Eric Newell – On Changing Industry Perspectives
By Dawn Booth, Your McMurray Magazine
In 1986, the world focus was on the international price war with crude oil after Saudi Arabia turned up its nation’s production. As a result, it created a plummet in oil prices across the globe.
Meanwhile, in Canada, hundreds of workers in the Fort McMurray oil sands were troubled with uncertainty on what the free-falling impact would make on the suddenly vulnerable energy sector. The atmosphere was bleak from the bust but as Industry Icon Eric Newell explained, Syncrude employees were eagerly hopeful.
“I remember going up onto the draglines and talking to a bunch of the employees. I joked and said: ‘I feel like I’ve been just through a management meeting.’ The employees were so forthcoming on talking, and they really understood the business,” the former CEO of Syncrude Canada shared on his first company introduction on June 22, 1986.
Newell, 76, was 41 years old at the time and working as a division manager for Imperial Oil in Toronto, Ontario. He was transferring over on loan from the oil company to become Syncrude’s vice president of finance and administration.
Before his Imperial departure, Newell said his last official assignment was re-designing Esso Petroleum Canada from the ground up. It was here where he learned to find logical solutions for creating better production by implementing an emphasis on strong employment standards, something he has made a mission to stand by throughout the decades of his well-respected career in the oil and gas industry.
“I came out to Syncrude, and that was a total surprise, but the world had changed,” he said. “I had risen to division manager at Imperial and went back to Toronto from Vancouver. President Gord Thomson pulled me and a division manager of the marketing department, into his office and said, ‘I want you to go away and start from a blank sheet of paper, right from values on up, and redesign our Company, Esso Petroleum Canada.’ It was a phenomenal assignment,” he recalled.
“We knew that such a large scale organization redesign would lead to massive changes to refining supply and marketing. In the process, I designed out my own job. It was this task, at Imperial Oil, where we worked so hard to avoid hurting people unnecessarily that I developed very strong feelings against larger organizations that quickly resort to massive employee layoffs to resolve economic issues. At Syncrude, we also had to downsize the workforce from over 4,700 employees to less than 3,400. We did all sorts of weird and wonderful things and managed this without laying off anyone.”
Three years later, on August 1, 1989, Newell would become the CEO of Syncrude and remain in the position for 14 years with nine spent as Chairman. During his time, the company surpassed many historical milestones, including the billion-barrel production benchmark and embarked on an ambitious multi-billion dollar expansion program, which made him a key player in the Western Canadian economy.
In the mid-’90s, he was President of the Alberta Chamber of Resources and spearheaded the creation of the National Oil Sands Task Force, which developed a comprehensive new energy vision for Canada.
His long list of accomplishments and achievements is still visible today as Newell was named the 2003 Energy Person of the Year by the Energy Council of Canada and was inducted into the Canadian Petroleum Hall of Fame in 2010.
Two years following, he was recognized by the Canadian Council for Aboriginal Relations and received the Award for Excellence in Aboriginal Relations.
Recently, he received double honours: Distinguished Friend of Education award from the Council for Advancement and Support of Education and the 2014 Friend of Education award from the Canadian Council for the Advancement of Education.
Setting Up the Apprentice Shift
To Newell, the initial decision to move across Canada into a small Northern Alberta community came with questionable doubts because it was going to be his fifteenth city in 20 years, and he and wife Kathy, had three young children (Brian, 13, Colleen 10 and Erin, 8).
“When I heard about the job, my first phone call was not to my wife. It was to my friend John Lynn who had been (Syncrude) CEO and was now running the Sarnia complex for Imperial Oil,” he laughed. “So, I called John and said, ‘John, I have three young kids. What’s the schooling like?’ That was the first thing that hit me, my kids and their schooling. John said it was the best education in Alberta, and he gave me the name of both superintendents, Jerry Heck for the Catholic school division and Bob Prather for the public school system. He said, ‘The first thing you do when you get out to Fort McMurray is to go talk to those guys, and your concerns will be long gone.’”
Little did Newell know, he would not only pursue the best for his children’s education but he would develop an innovative strategy to intertwine classrooms with Industry to build career opportunity growth throughout Alberta.
The first initiative was the development of a program that promoted apprenticeship in the skilled trades, as Newell took notice of the large gap between the oil sands workers retiring in comparison to the professionals coming in because there was a shortage of engineers, scientists and skilled tradespeople.
With the need for a massive change in the Industry’s cost structure, significant workforce reductions were required. Newell and the Syncrude executive team thought hard about how to reduce costs without making unnecessary layoffs and decided to alter the workforce. He made it a mission to get educators to join him in creating more specified courses and educational opportunities geared towards careers in the trades.
One of the key areas for the staff reduction was the application of information technology to reduce administrative staff where the majority of workers were women. But Syncrude developed the Bridges program to retain these female employees by redeploying them to other in-demand areas.
It started with a two-week course at Keyano College to introduce Syncrude’s office administration employees to hands-on learning experiences in the oil sands, which further helped motivate women to take on more non-traditional careers.
“At the executive level, we realized that, as the Mining area continued to expand, we would need more trucks, more shovels and more people in seats. At the same time, downsizing administrative positions would be taking place. But we said, ‘Look, women can do anything that men can do.’ Any female could job shadow any of the positions,” Newell said. “If there was any job that was interesting to them, we put them into a two-week orientation program at Keyano College. After this, they spent a 28-day cycle working with their assigned team.”
Newell further shared how none of the employees were at risk of losing their original jobs by participating in the program and there were no temporary hires for their positions during the process. If they weren’t enjoying the new change in their career, they could return.
“Interestingly enough, I don’t think there was a single woman who went back to their original position.”
Creating CAREERS in the Community
Through the apprentice shift, Newell knew there were more moves to make to revitalize the direction of Industry, and he said none of it happened by coincidence.
In 1989, the Alberta Chamber of Resources collaborated with the Alberta government to conduct a research study of the skill supply and demand balance across the province. The studies revealed the average age of a skilled tradesperson in Alberta was 47 and the average age of a first-year apprentice in Alberta was 27. The studies showed similar data across Canada.
“I found this news devastating, just coming into Syncrude as CEO, and trying to figure out how we were going to get oil sands development up and going again and suddenly realizing all these key skills are going to be lost,” said Newell.
“If we didn’t make this a business issue, we could kiss the oil sands development goodbye. But the youth figure was even more alarming because, at that time, the issue was not a skills shortage, it was youth unemployment. So, here we had these great jobs for our youth and nobody was going after them.”
This inspired the creation of CAREERS: The Next Generation Foundation with its focus on attracting youth into careers in skilled trades and other key operating and technological areas. It started as a grassroots program and developed into an industry-wide initiative which has enabled about 30,000 student interns become skilled tradespeople since its inception in 1997. For his leadership, Newell was an inaugural inductee into the Alberta Trades Hall of Fame launched on December 1, 2020.
Today, Newell continues to demonstrate his energetic leadership to others through the CAREERS program as a board member. He also continues to strengthen the bridge between education and business with his ongoing philanthropy and extensive knowledge.
“Education is the great equalizer of opportunity,” Newell explained. “I worked at all different levels of education, right from early childhood learning to literacy training to high school programs.”
He spent the last six years at Syncrude serving on the University of Alberta’s Board of Directors with the final four as Chair. After retiring from his CEO position, he became the 18th Chancellor (2004-08) and was appointed Special Advisor to the Provost of the University of Alberta in 2014.
Newell also served as the Chair of the Climate Change and Emissions Management Corporation and Chair for The Council of Canadian Academies’ Technological Prospects for Reducing the Environmental Footprint of Canadian Oil Sands.
Early this year, Newell and his wife Kathy celebrated 49 years of marriage. The couple also made a generous donation of $500,000 to the Telus World of Science’s Aurora Project to open a new gallery showcasing the Arctic. The Edmonton science centre is set to open the gallery in 2022. The donation will also support the creation of programming with Alberta’s Indigenous communities.
Looking ahead, Newell is optimistic about the Wood Buffalo region’s future, just as he’s seen it in similar times, decades ago.
“These are very tough times with COVID and the many other things going on in the energy sector worldwide. I would say the future is still very bright. The world is going to need oil and gas for the next several decades and we are well-positioned for a bright future down the road,” he said.
“The hallmark of the oil sands industry, right from the early days, has been its perseverance. We’ve had the ups and downs but we always come up ahead. It’s a great community. People are very resilient and adaptable and they try to make good things happen out of bad situations.”