If there is a style that characterizes Teck’s management, it is one of not bei ng hamstrung by convention. A physicist guards the books, a chartered accountant handles marketing, and mining engineers juggle tricky Japanese coal negotiations. This multi-talent approach has worked to Teck’s advantage. “We haven’t had a large number of people in the senior level of the company and, as a result, we have all worked at everything,” says 18-year Teck veteran Robert Hallbauer, former Teck senior vice-president, now president of Cominco.
The spin-off benefit has been a refined level of communication between executives, and this has mellowed over the years into a tightly- knit, informal working team. They talk. Gone is the protect-your-department attitude often associated with large companies. “When one of us hears of a discovery, has an idea or sees that xyz company might be a good acquisition, we make a point of talking about it — right now,” says Hallbauer.
It is a major factor in Teck’s race from humble digs to major leagues at a pace unrivaled by any Canadian mining company. To those looking in, Teck has been branded aggressive — to the point that the father-son team earned the name “the Evil Keevils.” But this contrasts with the relaxed, informal atmosphere among its key personnel.
“I don’t think I’ve ever been to a formal meeting here,” says John May, president of Teck Exploration, adding that even Norman Keevil Sr and Jr keep an open-door policy to senior managers. By the same token, senior executives can be approached by department heads.
Teck’s quick ability to scrum management and move like a corporate swat team has left larger, cumbersome firms typing inter-departmental memos while Teck scoops up the prize. “You can’t predict opportunity” says Keevil Jr who does believe, though, that a company can be prepared for it. Opportunity, rather than future take-overs, is defined as the fuel that will drive the Teck machine in the future. “If another great deal such as Hemlo comes up, we will take advantage of the opportunity.”
Much of Teck’s management embraces the same philosophy on opportunity — almost verbatim. There’s good reason; the majority have grown with Teck and know exactly what a Keevil deal is.
May is one such individual. As University of Toronto students, he and Keevil Jr both worked summers at the Temagami mine site prior to May’s 1959 graduation when he received his B.Sc. in applied geology. He left Teck to become involved in oil and base and precious metal exploration with a number of companies. In 1979 Keevil Jr convinced him to re-join Teck as president of exploration. It’s a move he hasn’t regretted. “I can’t imagine a better company to grow with than Teck,” he says, adding that Teck’s streak of discoveries and expanding rate of growth has been exciting.
Teck’s exploration style has been one of finding potential in what others have ignored; it extends beyond simple luck. “We create our opportunities,” says May.
Today the deals often come to Teck’s doorstep, thanks to a relationship with juniors that Teck has fostered over the years. Teck was one of the first companies to use market funds raised by juniors, during the period when large companies had few profits, for farm-in agreements. Junior companies still rate Teck as one of the best major companies with which to deal both on the terms of an agreement and on price. Fostering this relationship with juniors is something which May enjoys.
“We don’t have many — if any — hard and fast rules and can look at almost any kind of deal,” May says. “I think they like our entrepreneurial spirit. It stems from Keevil Jr and Sr and exists throughout the whole organization.”
May notes another trend: because Teck is lean on management, communication between departments has increased right down to the employee level as projects have moved from exploration to reality. “Exploration can talk to finance, mining and metallurgy. It makes everyone more aware. We can generally deal with all the problems that arise.”
Nakusp, B.C.-born Hallbauer is another Keevil Jr recruit. The two first met in 1962 at Placer Development’s British Columbia-based Craigmont mine. Hallbauer, a mining engineer who graduated from the University of B.C. in 1954, recalls: “I was the mine manager and he was working as a geologist doing research on a Ph.D.” (Keevil Jr earned a B.A.Sc. in applied geology from the University of Toronto and a Ph.D. in mineral technology from the University of California at Berkeley.)
Hallbauer had a reputation as a top- notch mine manager with a sharp eye for the bottom line. Craigmont was B.C.’s first major open pit operation and Hallbauer is noted for first bringing in the electric pit shovels and making design changes to rotary drill rig masts (this enabled open-pit benches to be drilled off in one pass). As one Teck executive says of him: “He can cut through all the fuzzy stuff and get to the heart of a problem.”
When Teck embarked on an ambitious expansion program in the late 1960s, a priority was to beef up its operating team. “He was the first person I thought of,” says Keevil Jr. Hallbauer arrived in 1968 to become vice-president of mining. Since then he has been at the helm of every major new mine venture in which Teck has been involved. These include: Afton, Bullmoose, Highmont, Niobec, a Yukon placer gold mine, Hemlo and Newfoundland Zinc. His contributions to the mining industry have earned him a 1984 Edgar A. Scholz Medal.
His greatest achievement is the smooth completion of Teck’s northeastern British Columbia coal operation called Bullmoose, a mine that took 12 years to bring together. “It was a difficult thing when you consider all the contracts that had to be negotiated with the customer, rail companies and the province,” says vice-president of marketing Keith Steeves, a chartered accountant who joined Teck in 1981. In the negotiations, Hallbauer was assisted by Richard Drozd, vice-president coal operations, and David Thompson, chief financial officer. Says Thompson of Hallbauer’s negotiating style: “He’s a good businessman. He understands the other person’s position and how to handle it, and he understands the bottom line.”
Bullmoose didn’t have the start-up or operating problems that have troubled Denison Mines’ Quintette coal mining operation in the same area. “A lot of the responsibility for that has to go to Hallbauer,” says Steeves, also giving credit to such key people as Lee Bilheimer and Mike Lipkewich.
Hallbauer, in turn, recruited Drozd, a mining engineer who graduated from the University of Toronto in 1958 and worked for 10 years in the mining industry before forming a Canadian arm of a Tucson, Ariz.-based consulting firm. Hallbauer convinced him to join Teck in 1969. “We were working on Highmont and he was the first to work in British Columbia for us,” recalls Hallbauer. Since then, they have teamed up on a number of Teck developments. “He’s versatile,” says Hallbauer describing Drozd’s experience which over the years has included engineering, consulting, operations and negotiations.
Drozd, who now handles ongoing negotiations with Japanese buyers, finds Teck just as versatile. “There are no hard and fast boundaries in the various departments. There is always an open atmosphere. It may not be unique to Teck, but the other companies don’t practise it as much.”
Steeves agrees: “In the senior level of the company, we are not confined to our management areas. If I see an opportunity, I can trace that through and get help from the other departments.”
But it is the Keevil father-and-son team that makes it effective. They rarely disagree on company direction, and decisions are a consensus of opinion s among the key executives. The Keevils look for new ideas and expect their employees to do likewise, they delegate authority, and they are not known for leaving proposals collecting dust on an obscure desk corner. Says Steeves: “Norman (Keevil Jr) is very aggressive, very quick to do things. That’s why the company works.”
Steeves himself is an example of Teck’s growth — and an ironic twist to the Cominco story. Steeves, a worker at Bethlehem Copper for 16 years, gave up his finance vice-presidency when Cominco, formerly a partial owner, took over in 1981. A chartered accountant by profession, Steeves was partly responsible for marketing at Bethlehem. A growing Teck had been splitting its marketing duties among several employees. Steeves arrived to become vice-president of marketing only a year after Thompson had arrived as Teck’s new vice-president of finance.
Steeves’ first challenge was to create a marketing department. “Teck had more products than most companies,” he says. Gold, silver, copper (blister and concentrate), molybdenum, coal, niobium, and zinc constitute the bulk of the company’s products. “They are all unique and their markets often have different cycles,” he adds. “The most unusual is coal, which is quite different from the metal markets.”
Steeves sees the department’s contributions as establishing stable, long- term relationships with buyers and potential buyers. Also, the creation of the department has freed up people such as Hallbauer and Drozd, who previously handled marketing. No Teck executive handles only one job, so Steeves is also in charge of government relations.
An asset has been Steeves’ strong financial background — a characteristic of most of Teck’s executive officers. As Hallbauer neatly points out: “Engineers are number-crunchers, too.”
The unchallenged “number-cruncher” is financial wizard Thompson, a London School of Economics graduate who worked for a mining company in South Africa. One day in 1978 he happened to be sitting across the negotiating table from Keevil Jr (Thompson’s firm was bargaining, albeit unsuccessfully, against Metallgesellschaft for a block of Teck.) Keevil Jr made a mental note of Thompson’s negotiating skills. Several years later he called Johannesburg from Toronto looking for Thompson, only to be told the British-born economist was staying in a hotel two blocks away.
Thompson met Keevil for dinner, accepted an offer and arrived in Vancouver in May, 1980. Prior to his firm’s unsuccessful bid to buy a block of Teck, Thompson had studied the company over 1976-77. “They were a bold company and Afton (which was under development) was a bold stroke,” says Thompson, adding that management “had a fresh approach” and the ability to “get around problems.” But the element that attracted Thompson the most was Afton’s tremendous corporate value.
“It looked like Afton would have a good cash flow and you could see how a company could be be built. You could see the potential.”
One of Thompson’s first moves was cost-cutting as Teck’s long-term debt peaked that year and interest rates also hit a new Canadian high. He did the same thing in South Africa where the political upheaval had fuelled inflation, causing debt-heavy companies to falter. Teck also had an ambitious development program projected. “I didn’t see how we would make it carrying that much debt.”
The latest Thompson coup has been the Rubik’s Cube-like assembly of the Cominco take-over. (detailed on page **).
He and Norman Keevil Jr masterminded the complicated plan that involved cutting back the purchase from the 53% of Cominco held by cp Enterprises to a manageable 31%, bringing in mim of Australia and Metallgesellschaft of West Germany as partners. The plan also involved helping to place the remain ing Cominco shares in strong hands in the market place.
The final step was a small Teck share issue, primarily in Europe, which raised funds that could be combined with cash on hand and save Teck from incurring bank debt. As Thompson says: “We tried to come up with a plan which accommodated both Norman’s interest in the opportunity and the assets presented with my interest in having our balance sheet just as strong after the transaction as before.”
Thompson, like other Teck executives, is constantly involved in discussions on proposals. He’s in daily contact with Keevil Jr whom he describes as “more involved in the detail” of running Teck whereas Keevil Sr is concerned with the direction of the company and “assumes the numbers are right or we wouldn’t be doing it.
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