class nuclear submarines, and supplying the diesel engine for the San Antonio-class amphibious transport docks; the Spanish Alvaro de Bazán-class frigates; the British River-class offshore patrol vessels; the Malaysian A-100 type offshore patrol vessels; and the Mexican Justo Sierra Mendez-class gunships.[3]

The Russian Caterpillar facility was completed in 16 months and occupied in November of 1999. It had the first electrical substation built in the Leningrad Oblast since the Communist government was dissolved on December 26, 1991. The facility was built under harsh winter conditions, where the temperature was below -25°C.

Employment

Caterpillar's worldwide employment was 96,315 at the end of the second quarter 2007, up 4,001, or 4 percent, from second quarter 2006. Of the increase, about 1,000 were the result of acquisitions, about 2,000 were salaried and management employees and 1,000 were hourly employees.[4]

According to a 2001 article in the Nashville Business Journal, 60% of Caterpillar's employees work outside the United States.[5]

[edit] Controversies

Labor problems

Caterpillar almost went under in the early 1980s, at one point losing almost $1 million per day due to a sharp downturn in product demand as competition with Japanese rival Komatsu (who at the time used the slogan "encircle Caterpillar"[6]) heated up. The company also suffered when President Ronald Reagan declared an embargo against the Soviet Union after they invaded Afghanistan, causing the company to be unable to sell millions of dollars worth of pipelaying equipment it had already built. The impact of the embargo on the company was about $400 million.[7]

The results were layoffs and massive labor union strikes, primarily by the United Auto Workers at plants in Illinois and Pennsylvania. Several news reports at the time indicated that products were piling up so high in facilities that temporary workers hired to work the lines could barely make their way to their work stations. Caterpillar suffered another long labor disagreement in the 1990s, in which the company hired what it termed "permanent replacements" for locked out union workers.

Caterpillar's response to these conflicts with the union was to "farm out" much of its parts production and warehouse work to outside firms: rather than fighting the union, Caterpillar has made itself less vulnerable to the union. Caterpillar also made effective use of office workers during the disputes, suspending research and development work to send thousands of engineers into their factories.

Caterpillar also embarked on its "southern strategy", opening new small plants ("focus facilities") in right to work states such as North Carolina (Clayton and Sanford), South Carolina (Greenville), Mississippi (Corinth), Missouri (Boonville), Tennessee (Dyersburg), and Georgia (Griffin and LaGrange). This has cost nearly 20,000 high-wage union jobs in the Peoria, Illinois area, but overall employment has increased and Caterpillar has survived and grown stronger.

Not long after the 1990s situation was resolved and the economy started to pick up again, Caterpillar adopted the "6 Sigma" quality management program, so as to reduce costs and inventory, and identify and correct defects in the company's processes and products.

Environment

Caterpillar has been criticized by many environmental groups. Products produced by the company include forestry equipment, mining equipment, and diesel engines. While providing higher fuel efficiency than gasoline engines, diesel engines usually produce higher levels of NOx and particulates.

In July, 1999, Caterpillar, along with five other diesel engine companies, signed a consent decree with the Justice Department and the State of California, after governmental investigations had revealed violations of the Clean Air Act, in the form of the sale of over a million diesel engines with "defeat devices," devices designed to regulate emissions during pre-sale tests, but to shut down during subsequent highway driving. Consequently, these engines, "emit up to triple the permissible level of smog-forming nitrogen oxides (NOx). In 1998 alone, these violating vehicles emitted 1.3 million tons of additional NOx – an amount equal to the emissions of 65 million cars."[8] The consent decree provided that $83 million be paid in civil penalties and determined new deadlines for meeting emissions standards. Caterpillar, however, was successful in lobbying for an extension of deadlines they considered too severe. Even so, in October, 2002, Caterpillar – the only diesel engine company (of those that signed decrees) to fail to meet the new emissions standards deadline – was forced to pay $128 million in per-engine non-conformance penalties.[9]

In 2004, the company came out with ACERT diesel engines that exceed federal guidelines for emission standards.[10] In 2007, Caterpillar released a second generation of ACERT to meet even stricter standards.[11]

Caterpillar actively[12] participates in initiatives such as the United States Environmental Protection Agency's National Clean Diesel Campaign program, which encourages retrofitting fleets of older buses and trucks with newer diesel engines that meet higher emissions standards.[13]

In 2005, Cat expressed a strong commitment to sustainability in its annual report's "letter to shareholders" and announced plans to publish an annual sustainability report.[14]

In 2005, Caterpillar donated $12 million dollars to The Nature Conservancy in a joint effort to protect and preserve river systems in Brazil, USA, and China.[15]

In recent years Caterpillar has expanded in the remanufacturing area. In 2006 they acquired Progress Rail Services Corporation, a provider of remanufactured locomotive and railcar products and services to the North American railroad industry. In 2007, they acquired Eurenov S.A.S., a remanufacturer of engines, transmissions and components for leading European automotive manufacturers.

In 2006, the company issued its first annual sustainability report, touting its remanufacturing, recycling, and environmental projects around the world. This report can be found on their website.

Caterpillar has, for many years, been a member of the World Business Council for Sustainable Development based in Geneva, Switzerland.[16]

Caterpillar has been listed on the Dow Jones Sustainability World Index each year since 2001.[17]

Israeli military sales and conversions

Israel Defense Forces armored Caterpillar D9L (right) and D9N (left) bulldozers
Israel Defense Forces armored Caterpillar D9L (right) and D9N (left) bulldozers

Caterpillar equipment, especially the D9 bulldozer, has been equipped with armor and military equipment by third parties, and used as a combat engineering vehicle. Caterpillar has been criticized by activists for selling its equipment to Israel, which has used it in the destruction of Palestinian homes as part of its security operations.[18][19]

A shareholder motion to examine the issue has been brought repeatedly by socially responsible investors at Caterpillar's annual meetings. In recommending a vote against the motion, Caterpillar's board stated, "Caterpillar shares the world's concern over unrest in the Middle East and we certainly have compassion for all those affected by the political strife. However, more than two million Caterpillar machines and engines are at work in virtually every country of the world each day. We have neither the legal right nor the means to police individual use of that equipment. We believe any comments on political conflict in the region are best left to our governmental leaders who have the ability to impact action and advance the peace process." The motion received 4% of shareholder support at the 2004 annual meeting.[20]

The family of Rachel Corrie, an American who was killed while attempting to prevent home demolitions in Gaza, has sued Caterpillar alleging it violated human rights and committed war crimes by knowingly selling its equipment to the Israeli army. Four Palestinians whose homes were bulldozed were also named plaintiffs.[21] An Israeli government investigation found that the bulldozer team was clearing debris to uncover smuggling tunnels, not destroying homes, and that the operator did not see Corrie.[22]

The suit was dismissed by a U.S. District Court judge in Tacoma in 2005.[23] The dismissal was upheld on appeal to the San Francisco-based 9th U.S. Circuit Court of Appeals on September 17, 2007, saying it is not the court's role to criticize foreign policy. "The executive branch has made a policy determination that Israel should purchase Caterpillar bulldozers," the appeals court decision stated. "A court could not find in favor of the plaintiffs without implicitly questioning, and even condemning, United States foreign policy toward Israel."[24]

Notable products

Cat 365B demolition vehicle in action
Cat 365B demolition vehicle in action

Caterpillar has a list of some 400 products for purchase through its dealer network. Of those, these are some of the more well known and notable:

Caterpillar is the world's largest manufacturer of wheel loaders. The medium size (MWL) and large size (LWL) are designed at the Aurora, Illinois facility. Medium wheel loaders are manufactured at: Aurora, Illinois, USA; Sagamihara, Kanagawa, Japan; Gosselies, Charleroi, Belgium; Piracicaba, São Paulo, Brazil;[25] and the People's Republic of China. Large wheel loaders are manufactured at Aurora, Illinois exclusively, on three assembly lines.

Caterpillar Electronics business unit has formed a joint venture with Trimble Navigation called as Caterpillar Trimble Control Technologies LLC.,(CTCT). The 50:50 joint venture,is to develop the next generation of advanced electronic guidance and control products for earthmoving machines in the construction, mining and waste industries. Caterpillar Trimble Control Technologies LLC is based in Dayton, Ohio and has started its operations on April 1, 2002.

References in popular culture

References

  1. ^ a b [1]
  2. ^ Caterpillar Worldwide Code of Conduct
  3. ^ Caterpillar Defence Products. Armed Forces - The Defence Suppliers Directory. R & F Defence Publications. Retrieved on 2007-08-04.
  4. ^ http://www.cat.com/cda/files/568340/7/Caterpillar%20Inc%202Q%20Press%20Release.pdf
  5. ^ Execs: Adapt to culture when working internationally. Nashville Business Journal (2001-02-22). Retrieved on 2007-08-05.
  6. ^ [2]
  7. ^ http://www.usaengage.org/archives/studies/append2.html
  8. ^ Six Diesel Engine Companies. Clean Air Villain of the Month. Clean Air Trust (2000-08-01). Retrieved on 2007-08-05.
  9. ^ Justice Department Announces FY2003 Record Year For Recovery Of Civil Penalties In Environmental Cases. United States Department of Justice (2003-12-16). Retrieved on 2007-08-05.
  10. ^ Caterpillar Brings Engines with ACERT Technology to Off-Road Machines. Caterpillar Inc.. Retrieved on 2007-08-05.
  11. ^ Caterpillar demonstrates 2007 compliant on-highway engine. Pit & Quarry. Retrieved on 2007-08-31.
  12. ^ Diesel Engine School Bus Retrofit Technology Workshop, Baltimore, MD, April 29, 2004. Maryland Department of the Environment. Retrieved on 2007-08-31.
  13. ^ Cat backs plan to cut school bus emissions. Trailer/Body Builders. Retrieved on 2007-08-31.
  14. ^ Cat Annual Report 2005. Caterpillar Inc.. Retrieved on 2007-08-31.
  15. ^ $12 Million from Caterpillar Inc. to The Nature Conservancy Launches Ambitious Global Freshwater River Project and Establishes a Great Rivers Center. The Nature Conservancy. Retrieved on 2007-08-31.
  16. ^ WBCSD member companies. World Business Council for Sustainable Development (2007-08-03). Retrieved on 2007-08-04.
  17. ^ Dow Jones Sustainability World Index Recognizes Caterpillar's Leadership for the Fifth Consecutive Year.. PRNewswire (2005-09-21). Retrieved on 2007-08-31.
  18. ^ Caterpillar digs in on Israeli bulldozer battle Chicago Sun-Times, June 15, 2006 by David Roeder
  19. ^ Caterpillar faces an intifada. Salon.com May 13, 2004
  20. ^ University of Wisconsin System Trust Funds. Caterpillar and Human Rights in Israel December 2004
  21. ^ Roxana Popescu, Seattle Times: Court of Appeals takes up Corrie lawsuit
  22. ^ http://www.nysun.com/article/62872
  23. ^ http://www.iht.com/articles/ap/2007/09/17/america/NA-GEN-US-Protester-Killed-Lawsuit.php
  24. ^ http://www.reuters.com/article/domesticNews/idUSN1733505920070917
  25. ^ http://brasil.cat.com
  26. ^ http://blog.zackjordandesign.com/images/032306_snowman.jpg
  27. ^ "Lipstick (Ascending) on Caterpillar Tracks"

External links

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C o n v e r g y s C o r p o r a t i o n

Convergys Corporation
Type Public (NYSE: CVG)
Founded Cincinnati (1989)
Headquarters Cincinnati, Ohio, United States
Key people David F. Dougherty, President and CEO
Industry Customer Management
Human Resources Management
Information Management
Outsourcing
Consulting
Professional Services
Products Infinys Rating and Billing (IRB), Dynamic Decisioning Solution (DDS), ICOMS
Revenue ▲ 2,844.3 million USD (2007)[1]
Net income ▲ 169.5 million USD (2007)[1]
Employees ~75,000 (2007)[1]
Website http://www.convergys.com

History

The company grew from Cincinnati Bell Information Systems and MATRIXX, both subsidiaries of Cincinnati Bell, and AT&T Solutions Customer Care (formerly AT&T American Transtech), which was sold to Cincinnati Bell in 1998; an IPO in 1998 made it a fully independent company. Since then, Convergys has acquired numerous companies and expanded its business to employ over 74,000 people in 40 countries around the world. Listed on the NYSE New York Stock Exchange it is headquartered in Cincinnati, Ohio and has offices across Northern America, Europe, the Middle East, Asia, the Pacific, and Latin America.

Recent news

  • Convergys Delivers Record Revenue of $2.8 Billion and Record EPS of $1.23 in 2007
  • Convergys Upgrades Nawras Telecom’s Billing and Customer Care Platform
  • Indonesian Telecom Company Goes Live with Convergys Billing and Care Platform for Pre- and Post-Paid Services
  • Convergys Implements Relationship Management Solution For AT&T Mobility
  • Convergys to Provide Customer Intelligence Solutions To Global Financial Services Firm
  • Convergys Corporation Provides Bouygues Telecom's Billing System
  • Convergys Helps Telecom Egypt Re-Engineer Billing Processes
  • Convergys to Provide Starbucks with HR Services

Recently Convergys stock price has been under downward pressure, however analysts are bullish about its growth prospects over the next two quarters following strong revenue figures and the announcment of a number of large high profile contracts. Convergys is the world's largest and leading outsourcing company.

Services

Convergys Global Consulting offers solutions across a wide range of market and business issues:

Revenue Generation: Maximise opportunities to increase revenue through acquiring and growing high-value customers

Revenue Protection: Understand key drivers of customer satisfaction, loyalty and retention in order to proactively defend market share and revenue

Operational Performance: Measure and benchmark operational performance to highlight and capitalise on opportunities to improve workforce productivity, operational efficiency and quality of service

Contact Optimization: Gather and use intelligence from customer and employee contacts to improve business performance and operations while decreasing costs

Technology Optimization: Apply technology and business process, usability, customer experience analysis and architectural expertise to deploy and refine technology that improves quality of service and maximizes ROI.


Customer Solutions

Customer Service: Consumer Support, Business-to-Business Support, Technical Support, Back Office, Customer Management Effectiveness
Customer Acquisition: Direct Response, Sales and Order Support, Back Office, Customer Management Effectiveness
Customer Retention: Loyalty and Churn Management, Back Office, Customer Management Effectiveness, Convergent Rating, Charging and Billing


HR Solutions

HR Business Process Outsourcing: Recruiting and Resourcing, Compensation, HR Administration, Payroll Benefits, Organizational Development, Learning, Workforce Intelligence, Enabling Services

Recognition and Awards

Convergys has been recognized with a number of prestigious awards from 2001 to 2007.[2] Its current awards include:

  • InformationWeek 500 - Top 10 Companies for Innovative Use of Technology
  • Fortune - Most Admired Companies (for 8 years running)
  • Fortune - Most Admired Company in Diversified Outsourcing
  • KLD Domini 400 - Top 400 Companies that Demonstrate Leadership in CSR
  • Training Industry Inc - Top 20 Most Influential Training Professionals
  • CRM Magazine - Outsourcing Services - Service Leader Award

References

  1. ^ a b c 10-K Form: 2007 Annual Report. shareholder.com. Retrieved on 2007-09-14.[dead link]
  2. ^ Convergys - Recognition and Awards, 2005-2007

External links

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Areva


The Areva Tower located in Europe's largest CBD, La Défense, Paris.
The Areva Tower located in Europe's largest CBD, La Défense, Paris.
Areva (Euronext: CEI)

 Areva is a French public multinational industrial conglomerate that deals in energy, especially in nuclear power. It was created on 3 September, 2001, by the merger of Framatome and Cogema (now Areva NC). Its main shareholder is the French owned company CEA, but the German company Siemens also retains 34% of the shares of Areva's subsidiary, Areva NP, in charge of building the EPR (third-generation nuclear reactor) [1].

The parent company is incorporated under French law as a société anonyme (SA - public corporation). The French State owns more than 90%. The corporate name Areva is inspired by Arevalo Abbey in Spain. Anne Lauvergeon is the Chairman of the Executive Board (equivalent to President and CEO). Areva official Ralf Güldner is the vice-chairman of the World Nuclear Association.

Nuclear energy company

Areva is the world-leading company in nuclear energy.[citation needed] It is the only company with a presence in each industrial activity linked to nuclear energy: mining, chemistry, enrichment, combustibles, services, engineering, nuclear propulsion and reactors, treatment, recycling, stabilization, and dismantling. Areva also claims to offer technological solutions for CO2 free energy; and produces earth leakage circuit breaker technologies.[citation needed]

Three main subsidiaries form the core of Areva:

  • Areva NP (formerly Framatome ANP) - Nuclear Power: develops and builds nuclear reactors; Siemens has a 34% stake in Areva NP
  • Areva NC (formerly Cogema) - Nuclear Cycle: covers the whole nuclear fuel cycle, from mining to waste disposal. Owns Eurodif.
  • Areva T&D: Transmission and Distribution: power transmission and distribution. It was bought from Alstom on 9 January, 2004. [2]

The major partners of Areva include: Technicatome, Euriware, STMicroelectronics, Eramet, and SAFRAN.

Areva is part of the Global Nuclear Energy Partnership (GNEP) alliance, along with the Japan Atomic Energy Agency (JAEA), Washington Group International and BWX. GNEP is a plan initiated in 2006 to form an international partnership to reprocess spent nuclear fuel in a way that renders the plutonium in it usable for nuclear fuel but not for nuclear weapons.

Administration

The actions of the Chairman of the Executive Board, Anne Lauvergeon, are subject to considerable oversight by both the board of directors and the supervisory board. In 2006, Spencer Abraham, the former U.S. Secretary of Energy, was named director of Areva Inc., the U.S. subsidiary of Areva [3].

Jean-Pierre Raffarin's government announced the privatization of Areva in 2003, but it was postponed several times, the French government opting finally for the privatization of GDF and EDF. At the end of October 2005, Prime minister Dominique de Villepin announced that he had suspended the privatization process.

History

Areva has its roots in Framatome, which was founded in 1958 by several companies of the French industrial giant The Schneider Group along with Empain, Merlin Gérin, and the American Westinghouse, in order to license Westinghouse's PWR technology and develop a bid for Chooz 1 in Belgium. Called Franco-Américaine de Constructions Atomiques (Framatome), the original company consisted of four engineers, one each from each of the parent companies. The original mission of the company was to act as a nuclear engineering firm and to develop a nuclear power plant that was to be identical to Westinghouse's existing product specifications. The first European plant of Westinghouse design was by then already under construction in Italy.

Meanwhile, the Électricité de France (EDF), the French government-owned electric utility, in opposition to the Commissariat à l'énergie atomique (CEA), maintained an interest in PWR technology. The Chooz contract offered the EDF, which joined with the Belgian electric utilities to call for the Chooz bids, the opportunity to explore PWR without offending French national pride in its homegrown GCR technology.[citation needed] By the beginning of 1960, only two bids remained in contention; midway through 2006 Framatome received informal permission to begin design work on the Chooz reactor. A formal contract was signed in September, 1961 for Framatome to deliver a turnkey system, that is, not only the reactor, but an entire, ready-to-use system of piping, cabling, supports, and other auxiliary systems, propelling Framatome from a nuclear engineering firm to an industrial contractor.

By 1981, France was pressing for even more control of Framatome.[citation needed] In January, Westinghouse agreed to sell its remaining 15 percent share to Creusot-Loire, which now owned 66 percent, and to cede complete marketing independence to Framatome. In February, the Belgian Baron Empain sold his 35 percent interest in Creusot-Loire to Paribas, a French government-linked banking group.

The May 1981 Socialist electoral victory in France intensified calls for greater government control of Framatome.[citation needed] A January 1982 company reorganization simultaneously strengthened French public and private control of the company by allowing Creusot-Loire to increase its share of the company while increasing CEA say in the running of the firm.

Nuclear Reactor Designs

EPR

Further information: European Pressurized Reactor

Areva has been constructing Finland's fifth reactor in Olkiluoto since 2005. The reactor, which is one of the first of the new, third generation reactors (EPR - European Pressurized Reactor), was supposed to begin producing electricity in 2009, but the project has been delayed because of technical difficulties and quality problems. In August, 2007 the production start was postponed to 2010-2011 [4]. The new plant is expected to cost 3 billion euros.

The second EPR in France is currently under construction at the Flamanville Nuclear Power Plant.[3] Other EPRs were to be sold to the United Kingdom and to the United States (See below).

On August 13, 2007 the French newspaper Le Parisien alleged that the Franco-Libyan civil nuclear power agreement signed by President Nicolas Sarkozy did not concern desalinization of sea water, as claimed by the French government, but instead focused in particular on selling the EPR to Libya, a contract potentially worth $3 billion[1]. The Parisian newspaper cited Philippe Delaune, deputy to the deputy director of international affairs for the CEA atomic agency, which is the main share-holder in Areva [1]. Following allegations that the deal had been related to the release of the Bulgarian nurses, the French Socialist Party, through the spokesperson Jean-Louis Bianco, declared that this deal was "geopolitically irresponsible". [1] The German government also denounced the agreement [1].

In November 2007, Areva agreed to a €8 billion deal with the China Guangdong Nuclear Power Group to supply them with two EPRs in Taishan, Guangdong, China. Under the terms of the agreement, Areva will also help operate the plant, including the reprocessing of spent fuel. [5]

Atmea I

The Atmea I is a new evolutionary reactor design targeted towards both developed and developing economies. It will be developed through a joint venture with Mitsubishi called Atmea. Current plans are targeting power output of about 1100 MWe, but the design could be scalable to produce different levels of power output to fit different size grids. Current plans call for design certification to be completed in about 3 years.[citation needed]

Worldwide presence

Worldwide, the Areva group has an industrial presence in 40 countries and its commercial network reaches more than 100 countries. It employs 58,000 people and has consolidated sales revenue of €10.863 billion. [6] In 2006, Fortune Magazine reported that Areva was the "Most Admired Global Energy Company."[7]

Areva has partnered with engineering contractors to aid in the reconstruction of Iraq by manufacturing equipment to construct electrical substations.[8]

In June 2007, Areva announced plans to acquire the African uranium mining company UraMin for a final price of about 2.5 billion USD. This move further beefs up Areva's nuclear business, and Areva plans to increase production to 9 million kilograms of yellowcake by 2012. [9]

Areva has also signed a memorandum of understanding with Mitsubishi Heavy Industries for the establishment of a joint venture for their next reactor design.[10]

Niger (mines)

The open pit uranium mine at Arlit, Niger.
The open pit uranium mine at Arlit, Niger.

Areva owns two mines in Arlit, Niger, where it employs 1,600 people; Niger is one of the world's three largest uranium exporters. Nigerian uranium account for 30% of French consumption and 32% of Niger's exports, but less than 5% of Niger's GDP [11]. The increase in the cost of uranium on world markets in 2006 (more than 46% [11]) will enable Niger to triple its revenues sourced from Areva [11]. On 25 July 2007, the CEO of Areva-Niger, Dominique Pin, was expelled from Niger (although he was in Paris at the time) on charges of supporting the Tuareg Rebellion [11]. According to Le Canard enchaîné, this move from Seyni Oumarou's government was motivated by negotiations concerning the uranium trade agreement, which was finally renewed on August 1, 2007 [11]. Furthermore, Laouel Kader Mahamadou, who had resigned from his functions as secretary general of the Nigerian government to take a consulting job with Areva-Niger, was asked by the Nigerian DGSE to remain in Niger instead of flying to France for an integration workshop until a "clarification of the situation" could be obtained[12].

The population of Niger was exposed to a serious famine in 2005. Areva donated 130,000 euros in June 2005 to the food crisis coordination group of Niger, and 120,000 euros in July in the form of two planes loaded with food and organized by Bernard Kouchner's Réussir NGO. According to Le Canard Enchaîné, this aid amounted to 0.05% of Areva's annual profits of 428 million euros. [13].

McArthur River mine

Areva Resources Canada Inc. also has a 30% share in the McArthur River mine in Canada, which contributes about 20% of total global uranium mining production. The rest of the mine is owned by Cameco Corporation.

South Korea

Further information: Nuclear power in South Korea

In 2007, Areva signed a ten year deal with the South Korean public company KHNP to enrich uranium in its forthcoming Georges Besse II enrichment plant. The deal is worth over 1 billion euros [14].

United States

Further information: Nuclear power in the United States

In the USA, Areva is present in 40 locations across 20 states and employs 5,000 people. Areva supplies network products to two-thirds of all US utilities. Moreover, Areva was ranked the N° 1 US supplier in nuclear energy products and services, in Energy Management Systems and in Energy Market Systems. Its US headquarters are located in Bethesda, MD.

In February 2002, the U.S. Secretary of Energy Spencer Abraham announced the Nuclear Power 2010 Program, which included plans for two EPRs. On September 15, 2005 Areva and Constellation Energy of Baltimore announced a new joint venture called UniStar Nuclear that will market the commercial EPR in the US. Spencer Abraham was named director of Areva's subsidiary in the United States in 2006 [3].

China

In China Areva won an 8 billion euro ($11.9 billion) agreement to build nuclear reactors, a record for the French company. The long-expected announcement came at the start of formal talks in Beijing between French President Nicolas Sarkozy and his Chinese counterpart, Hu Jintao.[15] ``France wants to build a complete partnership for the future with China, Sarkozy said today in Beijing during a joint briefing with Chinese President Hu Jintao. ``China's spectacular development is a chance for the world.[16]

French, American and Russian suppliers have been vying for contracts in China, which plans to build as many as 32 nuclear plants by 2020 to meet surging power demands while cutting emissions and reducing reliance on imported oil. U.S. and French politicians have been lobbying Beijing hard on behalf of their companies. "When you look at China's energy problems, nuclear energy is not the whole answer, but it is part of the answer," Areva CEO Anne Lauvergeon told a news conference.

The deal allows Areva to "consolidate its presence in one of the most dynamic markets in the world with enormous potential," Lauvergeon said.

State-run Areva said the contract with state-run China Guangdong Nuclear Power Corp. was a record for the French company. The third-generation pressurized water reactors, designed by Areva's Framatome subsidiary, would boost CGNPC's output by 3,400 megawatts, Areva said earlier.

The contract also calls on Areva to provide uranium to fuel the reactors through 2026. The reactors are to be built by 2013-2014 in the city of Taishan in Guangdong province, an export manufacturing powerhouse with heavy demand for power and high levels of industrial pollution.[17]

Other activities

Areva is also involved in military technology, designing for example the nuclear reactor for the French Barracuda class submarine.

One of Areva's subsidiaries, Euriware (founded in 1991) specializes in computer engineering, and employs 2,100 persons on 14 different sites. Areva also owns 11% of STMicroelectronics, 26,25% of Eramet, and 8,45% of Safran. In May 2005 it sold all of its stakes in Assystem, as well as FCI in October 2005 (sold to the hedge fund Bain Capital).

CERCA, a subsidiary of Areva, is also involved in TRIGA International, established in 1996 with the US firm General Atomics.

Areva is also a corporate member of the Bruegel think tank.

2007 fine

In January 2007 Areva was fined €53 million by the European Commission for rigging EU electricity markets through a cartel involving 11 companies, among which ABB, Alstom, Fuji, Hitachi Japan, AE Power Systems, Mitsubishi Electric Corp, Schneider, Siemens, Toshiba and VA Tech [18]. According to the Commission, "between 1988 and 2004, the companies rigged bids for procurement contracts, fixed prices, allocated projects to each other, shared markets and exchanged commercially important and confidential information."[18] Siemens was given a fine of €396 million, more than half of the total, for its alleged leadership role in the cartel.

EU Competition Commissioner Neelie Kroes declared that "The commission has put an end to a cartel which has cheated public utility companies and consumers for more than 16 years" [19].

Advertisements

Areva has gained some fame after airing 3,000 cel-shaded animation television ad spots created by French design group H5, who also created the similar music video for Röyksopp's "Remind Me". The ads explained how the generation and distribution of nuclear power works. The ads featured the song "Funkytown" by Lipps Inc..

References

  1. ^ a b c d e Marc Lomazzi, "Nucléaire: les dessous de l'accord entre la France et la Libye", Le Parisien, 13 August 2007 [1](French)
  2. ^ AREVA signs the agreement for the acquisition of ALSTOM's Transmission and Distribution activities, Areva press release, 9th January 2004
  3. ^ a b "L’ancien secrétaire à l’Énergie de l’administration Bush, Spencer Abraham, est nommé directeur de la filiale états-unienne d’Areva", Voltaire Network, March 9, 2006. (French) Spanish translation)
  4. ^ La Chine aurait annulée sa commande d'EPR, Le Nouvel Observateur, 22 August 2007 (French)
  5. ^ John Tagliabue, "China Deal Gives Lift to Revival of Fission", New York Times, 27 November 2007 [2]
  6. ^ Areva's press release
  7. ^ CNNMoney
  8. ^ Farabi and Jamila, Iraq Substations
  9. ^ Nuclear Engineering International
  10. ^ AREVA and MHI Sign Memorandum of Understanding on the Establishment of a Joint Venture for Their New Reactor
  11. ^ a b c d e "Atomes pas très crochus au Niger" in Le Canard enchaîné, 22 August 2007, p.4 (French)
  12. ^ Conflit armé dans le nord. Des morts et des réfugiés, Le Républicain-Niger, 23 August 2007 (French)
  13. ^ "Peu enrichi à l'uranium ("Not much enriched by uranium")", Le Canard Enchaîné, August 3, 2005. (French)
  14. ^ "S.Korea signs uranium enrichment deal with France", Reuters, 19 June 2007 on-line (English)
  15. ^ http://www.mercurynews.com/healthandscience/ci_7562266?nclick_check=1
  16. ^ Bloomberg.com: Worldwide
  17. ^ http://www.mercurynews.com/healthandscience/ci_7562266?nclick_check=1
  18. ^ a b EU cracks down on electricity-gear cartel, EurActiv, 25 January 2007 (English)
  19. ^ Vote call by Siemens shareholders, BBC, 25 January 2007 (English)

http://www.areva.com/servlet/news/pressroom/pressreleases/cp_29_04_2004-c-PressRelease-cid-1081335613196-p-1028798801053-en.html


See also

 energy Portal
nuclear technology Portal

Sites

External links

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