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Marriage of ideals

Consultant Maunsell is big in many parts of the world but, following its merger with US group AeCOM, European chief executive Peter Head says 'you ain't seen nothing yet'

Maunsell is no longer the international engineering and project management consultancy it was. But this is no reason for gloom. Quite the reverse.

'We're moving from being an international consultant to being a truly global one, ' says chief executive for Europe Peter Head. 'Maunsell is definitely not what it was, we are going to be bigger and better.'

The Maunsell name will still be seen in such places as Europe, the Middle East, Asia and Australia. In addition the company is breaking into the booming US market in a big way.

The reason for Head's optimism is the firm's merger in April with the giant US consortium AeCOM - an acronym of Architecture, engineering, Construction, Operations and Maintenance.

Maunsell's staff of 3,500 worldwide have joined more than twice that number from consultants working under the AeCOM umbrella, primarily in America, and with expertise in areas as varied as transportation, water and wastewater, aviation, ports and harbours, outsourcing and technology development.

In essence, the benefits of the merger are this. The US market opens up to Maunsell, in particular to its skills in long span bridges, tunnelling and high speed rail, while the Americans gain access to other parts of the world through the Maunsell network.

Together, they have already won work; design studies for elements of the proposed US west coast high speed rail line between San Diego and LA/San Francisco. Maunsell-led AeCOM bids have also gone in for long span bridge and tunnel projects.

'AeCOM has loads of skills and contacts we can exploit and our American colleagues in turn can benefit from our knowledge and client base, ' Head says. 'The merger puts all of us into a new league, able to compete with the likes of Bechtel, Fluor Daniel and Parsons Brinckerhoff.'

Prior to last year, when negotiations with AeCOM opened, Maunsell had been doing well in its traditional markets but the growth curve was flattening. The company felt that it had to break into the world's biggest market, the US, and pondered long and hard on how best to do it.

At the same time, AeCOM was firming up a strategy to turn itself into a global player. During its decade in business constituent firms continued to operate, in the main, within the US. It wanted to get out into the world.

There was a coming together of senior people from Maunsell and AeCOM and a merger was proposed. This took just 12 months to arrange. The 'fit' of Maunsell with AeCOM is an extraordinarily good one, according to Head, not just in terms of commercial interest and complementary expertise, but in business culture and shared values too.

There is a common view of life, he says. 'Soon after we started talking, we were finishing off each other's sentences.'

Both parties favoured a relatively small corporate structure with decision making, management and professional staff particular to clients and their projects. Both were keen on innovation and working with contractors and suppliers.

Achieving high quality and creating best value for clients were high on both agendas. So was recruiting and keeping the best people. Remaining firmly in private hands was also a joint objective.

AeCOM is owned by its employee shareholders. The ownership model is designed for growth, with no dividends paid.

Money is kept in the company and used for expansion, a not uncommon practice in the US.

Everyone has a salary and incentives based on share ownership.

As the company prospers, so the value of the shares grows, Head says. In the year just ended, AeCOM's shares rose 16%.

Maunsell is 'quite properly' represented in the AeCOM group, according to Head. Of the top 200 shareholders, half are from Maunsell. Two Maunsell directors, John Downer and Francis Bong, have been appointed to the AeCOM board.

Maunsell has become the global brand outside the US for all AeCOM work, with the firm's management team around the world managing the business much as before. Operations of AeCOM members outside the US have also been folded into the Maunsell sphere of interest.

Within the US, AeCOM members will retain their names and identities.

Head has been closely involved with devising strategy for the new, expanded AeCOM company. The key, he says, is taking advantage of strong markets. Already, in terms of market share, AeCOM is number one in the US, second in Asia and third globally. Of the five major US markets, the company is number one in California, Texas and Illinois, number two in New York and three in Florida.

It scores highly around the world in building and transportation, according to ratings published by the US construction press, but does less well in environmental sectors. For instance, in wastewater, sewerage and water supply, it lies third, fifth and ninth respectively. To address this relative weakness, water and environmental specialist Metcalf & Eddy has recently been drafted in to AeCOM.

'Our aim is to have strength in each business sector in every region of the world. There is plenty of scope for growth, not least in Europe where we have 600 people and currently constitute a small player in a big market, ' Head says. He points to the fact that AeCOM has 7,500 people working in the US, which is no bigger a marketplace than Europe.

Some AeCOM companies already have extensive knowledge of web based management systems and this will be exploited by the group as a whole. 'These systems allow us to add a new dimension to the 'small is beautiful concept'. We can offer local people to deal with local matters, backed up by a global organisation wtih world based resources of skills and knowledge.'

Design work, for example, can be carried out where it can be done most efficiently and economically. AeCOM will also be able to offer teams to work around the clock, if a client needs it.

AeCOM's strategic plan is a five year one, to be updated every year. 'Already we're putting in place the systems to function electronically and globally. Delivery is a key issue, providing quality and speed. The world's a busy place and continually speeding up, ' Head says.

AeCOM employs around 11,000 people worldwide and the company expects there to be 20,000 on the payroll within the next few years, such is the growing world market for infrastructure and built environment.

There is a shortage of qualified staff generally in Europe, the US and parts of Asia, Head says, but Maunsell is currently having no difficulty in obtaining the right recruits.

'The merger has put a spring in the step of Maunsell people.

It's exciting and the prospects for interesting work in the US and around the world have never been better, ' he says.

Project team

AeCOM is made up of the following companies: Consoer Townsend Envirodyne Engineers DMJM DMJM Aviation Frederic R Harris Holmes & Narver Maunsell McClier Metcalf & Eddy TCB Inc

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