Halliburton, in Iraq for the Long Haul, Recruits Employees Eager for Work
By SIMON ROMERO

Is Iraq the right destination for a 48-year-old with eight grandchildren? Cynthia Johnson, the grandmother in question, laughed at the query as she tried on an airtight yellow jumpsuit that might protect her from a chemical weapons attack.

Ms. Johnson and hundreds of others hired by the Halliburton Company packed into what used to be a J. C. Penney store at the Greenspoint Mall here this week to prepare to go to Iraq. She said her job there, serving food to American troops, was more promising than her previous occupation, cooking on an offshore oil platform in the Gulf of Mexico.

"The money's better and there's the feeling I'm doing something useful," said Ms. Johnson, a native of Deridder, La. "My daughters and grandchildren worry for me, but a job like this doesn't come up every day."

Other contractors, including General Electric and Siemens, have suspended their work in Iraq after an escalation of violence in the last month that singles out civilians. Halliburton, meanwhile, the most prominent company there with government contracts valued at $8 billion, appears to be gritting its teeth in anticipation of a long slog ahead.

Its frenzied efforts to prepare a new round of American workers to go to Iraq and the increasingly grim assessment of the risks there stand in contrast with the view that the contracts initially awarded to Halliburton last year, some without competitive bidding, would be a boon for the company.

Still, David J. Lesar, the company's chief executive, said Halliburton had no intention of slowing down in Iraq or leaving. "We're absolutely not going to pull out of there," Mr. Lesar said in an interview.

To be sure, Halliburton is the company Vice President Dick Cheney once ran, lifting it to prominence from its once obscure status as a concern known mostly for oilfield services. The company fought hard to secure the contracts that were once viewed as plum rewards but now have evolved into headaches and at times, a public relations nightmare. An early exit would seem untenable especially in light of the controversy surrounding Mr. Cheney's ties to the company, questions over how the company won some contracts and its overbilling for some services in Iraq.

None of this seems to slow the hundreds of people who stream into Houston each week from around the United States to vie for blue-collar jobs in Iraq. Most are lured by tax-free salaries of about $80,000 and sometimes more for overtime and unusually hazardous duty.

Many of those going through the two-week screening process were hesitant to give their names until passing background checks and absorbing the description of the risks associated with working in Iraq, which include graphic photos of wounded employees returning home. Some had not notified their bosses in other jobs or even their spouses that they might go to Iraq, fearful of doing so until absolutely sure of going.

"I guess I'm lucky not to have those issues since I'm unmarried, unemployed and ready for some steady work," said Michael Curry, 40, of Houston. Mr. Curry said he lost his job maintaining aircraft systems after air travel plummeted following the terrorist attacks in September 2001, so he was eager to be offered a position repairing air-conditioning units in Iraq by Halliburton. "This'll be my first time overseas, but I just want a job."

A grim acknowledgement that opportunities could outweigh risks pervades Halliburton's executive suite as well these days. Mr. Lesar's description of the mood at the company's spartan headquarters here is "solemn and serious." He should know, after returning last week from Kuwait to calm nerves among the company's truck drivers after three drivers were killed and one kidnapped in an ambush of their fuel convoy in nearby Iraq.

Since the start of the war, Halliburton has lost 33 employees and contractors in attacks or accidents in that country, more than the military casualties of any coalition member except the United States and Britain. Scrutinized by critics claiming it is profiteering from war, Halliburton has reluctantly admitted to overcharging the Pentagon for services like food preparation and gasoline delivery for American troops.

Adding to the pressure on the company, investors are groaning about measly profit margins the company has reported generated by its contracts in Iraq. With other contractors suspending their Iraqi operations in recent days, some are questioning why Halliburton does not limit its exposure to Iraq or at least consider selling the subsidiary, Kellogg Brown & Root, handling its work there.

"From a business mix standpoint, the Iraq work has little or no fit with the rest of the organization," said Gary Russell, an analyst in Denver with Stifel Nicolaus, a brokerage firm, who looks favorably on the company's other operations. Mr. Russell noted the "razor thin" profit margins of the Iraq contracts, which range from a base level of 1 percent to 2 percent and slightly higher depending on the company's performance; margins climb to 10 percent for other jobs like building liquefied natural gas terminals.

Could Halliburton be ruing the day it entered Iraq? Not quite, as senior executives prepare to discuss the company's financial results with investors next Wednesday. Part of the appeal of the Iraq contracts lies in serving a loyal customer, the United States government, that pays its bills on time. "I think our shareholders understand why we're in this business," Mr. Lesar said, citing the company's work for American military operations around the world since World War II.

Still, Mr. Lesar, who has run Halliburton since his predecessor, Mr. Cheney, stepped down to campaign for vice president in 2000, did not rule out selling or spinning off Kellogg Brown & Root. But he pointed out the unit was currently in bankruptcy protection as part of an effort to resolve asbestos claims, a process that could take months to conclude before a decision can be made. "Besides, we still have a mission to do," Mr. Lesar said.

In the meantime, markets are rewarding Halliburton as it advances in other areas like oilfield services and the resolution of asbestos lawsuits and a costly contract dispute with Brazil's national oil company. Halliburton's stock has climbed nearly 50 percent in the last year, closing at $30.85 on Friday, fueled largely by optimism about its non-Iraq operations, which account for nearly 60 percent of the company's sales.

"Halliburton's benefited by the perception that investors don't think the sky is falling anymore," said James H. Stone, an analyst at UBS in New York. "But their work in Iraq has clearly been a retardant."

As Mr. Lesar and other executives seek a balance between operations in Iraq and other activities, the company proceeded to prepare truck drivers, electricians, plumbers, cooks and others, to join about 24,000 other employees and contractors Halliburton has in Iraq, an operation that has swelled to account for a quarter of its overall work force. No one gave any indication that hiring would slow down anytime soon.

Halliburton's training center remained the most frenzied area of the Greenspoint Mall this week, easily outranking in popularity the retailers and recruiting offices for the armed forces located down nearby shiny corridors. "I found out about this opportunity while on the road in South Carolina," said a Halliburton recruit from Marion, Ohio, who offered only his first name, Roe, and was hired as a truck driver.

"I'm just telling my sons I'm going there to help the Army," he said.

From: http://www.nytimes.com/2004/04/24/business
/worldbusiness/24halliburton.html?ex=1083384000&en=7306c353a03b2db4&ei=5062