“These trials will take years, so we have to find a way for this to become non-news,” Mr. Card says.
A soaring share price may help soothe shareholder wounds. “When we transform into a top-performing company, that will take care of the vast majority of it,” Mr. Card says, adding that he won’t “feel good” about SNC’s shares until they return to the $55-60 range.
To get there, Mr. Card is reshaping SNC. The firm is pulling away from its infrastructure concession investments such as AltaLink, putting an unspecified stake in Alberta’s main electricity distributor up for sale. SNC wants to redeploy the proceeds into its core engineering business.
Mr. Card comes from a family of engineers: His father (who still practises at 86), his brother, his wife and his two children are all engineers. It’s something that permeates all of Mr. Card’s thinking as he wonders aloud how Beaver Hall’s chef, Jérôme Ferrer, manages to put away the odd-shaped tableware at his signature restaurant Europea. And yet, selling SNC’s lucrative assets to invest in engineering seems counterintuitive, given the company’s lacklustre results in that business.
Mr. Card argues that, historically, returns are 4 to 6 per cent higher in engineering and construction than in infrastructure. “The E&C business needs to be performing for that to happen – and we are not there yet. But there is no reason to think it shouldn’t be.”
Adapting the firm’s business strategy and maintaining its “diversified portfolio” is critical, he says. “With this global platform, we can get enough scale to stay relevant in a rapidly consolidating industry. We can say to Montreal and to Canada: Your company is going to be there 10 years from now. But if we don’t do this … maybe we won’t.”
The question is, will investors wait long enough? Activist investor West Face Capital acquired SNC shares last winter with an eye to “unlocking” value at the company. (The Toronto firm declined to comment on SNC’s new strategy, and Mr. Card refused to discuss his talks with West Face principals.)
Some analysts believe SNC is vulnerable to a takeover given its low valuation. SNC has no controlling shareholder, although the Caisse de dépôt et placement du Québec, with 10.2 per cent of the outstanding shares, endorses the company’s management.
But Mr. Card shrugs at the idea. “While you can never rule it out, it is not my worry. We are a complicated organization, and it would take quite a large and diverse acquirer to sort that out.” What he doesn’t volunteer is that the same bribery scandals that hinder SNC’s ability to make acquisitions might also deter predators.
Asked about this poison pill, Mr. Card shoots straight back. “It’s the wrong kind,” he says, but acknowledges that “it would take an incredibly sporty investor to want to [buy SNC].”
And given the cards Mr. Card was dealt, he’ll play whatever trump he can find.
Born in Santa Barbara, Calif., in 1953. Married to Nancy; father of Christopher and Allison. Hobbies include running, cycling, hunting fishing.
Bachelor’s degree in civil engineering from University of Washington; master’s in environmental engineering from Stanford University; executive MBA from Harvard Business School.
1996-2001: CEO of Kaiser-Hill; oversaw decommissioning of Rocky Flats nuclear weapons plant.
2001-2004: Undersecretary, U.S. Department of Energy.
2004-2009: President and chairman of CH2M Hill International. Also served as deputy program manager of the CLM consortia, delivery partner for 2012 London Olympics.
2009-2012: President of the energy, water and facilities division of CH2M Hill.
August, 2012: Named CEO of SNC-Lavalin, effective Oct. 1
IN HIS OWN WORDS
On growing up on a farm: “I worked nights and summers pruning trees, spreading insecticides, driving heavy equipment. I was a workaholic even back then.”
On his career: “The DOE was a one-in-a-lifetime, pinnacle-type job. … Since then I have nothing to prove.So my ego isn’t tied up in this. It allows me to be vulnerable. I don’t have to be the smartest guy in the room.”
On the yet-to-come decision on allowing SNC to bid on public works contracts in Quebec: “All the bad people that caused this are gone, so who is the system going to punish, when the only obvious recipients for the punishment are the 34,000 employees and the shareholders who are already victims?”
On being SNC’s first English-speaking American president: “I expected more of a cold shoulder, ‘You are not from the inside’ type remarks. But I am impressed: Everybody is focused on the outcomes and not on the petty details.”
On learning French: “Speaking French was on my bucket list before I came to SNC. But it is very frustrating. I am making some progress in vocabulary and grammar, not so much in conversation. I am still at a point where I need to translate and it slows me down.”