EG&G Incorporated

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EG&G Incorporated

45 William Street
Wellesley, Massachusetts 02181
U.S.A.
(617) 237-5100
Fax: (617) 431-4255

Public Company
Incorporated: 1947 as Edgerton, Germehausen & Grier, Inc.
Employees: 37,000
Sales: $2.69 billion
Stock Exchanges: New York
SICs: 3823 Process Control Instruments; 8742 Management Consulting Services

EG&G Incorporated is an organization of scientists, engineers, and management specialists that has assumed the difficult responsibility of ensuring that nuclear weapons are maintained precisely as they are intended. Its job is to prevent accidents, see that detonations are carried out correctly, and monitor the performance of nuclear weapons and other governments’ compliance with test ban treaties. While nuclear weapons projects comprise a major portion of EG&G’s business, the company is also a world leader in environmental, oceanographic, and electronics disciplines. EG&G engineers major water and land reclamation projects, studies atmospheric changes, and builds devices as varied as amplifiers, artificial limbs, and pollution testing equipment.

EG&G was established by three nuclear engineers from the Massachusetts Institute of Technology shortly after the end of World War II. These engineers, Harold E. Edgerton, Kenneth J. Germehausen, and Herbert E. Grier, had been involved in the American effort to construct an atomic bomb during the war. So valued were their contributions that after the war the government asked them to establish a company to manage further development of the country’s nuclear weapons. The three established a small partnership called Edgerton, Germehausen & Grier on November 13, 1947, and quickly began collecting contracts to advise the government on nuclear tests in Nevada and on South Pacific islands.

One of the first employees of the new company was Bernard J. O’Keefe, another MIT graduate who had worked for Dr. Grier during the war. O’Keefe served with the 21st Bomber Command in the Mariana Islands during the war, and is said to have personally wired the bomb that later destroyed the Japanese city of Nagasaki. O’Keefe was sent to Japan after its surrender to investigate that country’s progress with nuclear technology and recruit promising Japanese scientists for other atomic projects. A specialist in the design and development of electronic instrumentation and controls, O’Keefe quickly gained an important position in the growing firm.

Inconvenienced by the length of the company’s name, employees soon began to rely on the simple acronym EG&G, which later became its official name. In order to maintain close contact with MIT and its excellent nuclear and electronic engineering programs, EG&G set up its headquarters in Bedford, Massachusetts, in Northwest suburban Boston.

EG&G was involved in America’s effort to build a more powerful nuclear weapon, the hydrogen bomb. That year, Grier and O’Keefe were present at a Nevada test site to personally witness an H-bomb detonation. After the weapon failed to explode, Grier and O’Keefe flipped a coin to determine who should scale the 300-foot test tower and disarm the bomb. Although O’Keefe lost, he won the special distinction of being the first man to disarm a live H-bomb.

O’Keefe had a second brush with disaster in 1958 when he witnessed an H-bomb detonation at Bikini Atoll in the South Pacific. There, shifting winds in the upper atmosphere caused a radioactive cloud of fallout to shower his bunker.

These experiences taught O’Keefe the awesome destructive power of nuclear weaponry and the dangers of radioactive fallout. As an engineer and manager he was bound to perform his company’s contracts, but grew personally opposed to the use of nuclear weapons. This sharpened his sense of responsibility toward the emerging form of warfare, a quality that was not lost upon the government’s Atomic Energy Commission.

As a result of EG&G’s experience with detonations, and O’Keefe’s concern for nuclear non-proliferation, the company became increasingly involved in distant monitoring projects, particularly as they related to Soviet nuclear tests. By observing changes in the atmosphere, EG&G was able to determine the incidence and strength of Soviet tests and provide important data on the progress of Moscow’s weapons program. In the process, EG&G gained highly specialized knowledge in environmental sciences. These skills had numerous applications outside the weapons industry, in such areas as pollution control and environmental management.

As early as 1960, O’Keefe and the company’s three founders had considered establishing a new environmental analysis business, which would lessen EG&G’s dependence on low-margin government contracts and permit the company to enter new commercial markets. But at the time, neither public concern nor legislation placed a high value on such endeavors.

Three years later, the United States, the Soviet Union, and the United Kingdom signed a protocol that banned nuclear tests in the atmosphere, above ground, in the water, or in outer space. With this document, EG&G appeared to lose a major portion of its business. However, the protocol did not prevent underground tests, which were far more complicated. EG&G remained the only company with the proper supervisory credentials to manage this type of nuclear testing. The company was forced to develop geologic analytical capabilities and become a tunneling and mining operation as well.

Furthermore, the government had also laid plans to establish a kind of oceanographic equivalent to NASA. Eager to take a place in this organization, EG&G invested heavily in oceanographic research. While the underwater NASA never materialized, the efforts enabled O’Keefe to further cultivate new commercial markets for EG&G, including excavation and water transmission.

During this time the company’s three founders moved further into retirement, taking ceremonial “executive chairman emeritus” positions. As a result, O’Keefe became the de facto head of the company. EG&G also pursued a strong acquisition campaign, taking over 13 companies between 1964 and 1967.

By 1967 a strong environmental movement began to form in the United States. With legislation still years away, EG&G began laying plans to play an important role in the environmental projects it was sure would result.

EG&G was divided into four main operating divisions. The smallest of these was EG&G International, which was primarily concerned with oceanography. The standard products and equipment division, which grew fastest during the 1960s, produced a variety of machines and electronic devices. EG&G’s largest segment remained its nuclear detonation and monitoring business. But perhaps the most innovative and interesting division was the nuclear technology group, which was involved in the design of nuclear rocket engines for interplanetary propulsion.

Other noncombat nuclear projects included “nuclear landscaping” projects, in which controlled nuclear explosions could carve out harbors, canals, and other types of passages. EG&G’s CER Geonuclear unit participated in tests wherein nuclear explosions were used to fracture layers of rock so that otherwise inaccessible gas and oil reserves could be exploited. These public works projects, while feasible, failed to gain public support. In fact, opposition to nuclear technology in general increased as people grew wary of the safety of nuclear energy. In addition, nuclear excavation would have required an unlikely waiver of the 1963 Nuclear Test Ban Treaty.

With the evaporation of good commercial prospects for its nuclear engineering expertise, EG&G was forced to rely again on military projects. Despite efforts to step up mechanical and electrical engineering work (partly by acquiring a spate of small research companies), EG&G mustered only four percent annual growth during the late 1960s.

Interest in nuclear power increased dramatically during the 1973-1974 Arab oil embargo, in which Americans sought to reduce their costly dependence on imported oil. Realizing that the world’s oil exporting nations stood to permanently lose their largest customer, the United States, King Faisal of Saudi Arabia promptly called for an end to the embargo. But while Americans regained access to Arab oil, the end of the embargo was disastrous for the American nuclear energy industry—and for EG&G. The end of the embargo removed one of the great justifications for nuclear power, and gave anti-nuclear activists time to properly organize legislative battles.

While EG&G was being locked out of yet another promising commercial application of its technologies, it attempted projects in other fields. Some years earlier, in an effort to develop a new process for purifying nuclear isotopes, EG&G developed a flash tube that was ideal for photocopiers. However, by the time an application could be developed, Xerox had already saturated the market with conventional designs. In another ill-timed move, the company bet that environmental laws would cause demand for the unconventional Wankel engine to rise. EG&G purchased a Texas automobile testing agency in hopes of winning large emission monitoring contracts. However, the oil embargo destroyed the market for the clean, but gas-eating Wankel, and automobile environmental legislation was abandoned.

During this time, with the encouragement of the government, EG&G established a minority-dominated subsidiary, EG&G Roxbury, in a neighborhood of Boston, hoping to help strengthen the economic structure of the community. The project failed, however, when bureaucrats failed to properly support the program, causing only a few sales to be made from the subsidiary. After a few years of disastrous results, the entire program was wound up.

EG&G’s environmental division, which languished after the oil embargo, finally began to take off in 1976. Rather than concentrating on environmental compliance, the group evolved into a comprehensive resource efficiency operation that could provide complete oceanographic, atmospheric, and geophysical analysis. By conserving resources, operations could more easily achieve pollution and waste reduction targets.

Another area of success was in port development. Although unable to blast out custom designed harbors with nuclear devices, EG&G was a world leader in oceanographic studies and channel engineering. The company designed numerous tanker ports in the Persian Gulf and bauxite harbors in South America.

In 1979, President Jimmy Carter asked Bernard O’Keefe to serve as chairperson of the government’s synthetic fuels corporation. Having already been asked to serve on a transition team for then-presidential candidate Ronald Reagan, however, O’Keefe refused Carter’s offer.

With the election of Reagan in 1980, the United States took a sudden turn toward military armament programs. EG&G found a sudden resurgence in its flagging nuclear testing business and was tapped to develop a number of new nuclear weapons systems, including the MX missile and the Strategic Defense Initiative.

A self-described “card carrying member of the military-industrial complex,” Bernard O’Keefe wrote in his book Nuclear Hostages that the United States and the Soviet Union were locked in an arms race that neither of them could control. Ironically, EG&G remained deeply involved in a number of Reagan administration projects O’Keefe opposed, including the MX, the neutron bomb, and stationing of nuclear missiles in Europe. Nevertheless, EG&G’s pretax operating profit doubled from the new business.

EG&G also became involved in the space shuttle program, checking the spacecraft’s electrical components, loading its fuel, and managing the Cape Canaveral space center during shuttle missions. EG&G’s site management abilities won it a position with the Department of Energy’s elite Nuclear Emergency Search Team which investigates nuclear extortion threats. The company also won a contract to manage the government’s troubled Rocky Flats installation outside Denver. This facility, which manufactures nuclear weapon triggers, was widely criticized for mismanagement under Rockwell International.

O’Keefe retired from EG&G during this period of strong growth, and was succeeded by John M. Kucharski. Under President George Bush, and with the subsequent collapse of the Soviet military threat, the number of EG&G nuclear test projects decreased significantly. Pressure increased for EG&G to quickly cultivate profitable new commercial ventures to offset the loss of revenue from military contracts.

Because this process had been an ongoing concern of EG&G for nearly 30 years, the company had considerably greater success than other companies that faced similar circumstances. The conversion to commercial projects went smoothly, though much of the urgency was tempered by the growth of site management contracts and rising demand for nuclear non-proliferation monitoring.

Principal Subsidiaries

EG&G Alutech, Inc.; EG&G Astrophysics Research Corp.; EG&G (Australia) Pty. Ltd.; EG&G Automotive Research, Inc.; EG&G Birtcher, Inc.; EG&G Benelux B.V. (Netherlands); EG&G Canada Ltd.; EG&G Chandler Engineering Company; EG&G Defense Materials, Inc.; EG&G Dynatrend, Inc.; EG&G E.G. (UK); EG&G Energy Measurements, Inc.; EG&G Exporters Ltd. (U.S. Virgin Islands); EG&G Florida, Inc.; EG&G Flow Technology, Inc.; EG&G Frequency Products, Inc.; EG&G Gamma Scientific, Inc.; EG&G GmbH. (Germany); EG&G Holdings, Inc.; EG&G Hydro, Inc.; EG&G Idaho, Inc.; EG&G Instruments GmbH. (Germany); EG&G Instruments, Inc.; EG&G International Marine Services, Ltd. (Hong Kong); EG&G InterTech, Inc.; EG&G Investments, Inc.; EG&G Ireland, Ltd. (Cayman Islands); EG&G Japan, Inc. (U.S.A.); EG&G Judson Infared, Inc.; EG&G KT Aerofab, Inc.; EG&G Ltd. (UK); EG&G Management Systems, Inc.; EG&G Missouri Metals Shaping Company, Inc.; EG&G Mound Applied Technologies, Inc.; EG&G Power Systems, Inc.; EG&G Pressure Science, Inc.; EG&G Rocky Flats, Inc.; EG&G S.A. (France); EG&G Scanray International, Inc.; EG&G Sealol, Inc.; EG&G Sealol Eagle, Inc. (51%); EG&G Sealol (Sealol Egypt); EG&G SpA (Italy); EG&G Special Projects, Inc.; EG&G Structural Kinmatics, Inc.; EG&G Ventures, Inc.; EG&G Washington Analytical Services Center, Inc.; Antarctic Support Associates (Columbia); Asmuss-Sealol (NZ) Limited (New Zealand; 25%); B.A.I. VmbH. (Austria); B.A.I. SARL (France; 71%); Benelux Analytical Instruments S.A. (Belgium; 92.3%); Berthold A.G. (Switzerland); Berthold Analytical Instruments, Inc.; Berthold France S.A. (99.2%); Berthold GmbH. (Germany); Berthold Instruments U.K. Ltd. (55.3%); Berthold Munchen GmbH. (Germany; 60%); Berthold Systems, Inc. (30%); Berthold U.K. Ltd. (80%); Betron Scientific B.V. (Netherlands; 25%); Crosby Drive Investments, Inc.; Dextra Medical, Inc. (19.5%); Dilor S.A. (France; 20%); Eagle EG&G Aerospace Co., Ltd. (Japan; 49%); EC III, Inc. (Mexico; 49%); Frank Hill Assoc., Inc.; Geometries, Inc.; NOK EG&G Optoelectronics Corp. (Japan; 49%); Labserco Nuclear, Inc. (15%); Laboratorium Prof. Dr. Rudolf Berthold oHG. (Germany; 96.2%); Reticon Corp.; Reynolds Electrical & Engineering, Inc.; Rotron, Inc.; Safex Control B.V. (Netherlands; 10%); Sealol Hindustan Ltd. (India; 20%); Sealol Kuwait KSC (49%); Sealol S.A. (Venezuela); Seiko EG&G Co., Ltd. (Japan; 49%); Societe Civile Immobiliere (France; 82.5%); Vactec, Inc.; Wakefield Engineering, Inc.; Wellesley B.V. (Netherlands); Westpark, Inc.; Wickford N.V. (Netherlands Antilles); Winchester, Inc.; Worster Ltd. (Cayman Islands); Wright Components, Inc.