Atlantic Richfield Co.
Energy Production, Gasoline Retailing
1966-1999 (pending acquisition)
The late '70s and early '80s were boom years for Atlantic Richfield Co.
The company was reaping the benefits of its greatest triumph, the opening of the Alaska pipeline, in 1977. And customers were flocking to Arco's low-priced gas stations and buying snacks at its new AM/PM mini-markets.
It was the West's No.1 gasoline retailer in 1984 and considered among the more innovative energy companies, with strong earnings through the late '80s.
But it was during those years that the groundwork was unwittingly laid for Arco's eventual demise. By the end of this year, the acquisition of Arco by BP Amoco PLC is expected to be finalized, and Los Angeles will lose yet another high-profile corporate headquarters and hundreds of jobs connected with it.
It also marks the departure of a model corporate citizen that contributed millions to local charities.
The disappearance of Arco hits downtown Los Angeles especially hard, throwing 250,000 square feet of office space into the area's already struggling office market.
"For the longest time, they were a trend-setter in terms of corporate involvement in the community," said Jack Kyser, chief economist of the Los Angeles Economic Development Corp. "The Arco Foundation was heavily involved in projects."
One of Arco's the most noteworthy contributions involved raising money and rallying the community after fire damaged the main library downtown.
The roots of Arco's problems go back to its diversification into mining with its acquisition in the late 1970s of Anaconda Co., a large copper and aluminum manufacturer. The move was made during the empire-building days of Arco's visionary former Chairman Robert O. Anderson.
But it proved to be a misstep. There turned out to be no synergy between the two companies, and Arco officials later said there were environmental problems associated with Anaconda's mining sites.
Arco's touted Alaskan operations also caused problems, making management somewhat complacent about developing oil and gas reserves elsewhere. The company became more dependent on domestic sources of oil than its competitors, even though those resources were more expensive to develop than most foreign reserves.
When Arco finally tried to make a move overseas in the late 1980s, it was too late and too unfocused. Analysts said the situation was compounded because Arco paid too much in its $2.5 billion acquisition last year of Union Texas Petroleum Holding Inc.
In the wake of Arco's acquisition by BP, analysts and industry pros debated whether management was aggressive enough after Anderson retired in 1986. In today's world, it seems only the largest oil companies can survive.
"Arco could have survived as an independent," Arco Chairman Mike Bowlin said after the BP deal was announced. "But my assessment was that a combination with BP would make a stronger entity one of the greatest oil companies in the world."
Looking ahead, BP will retain a presence in L.A., but it's sure to be nowhere near as significant as Arco.
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