The most important executive east of Montreal is not a McCain, a Sobey, or even an Irving, but a compulsively overachieving engineer from Mumbai whose first job as a teenager in Canada was washing dishes for minimum wage.
Mike Ashar is the first non-family president of 87-year-old Irving Oil, giving him enormous clout in Atlantic Canada as an indispensable deputy for the powerful but divided Irving clan.
In energy markets on the East Coast and in New England, “no one is playing with the same muscle as we are,” says Mr. Ashar, 56, who moved 3½ years ago from a senior job at Calgary’s Suncor Energy Inc. to Irving Oil’s Golden Ball Building in downtown Saint John.
The ability to flex that muscle drew Mr. Ashar to Irving Oil – along with the chance to work in a more entrepreneurial enterprise. He couldn’t have predicted he would help fill a leadership vacuum left by the perplexing departure last year of Kenneth Irving, once heir-apparent to the energy assets of Canada’s third-richest business family.
Now, with oil markets roiling and recession fears rising, the Irvings, more than ever, need Mr. Ashar’s steady hand at the helm of their crown jewel, a massive refinery in Saint John.
Shipments from that single refinery make up 60 per cent of New Brunswick’s foreign exports, amounting to about $8-billion a year. Eighty per cent of the plant’s production goes south of the border.
The company buys about $10-billion worth of crude oil a year from offshore sources and Newfoundland and Labrador – a value equivalent to more than a third of New Brunswick’s gross domestic product. It employs about 3,500 people, many of them in chronically hard-pressed Saint John.
The sprawling complex of pipes and vessels astounds even Mr. Ashar, who spent a lot of his career running big oil sands projects in Alberta. At a time of volatile oil prices, “we’re very well-positioned with an asset that is truly phenomenal,” he boasts. “At 300,000 barrels of oil a day, it is not only the largest Canadian refinery – it is the largest on the entire East Coast.”
Mr. Ashar’s mandate is to post strong numbers, even growth, in the refinery’s core market of 30 million people in Atlantic Canada, Quebec and New England. It means being opportunistic, such as in the recent purchase of a Maine oil terminal from Exxon Mobil Corp., while maintaining margins in the face of global refinery overcapacity if the economy lands hard in another recession.
This focus on the 51-year-old refinery reflects a more modest horizon than when Mr. Ashar arrived in mid-2008. Those were heady days, when Kenneth and Arthur Irving – a grandson and son of legendary empire-builder K.C. Irving – were pondering the building of a new refinery to double capacity. But as the global economy tanked and refinery margins eroded, they pulled the plug on those plans.
Another casualty of the meltdown was Kenneth Irving himself. As the oil company’s leader, he had pushed for the hiring of a strong operator like Mr. Ashar, so that he could pursue his vision for a broad, future-focused energy powerhouse in southern New Brunswick – not just a new refinery but alternative energy, transmission networks, even a new headquarters.
Then the economic crisis hit, and Kenneth Irving took temporary leave, telling colleagues and friends it was for health reasons. When he returned several months later, many of his projects were shelved. It is not clear what transpired between Arthur and Kenneth, but it is believed the son could no longer see a future in his father’s company. He left Saint John, first for Portland, Me., and more recently for Toronto where, at 50, he is building a new career.
Mr. Ashar denies that the company retreated to business as usual, because “there is no usual,” he states. “Our industry went through a golden age of refining from 2004 to the first three quarters of 2008. The margins were great and you could do no wrong.” But then, “the industry changed quite a bit and it made sense for us to adapt to the new realities.”
The pressure on margins and profitability meant pulling back from some visionary exercises and focusing on core geography and core assets. Wind and tidal power may be important for the future, he says, but pale in significance to the manufacturing and marketing of petroleum products.
Mr. Ashar reports to 80-year-old Arthur Irving, who runs the energy side of the empire, but also to a board of directors of family and outside members that has assumed more authority in the past three years. It includes heavyweights John Mayberry, the former chief executive officer of steel giant Dofasco; Maureen Kempston Darkes, a former senior executive at General Motors; and John Cassaday, who heads Corus Entertainment.
A marathon runner, Mr. Ashar gets most passionate talking of his personal mission to invest in the body, mind and spirit of employees, and how Irving Oil is winning recognition for its corporate wellness programs. Another cherished tenet is lifelong learning, which he feels can help offset the remoteness of Saint John as a head office centre.
The education commitment extends from casual lunch-and-learn sessions to an executive MBA program with the University of New Brunswick that has 110 enrollees. Mr. Ashar himself dispenses vast reading lists and podcast lectures by leading thinkers to his top 60 managers.
He is, in essence, remaking the company in his overachieving image. His early years were spent in a tiny flat in Mumbai with his father, mother and younger sister. His father, a chemical and textiles specialist, brought the family to Toronto, landing at first a low-paid job while his wife worked as a seamstress.
Their son, who was 15 when he arrived, spent 17 years in full-time and evening university courses, getting a masters of chemical engineering and an MBA, and even scratching an itch for philosophy by taking an extra bachelor’s degree in the subject.
Years later, after occupying almost every major position in Suncor except CEO, it was time for a change – and change he got.
The Irving empire is in huge flux. There has been massive reorganization, cementing a split between the forestry and energy branches. Now Arthur Irving has a succession problem. There is speculation in Saint John that the family might sell the oil company, but it is a big part of K.C. Irving’s legacy and will not be surrendered easily.
Whatever happens, Mike Ashar feels he is in the right place at the right time. He made money in the oil patch and now he wants to make a difference – “not measured by paycheques or golf scores but by meaningful impact.” If he can upgrade the company’s knowledge and defend margins in a challenging time, while the family figures out its future in oil, that will be impact enough.