After graduating from USC in 1963, Ronald Tutor, who is now chairman and chief executive of Tutor Perini Corp. and oversees one of the largest construction companies in the country, was out of money and searching for work. His father, a small builder, was working on a hospital in Santa Barbara and Tutor agreed to join him on the project. “I really had no idea what career I wanted,” he told the Business Journal. “All I knew was I was so sick of being broke.” Tutor took over the business soon after, when his father was diagnosed with prostate cancer. In 1981, he formed the Tutor-Saliba Corp. with another construction veteran, Naseem Saliba, and the company became a power player in big construction. Tutor also joined Perini Corp., a Framingham, Mass.-based publicly traded construction business, as chief operating officer in 1997. He eventually became chief executive, and the companies merged in 2008 to form Tutor-Perini, which has a market cap of almost $1 billion. The headquarters remained in Los Angeles. Tutor was in the news recently because of a 15-year lawsuit with the Los Angeles County Metropolitan Transportation Authority. He had sued, claiming he was owed money; the MTA countersued, accusing his company of cheating the agency out of millions of dollars during construction of the Red Line subway. Tutor denies the accusations. The MTA has spent more than $30 million litigating the suit, even though the most it could win in damages is about half that sum. Tutor sat down with the Business Journal in his Sylmar offices to discuss the lawsuit, the merger and his management style.
Question: I notice you don’t have a computer in your office. Why?
Answer: I think, honest to God, I just never joined the 21st century. We’re completely computerized everywhere except here. I grew up using a calculator and a slide rule, and if I want a report, I just call someone and they bring it to me. I have a computer at home, but my 16-year-old kid is better at using it than I am.
How did the recent merger between Tutor-Saliba and Perini Corp. come about?
I’d joined Perini around 1997 because the company was in the depths of bankruptcy and they asked me to help them out. And around 2007 I felt they were successful again and I told the Perini board that I was going to leave and take Tutor-Saliba public. The board then came to me and asked that I consider a merger with Perini so that I would in effect become a public company. After a lot of thought, I agreed.
Why did you agree?
When I went to tell all the Perini executives I was leaving, almost all of whom had been with me since the beginning, well, believe it or not, there was some emotion attached to it. Not everything is about dollars and cents. There’s never been any doubt that it wasn’t in my financial interest to do the deal. But I did think it was the right thing to do.
What do you mean it wasn’t in your financial interest?
We merged when Perini shares were at $40, and now they’re at $19. In Tutor-Saliba I owned 100 percent of the shares, and in agreeing to the merger I think I took 45 percent of the shares. I guess I really won’t know whether the deal was financially good or not for four or five years. But it doesn’t matter. It’s done.
Have your duties changed at all?
No. We’ve restructured dramatically, but everyone still reports to me.
Where did you grow up?
I was born and raised right here in Los Angeles, in Sherman Oaks. I had a younger brother, and a wonderful mother and father. I was very fortunate to have a great family life. We weren’t wealthy. We probably never had more than $5,000 in the bank.
Did that affect your outlook?
When you grow up and nothing is easy, you want more. My children, whom I dearly love, have always grown up with everything easy for them. When you grow up like I did you get a certain hunger, and that’s what drives you to achieve. It’s what makes you work 14, 16, 18 hours a day if that’s what it takes. I always think that, as strong as my family was, I wouldn’t be where I am today if I had been born into a family of more means.
What did your parents do?
My mom worked her way up to become the head of the lady’s wardrobe department at Universal Studios. In those days they made all these great dresses in Hollywood, and my mom could sew any dress. She was a very hardworking, very talented lady, and in many ways more successful than my father. My father was a small builder. He loved to build a house or a small commercial building. He did most of the work himself.
What were your hobbies as a kid?
I played a lot of sports – football and baseball in high school – and worked a lot of odd jobs. I did anything I could get. I worked for the railroad; during the summers for my dad; I worked at a market as a box boy. And when I went to college, I worked my whole time as an apprentice checker at a market on Rodeo Drive. That’s how I made my spending money.
Where did you go to college?
USC. I always loved USC since I was a kid. I went to a USC football game against UCLA with my godfather when I was 11 years old and I fell in love with USC. All I knew was from that day forward I didn’t want to go anywhere else. My first three years I was in the engineering school, and then because I got tired of studying so hard I switched to the business school and spent the next two years getting a business degree.
So business was easier than engineering?
Yeah. Ten years ago at an awards banquet, I told a joke that got me into trouble with the dean of the business school. I said when I was in the engineering school, I would study three hours a night while my roommates were out partying. When I switched to the business school, I went from studying three hours a night to three hours a month. I don’t think he found it very funny. He said the business school isn’t like that anymore.
What did you do after graduation?
I needed to make money, and at the time my dad was building a hospital up in Santa Barbara. And he said while you’re looking for a job, come work for me for three or four months. So I moved up there and worked for him for about six, seven months. And about the time I was going to leave, he got sick with cancer of the prostate, and he was out of work for two years while he recovered. My dad had never bid on construction work, and we had very little money. So I decided – perhaps it was the sheer ignorance of youth – to start bidding for work. And by the time I was 27 or 28 years old, we were bidding large public works jobs.
Did your dad approve of the job you were doing?
He didn’t like it. I guess he felt like any father would who works his whole life to accomplish something, then his son comes in and in three or four years takes the business in a different direction. But we were so close as a family that between my mother and I, we won him over. He had an office next door to mine until he died.
How did you meet Naseeb Saliba?
My insurance agent was his brother, Leon Saliba, and he introduced us some time in 1971. We had dinner, and I liked him. He was just a sweet gentleman. I must have been 30 years old and he was about 60. He used to joke he was like my second father – we had that kind of relationship. He agreed to back me on a job I couldn’t bid for without him, and we were partners up until he retired around 1994.
How did you end up joining Perini Corp.?
I was introduced to the company two or three years after I met Mr. Saliba, and we did a number of joint ventures for the next 25 years. Then around 1997, the management of Perini asked me to get involved because their business was suffering. The then-chairman, David Perini, well, I’ll be charitable and say he wasn’t a very good CEO.
Why?
He took an extremely rich company, and when I came in it was virtually bankrupt. I think the first four years I worked there, it was for $25,000 a year, a consultant’s fee because it was all they could afford to pay me.
What do you think about this 15-year lawsuit you’re in with the MTA?
It’s like World War III. The MTA has spent much more than $34 million. And when it’s over the truth will come out and it will be so horrific to the taxpayers of this city. We never did anything wrong. In 1998 they gave me a written offer to pay me $4 million on my claims. And in my stupidity, rather than exploring a negotiated settlement, I told them to go straight to hell and we’ll see you in court.
Where is the case now?
We’re getting ready to try it again. It’s not close to over. It won’t end with this trial. We’ve been going for 15 years on a case that should have been settled for the $4 million they agreed to pay me. I’ve tried to end this half a dozen times, telling them, “You caused it all; you eat yours, I’ll eat mine.” But they don’t want to do it.
What’s your favorite project that your company’s worked on?
God, it’s a tough call. In recent years the most fun I had was on the Wynn Encore resort and casino in Las Vegas, because I ran the job myself. I had gone to a meeting with our management, and Steve Wynn and I met. I immediately liked him and I guess vice versa, because after the meeting he said he’d give us the job but only if I personally ran it. It was fun. Mr. Wynn is an absolute perfectionist. He gets involved in every detail, and when you’re done building one of his hotels it’s like you’ve finished building a piano. It’s beautiful.
How would you describe your management style?
Hands on. I used to do everything, handle all the big jobs myself during the day, and then on nights and weekends I would do bids and work on paperwork. I used to work an 18-hour day regularly. I don’t do that as much now. If employees come to me with a particularly perplexing problem and want me to get involved, I will.
What’s a typical day like for you?
Well, today I got up at 6 a.m. and was on the plane at 6:45 to fly up to Oakland for a meeting on a tunnel job up there. I usually travel somewhere – on a private plane, thank God – every week because we have offices all over the country. So I try to hit every office three or four times a year. Anyway, I had this meeting in Oakland, flew back here, and I’ve been doing paperwork, writing letters and taking phone calls ever since. I usually go home about 5 o’clock, and I take about 30 to 45 minutes worth of work home at night. I’ll have dinner, and when I’m bored I’ll go visit one of my four kids or five grandkids, or they’ll come over here. And I’m single now, so from time to time I’ll go out with ladies I know.
So you’re divorced?
I was married twice, divorced twice. I’m still good friends with both my former wives. It doesn’t seem I’m as good at the marriage business as I am at the construction business. It’s this job; it can just be all consuming. At one time during my first marriage I was virtually bankrupt because I’d lost a lot of money on a water treatment plant. The only way I saw out of it was to work even harder. I did what I thought I had to do, but my marriage suffered a great deal. Maybe I’m just married to the construction business.
Are you close to your kids?
Yes. I’m very close to all my children. If I wasn’t good as a husband, at least I’ll try to be a very good father.
What advice would you give to someone who wanted to follow in your footsteps?
It’s a very difficult business and it demands everything of you. You’d best be prepared to work very hard, be very smart and remember all the people around you are your greatest strengths. Protect them. Force them to work at their highest levels. But never delude yourself into thinking you can ever do it without them.
What’s been your biggest mistake?
Without a doubt, not settling with the MTA when I had a chance. I should have eaten the s—- they wanted me to.
What’s one thing most of your employees don’t know about you?
I think I’m very intimidating to most of them, but those that know me – and I try not to advertise this – know that I have a real soft spot. Anybody that’s been with me a long time knows we always take care of our own. It’s a little more difficult now that we’re a public company, but back when I wasn’t accountable to anyone, if employees came to us with a problem or needing tuition for a kid going to college, we’d lend them the money. And more often than not, we wouldn’t ask to be paid back.
What do you do in your spare time?
I have a boat and I love to take my kids and my grandkids out. Every year we try to plan a trip to Europe and one to the Caribbean. And I have a house up in Sun Valley, Idaho, and I like the snow and to ski during the winter. I try nowadays to take four to five weeks off a year.
When do you think you’ll retire?
Minimum of five years, maybe 10. I’m the kind of person who’s very restless. If I won a billion dollars in the lottery but they told me that to get it I had to stay home and not go to work, I don’t think I could do it. When I’m on vacation, I wake up at 6 a.m., curse my bad fortune, and go have a cup of coffee.
Ron Tutor
TITLE: Chairman and Chief Executive
COMPANY: Tutor-Perini Corp.
BORN: Los Angeles; 1940
EDUCATION: B.S., finance, USC
CAREER TURNING POINT: Working for his father in the construction business right out of college
PERSONAL: Lives in Beverly Hills
ACTIVITIES: Boating with family, skiing
