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Robert Card, a former senior executive at CH2M Hill Co. Ltd., will take the reins of Canadian construction and engineering heavyweight SNC-Lavalin on Oct. 1. (CH2M Hill Co. Ltd.)
Robert Card, a former senior executive at CH2M Hill Co. Ltd., will take the reins of Canadian construction and engineering heavyweight SNC-Lavalin on Oct. 1. (CH2M Hill Co. Ltd.)


Putting SNC back on track first priority for new CEO Add to ...

Robert Card has his work cut out for him as he takes the helm of problem-plagued SNC-Lavalin Group Inc. – not the least of which will be dealing with a nationalistic culture of business in Quebec – but experts say he has the credentials to put the company back on track.

Mr. Card, whose appointment as chief executive officer was announced after the close of the markets on Friday, will take over the Montreal-based engineering and construction titan on Oct. 1. SNC has been without a CEO since Pierre Duhaime stepped down in March in the midst of a bribery scandal related to $56-million in payments to unknown agents in Tunisia.

In a statement released last week to mark his appointment, Mr. Card, a former senior executive at Colorado-based CH2M Hill Co. Ltd., said he and his wife are excited to be moving to Quebec and to learn French. But, even if he becomes familiar with the language which he called “an integral part of this global firm’s heritage,” Norman Levine of Portfolio Management Corp. says Mr. Card will have to deal with antipathy created by the fact that he is not Québécois.

Quebec is a province that leans heavily toward hiring its own, Mr. Levine said Sunday. “It’s like nepotism. And, in nepotism, you are not chosen because you are the best,” he said, “you are chosen because you are what you are, not what your credentials are.”

On the other hand, time will likely blunt nationalistic resentments, said Mr. Levine. And shareholders, he said, will probably be extremely pleased that the company has managed to attract someone with Mr. Card’s experience and reputation.

As a first order of business, Mr. Card will have to convince those shareholders and SNC’s employees that the company’s troubles are in the past.

SNC says that a decision to shift work from the hydrocarbons and chemical division in Russia to Britain because of quality concerns, will cost an extra $50-million. Profits for this year are expected to fall short of what they were in 2011.

Meanwhile, 800 of the engineers and technologists at SNC’s Candu Energy subsidiary went on strike last month.

All told, the turmoil has caused SNC shares to lose more than 28 per cent of their value since February.

Maxim Sytchev of AltaCorp Capital Inc. said the fact that Mr. Card does not have an employment history at SNC will work in his favour. “For SNC’s shareholders, it’s nice to see that the board of directors has decided to go with an outsider, relative to somebody being promoted from within, because people are looking for a clean slate,” Mr. Sytchev said.

Mr. Card must re-establish confidence on the part of SNC’s investors and employees, he said. “So far the company has been fairly good in terms of addressing those challenges and we have seen this in terms of the number of contracts that SNC was able to secure over the last five months,” Mr. Sytchev said. “But clearly it’s still going to be a fairly long road ahead.”

The important thing is that Mr. Card comes from a highly reputable company in the same line of business as SNC and has been involved with engineering and construction for more than 40 years, said Mr. Sytchev. “He’s been dealing with difficult customers. He’s been dealing with all levels of government and so forth. So be brings the executional expertise that is required in this particular situation.”

As for SNC itself, Mr. Sytchev said the current difficulties will be overcome. “SNC has been around for 100 years,” he said. “They are going to be around for another 100 years.”

Mr. Levine agrees with that assessment. “This is one of the premier engineering construction companies in the world, not just in Canada,” he said. “Its share price has been way over-discounted because of the problems and this guy is stepping into a huge opportunity.”



Robert Card, a former senior executive at CH2M Hill Co. Ltd., will take the reins of SNC on Oct. 1.

At CH2M Hill, he held a variety of positions, including president and group chief executive of the international division.

He also recently acted as COO for the consortium responsible for building the $15-billion London Olympics complex. Between 2001 and 2004, he was an undersecretary with the U.S. Department of Energy.

Mr. Card has a Masters degree in Environmental and Civil Engineering from Stanford University and also attended Harvard.

CH2M Hill is a Fortune 500 engineering services firm with 30,000 staff, a presence in more than 80 countries and $6-billion (U.S.) in revenues.


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