Sverdrup Corporation History
Sales: $673 million
SICs: 8711 Engineering Services; 8712 Architectural Services; 8713 Surveying Services; 8731 Commercial Physical Research; 8733 Noncommercial Physical Research; 8734 Testing Laboratories; 8741 Management Services; 8742 Management Consulting Services; 8744 Facilities Support Services
Sverdrup Corporation is a broad-based engineering firm offering professional services in civil engineering and facilities, technology, and real estate development within the United States and abroad, boasting engineering experience in 65 countries. Founded in 1928, it was the only four-time winner of the American Consulting Engineers Council's Grand Conceptor Award, which honors engineering excellence. During the course of its more than 60 years, the company has engineered major bridges and tunnels; sports arenas; expansions for nine of the 20 largest U.S. airports; automated manufacturing and process plants; light rail and subways; corporate headquarters facilities; and cleanup of Superfund hazardous waste sites. In 1994, out of all U.S. engineering firms, Sverdrup was ranked 16th in engineering and architectural design, 19th in construction management, and 30th in design/build. It was also a leading provider of advanced engineering and technical services to support the operation of aerospace and industrial test centers.
The firm was founded as Sverdrup and Parcel in April 1928 by Leif J. Sverdrup and John Ira Parcel, a distinguished professor at the University of Minnesota. Sverdrup, a student of Parcel's and a Minnesota graduate in 1920, had been making a name for outstanding and thorough work at the Missouri Highway Department. He had become chief bridge engineer there in 1924. In 1927 the department didn't have the money to construct a bridge at Hermann, so construction of a toll bridge was chosen as the alternative. Sverdrup wrote to the Hermann Bridge Company, proposing to be the engineer that designed and supervised the construction of the bridge. He also wrote to Parcel, outlining his plan to start his own firm. He asked Parcel to be his partner.
Parcel had been at Minnesota for a long time and was reluctant to sever his ties completely, but eventually he decided to join the new company, taking an unpaid leave of absence from the university for one year in case things didn't work out. Sverdrup would own 60 percent of the firm, Parcel 40 percent. The firm opened its doors on April 1, 1928, two weeks before the Hermann job was approved.
While at the Missouri Highway Department Sverdrup met future partners D. C. Wolfe and E. R. Grant, and he asked them if they would join the company. Sverdrup subsequently hired design engineer Brice R. Smith from Missouri's leading supplier of bridge components. All would become partners by 1936. Initially the young firm struggled, with no contracts for major jobs lined up after the Hermann bridge, and by early 1929 it faced insolvency. There were lots of good leads, however, and neither Sverdrup nor Parcel wished to let anyone go, for they looked at dependable, well-trained employees as cash in the bank (a point of view the company maintained for many years). Just at the point of crisis, however, the company was selected to design a new bridge over the Missouri River, relocate U.S. Highway 54 at Lake of the Ozarks near the Bagnell Dam, and design the Grand Glaize bridge near the dam.
Given the long-term nature of civil engineering jobs, the stock market crash on October 25, 1929, created no immediate problems for Sverdrup and Parcel; in fact the following year was a successful one for the company. During that year Sverdrup decided that the company's continued success could only be guaranteed by spreading ownership among its employees, and so a policy of employee ownership was established for a limited number of principals. But on the whole the early 1930s were a period of instability for the company, with good years and bad. The depression finally caught up to Sverdrup and Parcel--only one bridge of consequence was contracted in 1931--but that contract associated the firm with a very significant future client: the U.S. Army Corps of Engineers.
Business remained bleak, however, and disaster again loomed when "the little job which saved the company" (as Sverdrup referred to it) came through at the end of 1931. Union Electric offered the company a contract to design a fish hatchery at Lake of the Ozarks (one of the provisions of the agreement with the state that allowed the Bagnell Dam to be constructed).
The company remained in trouble and Sverdrup could no longer support it with personal resources, for he had sold all his stocks and faced an acute shortage of cash. But a loan from an old St. Louis bank, backed by Sverdrup's pledge of his house and life insurance as collateral, made it possible for the firm to survive, and contracts for two more bridges came through. The New Deal's Public Works Administration (PWA), which made loans to states and municipalities for public works, also brought a degree of prosperity. By mid-decade, the firm had received commissions for two bridges from the PWA and increased its contact with the Corps of Engineers, developing several more bridges and picking up a pioneer hydropower project sponsored, but not completed, by the Corps along the Maine coast. In 1937 the company entered the electric transmission field, obtaining an initial commission from the Texas Rural Electrification Administration, and pulled in its first stadium job, for Sportsman's Park in St. Louis (a baseball stadium for the St. Louis Cardinals). "Jack Sverdrup continued to underscore the importance of the smaller jobs," said Franzwa. "He would someday parlay that knowledge of stadia into a number of the most famous sports arenas in the nation."
By the beginning of the 1940s the company had become one of the best bridge firms in the country. It broadened its scope significantly through its work with the Corps of Engineers in the Pacific theater during World War II, becoming one of the nation's most diversified engineering organizations by the mid-1940s. This transformation was carried out in the absence of company president Jack Sverdrup, who had accepted a commission in the Corps of Engineers and ended the war as major general in command of all engineering forces in the southwest Pacific and as adviser to General Douglas MacArthur.
One of the company's dramatic engineering feats during the war was the design and supervision of construction of Canol, a top-secret oil pipeline to Alaska laid across the Arctic wastes ("like a rock for eight months of the year, and a mushy tangle of primeval vegetation and sphagnum for the remainder"). The project's goal was to pump 3,000 barrels of crude oil through the line each day and to keep it flowing at temperatures that reached 70 degrees below zero. Employing 10,629 people at its peak, the project constructed 1,550 miles of pipe, 52 tanks, 14 air strips, and a number of roads and used 262,741 tons of supplies and 2,565 pieces of heavy equipment at a total cost of $133 million. Other Sverdrup wartime feats included the inventive construction of a chain of airfields into the Philippines and the design and construction of a 20-foot, 40,000-horsepower wind tunnel for the U.S. Army Air Corps. Bridge, railroad, and highway contracts constituted much of the company's continuing domestic work.
When the war ended in 1945, the company was well positioned to develop a variety of new roles including air technology research. This came thanks to the successful Sverdrup (who had refused President Harry Truman's request to become Secretary of Defense). The scope of work was so great that the company had to reorganize, and it was incorporated for the first time in 1946.
Recognizing the Germans' significant edge in aviation technology, U.S. officials proposed a new national supersonic facility, and Sverdrup and Parcel was chosen to prepare a national facilities master plan, conduct research and development, and provide architectural and engineering services at the new Arnold Engineering Development Center (AEDC). Sverdrup's responsibilities included the development of engine test facilities, flight test facilities, a missile testing range, rocket engine test cells, and even a chamber with photographic apparatus so sophisticated that a bullet could be photographed in full flight along with the shock pattern of the air it was cleaving.
The company continued its routine domestic work, developing bridges, electrical substations, a cement unloading dock (the first of many projects for the cement manufacturing industry), and a variety of other road and transportation projects. By the late 1940s the company was well situated with long-range postwar jobs and abundant new work both within the United States and overseas. The firm's architectural section was also beginning to develop. One of the most exciting projects approved during this time was the Joint Long-Range Proving Ground at Cape Canaveral, Florida, which was to be the base for the missiles and satellites that would usher in the U.S. space age.
As the 1950s began Congress decided to privatize the AEDC, and Sverdrup and Parcel established a separate subsidiary organization called ARO (Arnold Research Organization) to operate it. ARO's early accomplishments, described as beyond state-of-the-art, included creating an enormous propulsion wind tunnel to test reciprocating engines, turbojets, and ram jets. Within two to three years, the subsidiary was four times the size of its parent corporation.
Sverdrup soon experienced large backlogs, and though it continued its efforts in its traditional market areas it also engaged in new directions, such as construction management. By 1953, however, despite the gargantuan nature of the ARO work and other jobs, growth began to slow. The company established a presence in Washington, developing relationships with federal agencies that might have an interest in quality engineering and architecture. In 1954 and 1955 the federal highway program was funded, and Sverdrup and Parcel got its share of the work. Among the most impressive jobs obtained by the company was the design and construction of bridges and tunnels that would enable vehicles to cross the mouth of the Chesapeake Bay. The company's highway efforts became so extensive that in 1955 they were spun off into a new company called the Sverdrup & Parcel Engineering Company. During this period work overseas continued to develop, albeit more slowly than the company's domestic efforts.
ARO continued to develop special structures for the nation's military, including, in 1957, a wind tunnel in which engines reached the speed needed to escape earth's gravity, as well as the design of a rotating-arm facility that tested the directional stability, maneuverability, and control of high-speed submarines and surface vessels. By 1959 ARO was operating AEDC facilities that had cost $220 million to design and build, and it was conducting much of the testing program for the nation's space program. Sverdrup and Parcel also continued to pick up new jobs that would develop into significant areas of company specialization in the future, such as the rehabilitation of Sportsman's Park.
During the 1960s the company operated energetically in a variety of areas. It continued its work with NASA and the air force and built rocket test stands that tested missiles for all branches of the armed services, including the Mercury systems that carried America's first men into space. In 1962 Sverdrup contracted to produce 27 study, criteria, and planning volumes for a NASA test facility in Mississippi to meet the goal of putting a man on the moon by 1970.
The company's involvement in the federal highway program was reaching its zenith, with perhaps the most impressive project being the Chesapeake crossing, which would construct and connect a 5,740-foot tunnel, another 5,450-foot tunnel, a 3,790-foot bridge, a 457-foot bridge, 8,300 feet of earth causeway, and 64,500 feet of low-level trestle. The total length of the crossing was 17.5 miles, with another five miles of approach roads.
Sverdrup also developed a specialized reputation for its work with breweries and expanded its efforts with sports arenas, completing Busch Stadium in St. Louis in 1966 and completing many others by the end of the 1960s. The company also had time for special projects such as the design of track, supports, and a terminal building for the monorail system at the New York World's Fair and the design of a support system and skeleton for a life-sized replica of a blue whale for the Museum of Natural History in New York. The company considered, but did not develop, other projects including bridges over the Messina Strait from Sicily to Italy and over Long Island Sound and another canal across Panama.
By mid-decade the company was involved in projects in 32 states, the District of Columbia, the Panama Canal Zone, and 15 foreign countries. Nonetheless, Sverdrup found himself concerned that the company lacked midlevel strength and would be unable to fend for itself once the founding generation had passed on or retired. In 1965 Ira Parcel died; D. C. Wolfe and E. R. Grant retired in 1966. Only Sverdrup and Brice Smith were left.
Jack Sverdrup took steps to identify promising young people to lead the company in the future and also came to recognize that the company had developed a broader role with the passage of time--it was no longer a St. Louis firm with national branches but a national company headquartered in St. Louis. As the 1970s began, changes in federal priorities impacted the company. The federal highway program was winding down, and company executives recognized that new skills would be needed if business was to prosper. New efforts were undertaken in environmental engineering (including wastewater treatment), architectural and engineering design, railroads and subways, and geotechnical engineering.
The company also continued its efforts in its traditional areas of expertise (highways, tunnels, and bridges; projects for industry, including breweries; and the space program, including design of the space shuttle launch complex at Vandenberg). The company's international activities also boomed during this period. In 1975 company founder Jack Sverdrup died at the age of 78, raising concerns that the company might not be able to survive his passing. One year later, Brice Smith, the final remaining original partner, also died. In the words of a company official, however, "The company not only did not collapse, it didn't even sag."
Bob West, the new chairman, and Bill Rivers, president and CEO, recognized that with the rapid increase in company business a restructuring was necessary, and so in 1977 the Sverdrup Corporation was formed, composed of five operating companies--Sverdrup & Parcel and Associates, Inc., offering engineering, architectural, and planning services; ARO, Inc., providing facilities operation and high-technology engineering; SPIRE Corporation, for real estate and building development services; SPCM, Inc., providing construction management services; and Sverdrup & Parcel Consultants, Inc., handling most work in the state of New York. The company also installed corporate principals who took charge of the long-range planning and marketing for each basic technical area in which the company was involved, including industrial, buildings and real estate, environmental, facilities operation, transportation, and public works.
The late 1970s and early 1980s brought considerable financial difficulties for Sverdrup, beginning with a conflict with the U.S. Air Force over the ARO contract to manage the AEDC. Beginning in 1978 the Air Force for the first time called for priced proposals on the contract renewal. Although ARO's contract was renewed for three years, in 1980 the Air Force split the AEDC contract into three parts and put all out for bid--and Sverdrup/ARO lost two out of three.
The recession of the early 1980s did not help the company, nor did the entry of the conservative Ronald Reagan administration in Washington, which was devoted to shrinking the federal budget and providing correspondingly less public works spending. Naturally, Jack Sverdrup's death had also resulted in an erosion of the company's relationship with the Corps of Engineers. Overall, company officials recognized they had to improve performance on a number of fronts, including entering areas that had been atypical for consulting engineers and pulling back somewhat from dependence on the public sector.
Thus the company decided to focus more intensely on construction management and design/build efforts, in which the firm not only designed a project but also built it. ARO changed its name to Sverdrup Technology and began a stronger effort to attract private-sector clients by asserting that it could engineer solutions on the frontiers of technology and also sought to regain credibility with the Air Force. By mid-decade the renamed unit had begun to grow.
A focus on traditional sources of revenue also maintained company stability. Sverdrup developed several rapid-transit projects in large eastern cities, new rail facilities for the nation's Northeast corridor, a major construction management project for the San Francisco airport, brewery improvements, wastewater treatment plants, and industrial parks. In 1981 it began work on the Fort McHenry Tunnel in Baltimore. It also engaged in a number of international projects. In 1983 the company received its first Grand Conceptor Award from the American Consulting Engineers Council for its Columbia River Bridge in Oregon. In 1984 it completed work on the Vandenberg space shuttle site.
During the mid-1980s the company again reorganized. In 1984, the company created an additional division--Sverdrup Investments&mdashø create real estate and other developments for the firm. In 1985 Sverdrup restructured, replacing the cluster of companies created in 1977 with regional subgroups that offered the company's full scope of services to clients in smaller geographical areas. Sverdrup Technology remained a separate organization, however. Also in 1985 the company received a second Grand Conceptor Award for the Space Shuttle Complex, and by the end of the year its AEDC contract with the Air Force was extended for five years. (The company won its third Grand Conceptor Award just one year later for the Fort McHenry Tunnel in Baltimore.)
During the late 1980s and early 1990s the company received huge contracts from the public sector, including the State Department, Federal Aviation Administration, U.S. Air Force, and NASA. As the 1990s began Sverdrup also continued its efforts to provide a broad range of engineering services in the United States and abroad, engaging in a variety of innovative bridge, tunnel, dam, environmental technology, and other projects. In 1995 Sverdrup received a NASA award for its design of a simulator for astronaut training for Hubble Telescope repairs (NASA hailed it as a "breakthrough" that had permitted the successful completion of the mission). There were also state-of-the-art private-sector projects. Transportation continued as an important company interest, and a light rail system engineered by Sverdrup--MetroLink in St. Louis--received an unprecedented fourth Grand Conceptor Award from the ACEC in 1995.
Principal Subsidiaries:Sverdrup Technology Inc.; Sverdrup Investments Inc.; Sverdrup Environmental Inc.
- Franzwa, Gregory M., Legacy: The Sverdrup Story, St. Louis: Sverdrup Corporation, 1978.
- ------ Challenge: The Sverdrup Story Continues, St. Louis: Sverdrup Corporation, 1988.
Source: International Directory of Company Histories, Vol. 14. St. James Press, 1996.