As always I try to communicate facts.
Fact: McDermott Power Executive who told the attendees at the Town Hall on Oct 2, 2019; we are bidding new jobs. Has been proved a liar. He said we are bidding power projects on the east coast. He said we are bidding power projects in Utah. He said we are bidding power projects with a current client.
Today Oct 16, 2019, we are not on any of the bid lists. We have been politely told to finish our existing Power projects and come back when we have established a precedent of making money on a project that wasn’t a “copy job”.
The entire Power Division has been lied to. This is the same McDermott Power Executive who has strong armed projects to manage margin and gross profit in a careless manner irregardless of consequences in latter stages of the construction lifecycle.
Prediction: current Power projects will be bloated with “life rafts” to save people who sunk the previous projects (IPL, Calpine & Asheville). This bloating will further erode the already tight profit margins. Existing Power projects will sneak out the tiniest of margins or break even at best. Slim margins will then be blamed on construction execution rather than the self imposed “life rafts”.
The Power division will existing in name only. A company doesn’t need an entire division for 2 projects, soon to be 1. The Charlotte office operations will be consolidated in the new Houston offices.
Any and all Power assets or liabilities will be sold off in an unannounced sale. This sale will be so small, it is the equivalent of a garage sale of old junk.
With no Power backlog, there is no value for the “division” in its current state.
Rumor: the McDermott Power Executive was trying to broker the sale of the division. He was trying to sell the division because he was ineffective at internally selling the value of future Power projects to other McDermott Executives. He did not receive the support to pursue new work. In turn he failed to broker a deal to sell the Power division. He could not sell the division because Finance would have to recognize all of the losses on Asheville and Calpine.
These losses would bring the value of the Division to somewhere between $50M and $0, depending how to account for the likelihood of future gross profit on the current power projects (as stated above)
The rumor is a whisper from someone in a meeting with the McDermott Power Executive. I attribute it to ‘rumor’ status as I did not hear it directly. Take it for what it is worth.